When Damon Fletcher was CFO at Tableau, the company went through a major subscriptions transition where their customers would go from a perpetual licence software to paying yearly subscriptions. At the time, that meant educating Wall Street and its investors on the benefits of this new business model, how the outcomes of this transition would impact the company and how, in the long run, it would bring more revenue and even benefit their customers.
It was a decision that raised a lot of questions, but one that Damon and his team were fully invested and confident in. And knowing the business model well, staying on top of the market fluctuations and having access to real-time data, especially results from their customers, helped convince investors that this was the right move.
“I’m really proud of the team for helping us get through that transition and making what is a very uncertain outcome of how much subscription you’re gonna sell in a given period.”, Damon recalls. “The key for this sort of situation is making sure you really understand your business model. You need to educate and provide enough sensitivity to be able to help them [Wall Street] understand the range of potential outcomes.”
I’m really proud of the team for helping us get through that transition and making what is a very uncertain outcome of how much subscription you’re gonna sell in a given period.
Damon Fletcher
Former CFO at Tableau
For Damon, as a CFO, reducing stock volatility is a priority, and for that he had to make sure that people really understood the story, as opposed to just getting an outcome from the stock. And for that, consistent and clear communication plays a crucial role.
Finance teams deal with different types of uncertain periods. Whether it’s a major pricing and subscription model transition such as the one Fletcher went through back in 2017, a pandemic or a global economic volatility such as the one we’re going through at the moment, finance teams have probably seen it all over the last few decades.
And in a time where uncertainty makes the market, investors and even their own team question Finance teams have emerged as the beacon of resilience, proving themselves to be far more than mere number crunchers. They’ve moved from being the “paper pushers” and the people who control the money to being involved in strategic planning, advising and even helping make impactful decisions that help lead organisations through times of uncertainty.
How uncertain periods lead to great changes
Companies have been dealing with a myriad of challenges over the last few years, mostly due to the impact of the pandemic that led to a great economic shift. And while some thrived on the changes this period brought, others had to face roadblocks such as loss of funding that forced them to redefine and revise their strategies to stay on top of the market’s ever changing demands.
For companies such as Rydoo, that meant changing their business model and focusing on creating the best in-class expense management solution. As the Mechelen based company’s CFO, Noël Rauch, said during an online session during Pigment‘s FP&A Week, at the time, the team took the decision to sell the travel portion of the organisation. By doing so, they could focus on developing the best possible software for expense management that could outshine the competition.
The most important thing is to prioritise, focus on what is important and provide visibility. It’s really key that the whole organisation is looking towards our main goals.
Noël Rauch
CFO at Rydoo
“By concentrating on one business we could become a leader in that category and challenge the hegemony of our main competitors”, said Noël. “We kind of doubled our growth so we could really focus on what is important.”
But that decision only came to be with the right alignment between the whole executive team. As Noël explained during the session, the company has lived through quite a few uncertain periods, but in order to thrive in these situations, communication, visibility and focus on the company’s goals is key. “The most important thing is to prioritise, focus on what is important and provide visibility. It’s really key that the whole organisation is looking towards our main goals.”
The importance of being transparent
Visibility and clear communications plays a major role when organisations are dealing with investments, especially in a moment such as the one we’re facing, where everything can change in a blink of an eye. That’s why, now more than ever, forecasting, continuously staying on top of how a business is performing and sharing these findings with the board of investors is of the utmost importance.
“At Tableau, we had real-time access to data, and we made sure that data was always available throughout the quarter”, Damon Fletcher recalls. “We did weekly forecasts and we knew there was always some variability in which deals come in at the end of a quarter and which deals don’t. But we really understood heading into the print, how the business was performing.”
One of the most important things that you must do is have a great team and have a really strong process for forecasting and continuously evaluating how the business is performing.
