While some may paint accountants as boring bookkeepers with limited upward mobility, there’s actually a lot of room for them to rise to prominent, dynamic leadership positions. I would know, as I underwent this exact transition in my career. I started as an accountant in the late ’80s, and I worked my way up to become the CFO of Newbridge Networks, a start-up that went from zero revenue to $2 billion in just over a decade. Then I spent 10 years working in private equity before joining Solace in 2010. Since then, my primary role has been to design strategy, oversee finance operations, and facilitate company growth.
Working in leadership positions for four decades, I’ve observed changes in business strategy, dealt with various trends, and overcome obstacles. As the CFO of a medium-sized company, I was involved in day-to-day business operations ranging from approving deal structures and customer pricing quotes to deciding whether to hire in different functions.
Setting objectives and defining a strategy involve all management team members. CFOs can play a critical role in the process by ensuring that plans are supported by data. The further ahead in time planning goes, the cloudier projections become, requiring a leap of faith. CFOs need to opine on different business alternatives and support decisions with numbers.
When a business plan is defined or updated, CFOs should ensure that there’s a financing plan to support it. If a plan requires $10 million of financing in 12 months, then CFOs must figure out how to secure that funding.
During business planning, the go-to-market strategy most often gets less airtime and thought than it should. Many start-ups embark on creating a company based on great technological advancement, but the best technology doesn’t necessarily win. If you don’t thoughtfully decide how to market and sell the product, then even the best product in the world will fail. With technology, determining the best strategy in a changing environment is often complex. Like a long-term business strategy, the go-to-market plans should be tested before you implement them to ensure that the unit economics work. Will the cost of the resources the company needs provide for a profitable business model? There have been far more failures from poor go-to-market strategies than from poor product strategies.
Throughout my tenure as a CFO, I’ve witnessed the increasing relevance of technological advances in the workplace. From communication to automation, tech is now ingrained in every part of the modern workplace. Adapting to changes in tech is crucial to continued success, and it’s critical that finance professionals keep pace with innovations.
Nowadays, many enterprises want to fund their IT with operating expense budgets as opposed to making capital purchases, i.e., they want to rent as much of their IT infrastructure as they can, including from public cloud providers, instead of buying equipment and building data centers.
We used to spend a lot of time analyzing historical data to inform business planning; we’ve now switched to a predictive approach to financial planning, looking at a wider range of key indicators such as sales pipeline data. This allows finance professionals to help senior management project what’s likely to happen and make better decisions through the use of real-time data.
Many people’s first response to challenges is to try to find a standardized process to overcome all of them instead of thinking about each problem individually. I shudder when people pitch: “Here’s how you create a successful technology company.” Every challenge is unique, and the CFO’s response needs to make sense for the company’s situation. Assess the pros and cons of each potential solution and think innovatively.
It’s paramount to know your audience and their level of understanding of the subject matter. Financial data isn’t always clear to people in other departments who aren’t familiar with the terminology. You shouldn’t try to show how much you know; convey the information in a way that’s understandable.
As a board member at several companies, I’ve been on both sides of the table: receiving and giving information. The more simply you can present information, the better. You need to extract the most relevant data and explain it in a way that everyone can understand. The most common mistake I see is materials that provide a ton of data and leave it up to board members to comb through the information to find the issues worthy of discussion. It’s far better to present the issues that need discussing with relevant data.
CFOs need to spend time learning about all critical aspects of the business to understand data from different departments better. Fellow senior managers are invaluable in providing information and opinions. One-on-one discussions with colleagues provide the requisite context for data to help you make informed strategic decisions and drive success for the company.
DO MORE WITH LESS
At start-ups, general and administrative functions, including finance and accounting, are typically at the back of the line for resources. Tech companies focused on growth tend to prioritize engineers to get the product built and salespeople to bring in customers. As a result, the finance team is often understaffed, requiring finance professionals to wear multiple hats, but that’s a good way to diversify your skill set.
We’re in a profession with opportunities to progress. Since working my way up the ladder to CFO, less than 1% of my daily job is related to accounting. The rest is about running the business and strategic planning, but base accounting knowledge served as the gateway to my role in executive management.
There’s no ceiling on the accounting and finance profession. It may have a negative perception of being boring number crunching, but accounting is a springboard to get into the key strategic roles that run companies. If you anticipate trends and are flexible in the ways you approach challenges, then you’ll find a path to success and become a leader that other finance professionals look up to.
IMA LEADERSHIP ACADEMY
The IMA® Leadership Academy provides leadership opportunities for all members. From leadership assessment to leadership courses offered in person as well as through Webex to participation opportunities in mentoring, be it reverse or traditional, the IMA Leadership Academy can help you meet your leadership goals and improve your leadership skills. For more information, please visit the Leadership Academy website at www.imanet.org/career-resources/leadership-academy.