In the last post, we looked at the reasons for outsourcing or insourcing finance functions. In this post, we would have a brief look at finance resources needs, who should be your first finance hire, and why attitude is important.
Finance Resources Request
When finance teams request resources, they must be listened to and given the same consideration (if not more), as you would with other functions, such as sales, marketing, or product development. The reason is, the team needs both infrastructure and human resources to be operating at a level the company would need in 6 or 12 months-time, proactivity is very important. If such a decision is delayed, there would be a higher price to pay at a later stage.
First hire in Finance
Typically, a hands-on Finance Director (FD), or Financial Controller (FC) would be your first finance hire. At times both titles are used interchangeably. If not, an FD is a little more senior than an FC, he or she would very likely have more experience at a strategic level, compared to an FC. The FD or FC should be able to set up the infrastructure necessary to in-house your finance functions.
As a founder or CEO, it is very important that you listen and strongly consider their requests when they inevitably come. As the first hire, they can make so much difference to the foundation of the company and its future. In fact, they would play a significant role in the foundation on which the company’s success is built.
The strongest of them can add value in sales, marketing, operations, or legal setup and should not be classed as “just an accountant”, those archaic days are long gone. They may not have the answers, but they can certainly contribute. Please note, this hire is not a substitute for those specialised roles, rather a team player and valuable business partner. At this very early stage, it is about hiring a generalist-specialist, who understands the needs of a start-up company, even when the tasks are not in their job description.
The powerful asset (differentiator) is hiring someone who can think operationally with technical financial knowledge. They should have also experienced the challenges of being a finance lead (outsourced or in-house) in start-ups and the priorities short, medium, and long term i.e six, twelve, and eighteen months, in the start-up ecosystem specifically.
Finance Team Needs
By assessing your current infrastructure (if any) or finance setup, your first hire should be able to set up the architecture for your financial reporting, business intel (BI), internal control, purchasing system, financial planning and analysis, treasury management e t c. This would help create a solid foundation for the finance team. A start-up will need different types of people, tools, or infrastructure at different growth stages, more on this in future posts. There would be a lot of manual tasks at this stage.
This person should be able to provide clarity on which tasks can be automated, assess tools available in the market for such automation, and pricing, and build business cases for some of the more high-value tools. By the way, this is a continuous process for any finance team, regardless of the company size or growth stage. As part of the process, there needs to be an evaluation of the finance team structure and how to go about building the team. Every system, internal control or tool should be built with the expectation that the company will be audited and/or go through further investment in the future.
Your type of person
It is possible that the CEO/founders have not been able to establish the company’s values or mission at this point. They would not understand what they need in the finance team, or if they need one or the type of person needed at this stage, the job description would probably be vague and reflects as such. This role is not for everybody. It needs someone who is happy to ‘get their hands dirty'. It is not for a one-trick pony accountant or a finance expert, but someone who is happy to do what is necessary to get the job done. At this stage, there will be a lot of firefighting, and probably a little chaotic approach to problem-solving. It is not an atmosphere that fits everyone’s skill sets or attitude, choose wisely, with purpose.
There is nothing wrong with such an approach, it is just about hiring someone who is ‘right’ for your company. If you hire someone from a bigger company, who has never set up systems, or internal controls from scratch, a non-self-starter (sounds cliché but on point), they will get the shock of their life, and get lost in that chaos. As a founder or CEO, be upfront during the interview process, you can gauge their attitude and their problem-solving process. After explaining your expectations and providing insights into what you believe to be their priorities, ask them for their plans.
Having been in that position a few times, I remember asking our CEO, “how hard can I push..”, he just said..” go for it”!. That was all I needed; the rest is history. I genuinely believe any technical skills can be taught, but can you teach an attitude? I am unsure! With the right skill set and attitude, you should be confident they have what it takes to succeed.
Summary
First finance hire is a specialist role and not everyone can fit the bill. Hire a generalist-specialist, someone who is hands-on, they can add so much value to the company. As the CEO/Founder, it gives you the space to focus on growing the company while they get on with building a solid foundation for your finance team. As a CEO or founder, when this person requires your support, please give it to them, the reward of such support is immeasurable.
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