The fast pace is far from the only challenge facing CFOs at high-growth startups. Usually the very first critical hire when scaling begins, a senior finance executive is often brought on to help take the business to the next level—to transition the company from survival mode to a more streamlined, bigger company with more growth opportunities.
The role demands a special skill: Scaling the company in a sustainable way requires a deftness in navigating the state of the company today to what it could become, while trying not to burn out current resources (namely cash and key members of the team). Here are the critical considerations for CFOs in this situation.
Find and forecast the skills gaps. The company is about to go through significant changes, and not everyone who thrives at getting a startup off the ground may be a fit for the next version of the business—including, potentially, some members of the leadership team. Evaluate current roles and consider what additional skill sets will be needed as you ramp up.
Also include in this human-capital balancing act an evaluation of the kind of employees you want the evolving company to hire. Look beyond the core technical skills it’s hiring for: Some people operate as generalists and can take on different responsibilities as the company scales while others have a narrow skill set that may not be needed on the other side. As much as possible, you want employees who offer a broad skill set and the flexibility to fill in missing skills on an as-needed basis. A more flexible approach could give you more cost control over how and when certain skills are brought in (such as some finance, marketing and IT roles) while minimizing the risk that you’ll take on a bloated payroll if any growth plans don’t pan out.
Be on the lookout for people who hinder change. You want to retain people who are open to adapting to new ways of operating, new systems and technologies, and perhaps an entirely new culture. Look back at how the pandemic forced companies to rethink their workforce. Who at your company didn’t miss a beat, and who are still sticklers for the old way of working? With more changes on the horizon, you won’t want people who will be holding the company back.
As you bring in new people, keep this issue in mind during interviews by asking potential hires for examples of how they positively contributed or embraced change at their current or former employer. Consider where they have worked and whether those companies are known for the kind of progress you hope yours will make soon—or whether they are stuck-in-their-ways enterprises.
Keep your star talent in the loop. Another consideration is identifying the star employees you hope to retain and keeping them engaged with the company’s future direction. Transparency becomes important here, to ensure the alignment across the organization with current goals while also making sure employees feel like they have a part in all of it. What you and the other senior leaders say and how you lead will determine if people will continue to follow you toward the next stage in your company’s growth.
Align any growth plans with your exit strategy. The CFO’s purview includes keeping the company “investor ready,” for when the time comes to seek additional funding or pursue a transformative event such as an IPO or acquisition. Are your financial operations as efficient as they can be, and leading to up-to-date, reliable information and actionable insights? Is your business plan clear to your stakeholders? As one of the core representatives of the company, are you confident in the company’s future, and can you explain it succinctly, clearly and in a persuasive way?
The CFO’s Role
Taking a company through tremendous change—from one stage of growth to the next—requires strong leadership, open communication and a particular level of expertise. Because of their special perspective, CFOs are uniquely positioned to understand how the company is really doing while also having the experience to help take the company forward. Working with the CEO and other leaders, you want to have a strong voice in how the company advances to the next step. Embrace your role as a lead evangelist of the company, and the key players involved—including your best employees and investors—are likely to follow.