Back in 2012, Ben Horowitz published an article titled “Good Product Manager/ Bad Product Manager.” We borrowed from his format as we assessed a key role in a fast-growing company’s finance organization: the controller. (See our previous column, Good CFO/Bad CFO.) Special thanks to Aman Kothari, Darko Socanski, and the Bessemer Venture Partners CFO Advisory Board for their contributions.
Finding the right corporate controller for the scale and stage of growth for your organization is critical. If your company is a small, fast-growing organization, a “big company” controller may be unable or unwilling to roll up their sleeves to lean in and help address your most important issues. If your organization is more mature, an outstanding, hands-on small company controller may have difficulty developing a strong team and thinking and acting strategically.
The “goldilocks” controller has the right mix of skills and interests for your current challenges with the ability to scale the company in the short-to-medium term. As an organization scales it isn’t unusual for the controller to either be upgraded or for a chief accounting officer to be hired over them to help bridge gaps.
Whether you need a more nimble, hands-on controller or a big-picture, strategic controller, here are some common characteristics to consider in the selection and evaluation process.
A good controller can build and lead a strong accounting team. He or she hires the right people for the role and for the team and company culture. A bad controller is challenged on this front — he or she mis-hires and winds up doing all of the work themselves, then complains about it to everyone who will listen.
A good controller organizes for success. He or she designs their organization in a way that optimally supports the business now and that can be flexible to meet changing short-to-medium term needs. A bad controller hires bodies to “get the job done” and doesn’t have time to think about what comes next.
A good controller uses their innate understanding of each team member’s aspirations and limitations to get the best out of them. A bad controller can’t tell the difference between good talent and bad talent. He or she is afraid to upgrade the team because of the additional work they’ll need to do during the transition period.
A good controller sets clear expectations with the team and follows up. He or she sets goals for themselves and their team focused on continual process improvement. He or she asks lots of open-ended questions and learns from the answers. A bad controller does things the way the last controller did them without ever asking why. Bad controllers have no need to ask questions as they already know all of the answers.
At a smaller company, a good controller enjoys being hands-on and is happy with that as an ongoing part of their job, comfortably working both as a preparer and a reviewer. A bad controller in this size company resents having to do the detail work themselves and doesn’t bother to review the work of subordinates.
A good controller “owns it.” He or she is willing to do whatever it takes to get the job done and will work shoulder to shoulder with the team during those long close or pre-audit nights. The bad controller punches out after their 8 hours regardless of what is going on in the office, leaving the team behind to fend for themselves.
A good controller is quick to spread the credit and slow to spread the blame. He or she takes pride in the team’s successes and owns their failures. The same mistake doesn’t happen again because it becomes a teaching moment and a lesson is learned. A bad controller takes credit for others’ successes and blames others when things go wrong. There is no teaching and the same mistakes happen over and over again.
A good controller is super service-oriented and ensures that the finance team delivers outstanding service to its customers (the rest of the enterprise). A bad controller doesn’t believe that finance has any customers and ignores the needs of the other departments.
A good controller communicates well, both within finance and to the broader organization, knowing that he or she is part of a collective team that only succeeds together. A bad controller works in a silo and doesn’t encourage collaboration.
A good controller understands processes, systems, and their underlying data and will work closely with engineering and IT partners to get the best out of their technology tools. A bad controller doesn’t implement systems projects because he or she can’t find the time. Bad controllers hold up the migration from QuickBooks because they like the flexibility to be able to go back to edit closed periods.
A good controller creates accurate financial statements on a predictable schedule and has a plan to improve upon their timeliness and comprehensiveness. He or she understands that getting to a faster monthly close means that the team will have more time each month for process improvement, making the next monthly close even better. In a larger private company, the good controller has a plan to reduce monthly close to a public company timeframe while also maintaining the sanity of the team. The bad controller uses the entire month (or more) to close the books, leaving no time for process improvement and leaving the team perpetually in a state of exhaustion and stress.
A good controller inherently understands and is fluent in the majority of the operational and technical accounting concepts relevant to the business. At a smaller company, the controller might not have the same depth of technical accounting knowledge but he or she will still be fluent in the key concepts so as to know when to ask additional questions or flag issues. The bad controller assumes that the auditors will figure out all of the technical accounting issues in the audit so he or she minimizes their effort expended on investigating them.
A good controller builds a strong and constructive working relationship with the audit partner and is unafraid to engage in honest and open dialog around critical internal issues. Good controllers communicate often and share the common goal of “getting things right” and avoiding surprises. The bad controller dreads every conversation with the audit partner out of fear that his or her incompetence will be exposed.
A good controller is ethically and morally grounded and is unafraid to challenge and engage with others at all levels of the organization in discussions about ethical issues. A bad controller lives in fear for their job and thus will hide from challenging issues.
A good controller projects gravitas and can partner well with executives and others across the organization. A bad controller is uncomfortable when interacting with others and it shows.
A good controller seeks out mentorship and guidance and is focused on self-improvement. A bad controller just “does their job” as he or she doesn’t have the bandwidth to do any more.
Adam Spiegel served as CFO for a series of public and private high growth technology companies including RPX and Glassdoor. Previously he spent over a decade as an investment banker for the Credit Suisse First Boston Technology Group and Prudential Securities, completing transactions valued at over $8 billion. He now mentors CFOs and advises other executives of high growth technology companies.
Jeff Epstein is an operating partner at Bessemer Venture Partners and a lecturer at Stanford University. He specializes in marketplaces and business-to-business software companies. He serves on the boards of directors and audit committees of Kaiser Permanente, Twilio, Shutterstock, and several private companies.