had their first executive role at some point. While there's some credence to the expression “fake it till you make it,” there's a more methodical approach you can take to scaling yourself as a CXO—or if you're the CEO, to helping your new CXO scale. Think of the journey in three steps that can be taken in any order.
First, master the tactics. You need to understand all of the things that happen in your department. Some, you will know well because they're the ones you've done over time. Some you won't know at all. Make sure you do a complete inventory of the functional competencies for your role and all the roles reporting to you. Depending on how organized your company is with job descriptions and what's often known as a RACI (responsible‐accountable‐consulted‐informed) analysis, this may be as easy as pulling something off the shelf and having a series of meetings with the people on your team to walk you through what they do. If your company isn't that organized, you may want to take the opportunity to proactively build that kind of functional competency/RACI list for everything in your team. That is no small exercise, but it's one that will pay back massive dividends. As one of my long‐time colleagues and the writer of the CRO/Sales Part of this book, Anita Absey, says, “What gets measured gets managed.” I'd add to that: if you don't know something even exists, you can't begin to measure it, let alone manage it!
Second, form your strategic approach. Every single function in a company has tactical and transactional elements to it—and every single function can be ONLY tactical if you let it. That's the lowest common denominator. HR can be about benefits and payroll. Sales can be about pipeline management and closing deals. Marketing can be about blog posts and SEO. A transactional focus is especially true of corporate functions like HR and Finance, but it's true of all functions. But just as every function has its tactical elements that must be attended to, every function CAN be strategic. As you settle into your new role, and as you grow into the role of senior executive and learn the First Team lesson of putting the needs of the business before the needs of your department, you will be able to start thinking more holistically about the business and how your department fits into it, so when your CEO pulls the lever that indicates they need your team to step up and lead, to be strategic on some topic, you are ready. What does it mean to be strategic vs. tactical? It's the difference between eating what's on your plate and planning out next week's menu. What are the ways in which your function can produce competitive differentiation for the business? What are the frameworks that will guide your decision‐making about resource allocation or prioritization? How can you best support the other departments in the company? Those are the kinds of things you need to master in step 2. As my colleague Dave Wilby once said about one of the teams he was managing, “We have to figure out how to be the nose, not the tail.”
Finally, look around the corner to see what's next for you and for your team. Senior executives constantly need to be toggling between different execution and planning horizons. You need to make your goals this quarter, and to make them, you have to hit daily or weekly activity metrics and milestones. But what about next quarter? Or next year? Or what happens if your company doubles in size in the next six months and is set to double again? Start by revisiting that functional competency/RACI list from step 1 and stress‐test every element of it. Ask yourself, What must be true of this line item when the company is twice its current size? While you have to develop and scale as a leader—with all that goes into that in terms of soft skills—the only way to scale yourself as a CXO is to understand what great looks like for your role at the next stage of the company's life, and make sure you don't get there after your company needs you to.
All three of these steps—mastering the tactics of your department, forming your strategic approach, and understanding what's next—are things you may be able to do on your own to a point. That said, they will all go more quickly and with a higher probability of success if you engage your CEO, your Head of HR, members of your Board, or outside mentors or coaches to assist you on your journey.
Part Two Finance and Administration
Jack Sinclair
Chief Financial Officer
There's no one path to the role of “startup CFO” and it's likely that anyone with that title could have taken one of many paths to get there. Some come from an accounting background, they have a CPA and possibly have experience as a controller, mastering accounting systems, GAAP rules, and providing accurate and timely financials. Other startup CFOs have had experience in investment banking, focusing on mergers and acquisitions, initial public offerings, and key performance indicators (KPIs) before jumping over to the finance team of a company. And some, like myself, come from an unrelated field. I came to the role of startup CFO from consulting where I learned strategic analysis, competitive benchmarking and, most importantly, helping clients as a partner to solve problems. I also had a two‐year experience starting a company, where a friend and I tried to start a business creating corporate finance software. There were a lot of learning lessons there as well, especially that I should not be a primary coder in the business. Overall an effective CFO has to eventually master all of the basics—the accounting and finance requirements of the role—but often your early days as a startup CFO will focus on where you came from. And more often than not, a first‐time “Head of Finance” has to learn the areas they do not have expertise in on the fly.
Coming from the consulting world, I was missing a lot of the standard skills that CFOs need to have. I had never made a journal entry, never closed the accounting books, never formed a corporate entity in a foreign country, and never managed a cross‐functional team. I had a lot to learn and luckily was able to do a lot of it on the job. But while I was missing some of the standard CFO skills, I had deep experience and skills in some of the hard‐to‐teach things like financial analysis, competitive benchmarking, thinking strategically, and managing transactions. And, I was instinctively drawn to what I now believe is the secret to a great startup CFO: the concept of “Finance as a Partner.”
Most people, both in and out of Finance, think of the Finance division as either a gatekeeper to financial resources, or they think of us as the people who require budgets and justification for internal funding. If you accept the definition that Finance acts only as an approval gate, or a speed bump to getting things done, or a black hole for requests, you're limiting yourself and your team to the bare routine tasks of the role and your organization on a whole will not operate as smoothly as it can. I have always thought that Finance should be a partner to the organization and that mind shift, from making requests to working collaboratively with others both on finance issues but also on general business questions, is critically important for the Finance function and the company.
The other mind shift that is required if you're a startup and you want to help accelerate your company's growth, is that you'll have to constantly look for new innovations, new technologies, new ways of doing things. Too often decisions are made simply because that is the way they were always done and these outdated rules lose their effectiveness. For example, a requirement that people work in the office 40 hours a week was not possible in 2021, given the COVID‐19 pandemic. That's an extreme example, of course, but there are a lot of “rules” that made sense when they were created but lose their effectiveness over time. So, try to let go of these perceived guardrails and rules … and help teach others to do so as well.
Organizations can't scale if investments are not clearly understood or if areas of the business, such as Product and Marketing, suffer from lack of analytic support. If you're not a partner to the business, Finance will be seen as a speed bump, as a drag on growth rather than an accelerator of growth. Being seen as a gatekeeper, as a speed bump, can come from the best intentions of people in your company because they often see Finance as the guardian of cash. Also, since startups are often losing money while they get to scale and figure out their product‐market fit, careful management of cash is a priority. As the CFO in a startup, it's easy to just say “no” to people who want an exception or stick blindly to your budgeted spend. But if you approach the
