What It's Like To Be...
Curious what it would be like to walk in someone else’s (work) shoes? Join New York Times bestselling author Dan Heath as he explores the world of work, one profession at a time, and interviews people who love what they do. What does a couples therapist think when a friend asks for relationship advice? What happens if a welder fails to wear safety glasses? What can get a stadium beer vendor fired? If you’ve ever met someone whose work you were curious about, and you had 100 nosy questions but were too polite to ask … well, this is the show for you.
What It's Like To Be...
A Chief Financial Officer
Forecasting what a business will earn and spend, allocating resources among teams clamoring for more, and practicing professional skepticism without killing the vibe with Steve Love, a chief financial officer. What does it feel like to confess to a board of directors that you've made a potentially catastrophic error? And what happens when business leaders accidentally release non-public information?
IF YOU LIKE THIS EPISODE: Check out what it's like to be a turnaround consultant, a forensic accountant, or a life insurance salesman.
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Steve Love has been a chief financial officer for fifteen years. He currently works for Sift. It's a startup that helps businesses prevent online fraud. I asked him what sparks anxiety for a CFO, and he said,
Steve:Your head of sales tells you, "Hey, we need to talk about the forecast." I can guarantee you there's nothing good coming out of that conversation. They are not saying like, "Oh, my gosh..."
Dan:"Hey, we're ahead of plan."
Steve:No. Never. It's always negative. And you're like, "Ugh..."
Dan:How bad would someone have to miss their forecast before you would actually get angry about it? Like, feel like they had done something negligent or they had just botched it so bad it wasn't just the innocent quirks of the world unfolding.
Steve:Yeah. It's two aspects. One is like the percent. Like if it's, you know, 5% different, oh my goodness, take it, let's move on. If it's 10%... More than that starts to get painful and sometimes it's more than that. The biggest challenge is the why and and when. Are you telling me with like a week to go? And did you know? Did you really know? Or should you have known?
Dan:Yeah.
Steve:Right? Like, these three deals fell out of the forecast, that is to say they didn't close. When should we have known it?
Dan:That last part is key because a CFO's job is not just to make sure there's enough money in the bank, it's to understand the business. So a missed sales forecast doesn't just represent a failure to take in money. It represents a failure of understanding. And when a CFO doesn't understand what's coming, bad things can happen. I'm Dan Heath, and this is What It's Like to Be.
Dan: In every episode, we walk in the shoes of someone from a different profession:a forensic accountant, a brain surgeon, a turnaround consultant.
Dan:We want to know what do they do all day at work. Today, we'll ask Steve Love what it's like to be a chief financial officer. We'll talk about what it's like to tell a board of directors that you made a forecasting error that could be disastrous for the company. What happens if you spill the beans on nonpublic info in a public place, and what it's like behind the scenes when leaders are contemplating a layoff. Stay with us. So I posed a scenario to Steve. I told him, you've been hired as part of a growing retail coffee chain. It's got a few dozen stores, and I think most of us would have a sense of what the CEO would do from day to day, and maybe the chief marketing officer and the store managers. But what does the CFO do exactly?
Steve:It's interesting. I'm in charge of not as many things as I influence, and I help facilitate. For example, first question is, what's our strategy? Say, I'm out in the Bay Area, San Francisco Bay Area. Is it to be the best Bay Area coffee shop? By the way, good luck. There's a lot of competition.
Dan:Right.
Steve:Is it to be in California, West Coast, US, international... And when? Like, what's the strategy here? And what are we known for? We're known for having the broadest selection of varieties of coffee. Or, like, listen, actually, "We make the sweetest coffee you'll ever wanna know." Yeah.
Dan:Yeah.
Steve:Like the... The creamiest and... the sweetest. Right? Whatever it may be. Like, what are we trying to do? And the CFO is not determining that, but you're working with others to put together that plan. And hopefully, you already have that. So let's say that's already in place. You come and you say, okay. Great. Well, like, how am I gonna operationalize that? And financially, what do I wanna do? For example, do I want... what's my dials between growth and cash? Because every business everywhere, if you wanna grow, you have to spend some cash.
