The fractional CFO role comes with its own unique set of challenges—working with numerous clients, shifting between a variety of skillsets depending on their needs and the requisite leap of faith of becoming your own boss. But the job isn’t without strategic perks: “The advantage of being a fractional is that you’re not too close to the fire,” says Michaella Gallina, former CFO of Toronto-based fintech Wave who pivoted to become a fractional CFO. “You can see the whole landscape.“
Gallina discusses her transition to a fractional CFO role, the nuances versus traditional CFO positions and what she has learned over the course of her finance leadership career. Listen by clicking below. The Q&A, lightly trimmed and edited for clarity, follows.
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We have a great episode. I am going to get right into it. My guest is Michaella Gallina. She’s the former CFO of Wave, which is a Toronto-based fintech. She embarked on a career as a fractional CFO. She advises companies in that role across a wide range of sizes, industries and life cycles. Michaella, welcome to the Secrets of Rockstar CFOs.
Thanks so much for having me, Jack. I’m thrilled to be here.
As am I. It took us a while to put this together, but I’m glad we were finally able to do it. I think a lot of our audience is probably somewhat aware of being a fractional CFO, but maybe you could give a little bit of a 10,000-foot overview of what your role as a fractional CFO is like.
A fractional CFO is typically a seasoned financial leader who steps into companies at critical junctions when businesses need help making smarter financial decisions. It can sometimes be a few hours a week, a few days a month, or even on a specific project. That fractional model is beneficial because it gives companies access to seasoned executives without the overhead of a full-time person. Most of the companies that I work with are at that in-between stage. They might be a growth startup that’s scaling rapidly, they might be a mid-sized business that needs to raise capital, or they’re at an inflection point where they need some strategic oversight, combined with the expertise of someone who’s had varied experiences in finance.
That’s great. I used to do fractional CFO work. I wish I’d known you then. I could have had you write some of my marketing material.
Maybe going forward.
There you go. Your model sounds like you typically don’t work full-time for a given client. You might bring your expertise to smaller companies, and maybe you have more than one client at a given moment?
That’s correct. I normally work for a couple at a time, and it varies depending on the needs of the company. It might be helping them with a capital raise. It might be helping them decide and analyze their cash flow ahead of maybe a big growth spurt or a hiring spree that they need to do to help them make those decisions. The advantage of being a fractional is that you’re not too close to the fire. You can see the whole landscape. I think that’s helpful in the way that you advise companies. The end goal is always advising them to make a decision. I’m not coming in to make a decision for them, but very often, they don’t have the right person to do the right analysis in order to make the best decision that they can. That’s where I can help.
That makes a lot of sense. I’m curious, you’re relatively new to this role. What’s something that maybe surprised you or you think people don’t understand about being a fractional CFO?
That’s a great question. The biggest thing is that people think you’re going to come in and tell them what to do. On the other hand, people don’t understand how much the work is hands-on. It’s a little bit of even coming in and being the investment banking analyst for them. For some clients, I’m even building their first financial model. For other clients, I’m helping them with their pitch deck to make sure their messaging matches what investors want to hear versus what they might think, because they’re so entrenched in whatever product they have that they’re growing.
Those are the two main differences that most people don’t understand. I’m not here to tell you what to do. I’m going to advise you. I’m going to do the work and give you the analysis to make the best decision for you. Very often, I’ll make recommendations, but at the end of the day, they will choose to do what’s best for the company, and I’ll support them in making those decisions. Number two is rolling up your sleeves. It’s very much a get in the weeds type of job. It’s not a hands-off position.
Yeah, which is an interesting transition. We’ll get into your career in a moment because you started off in investment banking, and then you had a lot of progressive roles in investor relations and corporate finance. To work for these small entrepreneur-minded companies must have been an interesting transition.
Absolutely. At the same time, I feel like it’s a culmination of all the experiences that I’ve had because I’ve worked in capital markets. A lens that a lot of CFOs even don’t have is having that experience. That’s incredibly helpful to what I can bring in terms of strategic expertise because I think at the root of it, what you’re doing as a CFO is you’re driving the value of the company. If you truly don’t understand what drives value, and by the way, don’t have a team that understands what value creation means for your company, you are just reporting the news and very historical-looking, versus being proactive.
That’s so important in terms of the role of the CFO. The capital markets experience has been very helpful throughout my career to bring that perspective to a finance organization. In my corporate roles, I’ve worked in everything from investor relations to working on a venture fund to running FP&A to running corporate development. Having the expertise of a wide breadth of functions in a finance organization also helps me when I come into a company to advise them from not only different perspectives, but also what different roles should be thinking about that they might not have or do already.
It provided a wide breadth of knowledge that is so important because the historical and traditional CFOs, if you look in years past, are very often people who have been in the finance organization their entire careers. Having a different direction of thought or a variety of thoughts is becoming even more important for today’s CFOs.
