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Russ Jones on Turning Finance into a True Strategic Partner

Russ Jones, former CFO of Shopify, discusses what it was like to build a finance team at a hypergrowth company and the keys to developing strategic partnerships across the organization.

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Episode Summary

Building a finance team means investing in processes, tools, and people. But, making all three segments successful can be time-consuming and requires having a CFO ready to look outside the box and build partnerships with every department within an organization.

That’s easier said than done, but fortunately, there are success stories that prove it is possible.

In this episode of The Role Forward, our host Joe Michalowski welcomes Russ Jones, the former CFO of Shopify. The two discuss what it was like growing a finance team in a company such as Shopify, the challenges and lessons learned, and the importance of developing a partnership between finance and other departments.

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Featured Guest

Russ Jones

Former CFO, Shopify

Russ Jones was the Chief Financial Officer at Shopify from 2011 to March 2018, guiding the company through its 2015 IPO process. Prior to joining Shopify, Russ served as Chief Financial Officer to Xambala Incorporated in San Francisco. He then went on to co-found CFO4Results, which provided interim Chief Financial Officers, business and operational support services to a number of early to mid-stage technology companies.

Key Themes from the Episode
  • Don't fall into the early-stage trap of thinking you can build the right processes and controls later on. Do it as early as possible.
  • If a system works for finance but not for anyone else, then it doesn't work at all. Finance needs to focus first and foremost on being a strategic business partner.
  • Growing a finance team starts with understanding your own strengths and weaknesses as a finance professional.

Episode Highlights from Russ Jones

4:22 — The Role of Modern FP&A

”I view the FP&A role as critical as the accounting role for any company. Once you get the accounting side working, the FP&A role may be more important as you think about how to grow and create a profitable business. 

Initially, I was the default person or the FP&A person at Shopify. On my first day on the job, Toby, who’s the CEO, came to me and said, ‘We have a board meeting the following week. [This was March of 2011.] We haven’t yet presented an operating plan to the board. And it would be great if you could do that.’ […]

I think the first operating plan I did there on operating expenses for the full year was 1% off. So it was probably the closest I’ve ever been to an operating plan. But we started to build a function.

About two years in, we hired the first dedicated person, which was in the role of financial planning. They sourced the system that we were gonna use and were involved in the implementation of that. And then started to produce the operating plans on a routine basis. 

And then, as the company scaled, we started to add dedicated resources that were focused on particular business areas. And that’s a good way of scaling the business.”

14:45 — Processes and Systems Should Be Open to Improvement or Changed 

”Something goes wrong in a company, and all of a sudden, this new process is put in place to make sure that it doesn’t happen again. […] And as the company evolves, you constantly need to be looking at whether this process is still adding value. And, if not, then how do you eliminate it? 

I think that’s a constant goal. And in the same way that technical debt can slow down a company in how they’re trying to develop products, processes or managerial debt could do the same. It takes forever to get a decision made or something bought and stuff like that. It’s an important thing for finance people to be thinking about.”

26:05 — Building a Shopify Finance Team

”I hired an accounting manager because I needed to have someone who could make sure that the books got closed correctly. And with that individual and the part-time accountant, we ran the finance function for the first couple of years. And then I brought in a manager of financial reporting. You start bringing in more accounts, payroll people, and things of that nature. 

When it comes to specialty roles, one of the first was tax because tax is an area of its own expertise. […] Treasury is another one. […] I’ve seen people combine tax and treasury. I think that’s not a bad way of doing it, but at some point, getting a separate treasury function is another key.

And then, adding technical accounting people as things get more complex. Adding someone to an internal audit function is another key one. And, I wanna do a lot of these well in advance. If you think your plan is to go public — once you decide to go public, you really wanna go as fast as possible.

And so you don’t wanna be discovering things at that stage that are gonna slow down the process because there are market windows, and it’s a lot of effort. So when you decide the answer is going public, go as fast as you can.”

Full Transcript