Dan:Yeah. Let let's linger on that for a second because I think that probably a lot of people haven't thought about this before. But, like, if you're running a business for profit, that almost implies you want to be at steady state and just kind of turning the screws, getting a little bit more efficient, you know, maybe raising prices a hair in your coffee shops. But if you're in growth mode, you're gonna have to open that new business, and you're gonna have to build out the retail space. You're gonna have to hire staff before you have revenue coming in. And so that's part of what you think about, right? It's just the tension between growth and profitability?
Steve:Exactly. And you build models, and that could be as straightforward as a spreadsheet. It could be tools that use applications to do this, and that could be how you do it, but you have to summarize this in a in a consumable way for people. But you understand all that and say, okay. Interesting. If we how many stores say do we wanna open in which regions? If you wanna gain market share or you wanna penetrate a new market, however you want to grow, it costs money. And the rub is spending that money is a near certainty. Right? The results from that, the yield revenue is not.
Dan:Oh, that's a really good point. So it's like spending is something you can kind of put your thumb on. Like, you can predict spending pretty effectively.
Steve:Oh, yeah.
Dan:But the revenue side, I mean, there's a lot of mystery there.
Steve:Oh, yeah. Just because you're selling the thing doesn't mean people wanna buy it. Right? Just because you open up the new store in the neighboring city doesn't mean people are gonna visit. And so one of the things we do, we as a class, you know, CFOs is is we know with pretty good certainty that that cash is gonna go out in the form of the investment to grow. What we're less certain on is the revenue will pick up. Is it the the new store, the new product, whatever it may be... And so the biggest thing we do is the judgment on, let's say, a percentage likelihood to super simplify it. Okay. My folks who are doing the market research say, these five stores will have this level of traffic, this level of revenue, etcetera. Hey. I love it. And listen. I wanna believe like the old X Files. I wanna believe, but my job isn't to just put that number in. My job also isn't to just assume it's half that number. Just judgmentally, it's half that I might be safe. That probably means I would project using too much money. It needs to be a fairly thoughtful approach. There's no right answer. But if I look at this and say, "Okay. Interesting." I look at data, and I say, "Okay. We think this new shop's gonna sell this many cups at this price over this period of time. Hey, how do we do with our other shops?"
Dan:Right. Because you're trying to reality check all the numbers in this spreadsheet.
Steve:Yeah. And not go overboard.
Dan:You built up this model that says we're gonna do a million dollars first year. Well, what proof do we have for that? How did it go with the other shops? And then what what else could you look at to reality check it?
Steve:Yeah. Totally. Another thing you could look at is what's the concentration of competition in that space. You know? The last one we opened up, there was a Starbucks across the street. This one, the nearest Starbucks, is four blocks away. Right? What's the nature of those? Or, you know, if I was in the the coffee business, which I am in the mornings and in the afternoon for personal consumption. But if I'm in the coffee business, I'd wanna say, like, is there something about coffee consumption that I can see? Can I see, you know, pounds of coffee purchased in a ZIP code? Then, like, all things we do when we put together a forecast, we talk to other folks, and we get buy in. Rarely is it us saying as a CFO class saying, "Here's the number." You work with your colleagues to come up with the best number possible.
Dan:And are your colleagues usually too optimistic or too pessimistic?
Steve:You're almost always too optimistic.
Dan:Okay.
Steve:My career has been almost entirely in tech, you know, like software and life sciences.
Dan:Mhmm.
Steve:And so I get to work with these founders who have an idea, and they not only have the idea, they've then put into practice. And then they hire employees. They sell the product. They sell it so much and have so many employees. They need to hire a CFO. And you don't get there by being a doubter. I think you get there by not being necessarily optimistic, but you probably are, but by pushing through past the objections, past the hurdles. And so that is at times gonna be a little bit of friction with saying, "Okay. I hear you. Maybe we would sell a million dollars, you know, of coffee in the first year. But the data says we did $800k at this other store. We did $750k at that store. We did $685k on that store. It seems like that's kind of tightly correlates." And so you typically deal with optimistic folks, not just the founder, but salespeople are generally optimistic. They always think they're gonna do it. But typically, you're working with people who tend to be optimistic. And so you need to bring that perspective to it, but based in data, because the last thing you want is to be the naysayer, the, you know, the "CF-no", as some people call it. Right? And and it by the way, it's not fun. Like, everyone wants to get swept up in the excitement, but that's not the gig.