You’re right. It’s interesting because when I first became a CFO, and it was a while ago, but we all had the same resume. I’m from the Boston area. It’s not Silicon Valley, but it’s like a light version of Silicon Valley. There are a lot of early-stage companies, and all of them had a CFO, a couple of years after they raised capital. I don’t know how they differentiated us. All of us started out in a national CPA firm, as accounting managers, a controller, to our first CFO jobs. It was remarkable. That was the path to becoming a CFO. Now, you and a lot of people of your generation are breaking that mold and doing it in. It’s no longer non-traditional.
That’s exactly right. I think that’s an important point when people think about their careers. I would say a diversity of experiences is better. As you said, in the past, maybe that wasn’t viewed as the right track for a CFO, but now, companies are realizing that diversity of thought is more helpful as this function evolves.
That makes sense. I want to return to that, but a little bit about your own personal story. Where did you grow up, Michaella?
I grew up in a small town in Southern Colorado. I had a very idyllic childhood. I did 4-H. We had about 4,000 people in our community when I was growing up. In so many ways, it was so wonderful to have a childhood like that, where I had a horse in the backyard. I rode it to track practice. That doesn’t exist for a lot of people, but it gave me an amazing foundation. Also, at the same time, it made me want a whole lot more understanding of how the world works, and having more opportunities than we had. It was a wonderful way to grow up.
It sure sounds like. I do have to ask, are you related to the other Michaella Gallina in Colorado?
Is there another Michaella Gallina in Colorado? There can’t be.
Apparently, she’s going to be the master of the universe one day because I googled you, and she came up. She won some awards. She graduated from high school with a 3.98. She was the best student athlete and received all the citizenship awards. I’m looking at the picture. I’m like, “Michaella seems smart. She might be a little young to be on my show.” There are two of you, highly accomplished Michaella Gallinas, in Colorado. You went to college. What did you study at college?
I did. I went to the University of Denver, and I was very lucky to have a Fulbright merit scholarship. I worked hard in order to have some opportunity to leave, go to the big city, do something different and get educated. I studied finance. I did both an undergraduate and a graduate degree in finance at DU in four years because I was trying to pack all of it into my scholarship. I studied finance because I thought studying finance would make me financially secure. I’ll always be able to make money. From a lot of the areas where I grew up, there wasn’t a lot of wealth at all. People led simple lives with blue-collar jobs. It was incredible, but like we talked about before, it made me want more.
I thought if I studied finance, I’d always be able to be financially secure, and I’d always be able to find a job. It turns out I loved it. I was able to continue doing the master’s program as well. It was a wonderful program. Relationships through that program helped me get my first few jobs out of college. I’m very grateful for that experience.
That sounds like a wonderful thing. Was that a tough transition growing up from a small town to Denver? Denver is a pretty metropolitan place. Did you go to the Denver campus?
Yes, I was at the University of Denver right in the heart of the city. You’re exactly right. It was a big transition. I remember pulling into college the first day and seeing Hummers in the garage, a freshman in college driving a Hummer, which was mind-boggling to me that there was that money out there. There were more students on campus than I had generally experienced in my community. It was quite an adjustment to go from a very small town, lots of acreage, cattle ranching area, blue-collar community, to the metropolitan city of Denver, as you mentioned, in a different world. It did take me a while to come out of my shell because I think I was intimidated at first, but it ended up being a great experience.
It sounds like it’s so cool. I want to talk a little bit about your career journey. Let’s go from most recent to most current. Am I fair to say that your role at Wave was your first CFO role?
Correct, yes.
Tell us about what that was like, what you learned, some of the key lessons you had, and challenges you overcame.
I was promoted into that role. I was running investor relations for H&R Block and a few other organizations. Wave is a wholly owned subsidiary of H&R Block, but it operates completely standalone, based in Toronto. Wave was going through a big turnaround. My job coming in was to help get the company to profitability as soon as I could. That was hard because we were also evolving the business model to be a SaaS based business model. We needed to invest in the company. We were evolving a ton of roles in our business model in totality, and we’re trying to get to break even at the same time. It was a very complex role.
I would say I learned so much. I learned a great deal about improving culture and bringing them around to the main goal because if you think about it, most tech companies have a little bit of fast-growth startup culture where they want to grow as fast as they can. I had to reorient the entire business, not just the finance organization, into why we all needed to get behind the mission of getting to break even. That is no small task, especially for these companies that are focused on top-line growth. One of the most important things I did there was during all the company town halls, I would try to give a lesson on where we’re going and why we’re making these priorities important.
To the point I mentioned before, if you can orient a group of people around a common goal, that is important. When that goal is dictated by finance, it’s much harder in organizations because they look at finance as, “You control money, and all you care about is the bottom line. You don’t care about the strategic direction of the business.” If you can educate an organization on how your business is valued and why it’s important to get there, it reorients the entire strategic perspective.
That was something that I learned at Wave that was helpful to getting everyone on board, the marketing organization, HR organization, and sales and strategy, because if they understand the end goal, it’s a lot easier to be business partners across the organization versus trying to dictate something that doesn’t sound fun for the rest of the organization. I had a great time at Wave, but after a culmination of 15 years of working across different organizations, I decided it was time to bet on myself after having that experience, which is why I became a fractional.
