Strategy

Human-Centric Finance: A Conversation with Andrew Hoag and Marshall Cooper

When it comes to managing people, "there's no cookie cutter approach," said Andrew Hoag, CEO of Teampay.
Human-Centric Finance: A Conversation with Andrew Hoag and Marshall Cooper
Photo: via CFO Leadership Council

One of the many benefits of the return of in-person events is that you never know what kind of conversations you might find yourself in. While attending the CFO Leadership Conference in May, the CFO team had the opportunity to talk with myriad finance executives to learn all measures of insight. But it was great fortune to be able to sit down with both Marshall Cooper, the CEO of the Chief Executive Group, and Andrew Hoag, CEO of Teampay.

Cooper and Hoag were featured in a fireside chat as a part of the conference’s session, and generously offered their time and further insights to continue a wide-ranging conversation. Their thoughts and responses will be broken into two parts. Today we offer part one. 


andrew-hoag.jpg

Andrew Hoag

CEO, Teampay

  • Notable previous companies:
    • President, Ferocia
    • Creator, Founder’s Nest
    • Founder, CEO, Urbantag
    • Founder/CTO, Zwaggle

marshall-cooper.jpg

Marshall Cooper

CEO, Chief Executive Group

  • Notable previous companies:
    • Partner, Greenhaven Partners
    • Board member, AIPAC
    • Board member, Pyramid Research
    • President, Kennedy Information

This interview has been edited for length and clarity.

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ANDY BURT: Thank you for sitting down with CFO. Can you introduce yourselves, and share how did you two end up on the same stage during the CFO Leadership Conference?

ANDREW HOAG: I’m the founder and CEO of Teampay. We started Teampay about five and a half years ago. And Teampay is a solution for mid-market companies to get control and visibility into what their employees are spending. We think of it as kind of a mid-market procurement tool.

And you’re also sort of a serial adviser and entrepreneur?

HOAG: Yeah, I’ve been fulfilling my 10,000 hours. Started my first company where I was Founder/CEO in 2008. Sold that in 2012 and then spent a few years before Teampay consulting and advising with startups.

I did some angel investing on the side and just tried to stay plugged into the tech scene when I’m not running the business.

How about you, Marshall?

MARSHALL COOPER: I’m the CEO of Chief Executive Group. We serve business leaders and help them be more effective in their jobs. Chief Executive started serving CEOs back in 1977. I got involved in 2009 when my brother and I purchased the business and we’ve been growing ever since. We started serving public company board members about seven years ago when I acquired a similar business that had been owned by the New York Stock Exchange. And then about a couple of years ago we started [serving] CFOs as well. We acquired CFO Leadership Council last August.

Marshall, I’m curious — what kinds of CFOs and companies are a part of the CFO Leadership Conference? 

COOPER: I think this is sort of solidly middle market, upper-middle market… There are a few very large enterprises and there are lots of startups as well, but the middle market is really the vast majority of the attendees.

Our organization has always served that middle market. There are 200,000 U.S. businesses that are in the middle market. The middle market is broadly defined as $10 million of annual revenue to up to a billion dollars of annual revenue. There are very few companies above that. Surprisingly there are only 4,500-ish U.S. companies above a billion dollars of annual revenue. There’s a ton under $10 million. And each, at different sizes — organizations have very different challenges. The role of CFO is very different; in fact, most sub $10 million businesses probably don’t even have a CFO.

We find the largest companies there tend to be pretty sophisticated. They have pretty easy access to great resources, consultancies, etc. But it’s the middle market — they have a lot of the same responsibilities as the large enterprises, but don’t have the same capabilities and just dollars to invest in this stuff. So I think that’s sort of our sweet spot. That’s where we find pure learning really hits home and provides tremendous value for participants. 

What would you say are some of the biggest pain points that CFOs in this subset have to face?

HOAG: I think there are some natural breakpoints in there that we see in our customers through Teampay.

There’s this breakpoint of, you hire your first VP of finance and they’re kind of doing everything. And really what they’re just after at that point is leverage. And then right around that $10 million run rate, you start to think about building a proper finance organization. You bring in a controller into the operational side, you bring in the CFO to support the CEO on the strategic side, and you start to build out that organization. And at that point you pass Dunbar’s Number, all your systems break, and you have to redo all the systems.

That’s why the technology component has become so important within that middle-market because you need some of the structure of a really large company, but you don’t really have the resources or the bureaucracy or the time to kind of put all those systems in place.

“And at that point you pass Dunbar’s Number, all your systems break, and you have to redo all the systems.” – Andrew Hoag

It’s kind of the teenage years in some sense where I think there are a lot of challenges that hit CFOs from all directions, and that could include organizational design. Are we staffing correctly? Putting in good controls? You’re now dealing with, as we say, “real money,” right? Because you’re now audited most likely, and you actually have to deal with like tens of millions of dollars that you have to keep track of.

At some point along that journey, you may go public or you may get acquired by private equity. And so now you have external stakeholders with a very different lens on the business and more regulation and compliance than you had when you were a small company. All these things kind of come together in this pressure cooker in that mid-market, which I think makes it a really interesting place for organizations like this.

How do you coach your CFOs that you work with to keep their eye on the prize and to know that these pain points are coming down the road as you grow? How do you prepare? 

