The construction industry has been in a tough spot as investors hold back capital and postpone projects until interest rates fall. The economic slowdown could be tough on the industry's suppliers, who are generally confident of a recovery, though the timing is unclear. For a growing company like Built Technologies, whose software platform streamlines the construction loan administration process, it would be a mistake to just sit back and wait. “We need to focus on what we can control,” says Built Technologies CFO Sam Kemp.
Kemp joined the 275-employee Bild in September 2023 after five years at publicly traded GoDaddy, where the former equity research analyst started in investor relations and was promoted to chief strategy officer.
For Kemp, his first CFO role won't be all that different. In an interview with StrategicCFO360, Kemp explains why, talking about teaching the company's middle managers the planning process, linking business drivers to financial outcomes, and how to leverage situations to generate confidence in the company's game plan.
You’ve been at Built for almost a year now, what have you been working on so far?
We're a growth company. We're not a startup or a large enterprise. And when you find yourself in that situation, you have to quickly evaluate and ensure that the company can scale structurally. It's about having a thoughtful capital allocation approach and tying strategy to that capital allocation approach right away. I had to jump right into the annual operating planning process. We have a solid strategy, and my experience has been, [that process] When you think about managing resources, you need a strategy and a scope of focus. This directly impacts how you allocate resources to the business. Too often finance leaders let the strategy decide and don't get involved. They then take a heavy-handed approach and try to squeeze costs out of people.
What are your other priorities?
We are committed to leadership development, developing our leadership bench, middle management and above, and enabling them to lead through influence. [employee] Moving population growth forward. Finally, I think one of the things that most growing companies experience is they have disparate systems that don't talk well together. If the systems work together, finance has a very clear view of the connection between the business model and the operational drivers, and the operational drivers and finance. Building that tightly knit system is one of the biggest challenges that I've been focused on.
Do you need to remove some systems and invest in implementing new products? What else is involved from a CFO's perspective?
Is there something to work on the systems side? Yes. Surprisingly, the hardest part is identifying what you're going to measure — the definition and the metrics. The definition has a big impact on the signals you start sending to the business. The question is, how do you go about doing this? [data]How do operational and financial results tie together? Where are the gaps between the two? When you pull data from your systems, the answers are rarely easy to find. But by doing so, you can learn a lot about edge cases within your business, such as pricing mismatches and monetization mismatches that cause your business model to break down.
You mentioned leadership development. What kind of leaders are you developing in your organization?
I always start this conversation by asking how do you think people change their minds? The default answer, explicit or implicit, is that humans make better-informed decisions, meaning that if you present them with new data or compelling logic, they will change their mind about something. But if we're talking about generating belief and followership as leaders, showing people clear logic is not how you get people excited about your strategy or operating model or follow your ideas. In many of our trainings, we introduce the basic concept of how we generate belief as leaders.
Humans are inherently more driven by stories than by information, and we use the tools of narrative and storytelling to help people step outside of their everyday lives, internalize things, and put them into their own context.
Given these management principles, what do organizations expect from their leaders?
It's about being a sensemaker. It's about going beyond organizational boundaries, connecting people, and getting people to decide what they want to pursue. It's about figuring out the strategy and goals of the company, what it's trying to pursue, and what that means for the team. [an individual]Part of being part of a leadership team is understanding the situation and communicating it to your team, resulting in a situation-driven leadership approach rather than a prescriptive, highly tactical, top-down leadership approach.
What is the difference between being a strategic leader, your role at GoDaddy, and being a financial leader?
I thought the CFO role was quite different. There is a lot of overlap. If you want to be a very effective CFO, you have to start by influencing strategy. This is not an ego thing, it's a very real thing. If the company doesn't have the right scope, the right priorities, the right amount of capacity consumption, it will hinder the CFO's ability to influence things like resource allocation and aligning revenue growth and expense profile.
I was struck by how relevant many of my skills are. [from GoDaddy] At heart, I'm a finance person. And frankly, there were a lot of jobs at GoDaddy that I didn't want to do. I think there's something great about the way finance articulates value creation. Combining customer value creation, which I get from my strategy background, with shareholder value creation, which I get from my finance background, has been a great experience here at Built.