I want to get into that decision because it’s a tough thing to do for any entrepreneur, leave a company where you love it, you’re making an impact, you’re growing, you’re learning and probably you’re making pretty good money doing it, to bet on yourself. I want to explore that a little bit, but let’s talk about some of your early corporate roles. I found them intriguing because, as we referenced earlier, you spent more time in investor relations than a lot of CFOs that I’ve spoken to in the day, but also, you’ve run corporate development, and you’ve had some experience with turnarounds. Is that a fair characterization?
That’s correct. When I left the buy side, I was a stock picker on the buy side, covering consumer and technology stocks. I left that role to essentially go across the table to become the head of their investor relations. As the analyst, I was calling IR to build my financial model and ask questions. It was a natural move to become that person I was calling. It was helpful to have the analyst experience because that role typically isn’t filled. That role is typically more of a transitional role within an organization.
Within public companies, a lot of times, they rotate the IR role as a learning experience on the path to development, but I had the analyst experience, and so I could bring a different perspective. That made for an easy transition. I ended up working for three companies over six years, two of which had exits, and they were all transformations. For example, transformations of going from a SPAC to buying businesses to having an exit were the first company. The second company was a medtech company that had been raided by the FBI because a former CFO had misappropriated funds. It comes to mind because there are photos online of people wearing their jackets walking into the building.
We came in to write the perception of the business, get it back on track, did an acquisition that transformed the business and then sold it to a major healthcare company. We then attempted to do the same thing at a third business. I learned so much because when you’re in these nimble situations where you’re trying to change the perception of a company, grow it, do deals to make it bigger or transform the business model of the company, you learn a whole lot and you get to do so many more different roles than you would at maybe a big company that’s on track that all they’re focused on is their bottom line and you’re doing the same thing all the time.
It allowed me to raise my hand, say yes and take on projects that I would have never had opportunities to otherwise. It taught me what drives value and how to make an organization drive value, versus continuing to do what they’re doing, even with a growth mindset. Those were fantastic experiences. By the way, they were a grind trying to complete what we were doing and a tall task but resulted in incredible learning experiences that I encourage everyone to seek out because if you can go through a business transformation, I guarantee you will learn 10 times more than if you’re in one seat doing one role through one life cycle of a company.
That sounds like you’ve had some remarkable experiences, to say the least.
Very much so. I’ve been incredibly grateful. I will also say those experiences are not peanut butter and jelly rolls, where you sit in your seat and you work 9:00 to 5:00. They require a much greater level of engagement, a will to roll up your sleeves and hours of work. It does come with that caveat, but it was worth it.
Unlike me, you were able to keep your hair. I think the reason I went bald prematurely is that CFO jobs generally are a little bit stressful, but that sounds like that was on steroids. That’s the reason I was prematurely bald. That and probably genetics.
You’re very wise, then.
There you go. Before the corporate roles, you started off in banking-type firms. I’m curious. It seems like that was a great fit for your skillset and your passions. What did you learn from those who helped make you the successful CFO that you would eventually become?
Honestly, I think those roles were foundational, and I would not have the strategic leadership that I have today without them. I started my career in investment banking, and we were a generalist middle-market firm. I worked on deals across financial institutions to manufacturing companies, to medtech companies. Not only did that role give me a skillset that is critically valuable to a CFO, such as financial modeling, but back to understanding value, the investment banking role teaches you how the market values a company and what drives value. There are so many different elements of that, but it gave me a landscape of all the different ways that value can be seen and rewarded in the marketplace.
I think that’s so important when you’re setting a strategy or a vision. You are not just setting the financial targets and roadmapping what the financials are going to look like. The CFO needs to be a strategic thought leader in ensuring that the roadmap of the company is going to drive value ultimately. Without the investment banking experience, I wouldn’t have learned the very deep financial analysis that requires, and I wouldn’t have the same bigger picture view that I’m able to have now.
That sounds good. You’ve had a great run in your career. One thing I always like to explore because every CFO that I’ve interviewed has had them, and often multiple ones, who are some of the critical mentors that you’ve had along the way? They can be formal or informal because one thing I’ve learned, not everybody even knows that they serve as a mentor to people.
That’s exactly right. I think this is such an important topic. When I was younger, I did not understand the importance of mentors as great as I do today. It’s something that you need to be so cognizant of. Going back to the earliest of times, even growing up, my dad was a mentor to me, and he was a college tennis coach. He raised us with the mindset of, “You want the ball when the game is on the line.” He always pushed us to do greater. That was very formative for me growing up, so I don’t want to even lose how important early on to have mentors and the right people helping you along the way. Even if you don’t even realize it at the time, the importance of being around good people is everything. I say that because the way I would describe my mentors are good people.
