From CF-No To Strategic Partner |
CFOs have a reputation for control and caution. Some people think their role is to torpedo ideas and tell department heads there isn’t enough money for what they want to do, and to stay within their budget.
While there may be a little truth to that—people who don’t exercise financial restraint won’t become CFOs—decision-making is much more nuanced. In order not to be seen as your company’s chief naysayer, though, CFOs should consider a more transparent decision-making process. Evan Goldstein, CFO at sales enablement platform Seismic, has earned himself the reputation of being a team player who listens—even though he does say no. I spoke with him about how to turn around your company’s perception of the CFO, and an excerpt from our conversation is later in this newsletter.
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If you look at gas prices, inflation and consumer spending, it’s easy to see the economic impact of the Iran war. But if you look at the stock market, it’s almost as if there hasn’t been a war at all. Last week, major indexes closed at record-breaking highs for days: The Nasdaq ended Friday with its 13th consecutive day of growth—the longest streak since 2009. The rally ended Monday, after the U.S. seized an Iranian cargo ship that tried to make it through the U.S. blockade.
At the Semafor World Economy conference last week in Washington, D.C., two top officials who served past Democratic presidents—Bill Clinton’s Treasury Secretary Robert Rubin and Joe Biden’s Senior Advisor for Energy and Investment Amos Hochstein—spoke about the gap between markets and reality. Rubin, who worked at Goldman Sachs before joining the Clinton administration, said there have been other periods during which Wall Street was out of sync with Main Street. For two years leading up to the 1987 stock market crash, Rubin said, the markets were climbing—up until October 19, when the S&P 500 saw its largest ever one-day crash, falling 22.6%.
Hochstein added that traders have the perpetual goal of improving stock valuations. Therefore, if the president says the war’s about to end—something President Donald Trump has said since the first days of the war—taking him at his word is good for valuations. The long-term risks of the war and its impact on companies are never fully considered.
But that could also change rather quickly, Hochstein and Rubin said. If airports in Asia and Europe run out of jet fuel and have to cancel flights, kinks in the supply chain make medical procedures like MRIs prohibitively expensive, or prices go up because manufacturers cannot make bathroom fixtures, the economic issues will come to Wall Street to roost.
But no matter what happens in the war, Rubin said the current government isn’t using a coherent process to make decisions, and that could impact the U.S.’s credibility in the global economy for years to come. He said the U.S. has “an authoritarian figure who operates at extremes, way outside the range of anything we ever debate in this country.”
“I don’t think markets or participants in markets currently are factoring in what, at least to me, seems to be the tremendous potentially long-term damage we're doing in making the war judgments,” Rubin said.
More tech layoffs are on the way, and many of them are happening—according to the companies themselves—because of AI. Last week, Snap announced it was cutting about 16% of its workforce—1,000 jobs—because “rapid advancements in artificial intelligence” will allow the same amount of work to be done by fewer people. Last month, Meta sources told Reuters that 20% or more of the company’s employees would be laid off this year. Late last week, Reuters reported half of those jobs—about 8,000—would be cut on May 20.
While AI is creating a revolution in the way we work, is it really a reason to eliminate that many jobs? On stage at the same conference last week, Scale AI CEO Jason Droege said AI is an excuse for “right sizing” workforces. He said AI is still too unreliable for the important decisions humans make at work—including those dealing with finance.
On the sidelines of the same conference, Indeed CTO/CSO Anthony Moisant—whose company laid off about 1,300 employees last July—elaborated on the reasoning. During the pandemic and for months afterward, business investment was booming and interest rates were low. And so companies were on a hiring spree. A report last week from Indeed’s Hiring Lab showed that we’re still unwinding from this boom, he said, and the labor market seems to be normalizing. Unemployment numbers have been getting larger for 35 months straight, the report said, and there hasn’t been a recession.
The report points out that this doesn’t mean there couldn’t be larger economic trouble on the horizon, nor does it mean that AI won’t actually cause job cuts in the future. After all, just under 19% of firms reported using AI last month, according to government statistics cited by Indeed.
The official portal for refunding tariffs paid under the International Emergency Economic Powers Act—ruled illegal by the Supreme Court earlier this year—has opened, but there are many questions about the process and timeline. It's unclear how and when refunds will be issued, how documentation will be considered, and which issues would be bigger sticking points. According to a CNBC survey of CFOs, about half said they will apply for tariff refunds, but none will pass those refunds directly to consumers, who in many cases paid higher prices due to the tariffs. Part of the reasoning may be preparation for additional tariffs, which President Trump vowed to impose under a different authority.
How To Beat The CF-No Reputation
Because CFOs control the company’s purse strings—and likely got the job based on a track record of careful deliberation over spending—they’re often nicknamed the “CF-No.” Evan Goldstein, CFO at sales enablement platform Seismic, says that the negative perception can be overcome by seeming more open to discussion.
Goldstein, who previously spent more than a decade at both Salesforce and Genentech, talked to me about how to work with the rest of the company. This conversation has been edited for length, clarity and continuity.