Dan:It almost seems like you have to be a professional buzzkill. It's like you have to just temper the excess optimism of the the founder and, you know, VP of Sales and whatever.
Steve:Totally. You you don't wanna be a party pooper by any stretch. There's a great phrase. I started my first seven years was as an auditor for a big firm, And one of the phrases was you have to be professionally skeptical as an auditor. Now, an auditor is a third party, and you're you're actually technically independent both in appearance and in fact as is defined. And so for an auditor, you need to be professionally skeptical. Now, I'm by no means independent, man. I am part of the company emotionally, for sure, totally bought in, but I still have to bring some of that professional independence. Right? That professional skepticism to this idea. And I explain it to people. Like, "Listen, I wanna believe. But..." You know, or "And..." I try to use an "and" versus "but". A buddy of mine told me that, like, thirty years ago, and I still try to use it."So, I wanna believe. And here's a couple questions I have."
Dan:What is your most important work product over the course of a year? Is it a budget or a forecast or...?
Steve:You know, it's interesting. I think it used to be, "Here's the financials." But the role of a CFO and other roles too, but the CFO in particular has changed. It's gone from what are the results to why are the results what they are.
Dan:Oh, that's interesting.
Steve:Yeah.
Dan:Say more about that.
Steve:Yeah. So, you know, were we on our number? Like, top line. Pick two examples. Why was growth what it was? You know, your budget was $10,000,000 and it turned out to be whatever. Why is that? Well, because we booked less. Well, okay. That's not a good answer. Like, why? How much of it was the new logo versus expansion? Right? New logo? It's a new customer to you.
Dan:What do you mean by logo?
Steve:Yeah. New logo is a new customer. Expansion is you sold more product to the same customer. They already were a logo. It could be more customers chose to leave your platform. That's called churn. Right? All these factors. So what is it and why? And if I'm the board and the company, don't, like, lay out, like, 18 slides for me. Give me the top reasons.
Dan:So the top leadership and the board are expecting Steve to be able to make sense of these numbers in a simple way. Like, okay, we did a good job winning new customers, but we didn't do as well as we thought we would in selling extra services to our existing clients. Steve is like the financial Explainer.
Steve:I try to summarize it in that fashion. Have all this detail, immense amount of detail that all rolls up to a budget and then forecast as we go through. And I try to bring all that together, but summarize it in a way that that is simple to understand, but still gets the point across on the major drivers.
Dan:You know what's so interesting? I feel like the impression I'm getting is that you're like the tire-kicker-in-chief or the assumption-tester. You know what I mean? Like, it's almost like you're a Wall Street analyst of your own business just trying to understand it backwards and forwards and understand how the clockwork fits together. Is that right or am I off track?
Steve:Oh, totally. And it's fun. As a CFO, I don't code or market, sell, or support the thing that we do. But I need to understand all of that, at least adequately, to do my job.
Dan:Mhmm.
Steve:Right? And that's hard to do. Right? Like, you're a CFO with whatever background you have. But you try to understand, like, "Okay, what's that product?" Like, "How do we architect it? How did we code it? How did we market it? How do we market it? How do we sell it? How do we support it?" All those things to understand, like, when something like "Who should get the investment?" Right?"Who should get the spend, the operating expense?" But it's not just about, like, "I'm asking you a question to cut your budget." It's really about like, "Help me understand what's going on here and and how your business runs and what do you need?" We may actually have a suggestion to add more resources or reallocate within teams.
Dan:That's a really good way to explain it. Because I I think a lot of people may hear chief financial officer, and they think bean counting, budget review, hey, your expenses were over by 3%. What's going on, bub? You know, that sort of thing. And really what you're saying is, look, "Any enterprise has fixed assets." Like, there's some limit on the amount of money you can spend this year. And your job is to understand the microeconomics of the business so well that you know, "Hey, if we've got some money to spend, it would be smarter to spend it over here than over here. Over here we need to trim. This is a place where we could use more investment." So it's not about spending less or tracking spending, it's about taking limited resources and plugging them in in the best possible way.
Steve:Totally. Resource allocation.