My first boss ever in investment banking not only had this amazing track record, but he was a good human, and he emulated who I wanted to be both in and out of a boardroom. One of my other longest-time mentors was a man who started a prize for volunteering that I received in middle school. Having the validation of doing some things that were good for the world is critically important and drove who I am today to have that validation when you’re young.
By the way, he had a very similar career path that I’ve had, and so he was so instrumental in helping me along the way. He’s one of the most instrumental people in my life in making these decisions because he not only has been there, done that, but he validated what I was doing was right, at least from a human perspective, and he emulated the type of person I wanted to be in all ways. He’s someone that you’re like, “I want to be that person,” not because they’re the CEO of this company and they have a big title, but because their quiet leadership in all areas of their life is how I want it to be.
It’s not a popular opinion to talk about this whole work-life balance decision for people, but I do think that as much as a CFO is now becoming this very holistic role within an organization, that includes who we are as a person and what we want to do with our life. Finding mentors who can help guide us all along the way in all aspects of our lives is important.
You’re right. One of our previous guests thought it was funny that I have mentors, and she brought out, “How old are these people?” We were friends before the interview, but it was a funny moment. I have a Gen Z mentor. Partly, I run a professional association in my day job, and a lot of them are in their 30s and 40s. In a few years, they will be her age. It’s good to understand the most diverse, the most well-educated cohort that’s ever been. These are our members in five or 10 years. I’d better understand them before they join us.
That’s exactly right. They’re becoming a larger portion of the population. It’s understanding them and not becoming archaic. I always say that I never want to be archaic. I don’t want to have my niece and nephew tell me I don’t know how to use technology. I want to stay as relevant as possible. You have to take such an intentional view of that, and having a mentor like that is a fabulous idea. I might steal that from you.
I remember my parents. They were smart people. This isn’t going to make them seem so, but they couldn’t figure out VCRs, which was a new technology in my early teen years. They couldn’t figure out how to make the clock stop blinking. It was perpetually midnight or noon. They weren’t dumb. I always think about that. I don’t want to be laughed at behind my back the way my sisters and I laughed at my mom and dad. God rest their soul. Wonderful parents and people. One thing that intrigued me a little bit is that you’ve been a chief of staff. I think that might be a first that I’ve interviewed a former chief of staff and a different type of role. I’m wondering what you learned and how that prepared you to be a CFO/entrepreneur.
What an amazing experience that role was. I learned so much about how a company operates. If anyone reading has a chance to become a chief of staff in any way, I would say run for it and be very thoughtful about how that role works. In my role, I was able to sit with the CEO all day long in every single meeting he had. Whether it was an HR issue, whether we were talking about raising capital, whether it was a strategy call or whether it was talking to the head of marketing, I was in the room for every single call.
I was the point person for, “We need to fix this. We need to do this. Jump on a plane tomorrow and deal with whatever came up.” That was my role. What a blessing to get to have a role like that at a young age, because I think most of the time, as you go through whatever role that you have, you’re siloed into a small group of people, organization and role. You’re hyper-focused on that, but being in the chief of staff seat made me realize a number of things.
It made me realize that so much of running a company is managing people. To be candid, that was something that I did not realize before. I thought, “The CEO makes all the big decisions.” No, the right CEO empowers his people, he develops them and they advise him much like I do in my role today with other companies. If you get the right group of people around you, to me, that makes all the difference in the world. I would say it doesn’t matter what I’m doing as long as I’m working and learning from great people.
The chief of staff’s role underlined that. I can’t even tell you how much because I think we’re all in these roles, and we all think we need a specific skill set. We’re all trying to drive value by doing our roles well. Sometimes, you learn that the bigger picture is having a voice at the table and being able to put puzzle pieces together. That’s something you don’t recognize when you’re siloed. The chief of staff role gave me amazing exposure to the guts of a business and how businesses run on a day-to-day basis.
That sounds like a wonderful experience. I want to go back to it because we touched upon it earlier, but it’s worth exploring. Great career, great challenges. You work for some interesting companies, but you did decide to bite the bullet and bet on yourself, to use your own words. What was the motivation for that to become this entrepreneurial version of yourself?
That’s such a great question that I think everybody has to answer at multiple points in their careers and their lives. The phrase that comes to mind for me is that for everything, there’s a season. I had spent many seasons of my life grinding and always saying yes to the next opportunity. I’m an overachiever in every area of my life, but I’m also a bit of a people pleaser. I worked longer than everyone else. I’d be in the office before everyone else. I’d be the last one to leave. I’d always raise my hand for the next project. I realized I’d been doing that for 15 years.
It was a culmination of things. I’d had this experience in the CFO seat. My longtime leader, the CFO of H&R Block, retired at 49. He was one of the best leaders I’d ever worked for. It all came full circle. I had this moment where I was like, “He did what everyone wants to do. I’ve had a lot of amazing experiences. It’s time to bet on myself. It’s time to give me a little bit more flexibility in my life because I’ve been grinding for so long.”
