"What company do you know that has less data this month than it did last month?"
Michael Bayer, CFO of Wasabi Technologies, asked this rhetorical question in response to CFO's inquiry about the business outlook for his company and cloud storage. In preparation for this week's CFO Leadership Council Conference, we took the opportunity to ask Bayer to reflect on his own career in finance and how his organizational structure empowers Wasabi to greater opportunities.
CFO, Wasabi Technologies
Lecturer, Babson College
- First CFO position: 1998
- Notable previous companies:
This interview has been edited for length and clarity.
ANDY BURT: How has the CFO's role had to evolve in the last few years?
MICHAEL BAYER: The role of CFO is evolving in so many different ways. Compliance, operations, systems … these are all table stakes now. CFOs are defined today by how they can partner with their colleagues across the business — in go-to-market and product and operations — to help them define, articulate, and reach goals, drive revenue, and do more with less.
CFOs partner with investors to help ensure the business is adequately financed.
And increasingly, they are storytellers, helping to translate the business economics and metrics into a cohesive story, and a strategy for achieving results over the short- and long-term. That story needs to resonate with employees for recruiting, customers for deals, investors for funding, vendors for supply and trade credit, and so on.
"[CFOs] increasingly are storytellers, helping to translate the business economics and metrics into a cohesive story."
And also, CFOs must leverage the value of data, turning data into information. A company’s data could be the most valuable asset it has, but it never shows up on the balance sheet. The CFO should be helping the company think through how to get value out of its customer data, transaction data, market data — adding math to the conversation. That means CFOs need to have more of the “old job” — operator of the business, steward of the assets, counter of the things — performed by an effective team supported by well-integrated systems and processes.
It’s about setting strategy, hiring really smart people, and then setting them free to do the job at hand — and once in a while, helping move a big rock out of their way.
Wasabi operates in a flattened organizational structure. What are some managerial challenges you and the finance team face in this kind of structure?
BAYER: There are no challenges, there are opportunities. Well structured and staffed, a team that focuses on automation, process, standardization, and simplification — can be very flat. Player-coaches are the word of the day, and embracing and leveraging technology is key.
A flat organization does mean employees and managers alike need to have great confidence and collaboration skills. Skip-level conversations and interactions are the norm; teams can’t get caught up in the hierarchy of asking someone’s supervisor to ask their report to ask their report for something. Teams form and disband, and hierarchy is fluid. The best people for any team are generally the ones with their hands closest to the keys, along with the senior oversight to ensure prioritization and appropriate resources.
"Flat organizations mean more opportunities for the team ... It also means, there's no place to hide."
Flat organizations mean more opportunities for the team, too. First job out of school and you’re working directly with the CFO on a project. As an analyst, you’re doing forecasting with the head of sales. As a first-level manager, you’re working directly with the CEO to analyze a key initiative. This means more visibility and opportunity.
It also means, there’s no place to hide. In a flat organization, the roles which are just forwarding emails up and down the organization — the managers of old — are unnecessary. Collaborate, add value, marshall resources, and partner. That’s what it takes today.
You've had the CFO role in a number of companies in your career, and mostly as a CFO of startups. How did you land in this particular niche, and what opportunities do you look for to help these high-risk companies grow in their formative stages?
BAYER: I was fortunate that early in my career I had a couple of mentors who helped me, first to earn my stripes as a financial executive, and then to learn the trade. Once I had done it once, and then again, and again — it’s a role which transcends industry and even company stage. You can learn a formula and apply it to many different companies and situations.
The fun ones are the hypergrowth situations, where the job changes every single day. I’m not one for doing the same thing over and over. In a hypergrowth company, there’s a new opportunity around every corner, and often it’s something that has never been done before or something where you have to adapt multiple different solutions from other situations to forge something new.
What I like about being the CFO of early-stage companies is that it’s far from being just a CFO. I’ve managed every function in the business at one time or another, whether to lend a hand, fill in for a gap, or help drive a function further. Being just a CFO is a lot less fun and interesting.
"What I like about being CFO of early-stage companies is that it's far from being just a CFO ... Being just a CFO is a lot less fun and interesting."
I don’t consider these “high risk.” This is all about “managed risk.” What I looked for when I was searching for what is my current role was simple: “What company is going to be really, really big, fast?” And that’s what Wasabi is. And in looking for how to help them grow, to me it’s all about looking way down the track, designing the finance function for what the business will look like in 12 to 24 months. Because we’ll be there before we know it.
As an example, I replaced Quickbooks with Netsuite early on, so that by the time we were really scaling we already had an enterprise class ERP system in place. To do the transition when we were scaling so many other functions would have been really painful.
How far along are you in building a "best in class" finance team? In your experience, how long does it usually take, and what are the key milestones you set for yourself?
I’m so fortunate to work with a truly outstanding finance team that supports the business. We have great people at every level; we have a combination of deep experience with fresh new perspective; we have great people in every seat.
I always say, “I can teach skills to a smart person,” so I look for people who are smart, quick learners, and who believe in a service model, the partnering model, in everything they do. They will figure out the details if they are smart and have the right core principles.
I can’t even try to guess how long it usually takes; what I can say is it’s worth waiting to get the right people. I can reflect on my hiring mistakes, and invariably, it’s when I rushed to hire.
This lesson is important enough to repeat: IT’S WORTH THE WAIT FOR THE RIGHT PEOPLE.
You have been teaching at Babson College for a number of years — how are academic institutions preparing finance majors for futures in leadership? What has changed in curriculum over the years?
BAYER: I think schools are adjusting to the same trends I spoke of for the CFO role — the shift toward graduating students who have data skills, math skills, communications skills, collaboration skills. It’s hard, because they don’t all come to college — or where I teach, at the graduate level — prepared for the rigors of business. So schools have to expand their charter.
I’m really happy to teach at Babson College — my undergraduate alma mater — where we have a great balance of academically rigorous coursework combined with courses like mine, where I teach "Raising Capital" from a practitioner’s view point, rather than a more academic perspective.
Smart people can learn a lot from YouTube and the internet today; schools need to find the things that leverage the experience of instructors and an in-class, interactive experience.