CFO insights on financial management and adaptive leadership

Key takeaways: 

• Sustain company growth by tracking key financial metrics
• Leadership style and decision-making should adapt based on the stage and culture of the company 
• Learn how to balance efficiency with R&D spend in a way that works for your organization and growth stage 
• Build a diverse finance team with complementary skills for top performance
• Embed cost awareness and financial literacy in your culture for effective spend management 

Welcome to The Efficiency Code, your guide to unlocking peak performance in finance and procurement.

In this series, we decode the strategies of top industry leaders who are redefining efficiency and optimization. From embracing technology to effective spend management, discover how to achieve more with less. Join us as we crack the code to sustainable growth.

In this episode, we sit down with Sanjay Bowry, CFO at Gravitee, ,where he is currently driving financial strategy, fundraising and talent development. Sanjay has an impressive track record in scaling high-growth businesses such as Vita Mojo and Black Sheep Coffee. 

He’s taken a company from a negative bank balance to closing the NASDAQ bell and is a seasoned pro at building finance teams with complementary skills to scale up quickly and efficiently. 

Speaking with Kathy Svetina, he shares insights on sustainable growth in corporate finance vs. start-ups, balancing efficiency and R&D investment, how to adapt your leadership style for different business scenarios – and a lot more. Check out 5 of our favorite takeaways, and watch the full video above for more.

Sustain company growth by tracking key financial metrics

Sustainable company growth will differ between established corporations and scale-ups. While larger companies will focus on shareholder returns, startups should aim for growth while maintaining financial stability. Sanjay notes the importance of tracking metrics like customer acquisition payback, burn multiples, and annual recurring revenue growth. 

He advises startup finance leaders to consider these metrics at every decision point, whether it's hiring new staff or launching marketing campaigns. By consistently monitoring these indicators, startups can ensure they're trending towards profitability without sacrificing growth – a crucial balance for attracting investors and planning for future funding rounds or IPOs.

Leadership style and decision-making should adapt based on the stage and culture of the company 

While corporate leadership often focuses on stability and career progression, finance leaders in high-growth scale-ups need to inspire their teams to believe in the company's vision and mission. Sanjay emphasizes the importance of aligning your team with the startup's goals, whether it's becoming a category leader or transforming an industry. 

Startup journeys are filled with highs and lows, from major sales wins to funding challenges. By fostering a deep belief in the product and mission, leaders can help their teams become resilient and stay committed to the long-term vision. This approach creates a stronger and more motivated workforce, essential for navigating the unpredictable startup landscape.

Learn how to balance efficiency with R&D spend in a way that works for your organization and growth stage 

A common challenge for growth-focused CFOs is managing research and development spend. Sanjay is familiar with the difficulties of determining the right amount to invest in product development and engineering teams. There’s no golden rule for this, but the Rule of 40 can be used as a guiding principle. This metric combines a company's revenue growth rate and EBITDA margin, aiming for a sum of 40 or higher. 

For most scale-ups, this often means having revenue growth outpace negative EBITDA. Sanjay notes that successful Series C companies typically fall in the -20 to 0 range for this metric. By using the Rule of 40, startups can better balance their R&D investments with overall financial health, ensuring sustainable growth without overspending.

Build a diverse finance team with complementary skills for top performance

Sanjay has three top tips for building and managing a successful finance team in a startup environment. First, he emphasizes the importance of hiring people who believe in and align with the company's values. Second, Sanjay advises hiring team members with complementary skill sets to your own, citing his own experience of hiring a detail-oriented financial controller to balance his management accounting background. 

Finally, he stresses the importance of hiring people you genuinely enjoy spending time with, as this allows for better communication and makes difficult conversations easier. Sanjay likens effective finance teams to sports teams rather than families, highlighting the need for high performance and the ability to adapt to changes.

By following these principles, finance leaders can create a more cohesive, adaptable, and high-performing team.

Embed cost awareness and financial literacy in your culture for effective spend management 

Sanjay has numerous insights on how finance leaders can create a culture of cost awareness and financial literacy in a startup environment. He emphasizes the importance of making every employee feel responsible for cost management, not just the finance team. Sanjay's approach involves regularly sharing spending data with teams and encouraging them to think critically about resource allocation. 

While basic tools like spreadsheets can be effective initially, he notes the potential for more sophisticated software solutions as the company grows. The key, Sanjay argues, is to tie financial decisions to the company's larger goals, such as reaching specific Annual Recurring Revenue (ARR) targets for fundraising or IPO preparation.

By fostering this understanding across all levels, particularly among C-suite executives, finance leaders can create a more financially savvy and cost-conscious organization that's better equipped to achieve its long-term objectives.

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