I think for everyone who knew me, they were like, “This is the least Michaella thing we’ve ever seen you do, and we love it.” It was a result of understanding that I’ve had a lot of amazing experiences, being prepared to bet on myself and wanting to drive value. Being a fractional CFO, my job is to make a big difference at the companies that I’m going into that don’t otherwise have these skill sets. At least for myself, I derive a lot of my personal value from how much value I’m providing in my work and my day-to-day life. It was a full-circle moment where I realized this is the season of my life to go out and do things on my own.
It makes sense. You’re at the point now where you’ve accomplished enough that you can go and bring value as a fractional CFO, which is tough to do unless you’re a prodigy like the other Michaella Gallina. It’s tough to do unless you have 15 or 20 years of experience, whatever it might be.
I want to be her, so thank you.
I think maybe all of us do. I’m putting pressure on this poor young woman who was only 18, or at least was, when I read the article. What have you learned is the biggest difference between being a fractional CFO versus being a traditional W-2 in-house type of CFO?
I get to work with multiple companies on multiple problems at a time. I’m a person who does not like to do the same task routinely day to day. I get to solve new challenges every single day. When I finish one engagement with one company, I pick up a new engagement at another company that’s a completely different problem to be solved. I love the ambiguity of that because then, it’s go figure out the tools and make a toolbox. There is no one-trick pony to getting into any of these decisions.
I love the creativity. I love that it draws on all my past experiences. I love that I get to work with so many different entities at so many different stages on so many different problems. That gets me out of bed in the morning. That gets me excited. Not that you don’t have that in a normal day-to-day CFO role, because we all know you have a day planned, you wake up and maybe there’s tariffs announced, maybe your system went down overnight, or whatever it might be. Not that all CFOs don’t have those challenges, but I like that I get to advise in multiple areas at once.
For you, with tariffs, because it’s so timely right now, if you have three clients, that might be three completely different sets of challenges. By the way, if you have a domestic manufacturing company, maybe the tariffs are good. It’s a fascinating thing when you’ve got to approach it from so many different perspectives.
I’ve known a lot of my friends have gone into the fractional CFO game. They struggle at first, and they eventually figure it out. It’s a struggle at first to develop the book of business, that client acquisition process. As our audience can tell, you’re an introvert. That was my attempt at sarcasm, everybody. I know you’re a masterful networker. That’s something you’ve shared with me that you’ve spent a lot of time building. What’s that process like to build a business out of thin air?
I think that’s an element of needing to be a risk taker because there’s something to be said about a W-2 employee, a salary, a bonus and equity. At certain stages of a person’s life, I would probably advise them to have roles like that. For me, it’s a little bit different. I feel like in the fractional CFO seat, I am able to put together my entire network that I’ve kept in touch with and built relationships with over the last 15 years. Building relationships to me is everything, whether it’s the people you work with, the people you interact with on a day-to-day basis or the mentors that we’ve talked about. If you don’t have deep relationships, you’re missing out on life.
Yes, being a fractional CFO, business certainly ebbs and flows. There will be dry spells, and there will be spells where you will have to turn people away because you don’t have enough hours in the day. I’ve worked across so many different areas in my career that I’ve been able to build up a network that is pretty vast. Because I feel so strongly about building relationships, maybe they aren’t even vast, but the relationships that I have are very deep.
As soon as I started telling my network that this is what I was doing, business came. It’s because someone’s worked with me before, and they go, “I need a company who needs help. They don’t even know they need your help, but they need your help, and I’m going to tell them,” or it’s people that are like, “You’re available. I’ve always wanted to steal you. Maybe I couldn’t afford you as a full-time person, but can you help me with this particular problem that I have?” I think deep relationships are everything. I drive so much value out of that. It turns out I can provide value to those people because I know them so well. They know me. A lot of it is that they know the way I work.
I think that’s important, whether you’re a full-time CFO in a seat or whether you’re a fractional one, being able to work well with people, bring out the best in people and develop people. That pays dividends both for you and others down the road. It’s sometimes an element of human management that might be overlooked in the finance roles.
That’s wonderful. I want to ask you a question because for years, CFOs have been talking about the strategic partnership with the CEO. It’s not that it wasn’t true, but, at least from my perspective, it’s only relatively recently that CEOs have been saying, “Yes, the CFO is indeed my most important strategic partner.” That dynamic is probably a little bit different in a fractional role, maybe better, maybe worse, but how do you develop that relationship with your CEOs?
I would say yes and no. I think any element of that partnership is building trust. There are a lot of ways to do that. Being very candid is the way to do that. If there’s an elephant in the room, it needs to be addressed. Doing things like going above and beyond to ensure the CEO can trust your opinion is helpful. I’m not doing the bare minimum analysis. I’m going to bring in everything I positively can to educate the CEO on things that he or she may not know. When I’m doing a project for them, I’m going to present all the landscapes. I’m not going to present the landscape that is best for them because that might not be the best path.