Dan:Hey, folks. Dan here. In our ongoing mission as a podcast, to grow up and leave the nest, We're getting serious about finding sponsors to support us. We actually have a new guy on our team that's gonna lead that mission. Our dream is to find a single sponsor that would back the show for, say, a year. That would keep the noise factor down for you and frankly for the sponsor too so that their message can stand out. So here's the ask, if you have a contact at an organization that that might make a good sponsor or if you work there yourself, please shoot us a note. So just to be clear, we're not fishing for ideas about who to approach. Like, "Have you guys thought about approaching Microsoft...?" No. It's it's more like actual human contact info of potentially interested parties. So that new email address is partnerships@whatitslike.com. And if you forget that, it's right there in the show notes. Who knows? Maybe you will be the person who helps us get the show on firm financial footing. And speaking of which, let's get back to the CFO. Steve once worked for a public biotech company as the VP of finance. That's one rung down from the CFO. So he had created a forecast of how much money the company would need to raise to complete what are called phase three trials, which is where you test a new product with a lot of people just before seeking regulatory approval, like with the FDA. His company shared Steve's forecast with potential investors.
Steve:So it was like, for example, you are funding us through the end of our phase three trial. We were a biotech phase three trials. We try it in humans and prove, does it work or not compared to what you said is the target. And so we raised enough money to get through the end of our phase three and report. Huge. Great. I'll give you money. We're good. Shortly after we closed it, I realized there was an error in my forecast model.
Dan:Oh, no.
Steve:Oh my god, Dan. It was terrible. And I could just remember what that felt like. This chill goes through your entire body and you think, holy bleep.
Dan:I'm feeling it right now. I wasn't even part of it.
Steve:Oh my god. And you're like, oh. And then you furiously recheck it, and then you start to accept it, then you recheck it a few more times. You're like, "No, like, that's the number." And it meant that we would run out of money before we reported phase three data.
Dan:Oh, no.
Steve:Oh my god. It was terrible.
Dan:Steve had the unenviable job of telling the CEO and the CFO this news.
Steve:Uh, it didn't go over well. And they said, "Okay. Well, the board meeting is coming up and you could tell the board."
Dan:Oh, they're gonna make you deliver the news personally."Here's the yahoo that made the mistake. Come on out."
Steve:Yeah. Exactly. So I made the comment and one of our investors who was on the board in particular got pretty upset. And, oh my god, I'll never forget it. And, you know, had a few comments about it, which I totally understand. One might say it was a little mean spirited, but like I totally get it, man. This was terrible news that I delivered. So interesting postscript. We didn't run out of money before phase three because some of the assumptions we'd made around timing of payments for these huge trials, they were gonna take much longer. They ultimately took much longer than what we expected. So we were later before we needed to get within a window of saying "We might not have enough cash to get the end of these phase three trials." Before we got there from a public disclosure perspective, we found the countervailing trend of, actually, the payments are gonna be made much later than our updated assumption was. So we do "Yippee. We have enough money." But it's interesting. I think credibility is hard fought and quickly lost. And I do think the first iteration of that that error that I found did cost me a fair amount, you know, even though ultimately it didn't turn out to be correct.
Dan:On this topic of running out of money, I asked Steve whether he'd ever had to oversee layoffs.
Steve:Oh, a bunch. Well, a bunch. I mean, to be cavalier. Oh, yeah. Yeah. At the different companies, you know, two sizable ones in the last three and a half years. You know? And the press has been full of the number of reductions of companies. Right? And, you know, through early '22, 2022, companies large and small added a lot of people. And then the revenue growth decreased significantly to, like, single digits for many companies. And that meant that you didn't need all these people, all these positions, and other initiatives like, you know, you know, agreements to buy stuff from other parties, and you had to reduce it. And the biggest item in there is people. So yeah. And it's terrible. You know, it's not fun, but it's part of the job.
Dan:And it's so interesting... I mean, these conversations must be so fraught because, I mean, it's just a product of guesswork and trust in each other to make these really, really important decisions because there's nothing else that you can rely on.
