Expand Your Toolkit: A Crash Course in Finance for Operations
AdaptivOps recently sat down with Thomas Grenet, Portfolio Finance Director at EmergeONE, to discuss his experiences helping finance and operations work together.
Today, Thomas Grenet is no stranger to the world of finance, but that wasn’t always the case. After graduating from business school in Paris, Thomas worked as a marketing intern. However, he found the work a little dull; he wanted to pursue something more intellectually stimulating. So, despite having zero experience in finance, he ended up working in leverage finance and he was immediately hooked.
The work required a mix of legal and financial expertise, as well as a strong work ethic and communication skills. In a matter of weeks, Thomas could get to know a company or sector inside and out. It was both exciting and challenging. Unfortunately, just nine months after getting into the industry, the housing crisis of 2008 sent global markets into a free fall. And his job shifted from helping closing new deals to restructuring defaulting loans..
Suddenly, Thomas was much closer to the business the bank financed, talking almost daily to the management team in some cases. The position was at times awkward — after all he was a banker, not an investor — it was also extremely insightful for Thomas of what the role of finance inside a company is all about.
Making the Jump to Startups
After years working for finance organizations, Thomas Grenet decided it was time to get his hands dirty and help new ventures grow. Since then, Thomas has served as the head of finance for two startups, and is now a consultant for seed-stage companies in London.
At first glance, Thomas Grenet’s experience would make him seem like an attractive asset to startups. However, he claims that the fit is not that clear-cut. Why? Because banking and finance for startups require very different skill sets. Operationally, in particular as a first finance hire, Thomas had to get right into the weeds — e.g. reconciling invoices, producing (and not analyzing) monthly management accounts, laying out billing and payment processes, etc.
Meanwhile, at a more strategic level, a finance lead together with the management team is setting KPIs, OKRs and allocating capital for the team to grow towards building a sustainable business. This requires building procedures generating solid and consistent data across the company.
Thomas came from a top-down mindset and suddenly moved to a bottom-up environment.
Thomas’s Advice for C-Suite and Ops Managers
As someone who has worked directly with ops from the perspective of a finance lead, Thomas has a few pearls of wisdom to help operations managers and company heads get the best of both worlds.
- Ensure proper alignment and consistency. It’s a matter of sitting down with the funders to make sure everyone is tracking the same thing and speaking the same language. Be especially clear about the definitions used across the entire operations team and organization. Additionally, take the time to make sure the data is well structured and understood.
- Communicate and be transparent. Don’t try to hide things from finance, because, at the end of the month, they will see where the money is going. If the money is misspent, i.e. not in line with the roadmap, trust will be damaged and the finance lead will put you on a short leash. Plans often need to change however, in which case alignment with your finance lead is just a conversation away. The more you communicate with them, the more they can support you.
- Scale before you need it. Most bottlenecks arise from missing processes and software, which are generally inexpensive to implement. Simply scaling early on can help you avoid workflow problems between finance and ops as the organization grows.
- Demand empowerment. Without delegation tools, we create bottlenecks and dilute accountability.T With KPIs, OKRs and a budget clearly defined, ask in addition for signing and spending delegation privileges for key team members.
- Think of the finance team as an enabler. Finance is mainly here to support the growth of the business. A critical part is about allocating resources to test new growth hypotheses. Provide finance with a clear case: what you want to learn, what resources you need, what metrics will you use to measure its success (e.g. additional sales it will generate, man-hours it will save), what return it would generate.
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