Provide energy to the team and the CEO

The output of a startup is a function of luck, talent and energy, with complex relationships between each variable.   But I would bet that energy is the most important variable, particularly in the earlier stages. Founder (and/or CEO) energy is magnified in an organization because most people dedicate more energy to the startup when they see the founder provide energy.  In the role of CFO, possibly the most impactful thing you can do is to provide energy to the founder. Focus on what is working. Solve problems for the CEO. And most importantly, don’t do things that suck away energy. Some things that suck energy are obvious since they apply to most people (e.g., being overly problem-oriented) and some of what sucks energy depends on the person you work with.  Be acutely aware of what stifles the founder’s energy and just don’t do it. If you become good at managing energy, you differentiate yourself significantly in relation to the typical analytical CFO. 

Note, this does not mean hiding bad news. Good CEOs want to know the bad news, but they also want it delivered with perspective and calmness. In fact, knowing they have a partner to help them deal with bad news can be a tremendous source of positive energy.

First, do no harm

By the time a startup hires a CFO, it has had success in some areas. Companies are complex organisms and as such it is hard to understand the full effects of tweaking certain variables.  As a new CFO, you will find lots of things that you want to change.  But be careful and be curious as to why things are the way they are. Spend as much or more time on understanding why things have worked than on what needs improving. Ideally, you have already spent a lot of time on this during the hiring process.

Being on the same page

There is nothing children spot faster than when their parents are not aligned.  The same goes for the team when the CEO and CFO are not on the same page. However, you should also disagree frequently, since you have different perspectives and many decisions will be difficult. You must invest time to resolve differences and be willing to disagree and commit. In order to not spend too much time or energy on disagreements, you both must know how to choose your battles. 

There are enough complexities for the team to manage in a growth company - trying to understand whose lead to follow is a terrible waste of time.

If you believe in your space and your team, you should never give up

The world is not short of value-generating problems to solve.  However, it is difficult to develop a formula to solve a problem in a way that creates value for the customer and the company.  If it was, it would have already been done. But if you keep iterating with focus and energy, it becomes much more likely you will succeed. It’s just really, really hard to do this for extended periods of time for most people (myself included).

This essay by Paul Graham says it better. 

http://www.paulgraham.com/die.html

Assume good intentions

People will do things that frustrate you. You will ask someone to do something (or at least you will remember it) and they won’t do it. They will make stupid mistakes.  They will take shortcuts when they shouldn’t.  If you assume good intentions when addressing any issues, it is much easier to uncover the source of your frustration and be open to different inputs and solutions. If you assume bad intentions in the other party, 95% of the time you will blind yourself to the real problem and the best solutions.

Know your strengths.  Know the CEOs strengths. Know both your weaknesses

It is important to be very clear with the CEO about what you are good and not as good at. This will save lots of time in difficult situations. You must also know the same about the CEO.  Many CEOs aren’t naturally open about their strengths and weaknesses, so you can’t necessarily count on them telling you. If you get this right, it enables more focus on complementing and not competing.   

Self-awareness also helps you build a team that fills your weaknesses.  For example, I am not naturally detail oriented, which is an important skill in a finance organization.  Knowing that I have a very detail oriented person on the team balances my preference, and also raises the bar for me to be thorough when necessary. 

Decisions, decisions, decisions

Your job, and the CEO’s job, involves making many decisions. Quick decisions are (mostly) critical. Many times you will get the first decision wrong.  But this is just information you can learn from, and information you would never have had if you had waited.  

Sometimes seemingly illogical decisions are made to send a signal to the organization. For example, you might “fire” a customer that doesn’t fit the target market you want the organization to focus on. The mantra “hard decisions, easy life; easy decisions, hard life” applies to companies too.

You can and should sleep on the bigger decisions. Procrastination has its purpose or it wouldn’t have survived as a human trait for so long.

CFO is an HR position

As a company scales, more and more of the CEO’s job becomes HR.  Recruiting, motivating, re-organizing, firing, training, compensation.  If you want to really be the CEO’s main partner, you must have opinions and spend considerable energy on these areas.  And in order to be effective here, you must get to know the different parts of the organization.  Have regularly scheduled meetings with the different leaders.  Understand their challenges.  You can often be a great advisor on how they can be most effective with the CEO.