Steve:Oh, yeah. And I'll tell ya, here's an example of my last company. We had a board meeting in June of 2022. So for high-tech companies and more companies too, but high-tech in particular, there was a huge decrease in new customers signing up and existing customers buying more product. Right? And that started in spring of 2022. And most companies had a rough Q1, which that was a Q1. March or April. And by rough, I mean, they didn't generate the level of new business, new revenue that they had targeted. And everyone said, "Okay. Well, that could just be a hiccup. Let's see." Good times have been rolling, Dan, for, like, ten years. Someone's like, "Oh, listen. It could recover." Well, Q2 started, and it looked pretty bleak, not just for us, but public markets reflect all this. And so my CEO and I and our and our, you know, our fellow execs, we worked on a plan for a reduction. And we went to the board and we said, "This is what we wanna do." And one of the board members who I love, great guy, practical, smart, engaged, everything, he said, "You know, you just hired all of these sales reps." True. We had a huge push. All these new sales reps were hired. There's a thing called "ramping". You hire a sales rep, and it takes time for them to learn the product and get productive. So they ramp. And then at the end of the ramp period, maybe nine months, you expect they start booking deals, booking revenue.
Dan:Mhmm.
Steve:And so the the board member said, like, you know, you don't know yet what's going to happen. Right? This may just be a blip. And he sits on many boards, super informed and balanced guy. He said, "You just don't know."
Dan:That is excruciating. God, what a decision to have to make.
Steve:Totally. And we had gone through and done a plan, at least, like, not by person, but we identified where we would reduce costs. So we said, "Okay. Hey. We get it." He's like, "You don't wanna be here in next quarter telling us..." because board meetings are quarterly."Next quarter, telling us that, boy, you sure wish you retained all these reps." We're like, "Okay, got it." Well, two months later, not three. Two months later, it got worse for everybody. Right? Nobody was immune to this. And then we did a material reduction. And, like, it was so clear across the industry that the board understood what we were doing and they were supportive. But yeah. And so you went through all the emotion. It's easier. I appreciate that the emotion of planning it is different than the emotion of being impacted, right? Being one of the people let go. I totally appreciate that. And it's challenging to plan it and work through all these things as well. So to do it and go to the board and say, "This is what we're doing", and they're like, "Feedback is no." Okay. And then two months later, you're like, here I am again, you know? And it was more extensive. But, yeah, there's there's no one right answer. And even if you know you need to reduce your expense, is that the right number? Is your assumed revenue, is that the right number? Will you hit that? Will you do better? But, like, that's the uncertainties, but that's what we do. We try to... You know, in finance, but more broadly with everybody, particularly the execs is, okay. This is what we think could happen. Here's a couple scenarios, and let's work on one and then develop that one and co-create and co own that scenario that we implement.
Dan:What's the difference in the work between being like a public company CFO versus, you know, a small, fast growing tech startup like you're in now?
Steve:Oh, yeah. The public company aspect is so much more on compliance and in, you know, SEC compliance, which is pretty extensive, and investor management. And that investor management also has its very strict rules around that.
Dan:What does investor management look like for people who have just no exposure to this world?
Steve:Oh, totally. So people own stock in your company, could be a share, and they call you up. And they say, "Hey, what's going on with your company?"
Dan:Wait. Somebody off the street will call you up?
Steve:They may. Good news is there's a thing called "Regulation FD" or "Fair disclosure" that you can't tell any one investor or a subset of investors anything that you wouldn't tell everybody. And so you can then say, we call it "Reg FD", "Regulation FD"."Reg FD, I can't disclose more. However, I'd like to direct you to our press release on our earnings, our public comments at this investor conference." But you spend a lot of time there. So someone can call you."Hey. I've got a 100 shares, and I think you guys blah blah blah..." whatever their comments may be, which is delightful. So some of that, the biggest work on investor management is in going to conferences. Lots of conferences where you typically present the business. It could be the CFO. It could be CFO, CEO. Typically, two people, and you kinda share that. And you have forty five minutes on the stage, and then you have a series of one-on-ones.
Dan:And who's in the audience?
Steve:Oh, typically, investment professionals who either own your stock or don't, and they're determining, do I stay in? Do I or do I do I buy some of that stock?
Dan:So this is basically a sales pitch. Yeah?
Steve:Oh, yeah. Yeah. So, like, you are a salesperson for the company in the context of the rules that surround you. Right? Like, you can only discuss certain things. You carefully manage what things I do talk about. Because once you disclose a thing, like here's our revenue growth rate or an operational metric. Once you disclose something externally, you have to be prepared to continue to disclose this. Right? Because it's once it's out there, you have to disclose it all the time. You don't have to, but if you don't, then people assume, as always, if they don't know why, they assume the worst, they'll say, "Oh, interesting. You stop sharing that metric with me because it got worse."