If you can build trust by developing rapport with that person and doing it in the right ways, in the right rooms, and at the right times, that is everything because then they’re going to trust your voice at the table. You can do all these tactics, but having a deep relationship is more important than trying to just be an authoritarian. The best companies derive all of their strategy and their business decisions in partnership with these management teams. They’re not doing it in silos. By the way, the CEO is going to have a voice in the annual plan that you’re going to do, without a doubt. That needs to be a very symbiotic relationship across the business.
I think finance very often gets siloed into being the numbers person, but you can present a strategic plan of, “We might want to revisit doing this new line of business because look at what it’s going to do to our margins, and we’re valued on EBITDA,” or whatever it might be. Having the strategic thought allows you to participate in so many different conversations than the typical financial conversations. That builds credibility and trust. That allows you to have a much better and more holistic relationship with not only the CEO, but any other decision makers that are involved in any of the things that you’re touching or working on.
I’m sure, given your background, the CEOs certainly value the relationship with you as much as you do with them. When the two people at the top are at least getting along and have that type of relationship, it solves a lot of problems and creates a lot of opportunities. I understand you’re in, for me, a relatively rare position. I don’t know a lot of fractional CFOs who are involved in their clients’ hiring process, but you are. Can you tell me what that is like?
Let me use an example of a client I’m working with right now. They’re doing $6 million in revenue, and they’re growing to $14 million. We’ll probably double that in the year after. They’re in a very interesting position in their growth where they’re trying to figure out how we prepare ahead of the growth that we know is coming. One of the questions that I’m helping them answer is, “Who can they hire?” How many people can they afford to hire and where? A company would love to hire X number of people in whatever roles in a certain area, but can they afford to do that? Would it be better to hire a smaller number of people there and more people in a different area because of the strategic questions that they’re going to have to be answering over the next couple of years?
That’s where I can come in and help, not only with the pool of money or available funds that we think we can allocate to hiring, but importantly, how to strategically hire and not just hire for the sake of it, because we have money or because we need to do that. I help put a strategic lens on that. Being a part of the hiring process is important because in companies that are going through big life cycle changes or are at pivotal moments like this, hiring the right person is everything.
Sometimes, a company might think, “We need a new head of sales. We can steal the big competitor’s field. We could get their main guy. I know him.” Sometimes, that is not the right person to hire. Does that person have experience growing a company? Does that person have experience building a team? Are they going to be happy in a smaller environment compared to the perks that they’re used to having at bigger companies? I can be a trusted partner to the CEO and answer that entire breadth of questions when they would otherwise normally be on their own, trying to make their own decision.
It’s not me making the decision, but it’s being a strategic thought partner in the entire process, because I think if you hire the right people and you empower them, that’s the secret sauce to any business. If you hire the wrong person, it’s going to be incredibly expensive and incredibly disruptive to the culture. That, of course, is going to happen from time to time, but if you can have a thought partner in making these big decisions at very pivotal moments in these companies’ life cycles, you can add a ton of value.
One bad hire, depending upon how bad and what role, could have a cataclysmic effect on certain companies, particularly if you’re looking at a 40 or 50-person company, perhaps even smaller for some of your clients. If someone somehow gets through that process, it’s like, “What were we thinking?”
I’ve seen it have even bigger and more detrimental effects in bigger businesses because it affects teams entirely underneath that person and strategies, and it can be detrimental.
You had a great quote, and I want you to share your thoughts on that with our audience. Your quote was that you see the modern CFO as being a steward of value. It’s more than money. Can you expand upon that?
What you said is essentially the essence. It’s knowing what a privilege it is to be in a role where you are overseeing and safeguarding not just the dollars and cents of the company, but the bigger picture of what those dollars enable, like the total value of the company or the perception of the company. It’s something so much greater. I always say that a CFO is both the compass and the shield. It’s the compass for making decisions for the long-term vision, ensuring that the financial resources are aligned and managing both day-to-day and long-term.
You’re also the shield because you have to protect that company against risks, against inefficiencies and against short-term decisions that are at odds with the long-term vision of the company. I think there’s a reverence for being in a leadership position like that, that the CFO needs to have a sincere appreciation for both short-term and long-term.
I’m legally required to ask you the following question. I’m curious about gen AI. You can’t have a conversation with someone without it coming up eventually. You work for relatively small companies, and adopting gen AI might be a little bit more risky and a little bit more challenging. What would be some advice you’d give to small companies, CFOs, and otherwise who want to take advantage of this once-in-a-generation type of technology, but it’s hard with modest assets to support it?
The first thing is if you’re even thinking about it, you’re on the right track because this is something that’s evolving so rapidly, and you need to stay on top of it. I’ll probably circle back to that here in a second. AI is transforming the way CFOs operate, from automating routine tasks, like reconciliations and reporting, to helping provide predictive insights and recommendations that are helping shape strategic decisions.
What I would say is you need to make sure that you are being educated on what tools you can use and not being stagnant on that front, because I think AI, even three weeks ago, was so different than what it is today. The way you were using it three weeks ago might not be the best and most efficient way to be using it right now. You must stay on top of the trends, and you must continue to educate yourself on how it’s evolving in order for it to help you.
