This interview is all about the changing role of the CFO in technology companies. And we couldn’t have asked for a better person than Joel Fields, CFO of WTS Paradigm, to talk about it. It’s fascinating. The CFO role has evolved way beyond making sure the financials are accurate. And Joel provides a window into his mind and focus areas.
Here are some questions Joel answers:
-What skill set should a CFO have for a technology company?
-How does Joel spend his time?
-How does he decide to get involved with a project?
-How does he help with innovation from a CFO perspective?
Dave Kruse: Hey everyone welcome to another episode of Flyover Labs, today we are lucky enough to have Joe Fields with us and Joel is the CFO at WTS Paradigm. I invited Joel because I want to talk more about the CFO role at tech companies and how that’s changing, you know, it used to be all about the financials and, you know, looking over the budgets and… but that’s changing and so I’ve invited Joel on the show to kind to see how is it that’s exactly changing and Joel is kind of an expert so I expect pretty big things.
Joel Fields: Wow.
Dave Kruse: So Joel, thanks for joining us.
Joel Fields: Happy to be here.
Dave Kruse: So let’s jump right in. Can you just give us a little bit about your background on yourself and on WTS; what is WTS Paradigm.
Joel Fields: Yeah, and you set the bar pretty high there so, I’m definitely going to screw this up.
Dave Kruse: Super high, super high…
Joel Fields: Background on me, I actually went to school for computer science, graduated degree in computer science, worked as a programmer in health care software for a couple of years, moved into management pretty quickly, I realized that I really enjoyed the business side more, I think it fit my strengths a little bit better, and having that programming background really helped me relate thought to the programmers and what we’re doing as a business but like I said, I kind of migrated more to the management side. I came to WTS Paradigm about ten years ago, started off here in development and product management; so managing a product line of ours. Over the years though, I just kind of bounced around to different roles in our company; midsized company, agile really dynamic company and so I like new things, I like change, I like new challenges in the company obviously a growing company has different needs overtime and so played a number of different roles in this company through our software groups as I mentioned but also in operations, finance, even helping in sales and marketing overtime and ultimately as you mentioned I am currently filling the CFO role.
Dave Kruse: And what do you guys do here ?
Joel Fields: So WTS Paradigm is a software and professional services company. We focus on the building products industry, so essentially we build software for manufactures and resellers of building products, and so the actual companies that make the products and so we have software for the backend manufacturing facility but also the companies that resell into those products to either to the consumer or to the contractor in our industry and so we have sales solutions for those and then the professional services side of it is supportive of that so we help our customers know best practices of the industry, work flow management, training, etc.
Dave Kruse: So I’m curious, so you started out more as the technical developer role, so if there was a developer listening, who wanted to make the switch to the more kind of the business side of things, how do you make that switch, how’d you learn.., you just kind of jump in or …
Joel Fields: Yeah you’ve got to be, as with any change in life, you’ve got to be open to it, you’ve got to be open to the challenge, you’ve got to be open to learning, you’ve got to be open to really changing the way you think and it’s not easy as with many things in life or anything like that but the advice I would give is be opened to it, seek help. I’ve used a lot of advisors over the years both formal and informal and that is incredibly helpful; kind of people that have been there, done that, so whether it’s a role shift like I’ve been through or any other role shift, I think really, don’t underestimate the power of asking for help.
Dave Kruse: That makes sense. So, as CFO can you describe kind of your main priorities or focuses and then how has that changed since you took over at WTS.
Joel Fields: Sure. When I took the role over, it really initially was focused on kind of getting our financial house in order and we had good basic financials prior to that but it really was tweaking our financial system and methodologies and budgeting and all that good stuff that come with it, to really help it resonate more with both our business and our shareholders and so…
Dave Kruse: Can you give an example.