HOAG: I think it’s a little bit of giving them a little bit of a roadmap. Here’s what’s coming, right?

We used to talk about this complexity wall — you’re kind of going [forward] and then all of a sudden you hit this complexity point and it becomes exponential, right? There’s just all this complexity that comes at you when you’re trying to now deal with 200 or 2,000 employees and all the subsequent systems. 

And then it goes back to something I mentioned, which is really understanding for that phase of the business, what are the outcomes that are important to the business? And then prioritizing those and being really strict about that prioritization. [This step is] especially for someone who came down from a bigger company — “I know what the playbook is,” right?

But that playbook won’t apply if you’re only doing $20 million in revenue versus $2 billion. We need to be able to understand, where do we moderate on that dial and what are the outcomes that matter for us at $20 million? And what are the things that we can actually say “no” to?

And that’s something I’m always thinking about with my team — what are the things you actually don’t have to do now because we can plan to do later. They’re not super important yet. 

COOPER: The change is accelerating, there’s no one thing that you can do, except be agile and adaptive. That’s the skill that I think will take people through any change.

I do think one of the keys is process design and development. I think people come to the role and, there’s a body of knowledge for sure. You gain accreditation and CPA and all this stuff. There’s sort of security and safety in just doing the numbers. But it’s critical that somebody in this role also takes a step back and understands how to initiate process design and change.

“The change is accelerating, there’s no one thing that you can do, except be agile and adaptive.” – Marshall Cooper

HOAG: And this is what I was talking about with the architecture and process design. It’s thinking holistically about how all the pieces fit together, not just inside the [finance] machine.

COOPER: That’s among any manager, I think it’s sort of rare, but critical to be able to understand when a process needs to be put in place and to be able to initiate that. That’s a sign of a leader and somebody who can help evolve the organization to scale.

Andrew, one of the things that you made as the centerpiece of your talk was this idea of being “human-centric” in finance. You focused a lot on the vertical component — building teams that feel empowered, engaged, and supported — but what about the horizontal component? The CFO’s peers and partners? The rest of the C-suite?

HOAG: I think there are a number of factors coming into play there. It’s the expansion of the role of the CFO right now. Now they’re kind of the number two to the CEO. There’s a lot of external and other responsibilities strategically they have in the organization and that then ties into the other functional leaders, right?

So how do the CFO and the chief technology officer get together and talk about the impact of our roadmap on revenue? What are the revenue numbers? There’s concrete examples of how that plays out staffing levels. Also, partnering with the chief human resources officer on employee engagement and retention, right? How much do we need to invest in talent acquisition versus employee engagement? What’s our retention model? And are there things we can do [as partners] because ultimately the CFO has to understand the operating model for the business.

All of those functional leaders are not only contributing to an operating model, but they’re also receiving feedback as well. And I think one of the things that we’ve gone through is we’ve moved in the midmarket with our own companies. Getting all that aligned, right, is a significant amount of effort and really requires a strong partnership between the CFO and the finance team with the rest of the functional departments. 

How do you see the relationships between CFOs and the C-suite evolving as a company grows and as the job gets more sophisticated?

COOPER: To use an analogy — I think 20 years ago, organizations, for-profit businesses, existed to create profit. But we’ve moved to a multiple stakeholder model. The organization now of course recognizes that they have to serve customers, employees, communities and, of course, shareholders. I think, in the role of the CFO, I see a similar analogy.

A short while ago, it was, work with the CEO, hand in glove, a partnership. And now I do think they have multiple stakeholders and it’s critical that they develop relationships and enable the entire C-suite organization. I think there’s also a tendency to sort of hoard data in an organization. It happens with digital operations and web, etc.

HOAG: Silos.

COOPER: Exactly. I think by freeing the data, it pushes it across the organization and benefits everybody. But it’s a change from where we’ve come from.

Andrew, one of the phrases you said during your presentation really resonated with me. You said, “capital is fungible, people are not.” Could you unpack that?

HOAG: Obviously the dollars that go into the business can be used in a multitude of ways, and this dollar isn’t necessarily tied to this thing, right? The people are not. People have skills, they have talent, they have motivations — the puzzle of people, right?

If you imagine a puzzle, in the “dollar” sense, all the puzzle pieces are exactly the same shape and size and you can move them around and fit them together any way you want. But on the people side, every single piece of the puzzle is different and you have got to figure out how to get that mosaic together. And I think it actually makes the people part of the job, or any job, more complicated. I think for some of the people that I’ve worked with, it’s more interesting in that sense, because you really have to customize and tailor to each individual person.

“People have skills, they have talent, they have motivations — the puzzle of people, right?” – Andrew Hoag

There’s no cookie-cutter approach. But when I think about my role as the CEO, I’m only as good as the people, and that is the delivery mechanism at the end of the day. I can design an organization and try to fit them in boxes. But if it’s the wrong person in the wrong box, I have a problem. So do I change the box or change the person? And that’s the art of the job is figuring out that mutual fit.

Whereas a dollar is a dollar is a dollar, and obviously, there are different costs to how I bring those dollars into the business, but when I’m spending them, there’s no difference between spending this dollar versus that dollar versus the people assignment part is much more complicated.

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Follow CFO.com for part two of our conversation, forthcoming.