Dan:That's so interesting. Is it hard? I mean, I'm just curious about the actual... I'm picturing you on stage in a ballroom somewhere and there's investors in the crowd and they're asking questions, and I'm sure they're smart questions because these are people managing billions of dollars, and you're having to, like, constantly self-monitor, like, is this public? Can I say this? What can I say? And so it's like you have to do all the normal work of answering a hard question, but also the meta work of honoring all of these securities regulations. What is that like, that experience?
Steve:Oh, yeah. You have to be very focused and disciplined in what you say, and that's part of the reason this takes so long. Like, there's sessions that you set up as a CEO, CFO, your general counsel, that's your head of legal. And there's a role called investor relations where they're the primary point-of-interaction with investors. And then they'll set up the meetings. They'll help draft communications. And you talk for, you know, hours before an earnings call. And then you actually draft a literal script.
Dan:Just to make sure you're not going too far or...?
Steve:Completely. So you actually draft a script. And so when if it feels like people are reading in these earnings calls, it's because they are.
Dan:How about that?
Steve:And then you're in a conference room. So then when you open up to questions, you're then all looking at each other and you're writing things down of how you wanna reply. You have a big whiteboard and someone can note there. So as the person's asking the question, you're like, "Hey. Hi. I'm Steve from Love Securities, and thanks so much for taking my call. I have a question about your growth rate. How much of that was due to your business in Asia Pac?" Well, hopefully, you've got these big sheets in front of you with all of your operational metrics. Right? You could well, hopefully, you may already know. But if not, you consult your sheets that are laid out right in front of you on your on your conference room table. Or if you don't, someone is probably up on the on the whiteboard scribbling something out.
Dan:Like one of your colleagues is giving you, like, "Talk about the Hong Kong business or something like that." Yeah.
Steve:Yeah. Because it's... there's a sales component. They'll say, "Hey, mention the new product..." remember that we talked about during the script. They'll say, "Reference new product in Asia and Asia uptake." You know? Hey. So you'll say, "Well, our business in Asia did this or that because of this primary driver. And as you mentioned, we have our new product, which we think is gonna be really great for the Asia Pacific region." Right? So it's a bit of a ballet as you're working through the questions, but all this takes a lot of work. So, what am I saying? Only say what we wanna say. Be facile enough and familiar enough with all the information to be able to be audible ready, you know? And there's certain things you can't say.
Dan:What do you do if you say something you weren't supposed to?
Steve:Yeah. So here's a funny story that sounded terrifying to me. There was a CFO, very experienced, and it's very large high-tech companies. And he was out to dinner, and this is just per what's out there, press. And he was out having drinks at dinner and said things at the dinner that was not publicly disclosed.
Dan:Mhmm.
Steve:So then that firm, big one, needed to then do a press release to "cure" the issue. Right?
Dan:Oh, to cure it. That's a great word for it.
Steve:Yeah. So now you had to issue a press release. Hey, "By the way, blah blah blah. And here's the content that this individual disclosed at a dinner." And if I'm not mistaken, I think that person did that twice.
Dan:That's so funny. So you have to do this CYA thing where somebody's like, "Oh, Rodney spilled the beans at dinner again last night. Get the press release ready."
Steve:Exactly. Exactly.
Dan:So, Steve, we always end our episodes with a quick lightning round of questions. Here we go. What is a word or phrase that only someone from your profession will be likely to know and what does it mean?
Steve:BVA. It means budget versus actual.
Dan:Okay.
Steve:So you have a budget. Well, what was the actual for the month or for the quarter or for the year? And then, course, why was it what it was? What does that how does that inform what you wanna do next?
Dan:What is the most insulting thing you could say about a CFO's work?
Steve:Well, bean counter, you know, or "You only look to the past." Right? Like, "No, absolutely not." Like, listen. The past is critical to understanding the performance and the why, right? What are the drivers? And to use to predict the future. So the past is critical, but that's only part of what we do.
Dan:That's I think that'll be counterintuitive for a lot of listeners too, just the idea that so much time is spent just kind of grappling with the way the future could unfold and trying to be ready. Right? Like, you don't wanna miss your sales numbers by 6%, and then that means you run out of money to pay payroll. Right? You you have to be, like, testing these different scenarios and their implications.