When you are looking at investments, what are your priorities and what do you look for?
Goldstein: At a very high level, I look for: What’s the return for the company in the long term? Will it help us achieve the desired goals? I’ve had the fortune of working for high-growth companies for the majority of my career. How do we drive growth? If we make an investment at Genentech, is it a new compound or molecule or an indication that will drive revenue growth? At Salesforce, it was always about the top line. At a high-growth tech company like Seismic, that’s the case as well.
There’s other situations for how we want to optimize. I’ve been at Seismic for four years. We have an internal mantra of better, not just bigger. I think that holds true to how we think about the allocation of resources across the board. It starts with: What’s the ROI?
The other thing is just a little bit of a longer vision. I think CFOs generally are thinking more long term. I talk about this with my CRO quite a bit. He’s about this quarter, the next quarter, delivering booking numbers, achieving a certain goal. And I’m looking three years out, how am I driving enterprise value to improve our long-term valuation?
It’s really about finding that balance. That can come from top line, but could also be about how we make an investment about effectiveness. Think about a software implementation. Is there an opportunity cost of hiring more people? Will it help streamline the connectivity of our processes, of other tools, and things like that?
How do you make it so that you are not seen as a CF-No when it comes to investments?
My peers would say that I am open to dialogue and trade offs. The key thing of what makes a CF-No versus a strategic CFO is how you engage with the business.
You have to know the business. It’s one thing to know how to close the books and accounting principles and all those things, but it’s another thing to know the business, our products, talk to customers. I’m a big believer that it's an important role of the CFO.
It’s also about the way you collaborate. I’m a big believer in the power of questions. Whenever there’s a heightened moment when someone really wants this—’I need this head!’—you just start having a conversation with them and saying, ‘OK, why do you need this head versus that head?’ Or, ‘Why do you think this is going to drive the investment you want, versus some of the other investments we’ve made over the last year?’ “If we didn’t have any additional resources and this is your priority, what would you eliminate to fund this?”
The great power is there’s so many different types of questions. There’s yes, no, open-ended, leading questions. I always think about that when someone’s pounding the table for an investment, I say, ‘Let’s have a conversation about it.’ You don’t lean in and be aggressive, saying, ‘I don’t think this is the right thing to do.’ You have to have that open-minded dialogue, even if you think you know where you’re going to go.
What advice would you give to a CFO who wants to scrutinize investments, but is also trying not to be the head of the ‘department of no’?
Deep dive the business. I spent most of my career in FP&A, and when I would take over a new function, I would understand the business: what the risks, the trade-offs are.
Get to know people. Finance folks generally tend to be introverts by nature. I encourage people to get to know the people running your businesses.
Learn how to collaborate with them. Finance is much more black and white. I had the unique opportunity at Salesforce to interact with a lot of creatives. They don’t think serially. That’s their superpower.
Speak the right currency. They’re in euros, we’re in U.S. dollars. What’s the exchange rate to match those things up? If you just say, ‘Your budget is this; this is all you can do,’ they’re not going to respond well. Instead, ‘This is the dollars that we have. If you were to rank these, how would you prioritize? I’m trying to figure out a way to fund all of this.’ You’re seen more as a partner in a productive way.
You’re not just a finance person. That is your role and responsibility, but executives want more from you. When I first joined Seismic, our former CEO asked, ‘What’s your observation?’ I replied, ‘We’re not talking about customers in meetings enough.’ [What I meant is] at its heart, Seismic is incredibly customer-centric and we need to talk about it more. That’s not a finance thing, but it’s a business value.
Materials manufacturer the Westlake Corporation appointed Jonathan H. Baksht as senior vice president and chief financial officer, effective June 15. Baksht most recently worked as executive vice president and chief financial officer of Fortune Brands Innovations, Inc., and he will succeed M. Steven Bender.
Business and technology solutions consultancy Nomura Research Institute hired Steven Rivera as chief revenue officer for North America, effective April 20. Rivera most recently worked in the same role at Logically.
Hiring platform Indeed promoted Sean McSherry to its chief financial officer role, effective April 2. McSherry joined the firm in 2012, and most recently worked as the company’s senior vice president of finance.
The world of work is changing, and tomorrow’s college graduates need to be prepared for it. Several Forbes C-suite newsletter readers responded to a survey for our third annual New Ivies list, naming 20 schools whose graduates do well in today’s entry-level jobs. One constant factor at these schools? An emphasis on AI:
60%: Percentage of executives who said AI will change their staffing needs
42%: Percentage of executives who are more likely to hire public university graduates today than five years ago
‘Prioritize intellectual rigor over inherited prestige’ A C-suite executive said of today’s successful institutions, as part of the survey
While many auditors’ processes haven’t been changed much by technology, studies have shown AI can be truly helpful to them. The real challenge is framing the reasons for adopting AI in a way that makes them want to do so.
AI boosts employee output, but it also weakens employee engagement. Here’s why it’s more important than ever to make employees feel more connected.
Last week was tax day. After the federal income tax system began in 1913, which of these vices flourished?
See if you got the right answer here.