I would also caution, especially for smaller companies. AI doesn’t replace human judgment. It augments it. It’s certainly not perfect, and it’s only as good as you use it. While AI tools can help you maybe forecast cashflow more dynamically, which is a huge benefit to most small growing companies, it might also not do the best analytics on your company specifically because of whatever dynamics about your company that make it unique, that it might not know about.
Stay up to date on what it can do and how it can help you become more efficient. Find ways that it can help augment your decision-making, but also don’t rely on it fully because it can’t replace and know all of the same things that you know at the same time. Staying curious and not getting stuck in the way that you’re using it, to me, is the most important thing right now because we’re in this period of rapid evolution.
That makes a lot of sense. Before the show, you and I were talking. We both share a strange personality characteristic. We’re unfeelingly polite to our AI tools. You say please and thank you, right?
That’s right. We were talking about how that is costing so much money and adding energy to power all the pleasantries that we share with ChatGPT and other AI.
It is weird because it almost seems like you’re talking to a human being through a different medium than you’re used to. It seems to know a lot about you and give thoughtful answers. I say, “That’s wonderful. Thank you for your help.”
I feel like that feedback helps shape better responses because I’ll be like, “Thank you. This is very close to what I was looking for and so much better than the last answer, and here’s why.” That helps train it, but I also feel like it’s doing so much work for you. I want to be generous and thankful for it. It’s so weird saying to a machine.
One thing that I’ve observed is that CFOs hate more than almost anything the ability to forecast, see the future and do the critical strategic planning that they need to. I often joke that if CFOs could have a superpower, it would be the ability to see around corners, which isn’t much of a joke. We live in an extraordinarily volatile time. It seems to change on a daily basis. In the current environment, that’s unpredictable and always changing. How are you able to do your financial planning, your forecasting in a way that’s going to support your company, its growth goals, its stability goals, but also be flexible in case things change, which they might next Tuesday?
As you said, in today’s economic climate, the uncertainty is likely greater than it has been in a long time, which makes financial forecasting and strategic planning that much more difficult, but it’s not impossible. I think operating with some frameworks can be helpful. It’s always being proactive and focusing on what you can control. Tariffs, for example, right now, that everyone’s talking about, or other economic issues that might pop up, even Black Swans that we have no idea what those could be like, are things that are out of your control.
As a CFO, I always think about what I can control. In times like these, it’s even more important to do less with more and maintain flexibility. The key there is not pausing work that won’t cause the business to be in a worse place over time, but still focusing on the biggest long-term value drivers that we know we have to execute on. How do we make sure that we adjust resources to enable ourselves to continue with those most important tasks? How do you prioritize what is most important? In times like these, rather than chasing revenue growth, it might be more important to focus on what creates value for your customers.
This goes to our discussion that a CFO is much more than just a financial person, because if you understand how to deliver value as much as what the value creation is, you can build a better project and a better strategic roadmap. In times of economic uncertainty, we have more opportunities. If the CFO understands the market, this might be a time when they can encourage teams to think outside of the box to help grow the business in different ways than before. Focusing on flexibility and adaptability and being proactive to ensure you aren’t getting up over your skis financially, given the higher risk environment, is going to be most important.
I always like to make sure we cover the people element. In times like these, your staff is going to be more stressed. They might need a little bit more flexibility. Continuing to recognize people who are doing good work and thinking outside of the box can be important because some of the best ideas you can find might be a lower level accounting role who says, “We could create a lot of efficiencies here, or we might be able to get a benefit if we change the way that we do some certain process.” Empowering your team in times of economic uncertainty can yield surprisingly great efficiencies that’ll help.
I want to change the subject, and you touched upon it earlier that with some of the roles you’ve had. They were wonderful, great learning opportunities and great growth experiences, but it can be all-encompassing. How do you manage that work-life balance with any tricks you’ve picked up over the years?
I can tell you I haven’t done a great job of it. When you think about “for everything, there is a season,” my advice to the younger generation would be to say yes to everything you can while you can. There are going to be periods in times of your life when you can’t. Picking up the opportunities that come organically are usually the best development opportunities. Say yes when you can. Take an interest in what you’re doing.
I always say, if your job is to produce a spreadsheet for your manager, put yourself in the manager’s shoes. They’re getting the spreadsheet, and they’re making a decision off of it. Can you offer insights, advice, or some scenario modeling? How can you go above and beyond to answer that need? Those are the things that are going to help you get further ahead. That doesn’t necessarily mean working more hours all the time. I think if you understand your priorities as a person and what’s important to you, you can help shape that. Finding ways to become more efficient in your job is one way.
Being very candid and developing a great relationship with your manager is another, for times when you might need to step back and have more time. Talking about mentors, I love that this topic has come up so much. Using mentors to help you guide your career decisions can be helpful in the topic of this work-life balance discussion, because again, if you find someone that you want to emulate, they can often give you good insight into how to manage all the different areas of your life. CFOs in particular are high achievers, but high achievers are generally not high achievers in one area. They want to be high achievers in all areas of their life, which probably means a hobby outside of work and their personal life outside of work.