Steve:For sure. Especially in uncertain times. And, oh, man. Like, don't know about you, but I'm so tired of reading the word "uncertainty" in all the... I mean, this is, like, off the charts. Like, I really would like to get to something more certain, but, of course, we all would. So, yeah, at times like now... I was talking to another CFO who said she has scenarios for her scenarios. And that sounds exhausting, but I get what she's talking about. Like, I I understand that approach, especially at times like this.
Dan:Being a CFO doesn't sound like a laugh-a-minute kind of role, but Steve said sometimes it can be fun. He worked for a company called Dialpad a while back. And there?
Steve:I could be probably the most me from a humor and fun perspective that I ever was or ever will be. You gotta be a little careful. Right? You're the CFO. People expect certain things. You're not up there doing stand up. Right? Even though, you know, I try to have a lot of fun. I had one chairman of the board tell me, at my first CFO gig, he was like a captain of industry type. He's a Brit with a very heavy English accent and, like, super successful. And I asked for feedback and he gave it to me. And he said, "Steve, people expect from the CFO a certain level of gravitas." And I'm like, "Okay. So you're telling me I don't have it." It could have been cultural. Right? Like, I'm working in Silicon Valley. He's a captain of industry who had been, like, CFO of very large firms and CEO of one or two. And so it could have been cultural, but still, hey. It's a good point. I appreciate the feedback.
Dan:That gravitas comment is kind of interesting because it does seem like the CFO, you wanna cast someone who's like the most sober and the most adult of the people in the room. Like, do you feel a sense of having to live up to that?
Steve:Oh, yeah. And it's been a journey to get there. So, like, going all the way back to when I was in college, when I thought accounting's the thing for me, and I realized I was in my junior year, I was surrounded by all these folks who, you know, they were stereotypical accountants. And I felt like a total oddball, Dan. You know? I was going to Grateful Dead shows, hanging out with my friends, having a great time. I love to chat and talk, you know? And I felt like an oddball. Maybe a little bit in life, frankly, but certainly in that context. But how I came to think about it was there's a lot of people like that, like the stereotypical accountant. But if I could have great technical accounting chops, right, skills and then build that into a practice of, like, skills, right, while being me, I would not be the flavor maybe for everybody. But people would say, "Oh my goodness. Like, that guy, he's got the skills, and I could relate to him. I could communicate with him. I wanna hang out with him." And so that was the persona. That's the approach I took into work. And I worked for a huge firm. Great experience, seven years. And I definitely I think, I think, I definitely, as intended, stood out a little bit. Sometimes it was good. Sometimes it was bad. But, like, I also had to learn how to tone it down.
Dan:Mhmm.
Steve:And earn the right to then show the personality more, the differentiated - hope what I think is - a differentiated personality, especially at the lower levels. The CFO, probably even a little bit there too. It's a little different. But where I work, people love it. Well, some people love it, and that's okay.
Dan:Steve Love is the Chief Financial Officer at Sift. In the episode, I referred to CFOs as professional buzzkills and tire-kickers-in-chief, which I confess were somewhat glib and borderline insulting labels to apply to a job that exists for one critical reason... to eliminate surprises. Right? Investors hate surprises. Boards hate surprises. It's the CFO's paradoxical job to anticipate surprises in all their forms. Blown sales forecasts, ballooning supply costs, lagging efforts at retaining customers, the CFO has to see it all coming. And this is pretty unfair to the CFO really because it means anybody's mistake ultimately redounds to the CFO. The head of sales misses a forecast, it's his or her failure, and it's the CFO's failure for not seeing it coming. Steve said,
Steve:As a CFO, I don't code or market, sell or support the thing that we do, but I need to understand all of that at least adequately to do my job.
Dan:Because he's the guy who's relied on to squeeze out the surprise. Balancing growth ambitions against cash realities, fielding questions from boards and analysts, recalibrating budgets versus actuals, and practicing professional skepticism without killing the vibe. Folks, that's what it's like to be a chief financial officer.
Dan: A shout out to recent Spotify commenters:Chameleon's Pride, CraigWise, Daniella1994, and Shane Spell.
Dan:This episode was produced by Matt Purdy, who by the way is sitting right across from me in this room. I see him. He's real. This is the first time we've actually been together in person after all this time. I'm Dan Heath. We'll see you next time.