Joel Fields: Yeah, so structuring our financials for our different operating units, meaning our department in the company, had the information they needed in order to continually advance their growth and so that could mean a number of different things but we really did a lot of focus around segmenting our financials, having it role up appropriately and really giving our leaders throughout the company the information they need to make the right decisions and that was most of the groundwork when I was getting into the role. Since then, we now have a really solid foundation, and have for a while, and so the role has evolved as you kind of alluded to. Now, it’s really a lot of it is focused, of course, there is the financial side and working with banks and all that good side that, you know, that go with the traditional role and budgeting and all that fun stuff but really is very engaged with all of our operational teams in helping them with their strategies and build those strategies, develop them and challenge them but really being very engaged with our company that includes, you know, how do we provide better customer service which we wouldn’t traditionally think off from a CFO role but that really, if you step onto the details and think about, it has a direct impact on our bottom line, if we are providing good service, showing more value to the customers it is going to help shareholder value as well.
Dave Kruse: So do have an example how you could help the customer service or …
Joel Fields: Yeah, I think often, at least in my experience, I’ve seen and I’m as guilty of this in the past at times, but finance could be seen as a barrier, you know, you have to hit this number, you got to hit this metric, you got to do those things, so I find myself often now helping people see that, there are other options and especially being in a midsized dynamic agile company, where we can kind of make our own decisions so helping people understand that maybe that metric isn’t the most important thing right now and maybe just knocking the ball out of the park for the customer right now is the most important thing, that would be one example.
Dave Kruse: Well that makes sense, where you kind of give them a balance between the metrics and yeah, more kind of on the soft side almost, which you wouldn’t typically think of a CFO but it makes sense here.
Joel Fields: Well it’s really just helping them walk that line and there is no perfect formula, so you find yourself balancing there, at least I find myself balancing it every day. We do have to watch the financials, we do have to watch the bottom line, we’re a business. But at the same time, you know coaching and challenging myself and others to really make sure we’ve got the right balance throughout the organization, and that’s where a lot of my time goes.
Dave Kruse: Are you part of the conversation with most divisions whether it’s customer service, sales, development, all kind of around the same idea of walking that fine line.
Joel Fields: Yeah absolutely. I wouldn’t say, I mean of course I’m not in every discussion or anything like that but yeah we try to immigrate our leadership team throughout the whole company so it’s not siloed and that’s absolutely true for myself; so some groups more so than others but definitely involved with all different aspects of the business.
Dave Kruse: How do other divisions when the pull you, Joel into a conversation, at what point does it make sense.
Joel Fields: I think it varies, it’s situation dependant. Sometimes I pull myself into those conversations, so sometimes I do that, but you know, I don’t think there’s really a clear answer for that, I think it’s situation dependant of you know, if there’s something that someone thinks I can add value to in the conversation or you know, a big decision in the company and again you know, we’re not a ten thousand-person company, we are small agile, we like to communicate and have lot of people involved in big decisions and so it just kind of naturally happens.
Dave Kruse: Gotcha, okay and I know you talk to other people we had similar roles, do you see this change kind of happening in other companies as well, even outside of tech companies or … … tech companies.
Joel Fields: So I’m mainly in interface with other tech companies but I do think what I’ve seen and it’s not necessarily limited to tech or not but in some companies finance is kind of this department sitting in the corner that you know, tells you the metrics that you need to head and tells you when you’re good or bad and that’s about as integrated as they are but I don’t think that’s very healthy for an organization and I think the finance role really could play a bigger part in the organization. So I see it in both ways, I see it where it is more integrated such as the things I was describing but I also do know of examples where finance is an isolative role that’s kind of the people that tell you what you can’t do .
Dave Kruse: Interesting, gotcha, and who is part of your team, right now, in the finance.
Joel Fields: So the cliché answer would be the whole company because we’re all in it together but really the teams that report up through me right now are what we call; it’s two different divisions of our company, one of them we call internal operations and that group is finance, accounting, HR, administration, legal plays a big part of that, IT; they all live in, what we call internal operations. So, they are all are, what I refer to as the supporting roles of the company and the other group, the other division that reports to me right is our professional services group and so that’s the group that provides those services I was referring to earlier; of project management and business analysis and even some custom programming.
Dave Kruse: And do you see other organizations having IT as part of the, kind of under the CFO’s. It seems like some companies have their IT aspect under the CFO, and some don’t.
Joel Fields: I see it both ways, I really just think it depends on the makeup of the organization on how it works but I definitely see it both ways.