I find if you empower people as a leader, as a manager, as the CFO, to authentically do their job in ways that you reward their productivity versus the number of hours they’re in the seat, for example, and cherish who they are as a human, they’re going to be more loyal to you, they’re going to do better work for you, and they’re going to be able to manage their life without you micromanaging the hours that they work. All in all, that’s better for everyone involved, and you build stronger teams that way.
It’s fantastic advice. You mentioned hobbies. You have one of the most impressive-looking ribbons on the wall next to a picture of your horse, and you referenced that you grew up amongst horses, but is that a hobby of yours to this day? I have to ask where you earned that ribbon, because that ribbon is about as big as you are.
Thank you. I’m very proud of it, which is why I like to look at it. Yes, I ride show jumping horses. I’ve ridden horses since I was five years old. I always say that having a serious hobby outside of work makes me better because it gives me skill sets that I leverage in the workforce that I could have never developed in the workforce. I’ve competed at the top level of my sport, which requires discipline or grit. I do a sport where I’m in tandem with an animal. It is extremely humbling.
As many ribbons as I have here in the background, I have hit the dirt at big competitions. It teaches you to always get back on the horse, and it teaches you how to be a better leader while controlling your emotions because horses are so emotional. I think it’s incredibly important to have those lessons that you learn outside of the office, because it makes you a much better leader inside the office, rather than operating always in a very small mirror scope of corporate leadership or being a CFO. It’s important to get out there and explore other opportunities to learn and grow.
That’s wonderful. I think perhaps that the CFO’s humility gene is forcing you to understate it. You’re not a casual horse rider. You’re a national champion. Is that correct?
That’s correct. I’m a little bit of a has-been, but I still do it to the full ability that I can these days.
You’re a has-been. I never was. It was an early joke, athletically. The first several guests, I’m by dumb chance or something, I’m picking everybody that I interview as a better athlete, more accomplished athlete than I was. I’m guessing that somehow sports in youth lead to people having flourishing careers as executives. There are too many of them.
I saw a stat the other day that a big company survey had done. It said that over 79 percent of female executives had played sports growing up. It brings in everything that we talked about: dedication, grit, leadership, and, importantly, how to work as a team. As we talk about CFOs being involved in the hiring process, it’s so important to have team players who understand this is about the greater good. I think there is no coincidence in that figure.
I have noticed almost all of the women I’ve interviewed played sports at a high level, like Lauren StClair, who was the CFO of NerdWallet. She played Division 1 basketball at Stanford. That’s a pretty competitive program. A bunch of others, too. That’s fascinating. I also know one thing. You love to travel. You took a trip with your mom, which I think is wonderful.
Thank you. We’ve done a lot of traveling together. We had a blast. Thank you for bringing that up, Jack, because I have some amazing pictures of being in Patagonia. One of the reasons why I went to doing fractional work is that I can work remotely from wherever I am, wherever has Wi-Fi. I can still provide value to my clients, and I can still take two-week vacations. I’d never taken a week off in my entire career prior to making this transition. It enables me to do all the things that I love.
My mom and I have traveled all over the world together. We have such a great time. To our conversation about doing things outside of work that make you better, if I could give a piece of advice to any CFO who’s been grinding, it’s to take the trip. Sometimes, getting out of the weeds of the problems that you’re working on in the day-to-day allows you to suddenly think more clearly.
Half the time, I come back and I’m like, “I figured out a new angle to do this. Why hadn’t I thought about that before?” It’s because you get so stuck in the weeds of the day-to-day that it’s hard to pluck yourself out of that. Travel is a great way that rewires your brain and allows you to think more creatively versus the routine of having meeting after meeting on our calendars. I highly encourage travel for my teams and employees as much as for yourself.
Michaella, I like to always end the show with the final question. What’s your advice for the next generation of CFOs? You’ve given a lot of it, including then, but if you were to focus on one particular thing that you’d hope that the next generation could pick up from this show, what might it be?
Thanks, Jack. I certainly do not have it all figured out. Let me make sure I insert that disclaimer first. I think for me, it’s staying true to your values and saying yes to opportunities that you might not have thought about before, because those organic opportunities tend to be the ones that are a little off the beaten path. Our conversation is coming full circle because you talked about how the CFO seat used to be a very narrow one-way road to get to that seat. Now, companies are rewarding the diversity of experiences to help shape bigger strategic thinking, since the roles become more holistic within the company. If you say yes to organic opportunities where you know you’ll be able to learn something new, that’s only going to be more important in your toolkit going forward.
That’s wonderful advice. I know you’ve got a lot going on. I want to thank you for your time here. This was a wonderful episode, and people are going to learn a lot about the CFO role and your background as well. I’d like to give you the final word.
Thank you, Jack. I have loved being here. Thank you so much for sharing my experience. I would say my experience is only one of several million out there, so take it with a grain of salt. I’ve loved our conversation. Thank you
