Like most corporate disciplines, the world of finance and accounting has undergone a number of evolutions.
Once regarded as mere bookkeepers, financiers now lead top global companies, as they use their savvy to engineer complex acquisitions or enter new markets.
As for the chief financial officer, the role has amassed more power than ever, argues the Economist. Not only are today’s CFOs expected to maintain the financial health of a company — they’re expected to lead it on strategy. What’s more, finance executives are expected to lead when it comes to managing talent too.
Talent Economy spoke with Mark Partin, CFO of Los Angeles, California-based financial controls and automation company BlackLine, on these issues and more. Edited excerpts follow.
How has the CFO role evolved in the last decade?
Let’s take it for two decades, because I think there’s a cycle. And you can see that cycle at work over a longer period of time. Some of this is self-serving, because I do think that the CFO role becomes increasingly more important over time.
The CFO role has moved from the person at the table that just knows the numbers to the person who can use their knowledge of the business model and numbers and the markets and the competition and use that information to elevate the dialogue, the level of growth and to be a contributor to the forward-thinking strategy of the company.
I think as I’ve seen recruiters looking for CFOs, and as I’ve seen CEOs looking for their No. 1, that is a constant — that increasingly they’re wanting a partner that can be more strategic and work more toward the growth of the company.
What’s more valuable these days, a CPA or MBA?
To a budding CFO I think you’ve got to have the CPA stuff covered. I think you’ve got to have street credit, you have to be able to understand that you need to hire a strong controller, but you see more CFOs willing to let that controller take the ownership of the accounting, and I think there are a few good reasons for that.
The reason I’ve been willing to do that is I have a very strong audit committee chair and I have a very strong controller and accounting firm, and so I think the combination of those things, along with the fact that today more than ever I have better tools where I can manage it, where I didn’t have before. But where I can let a group of advisors and team members do that is only because I have the confidence in my tools and in my people.
It is not a career maker; it is a career killer if you have a mistake on the CPA-side, on the accounting side of the house. And the reason I think today’s CFOs are leaning more toward needing the growth is just the requirements. It’s so much more pressure these days at every level to have a seat at the table, to be a contributor to growth, and that’s how, if you’re looking to be a CFO, that’s where I would focus — the ability to be strategic, the ability to be a partner and understand the business.
What skills should young finance professionals look to master?
I think there’s a blueprint, and I’m really happy with that blueprint. You start out in accounting, and you focus in the debits, credits, the closing of the book, the controller level, accounting-level details. I think that still is and always has been one of the best career builders in terms of getting to the financial side of the house.
But I do think there’s a pivot, and if you’re starting your career I think the CPA is a good place to start. I think a Big Four accounting firm and even accounting in an organization so that you’re learning the right things and not the old outdated things. You want to be on the right places, the right tools, the right kind of company, but that’s where you start. And I think you pivot in some point in your career toward the finance side of the house.
As CFO, what’s your perspective on HR and how it’s structured?
Today’s HR should be split. It should be a recruiting function and an HR function, and they operate very independently. Recruiting is about messaging, it’s about speed, it’s about marketing, it’s about putting your best foot forward to recruits, whether they come in, they go out, or they come in and out, and I think it’s an experience that you have to focus on No. 1.
Two is, connected company; you have to be out in the environment. It used to be that you just had to have a good intern or co-op program, but now you need to be engaged in the local universities, the feeder systems, the best companies and the associations, and you need to be very active in engaging that, the same way you would a sales pipeline for prospects. It’s a constant engagement.
Third, I think you have to understand the different markets. Hiring a sales person on a national basis is different than hiring an accounting person in your local market, and is different than hiring an experienced type of role at a senior level. So I think my view is that at the hiring manager level, whether it’s the CFO or head of sales, those are the things we’re thinking about.
BlackLine is a software company based in California. How does it stay competitive on talent given how competitive the local market is?
Two things. One is the benefit of not being in the Bay Area. We think we have a higher loyalty factor so, once you do get them, the ability to keep them is better. And largely it’s not because of the lack of fluidity in the market; it’s due to the lack of craziness in the market that might exist in the Bay Area. So for us, that’s a higher loyalty factor. Getting them is still hard. L.A. is competitive in startups; it’s competitive in the tech corridor.
We are pulling people up into an area just near L.A., so for us we compete through communicating our culture. We’re one of the best companies to work for, year after year. We’re a female-owned, founder-led tech company in L.A. that has scale and a proven track record of success, where a lot of the people that we compete for talent with don’t. We have a good name brand reputation; we’re very protective of that. And by the way, we have had to turn people away because our clients are our best talent pool. They use our product, they fall in love with it, and they call us and want to come work for us. And we did that for a number of years, and we had to stop doing that because our customers would get a little upset about that.
It’s a kind of culture that breeds good word of mouth. Reference is our highest source of recruitment, and that comes from just being in this market with a good name and a good reputation.
What advice would you give a veteran CFO who is entering a startup environment for the first time?
For me, in order to make that switch — which happens a lot, which is great for startups, because they get that value and benefit of a scaled leader — is first be flexible.
Second, focus on the culture. You know we CFOs have been given a bad rap over the years for our personalities and our cultures, and I think what you have to do at that level is don’t try to change the culture; you want to be a part of it, so that comes with flexibility and adaptability.
And third, do exactly what I did. I found my top three people. And that’s my team, and they help me, and I help them, and it’s been a very good way to focus on getting your team together as soon as you can. Be flexible and focus on the culture.