Dave Kruse: Okay. So kind of what is transition and I don’t know if you an answer to this or not but what would you have done differently, did you like, sometimes overstep what you are supposed to do or should you have done more or is there any mistakes that you made …
Joel Fields: No, I never make mistakes.
Dave Kruse: Not ever ? ( Laughs… ) so that’s perfect.
Joel Fields: ( Laughs… ) No… there’s a lot of mistakes, yeah .. and we can talk for days and I don’t think we have days on this thing.
Dave Kruse: I wish, I wish.
Joel Fields: I would say, you know, just reflecting about, you know, my progression through these roles and looking back and one that I would think of absolutely is as I referenced earlier, as I was getting into this role, I had to focus around tightening up financials, really organizing it in a way that resonated well with both our business and our shareholders, but really like I said, kind of tightening it up because it was run pretty loosely as you would have imagined from more of our earlier start up B type of company and so with that …
Dave Kruse: And what do you mean tighter ?
Joel Fields: And so that’s probably the mistake, so what we did is we really put a lot of controls around spending, which again on first glance is a good thing but I think we took a little too far, kind of tightened it up too much where people didn’t feel empowered in certain areas of the company so looking back, if your question is, you know, what mistakes ? what would you do different, that’s probably one; I think we went a little too far with that and when we realized that we kind of quickly unwound it in certain areas where it make sense so that people did feel like they had the right amount of control or right amount of responsibility, the right amount of empowerment but I think early on, as we are getting it kind of out of control, we took it a little too far.
Dave Kruse: And by tightening, did you just miss out on potential opportunities or what’s the problem with tightening.
Joel Fields: No am sure we did, but I think the problem with the level of tightening we did was more so people feeling like they weren’t trusted or empowered with running their area and so I do assume, some side effects for that has missed out on some opportunities, but I think that was the biggest thing and that was the point of feedback and again we quickly unwound that and kind of recalibrated it when we started to get that feedback but we did take it too far.
Dave Kruse: And so we kind of talked about who is part of your team, do you see hiring new skill sets in the future ?
Joel Fields: Yeah, so we being a software company are constantly looking for great smart developers and programmers, technical folks; we’re getting more into data analytics and so looking at those types of roles, absolutely, we are always looking at people in our Professional Services side as well, Project Mangers, Business Analysts, etc., and with those things a lot of my team’s specifically that Internal Operations group, I mean that kind of has to scale with the rest of the company with these supporting roles. So, we do see as technology changes, we are hiring different skill sets, different pointed skills overtime and we’re constantly hiring.
Dave Kruse: And how do you spend your time throughout the day or week, how do you know how much time spend on with the sales team versus going over the budget and how do you allocate it …
Joel Fields: It’s the mixture, I would say some of it is very structured, so in our company we do a quarterly budget, for example; actually we are doing it right now.
Dave Kruse: Cool, exciting.
Joel Fields: And so in those periods there’s a lot of scheduled sessions around that and so there’ll be days, you know, morning to night of budgeting sessions around that. So, there are those scheduled times or monthly financial close or those sort of things that are very scheduled and we have a lot of time components to them and there’s also a lot of insuring that I’m available to be dynamic and reactive in the company and when I was talking about a lot of the role being related to the different operating units and working with them on their goals and strategies, I mean that’s not things that you could go and schedule out and deal with. So I find that my role is, on one hand very structured and scheduled and you got to do these things at this time or help this group get through something at a certain time and the other side though, whether it’s working with customers or our internal folks here, there really is a big component of being available and being dynamic.
Dave Kruse: You time allocation, has that changed ? , you know, as this transition has happened.
Joel Fields: Yeah after we got a good foundation, I would say in the financials and sort of that realm then that’s become more operational, just as far as operating the financial side of the company and more time is being opened up for those more dynamic and strategic things throughout the organization.
Dave Kruse: And how can a CFO of a company innovate more … you definitely talked about how you can help with division, kind of walk the fine line between whether they should head up certain metric or take more responsibility for taking care of a customer but yeah, how else could you help.
