How We Hired a Qualified CFO
After I wrote about your next hire, I heard back from Kevin who asked if I might provide an example of what the lists I wrote about might look like and how they might work. As a reminder, I said that when it comes to building an organization and figuring out who should be in what role, it’s helpful to keep four lists:
What needs to get done, ordered by importance.
What people are doing, ordered by time spent doing it.
What people are good at, ordered by ability.
What people like to do, ordered by how much they like doing it.
As for an example, here’s a simplified version of the framework I used back when I was our chief financial officer (CFO) when our chief executive officer (CEO) Brent and I were discussing hiring Nikki to take over as CFO in order to move me into being our chief investment officer (CIO).
I wrote previously that in an ideal world, these four lists are nearly identical, so you can see the incongruity in this example. I was spending the most time on internal financial management, which was neither the most important thing that needed to be done nor something that I was good at or particularly liked to do. And the reason that was so is because it was important and I wasn’t good at it (hence being the most under qualified CFO in America). So I had to spend a lot of time getting up to speed on everything that went into it in order to be competent at it. That’s a problem.
Another thing to point out is that these lists don’t exist in a vacuum. Obviously at an investing firm investing is very important, but at that time what needed to be done in investing was a very high priority for Brent and Emily. Yet the responsibilities associated with that area also came with opportunity costs for Brent, so if he wanted me to make investing a greater priority (which I would welcome since I like it and am, let’s say at least for the sake of argument here, good at it), something else had to give.
So what this simple exercise showed clearly is that our next hire needed to be someone who was good at and liked porto financial oversight and internal financial management because then their lists would be nearly identical and then so would mine! And I don’t mean to speak for Nikki, but I think we got that hire right.
That, in its simplest form, is how I use lists like this to inform hiring and structuring decisions. And I say in its simplest form because there is much more nuance and complexity. For example, underlying each of Investing, Capital Markets, Portco Financial Oversight, and Internal Financial Management are myriad roles and responsibilities. For example, Capital Markets includes both writing investor letters and also regulatory compliance. As you might guess, I am much more the former than the latter, and my role and our team are structured to reflect that. Similarly, Portco Financial Oversight includes both budgeting and expense management as well as long-term capital allocation decisions. You can probably guess where I am more likely to be involved.
In other words, as organizations grow in scale and complexity these lists can act like nesting dolls as you define roles and responsibilities. But by striving to align what needs to be done with what you’re doing with what you’re good at and, of course, and perhaps most importantly, what you like, you, too, can end up with a qualified CFO.
– Tim
