For a group of Silicon Valley CFOs who meet about once a quarter to discuss the challenges they’re facing, the notion that they exemplify a “new breed” of finance chief is an underlying theme.
These folks tend to spend less than half of their time on traditional finance functions like reporting, treasury, tax and investor relations. Instead, they engage in minutely detailed data analysis, drive the sales process and act as lead executors of the company’s business model and overall strategic direction.
The redefinition of responsibilities has been percolating across the CFO population for some time, in a majority of industries and throughout the world. But it may be most developed and vibrant in the technology sector, especially at up-and-coming players in the exploding cloud-based software and services arena.
CFOs of such companies comprise the Silicon Valley group, which has about five core members and a handful of others that make some of the meetings. “We pretty much open the kimono about our businesses and talk about anything we want to,” says Tyler Sloat, who heads finance for Zuora, seller of a platform for managing subscription-based businesses. (The group includes at least two close competitors: Ned Sizer and Dylan Smith, respectively of Hightail and Box.com, both providers of file-sharing services.)
Down in the Dirt
Unlike the majority of CFOs in the prior generation who came up through the accounting or treasury track, most of the group members specialized in financial planning and analysis. FP&A may be the most important skill set for finance leaders at pre-IPO cloud companies. It’s not just that companies are realizing FP&A is vital and therefore hiring more analysts, raising their status and paying them more. It’s that these people are now bagging CFO jobs.
“Thinking about the ‘new breed’ of CFO, the analytical piece is a big differentiator and a reason I was chosen for this role over other candidates,” says Hightail’s Sizer, 47. “Folks like me are in high demand today to solve a data problem.” That is, most companies, but especially online technology companies, have massive amounts of data and must figure out how to use it to drive business performance improvements.
Sizer has “a ton” of experience in data warehousing, running analytics groups and driving product testing and optimization through online marketplaces. He spent the 1990s at Ford Motor Co. perfecting a then-emerging craft: data-driven analysis of profitability by product line and geographic market. That experience led to a series of senior FP&A jobs at well-known technology companies: Siebel Systems, Macromedia, Omniture and Ancestry.com.