Jeol Fields: I think first of all finance can get in the way of innovation and I do see that happen at times in organizations, you know, we can’t spend that money blah blah blah… those sorts of things, kind of being the naysayers of the organizations; that sold, they can’t be the role, rather I think the Financial Team when fully integrated in the company can be an asset to help the business decide what initiatives makes sense and what don’t make sense, what if, we kind of run their course and we should kill the initiative. You know, what we should have double-down on, I think it could be an asset to the organization rather than, like I said in some organizations, I think Finance are the “No People”.
Dave Kruse: Yeah right, how could you help a division decide whether or not to peruse a certain project, … ROI.
Joel Fields: Yeah, I think looking at the ROI, I think someone with a financial background or someone with that perspective brings a different element to the table on those discussions, so there might be some really cool technical project that we are working on that’s really sexy and fun that, that team is fired up about, and maybe, you know, the Finance Team would bring an element of, you know, what really is the market for this product and let’s make sure we are analysing it and positioning it in the right way and not just perusing some fun technology, and how are we developing it into something that will provide customer and shareholder value.
Dave Kruse: You know, that makes sense and so, I think we have a little time left, that’s good… so if a tech company wanted to hire a CFO and right now they are more the traditional…, what will you look for in a CFO.
Joel Fields: I think first of all, if I was looking for one, I would look for someone that’s dynamic and you probably heard me say that word ten times in this discussion. But what I mean by that, is someone that really can sort of flex and bend and relate to other areas of the business, exposure to technology in this person’s background and whether that’s directly or indirectly but as with any industry the software or really technology industry in general is unique and there are unique financial aspects to it but there’s unique people involved in that, unique products and so I think that has a huge plus of having sort of background in a technology company. The other thing I would say is, I think someone in a leadership position, really any leadership position but Finance as well, their ability to take, what are very complex topics and break them down and relate them to people that don’t think about those everyday is an absolute key attribute of success in this role, I think. Again, you know, whether it’s a financial topic that’s really complex like a revenue recognition or something like that in software which does get very complex and being able to present that or talk to that topic in a way that resonates with others that really don’t think about that every day, I think is a key characteristic of success.
Dave Kruse: So would this person be necessarily a controller-type company or could they come from another division and be suited for the CFO role ?
Joel Fields: That’s got to be a loaded question because I came from another division…
Dave Kruse: Well that’s working out.
Joel Fields: I really think it could be either, I think its…
Dave Kruse: But you took time, you didn’t jump from the developer to CFO.
Joel Fields: No no, there are a few roles in there.
Dave Kruse: Yeah yeah, I guess you kind of talked a little bit, but what was your transition from developer to CFO…?
Joel Fields : We talked a little bit about it but really it was, you know, again being in a small midsized company; I like change, I like being challenged, so I kind of jumped into the areas where the company needed so I kind of forced myself into those areas but really to get to your question on the financial side specifically, I had a lot, and still do, a lot of advisors, mentors; created a really nice group of people that I came to rely on heavily for advice, for education for those sorts of things, which really helped me, kind of take a crash course in…, parts of it kind of come naturally, but there a lot of nuances, as there are to any job and that was just completely invaluable for me getting up to speed.
Dave Kruse: I think it would be tough these days to find a CFO also with a good tech experience, I mean, when you say tech experience or exposure, obviously he could be a developer or he could also, you know, be like a Product Manager, what did you have in mind.
Joel Fields: Whether it’s a different role like that or really all I was referring to is having experience within a technology company, it could be a finance person within a technology company, but I think if they’ve been successful in technology companies it shows that they are able to relate to this type of business and whether it’s on financial topics relative to a technology company like revenue recognition or something like that or relating to the employees or the customer base or how to show value, those sorts of things are unique to this industry as with any industry.
Dave Kruse: Alright well, I think we about out of time unfortunately but definitely appreciate Joel, this has been awesome, and a nice tutorial on the changing role of CFO’s, and I mean for me, I didn’t know that CFO’s were getting involved in so many different areas. I mean, I knew, of course they get involved in lots of areas, but I still picture them a little more on the financial role, so this has been interesting and I appreciate your time.
Joel Fields: Yeah no problem, happy to do it.
Dave Kruse: Alright, thanks Joel.
Joel Fields: Thank you.