Scaling Smart - The CFO role within high-growth businesses
Perhaps I’m biased, but CFOs in high-growth tech businesses have one of the most exciting and challenging roles imaginable.
C-Suites across the globe are becoming more fluid, particularly in the tech space, and the modern tech CFO of today is very different from the one of decades past. It’s a role that is constantly changing, being shaped by political, macroeconomic, social, and environmental factors – often outside of their control.
How those factors are understood, and unpicked is critical to success, particularly within fast-paced sectors.
However, understanding can only get you so far. What separates an average CFO from a great one is the operating model they create. Models that can adapt to changes to technology, people, and operating landscapes are very difficult to build successfully and are no longer possible with numbers alone.
As we enter a new landscape where factors like AI play a larger role, CFOs will increasingly need to interrogate their beliefs and assumptions more rather than solely relying on historical data for answers.
In my time as CFO, I’ve learned a huge amount, but one piece of advice key for any CFO in tech is to know your firm’s business model inside out and be open to evolving your operating model around it. It sounds obvious of course, but the reality is that in a growing business, priorities change on an incredibly regular basis.
I believe too many CFOs are wedded to outdated operating models that may well have worked for an earlier stage business, but aren’t viable for rapid growth. Review your operating model on a hyper-frequent basis and be honest.
Ask how should your operating model evolve? With growth, the operating model must evolve or else your organization will not be able to handle the growth and seize up.
Good CFOs know better than anyone which processes or teams can scale, which can’t (yet) and what it takes to scale teams. From there, they can then look at the types of investment that need to be made. Fully understanding which new products are available in the market is also critical to ensuring that teams across the business are as efficient and productive as possible.
As an example of this, at Taulia our operations team handles a huge amount of volume on our more established products. When we innovate and introduce new products, the same team needs to be more deliberate in their work and closely align with product and engineering to provide the feedback to build a scalable product in production. I believe this model is much better than introducing a new product with hardened processes, which often means that innovation stalls and product releases are slow.
I often hear CFOs discuss technical debt – the cost of future work that arises when a software development or infrastructure team prioritizes speed over quality in order to meet deadlines. The reality here is that there will always be technical debt.
However, it’s still important to carve out a certain amount of engineering hours to maintain or reduce the amount of this technical debt. If we’re always investing in new products and technology, without ever addressing old issues, the cost of reducing this technical debt at a future date can often be insurmountable. A ‘reduce as you go’ strategy prevents a build-up that can cripple your finances.
Aside from ‘know your firm’s business model inside out and be open to evolving your operating model around it’ I have a few key tips to share from my time at Taulia.
Being a CFO at a fast-growing tech business is never dull, always challenging, and often humbling. Having an open mindset, being thick-skinned, and being prepared to adapt are perhaps the three most important qualities for a modern CFO.