A Chief Financial Officer (CFO) position carries a lot of responsibility, and all the more so at a fast-paced tech company. Startup CFOs are tasked with driving a growing business towards success and profitability as quickly as possible, which is certainly no easy feat.
Whether you’re a budding entrepreneur looking for insights into this career path, or a mid-career professional aiming to improve your skills, there’s no better way to learn than to consult with a seasoned expert. To that end, we’ve brought you some exclusive tips from TravelPerk’s current COO and former CFO, Huw Slater (LinkedIn).
Huw’s impressive career spans nearly two decades, including 10 years in finance positions at BT Group, 3 years as VP of International Finance and Operations at Box, and CFO positions at Typeform and Travelperk. To learn more about Huw and his top tips for startup CFOs, check out his interview on Soldo’s podcast, “The CFO Playbook.”
Huw’s journey toward becoming an experienced CFO started in a surprising place: the University of Manchester’s physics department. Building on his lifelong interest in math and science, he graduated with his BSc in Astrophysics in 2003.
So how did he shift his focus from the stars to the C-suite? After a chance encounter with a British Telecom employee and a conversation about rugby, Huw joined the company as a new graduate and kicked off his career in finance. Beginning as a Financial Analyst, he worked his way up to eventually become a Finance Director. Subsequently, he joined cloud content management company Box as they were expanding internationally pre-IPO. He then moved to Barcelona to take a CFO role at Typeform, before becoming TravelPerk’s CFO and COO.
While astrophysics and finance may seem like very different subjects, Huw has found some interesting parallels between the two. Both require strong analytical skills, and the ability to dissect complex facts and break them down into core ideas. They also both involve curiosity and asking the right questions.
In physics, velocity is the measure of both speed and direction. This applies to business as well: to obtain results, leaders need to combine speed with focus. Startup CFOs are tasked with maintaining a strong growth trajectory in an organization with many moving parts.
Another physics concept that ties in well with an executive’s responsibilities is entropy: disorder, uncertainty, or randomness. In business terms, this means managing the many distractions that come up every day. Paraphrasing Steve Jobs, Huw says CFOs must “say ‘no’ to 999 good ideas, so they can say ‘yes’ to one great one.”
How TravelPerk overcame the pandemic challenge
The COVID-19 pandemic was a major challenge for companies in nearly every industry, and travel was particularly affected. Fortunately, TravelPerk came out strong from the pandemic, without needing to make redundancies. So how did the leadership team manage this crisis?
As Huw reports it, the TravelPerk team had scheduled a board meeting for about 10 days before the first COVID-19 lockdowns started. At that meeting, leadership had to address the uncertain reality of the pandemic at a time when few people knew what the future would look like. They put together some strategic planning for different scenarios in two phases and decided to temporarily cut marketing and freeze new hires. They then agreed to give weekly updates to board members as the situation evolved, planning to make more significant cuts in two months if circumstances demanded it.
A key consideration here was long-term thinking. For example, while layoffs might have eased financial pain in the short term, they could have also hurt the long-term health of the company. Instead, the finance team aimed to make strategic cuts in areas that represented high cost savings and low impact. They also made some surprising choices, like doubling the size of the engineering team as an investment in future business success.
Ultimately, the COVID-19 pandemic created a need for new types of business travel. Travel-related spend tripled in 2021, and the market is expected to grow even more in 2022. As companies have shifted to full-time remote or hybrid models, there is now more of a need for internal meetings as distributed teams get together in person for offsites, team building activities, and more. In this context, the future of TravelPerk looks brighter than ever.
Currently, TravelPerk is maintaining its core focus while creating more partnerships with companies like Soldo (a spend management platform with prepaid company cards). This way, we can provide customers with a 360° business travel offer, while staying true to what we do best. Using our SaaS software, finance teams can streamline their business travel programs, gaining control and visibility over budgets while business travelers maintain their autonomy. It’s a win-win situation for everyone.
Why startup CFOs need to master clear communication
At TravelPerk, we’re all about in-person connection and communication. That’s why it’s not surprising that Huw mentions effective communication as one of the keys to succeeding as a CFO.
Part of this involves strategic transparency. There’s no question that transparency is crucial in business, and people appreciate it — a Paychex survey showed that 83.3% of employees with very transparent employers were satisfied with their jobs. However, this need for transparency doesn’t necessarily apply to every single issue: the survey also showed that employees were mostly concerned with issues that directly affected them.
According to Huw, “extreme transparency” can quickly turn into a series of unwanted distractions. While teams absolutely need to know about key issues, overloading them with irrelevant information will simply waste their time. Truly effective communication is about delivering the right information, to the right people, at the right time. While this concept isn’t complicated, it does require commitment and work.
On the other hand, when it comes to goal-setting and targets, it’s better to err on the side of “overcommunication”. Huw recommends a radically open and honest approach to sharing progress and context. This way, teams can remain aligned and understand why targets have been set the way they are.
On a personal level, CFOs need to remember to give themselves the space they need to be effective communicators. Huw likes to set aside 45 minutes of “alone time” after he comes home to relax and rebuild his energy. However, he also finds that being around people can be energizing — during the lockdown, this became especially clear.
Setting goals and KPIs at a fast-paced tech startup
While highly-ambitious targets are appealing to investors, these targets also need to be realistic and achievable for the team. The goal is not just to get people to the next target, but to enable them to work sustainably without burning out.
At TravelPerk, the executive team meets regularly to brainstorm targets, then hands them off to the extended leadership team for feedback before finalizing. While it’s inevitable that targets will be missed sometimes, it’s important to keep this in check — occasionally missing a target by 10% might work out, but missing one by 50% would be very demoralizing.
Huw believes that targets must always be fair. For example, he recalls a situation in a previous job where employees at lower levels of the company hierarchy were given more ambitious targets than their seniors. They would frequently miss targets, causing them to feel disappointed, while the management team would receive bonuses. To avoid this type of outcome, Huw advocates for setting realistic targets across the organization, while being transparent with both employees and the board of directors.
To balance achievability with ambition, TravelPerk’s leadership team allocates around 10% of resources to “moonshot goals” (highly ambitious, innovative goals) and 70% to “incremental goals” (core, routine tasks of the business).
Becoming a successful CFO in the tech world
If there is one key goal startup CFOs have, it’s this: move faster with fewer resources. Of course, this is a serious challenge. To meet their objectives, today’s CFOs frequently choose to invest in software solutions like TravelPerk and free up their employees’ time for higher-value tasks.
You’re a leader first, and a CFO second.
Huw Slater, COO at TravelPerk
What his statement means is that, although CFOs are responsible for accounting functions, financial planning and analysis, metrics, and cash flow management, a CFO’s top priorities should be communication and higher-level business strategy. Successful CFOs should over-index on leadership by focusing on both team goals and company goals. The finance function should support the company’s overall strategy from a cooperative, rather than confrontational, standpoint.
Huw’s final words of advice for finance leaders are:
Run towards the flames… find the hardest problem that exists in the company. Just go and help somebody, get it done. That’s how you grow.
Huw Slater, COO at TravelPerk
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