scaling well past the startup stage are the ones who typically:
Play the role of the Late Night Hero over and over again. There's always a pending crunch time that requires their personal attention and a ton of manual work—the monthly close, the audit, the budget, commission planning, compensation cycles. CFOs who are mired in doing all of these things personally and manually haven't built the systems, teams, or processes required to scale the business.
Allow accounting teams to swell in size. “Throwing bodies at the problem” and allowing people to pile up on a team instead of taking a process innovation perspective to Accounting is easy because it's the path of least resistance, but your CFO would never allow other teams to do that, so why should they permit it on their own teams? Accounting teams in particular tend to be the most traditional, paper‐based, teams and don't need to be.
Get forecasts wrong, or don't even try to do them. Especially while your startup is in burn mode and constantly calculating its runway and months until the next required financing, regular and accurate/conservative forecasts are critical. Even without a ton of revenue visibility on forward‐looking sales, good CFOs should have enough of a grip on expenses, cash flow, and order‐to‐cash dynamics to produce good, rolling 12‐month cash forecasts.
How I Engage with the CFO
A few ways I've typically spent the most time or got the most value out of CFOs over the years are:
Doing mental math together. My CFO and I are always attuned to key metrics and from time to time project them forward in our minds. We are constantly checking to see that our financial and operating results mesh with our mental math. When looking at our cash balance, we look back at the last financial statement's cash number and mentally work our way to the current statement: operating profits or losses, big swings in AR or AP, CapEx, and other “below the line” items. Do they add up? Can we explain it in plain English to other leaders or directors? The same thing applies to operating metrics—the size of our database, our headcount, our sales commission rate.
Spotting the wrong number on the page. I'm sure this has driven CFOs crazy over my career, but I have some kind of weird knack for looking at a wall of numbers and finding the one that's wrong. It's some combination of instincts about the business, math skills, and looking at numbers with fresh eyes as opposed to being the one to produce the numbers in the first place. But it's part of the partnership I have with my CFO that improves the quality of our work and quantitative reasoning.
Working hard to tell stories with numbers. The best CFOs are the ones who are also good communicators—but that only partly means they are good at public speaking. Being able to tell a story with numbers and visuals is an incredibly important skill that not all CFOs possess. Whether the communication piece is an email to leaders, a slide at an all‐hands meeting, or a Board call, partnering with a CFO on identifying the top three points to be made and coming up with the relevant set of data to back the numbers up—and then making sure the visual display of that information is also easy to read and intellectually honest can be the difference between helping others make good decisions or bad ones.
Part Three People and Human Resources
Cathy Hawley
Chief People Officer
Human Resources has evolved from transactional, compliance‐focused administrative work to more strategic, proactive work that touches all aspects of the business. The work is much more rewarding and impactful now. This section focuses on the “new HR” which I'll call “People,” and also focuses on a particular framing for People leaders who want to help a CEO and leadership team create a people‐centric, values‐driven, learning organization and culture that optimizes the contribution and experience of employees and their impact to the company. Trust me, as someone who has experienced traditional HR and also worked with CEOs who are only business‐ and not people‐focused, strategically driving a people‐focused company is much more rewarding and impactful. If your founder/CEO has interest in building a values‐driven company, you'll find this Part relevant to your success. I've been lucky to work with Matt at both Return Path and at Bolster, and his mentorship and guidance helped me be more impactful in my People roles, and also expand my impact. At Bolster, I'm working with two sides of our marketplace: members (executives who want to work in on‐demand roles) and clients (CEOs who need to bolster their leadership teams with on‐demand executive talent).
I started my career in a very traditional HR role as the HR Manager at a 100‐person truck stop. I did everything you'd expect in that role including hiring, processing payroll, writing an employee manual, dealing with workers' compensation claims … if it was remotely connected to compliance, I did it. The truck stop was hierarchical, had traditional gender roles, and no one was consulted on any decision since the CEO made all the decisions himself. Although I knew I couldn't thrive there in the long term, I did learn everything about transactional HR that they don't teach you in college, like how to actually run payroll, negotiate benefits, manage difficult employee situations, and manage risk. My role was to focus on the company first, by making sure that we mitigated risk and reduced costs. Many HR people started their careers in similar environments, and, without the benefit of a more open‐minded CEO or company, they become the HR Directors of comic strips.
Luckily, my career shifted after that and I later had the opportunity to work with technology companies whose cultures were focused on people—on trusting that you've hired adults who don't need “managing,” and focused on providing development opportunities for people. At these companies my role was to focus on both the business and on people, and help us make good business decisions that were best for people.
Both business‐first and people‐centric/inclusive companies exist today. If you're an early‐stage startup, and have a CEO who cares deeply about people, help them create a people‐centric/inclusive environment. Building a sustainable company that people love to work for will drive engagement and business results. When someone feels included, and can bring their whole self to work, when they don't have to worry about being judged for having different opinions or ways of working, they do better work. They can focus on the task at hand rather than worrying about what people think, or whether they will be heard if they have an opinion.
At Return Path, we didn't explicitly start with building an inclusive culture. Luckily, the founders and early team members did have a bias toward inclusion and they built a lot of practices and processes that led toward an inclusive environment. At Bolster, we are intentionally building inclusion into our strategy and culture (and in our case, it's related to our actual product offering, too). You'll see people‐centric and inclusive practices throughout this Part that are different from those you've seen at many companies and you'll see how they lead to a more inclusive environment. It's not easy to be inclusive without the support of your CEO since you'll continually have to educate and influence leaders and employees to embrace a different way of working. Having your CEO embrace and lead that education and influence with you is powerful. In my experience, there are more CEOs right now who want to build an inclusive culture than there are HR leaders who have the skills and experience to do this, so the quicker you can embrace the mindset and build the skills required, the more impact you can make at your company and in the world!
Payroll, benefits, and people operations are, of course, urgent in a startup. I'll touch on those later in Chapter 39. These are table stakes and don't highly differentiate you, so I'll start with what I think is your most important role: building an inclusive culture.
As Chief People Officer, you will have far more tasks
