on introducing disruption in the team...

When you are looking to make changes in your team, you have to be mindful about how much disruption you are introducing deliberately.  Sometimes you don't have a choice - external factors introduce.  But when you do have a choice, you have to be careful about the areas getting disrupted, how much, and when.  It is also important to consider the ability of the team under the leaders.  You should also assess how your direct leaders are in collaborating with other parts of the organization.  As a CFO, it isn't just the ability of your leaders to do their functional jobs, it's also about their ability to do their organizational roles - extensions of the CFO.

on getting ready for IPO...

A lot of companies focus so much on governance and controls when they consider filing for an IPO.  But the reality is, that is one aspect of the whole proposition.  One of the trickier things is to have a rigor in the business, and the ability of FP&A to predict the business.  Whether you have the processes, the people, and the overall ability to forecast the business, tell your investors what you are going to do, and then come within an acceptable range of that forecast.  Once you have that, you also need a narrative.  A narrative that is compelling, exciting, and believable.  While private investors look for it, wall street also wants something that is more real and near term.  Something that the company can actually execute to.  It is important to have a narrative that marries possibilities with the ability of the company to execute, and then show the execution.

Once you have done this, you can think about the controls, governance, tax structures, legal compliances, etc. 

On being an 'swim lanes' type of CFO....

Someone once described Jim as a 'swim lanes' type of CFO.  That he will press functional leaders to do their jobs, but wouldn't get into their kitchens.  He will challenge, validate and verify.  But eventually, he will trust them to do their jobs.  That also allows him to remain independent and not get overly close to the business.

I asked Jim for his reaction to this characterization.  His response...

I have always been an operational CFO.  I am heavily engaged in the business and with a very balanced approach.  I try to be as rational as I can be.  And with an accountability orientation.  So in this regard, I am trying to understand what an operating leader is trying to do, kicking the tires on operational feasibility, and looking for end-to-end alignment with key stakeholders.  I am not trying to do their jobs.  

Getting investors and internal leaders to focus on the right things...

In startups, it's common for founders and leaders to pitch a promise of a bright future to investors.  They get aggressive in projections, growth strategies and investment options.  And often, they start believing in their own spiel - they start smoking their own vapor.  As the CFO, you need to steer people to see past the sizzle, get to the steak.  It is critical to keep people focused on the right metrics and allocating on real basis (not allocations only to attain an investor promise).  This is the sure way of building the business for long term.

Similar to business leaders, it is important for the CFO to get the investors to focus on the real growth story.  Sometimes companies are saddled with businesses that create a drag to the overall growth.  This could be a set of customers, products, or markets.  But investors often focus too much on the drag - since that presents risk.  It is important for the CFO to carve a story that drives focus to the growth pieces.  eg. in akamai, when the Giants (Apple, Facebook, etc) went DIY, Jim had to carve the story saying "internet platform companies are not on Akamai anymore as they build their own capabilities, but the core business continues to show momentum and growth" 

On determining whether the team really needs resources...

It is generally hard to determine when the team needs more people.  But the decision making can be eased with two step evaluation:

1) what do you want to get done and do you have the right capabilities in the team to get that done.  If not - or if the team is being built from scratch, decision is easier.

2) the team has the capabilities, but bandwidth is short.  In this case, it is best to implement performance metrics and then assess whether bandwidth is really short.  And even in this, it is important to pressure test and check for automation options before throwing people.  Startups usually suffer with the mentality of throwing people at the problem.

For eg. in an invoice processing team, if they were processing 100 invoices earlier, and now they are processing 300 - great, its indicative of bandwidth shortage.  but the question should be, can we get some system to do the processing, rather than throw people at the problem.

Art of being a leader, friends with peers, and also be respected...

This is more of an art than science. Either you have it or you don’t. But broadly... it is a combination of following factors: 

1) whether the other leaders are doing the right thing for the business. If they are, then your life becomes easier. But you need to assess if they are. And that’s hard. 

2) quick wins. Are you doing simple things that can help them in their jobs. These could be something in your sleeve - not too painful for you, but makes them feel good. 

3) genuine interest: you have to show that you are genuinely interested in their pain.  And not just pain with finance, but pain in doing their jobs. And you can’t fake it. You have to listen, you have to ask questions. 

4) business acumen and operational understanding: you have to bring to the table business acumen to show that you get it. That you know business in general, and that company’s business specifically. 

5) push them: you have to demand/push them in the right direction. That shows that you are not a puppy dog ready to help them. That you are going to be equal. 

Eg. When Bob Hughes needed some marketing $$, I found him some. It wasn’t hard, but the next time I had some contentious topic, he was more willing to work with me. 

Key is to ask and understand general pain, not just with finance. Show interest.  And figure the easy stuff to solve. Your challenge, Nitin, is not to go too far with the business leaders. How do you build and keep that objectivity. At the end, THAT will get you the respect. The overly native is the friendship. Striking that balance is the hard stuff - but that's what gets you the respect.

Working as a controller...

This is good experience to have. You get to learn the complexity of a business and the trade offs.  But as a controller you need to realize that accounting is what it is.  You can’t and shouldn’t mess with it. In other words, contract languages drive accounting treatments.  Unless contracts change, accounting should happen the way it should.  Dont try to bend rules.   

But the key to remember is - how do you work with auditors and how do you make them your partners. How do you take complex agreements and ensure treatment will be conducive for the business. And here it doesn’t mean going as a puppy dog to the auditors, asking them for opinion and following it.  It means you read the contract, take your interpretation, form an opinion and ask them for theirs.  If they don’t partner, you escalate, and if that doesn’t work you need to float a replacement option. But remember, you need to get out of the role quick coz that’s not why they hired you. And if you stay there long, you risk getting boxed.