CFOs shouldn’t skimp on resources, even if an investment appears nonessential, because eventually the new resources can increase equity value, Jobcase CFO Beth Clymer said this week in a CFO Thought Leader podcast.
At Jobcase, a job-hunting and workplace-success social media platform for nonprofessionals, few investments are outside the core mission of the company, she said. Anything that makes the platform a richer environment for job hunters, employees seeking to advance their skills, or employers trying to attract talent is considered an equity value-add.
“If we make Jobcase a great place people can come to for help in their work life, and feel like they got support in the community to move ahead, they’re going to tell their friends and their friends are going to join us and our business will grow,” said Clymer, who took the CFO role two years ago after a decade in private equity at Bain Capital. “The flywheel that’s created by creating a great site for people is a massive drive of the economics for our business.”
Even with a back-office function like accounting, which doesn’t appear to tie directly to equity value, adding headcount that can improve the function can be justified on a value basis.
“CFOs often make the mistake, because they’re the ones most focused on how to make the budget balance, of saying, ‘Well, I don’t need that extra analyst or accounting manager,’” she said. “But the impact a strong finance organization can have throughout the business is massive. These resources almost always pay for themselves, so focus on surrounding yourself with the quantity and quality that is going to allow your finance organization to really help drive the business.”
The same goes for investment in systems that can reduce the need for more headcount and also free up back-office staff for higher-value work. Getting these kinds of systems in place was a priority for Clymer when she joined the company.
“We have to find ways to put ourselves out of a job,” she said. “We had a lot of business reporting that was done manually. That was automated. We had a lot of interfaces between our sales processes and finance processes that were manual. They’re now automated. So, we still have quite a lean finance team but are able to do a lot more with not a lot more resources in terms of the value we add to the organization.”
High-functioning FP&A team
Clymer’s CFO role is her first job on the operational side of business after some 15 years on the consulting and private equity side, but the transition was seamless, she thinks, because her work at Bain Capital put her side-by-side with CEOs and CFOs of portfolio companies as they planned and executed ways to increase equity value.
“I often gravitated to the parts of the business that had a lot to do with the office of the CFO,” she said. “So, that might include finance team building, making sure the organization’s KPIs and reporting align with the strategy and align with the business results we’re trying to drive, working on process transformation, and thinking about capital strategy, debt raises, restructuring, executive compensation, bonus plans and commissions.”
Jobcase had a solid finance team, but wasn’t structured to support the kind of growth it was about to see as it made inroads into the traditionally underserved nonprofessional workforce market.
“My first order of business was to build out a financial planning and analysis (FP&A) function,” she said. “We had some of these skills but we didn't have anyone focused on that.”
The company now has a dedicated FP&A team and also a growing number of non-finance people in operational roles acting as adjunct planning members.
“We have a lot of analytical folks that sit throughout the teams, so we’ve been able to leverage those talents and our FP&A team works closely with these analytically minded folks in each section of the business when they’re developing their forecast,” she said. “In fact, some parts of the business will be sending our FP&A head their forecast before he asks them for it, which was always a dream. So, I’m a big believer that the FP&A mindset needs to live everywhere but it doesn't necessarily have to report up through the CFO on the organization chart.”
Her FP&A team no doubt needs the help. With 110 million registered users and 20 million of them active on the site each month, the company generates a lot of data to sift through.
“What my head of FP&A and myself have done is help [these operational team members] figure out how to channel that [data] into the financial model and these things didn't previously exist at Jobcase,” she said. “But it’s been a natural thing given the way their analytical minds already worked.”