Nov 15, 2020
Ross Tennenbaum remembers that back in 2018, when he was a managing director at Goldman Sachs, he had conversations with a number of senior executives from Slack Technologies, Inc.
At the time, the fast-growing workplace messaging and communication platform was preparing to go public, and the company was making a special effort to educate bankers and analysts alike about the firm’s business. As his questions became more pointed, Tennenbaum says, he noticed that members of Slack’s senior management team would frequently permit other executives stationed along the conversation’s periphery to supply the answers.
“At first, I thought that they served sort of a chief-of-staff type of role, but what I realized was that when the executive was pressed with a question, one of the sidekicks would always be turned to for the answer,” explains Tennenbaum, who found his conversations with Slack to be highly informative.
Later, Tennenbaum learned that the sidekicks were members of Slack’s business operations team, a cluster of analysts that he describes as being “cousins” to Slack’s finance and FP&A teams.
“This team was incredible: They were so dialed in to the business, and they were partnered with Slack’s executives, which allowed the latter to quickly make data-driven decisions,” says Tennenbaum, who today, as CFO of software developer Avalara, is seeking to borrow a page from Slack and populate his own business operations and FP&A functions with teams of analysts on the ready to inform and supply answers to questions.
“This is about creating not just budgets but also operational plans that tie strategy and tactics to key metrics so that we can see when things are trending up or trending down and be able to more quickly take action,” adds Tennenbaum, who believes that many businesses struggle due to a disconnect between what he calls “top-level metrics” that are being widely shared and reported by the company and decision-making by “everyday operators” often situated deep inside a company.
“How do we make these people feel a sense of ownership of the measure and feel more accountable when it comes to driving outcomes?” asks Tennenbaum, who notes that a disconnect can occur even after a company has made an effort to push a metric deeper into the organization.
“What happens is that they don’t do a good job of updating the metrics every month, reviewing them and quickly assessing where they’re on and off track, and course-correcting,” comments Tennenbaum.
At Avalara, remedying the metrics disconnect is now a top priority for finance.
Says Tennenbaum: “To me, that’s the impactful part of the CFO job.” –Jack Sweeney Subscribe to our Newsletter