Charly Kevers
CFO at Carta
For that to be possible, Fletcher says, having an engaged and motivated group of people to work with and a well aligned process is half the battle. “One of the most important things that you must do is have a great team and have a really strong process for forecasting and continuously evaluating how the business is performing.”
But being transparent also means being realistic. For Charly Kevers, CFO at Carta, having a clear and open communication with internal stakeholders and with the board can also mean saying that you don’t feel confident something might work, by also being able to explain how it will play out in the future.
“We [the Finance team] need to be able to communicate internally but also to our board and be able to say ‘here’s where we have more confidence, and where’s where we have less confidence'”, Kevers said. “It’s kind of finding that right balance of where we think the picture will land.”
The chameleon CFO's
Uncertainty periods can arise when organisations least expect them to, and the last few years have proven that. The best way for finance teams and CFO’s to deal with this incertitude? Staying on top of what’s happening in the market and being able to project what will happen so they can be prepared to adjust to it.
“The most important part of my job these days is, frankly, the macro”, said Charly Kevers from Carta. “Predicting what the market’s going to go given as it’s been all over the place over the last few years, so I know how everything is going to close. Also, understanding the health of, in our case at Carta, the venture ecosystem and preparing the business to, if something happens, we plan as much as we can around the main trends.”
We must make sure that everyone is able to adapt to changing circumstances so that we can also respond quickly to all new challenges.
Noël Rauch
CFO at Rydoo
Planning and preparing can go a long way, but according to Rydoo’s CFO, developing a sense of agility and resilience can also help teams prepare to adapt to anything that may come their way. “We must make sure that everyone is able to adapt to changing circumstances so that we can also respond quickly to all new challenges”, said Noël.
Delegating to focus on what really matters
But in order for CFO’s to be able to stay on top of the market and be ready to face challenges as they come, they need to have the time to prioritise, focus and plan for their strategies. For that, other tasks must be delegated either to other members of the team, or even automated through software. To do this, Charly Kevers works closely with his team at Carta to help facilitate day to day processes. “The main engagement for me, at this point, is finding areas where they’re blocked that I can unblock and facilitate the execution for them.”
For Damon Fletcher, having a strong foundation in his finance organisation was key for him to become more involved in other areas, and it even allowed him time to get to know his customer database and their needs. “I had the opportunity to build a really strong kind of leadership team within the finance organisation that was able to manage those core responsibilities which allowed me the flexibility to participate in business review meetings where we’re reviewing the customer success strategy or the go-to-market strategy.” Fletcher recalled.
The former CFO at Tableau went as far as to say that, if CFO’s have the right team, they should use their expertise to become more involved in getting to know their customers, learning their pain-points and their businesses, and using those insights for strategically planning the future of the organisation. “I think your experience level and having a customer perspective for your sales leaders can be a very valuable tool to help them prepare for sales meetings or help them really evaluate their strategy.”
Your experience level [as a CFO] and having a customer perspective for your sales leaders can be a very valuable tool to help them prepare for sales meetings or help them really evaluate their strategy.
Damon Fletcher
Former CFO at Tableau
Aside from talking with customers and understanding their problems and how they use Carta’s products, Kevers also spends some of his time on external communications. On the one hand, to keep their current investors up to speed on everything that’s happening in the organisation, but also to create new relationships with potential future investors.
“I engage with our investors and to keep them abreast of what’s going on, not just at board meetings but throughout the quarter, making sure they’re aware of what’s going on, given how things move pretty fast in this environment, but also continue to build relationships with potential future investors, making sure they understand the story and, and how the business is performing.”
In the face of uncertain times, the role of Finance teams and CFO’s has evolved significantly. Strategic decision-making is crucial for growth and resilience and modern CFOs have become adaptable, leveraging real-time data for decision-making and effectively communicating insights with stakeholders.
The shift towards customer-centricity offers a competitive edge. As CFOs delegate tasks and focus on strategic planning, they are becoming essential, not only to manage the company’s money but to steer organisations strategically, helping them navigate even through the toughest moments.