November 4, 2024 • 33 mins
Join us on Count Me In for an insightful chat with Justin Smith, CFO at FinQuery! Justin tackles pay disparities that accountants face at Big Four firms and envisions a future where salaries rise to reflect their true value. He also shares how FinQuery's robust learning budget helps employees dive into AI and product development.
We explore the importance of transparency, mission-led organizations, and celebrating achievements to boost morale. Justin's advice on balancing empathy with organizational goals is a must-hear for leaders navigating post-pandemic challenges. Hosted by Adam Larson, this episode is packed with valuable insights on accounting, leadership, and employee engagement. Don't miss it!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Adam Larson (00:21):
Welcome to Count Me In. I'm your host, Adam Larson,
and today, we're joined byJustin Smith, the CFO at
FinQuery. Justin brings deepinsights from the finance and
tech sectors. We'll discuss thepay gap between accountants and
other professionals and thefuture of accounting education
and the impact of technology onlearning. We'll also explore how
FinQuery's investment inemployee development boosts
(00:42):
satisfaction and retention.
Additionally, Justin highlightseffective communication,
transparency in financial plans,and the importance of
celebrating achievements. Sotune in as we delve into these
critical topics with JustinSmith right here on Count Me In.
(01:03):
Well, Justin, I'm really excitedto have you on the, podcast
today. We're gonna be talkingabout leadership and growing
efficiently. And to start off, Ithought we could talk about a
little bit about, you know,what's the current state of
leadership within organizations,especially now that we're a
couple years from the height ofpandemic.
What we did before the pandemicisn't gonna work after the
pandemic.
Justin Smith (01:24):
Yeah. Look, I, I think I think in many ways the
game has changed. Organizationsare functioning in a certainly
just geographically moredisconnected, you know, manner.
There's there's work remote,there's hybrid, there's and
there's a lot of tensions, Ithink, that exist within
organizations. You know, manycompanies want what they
(01:44):
perceive as more collaborationand people think about that, in
terms of, you know, beinggeographically co located.
Workers, I think, are, lookingback over the last 3 or 4 years.
And in many ways, rightfullysaying, hey, there's a lot of
great gains that we've had. And,you know, we were able to to
find, you know, levels ofproductivity. And I I think
workers want to hold on to that.And then there's, you know,
(02:05):
other other tensions that we'reseeing out there where, you
know, prior to the pandemic,there was a I think there was a
focus on growth that, you know,people still wanna see in
today's time, but expectationshave come down.
And a big driver behind that is,the fact that cost of capital
prior to the pandemic was a stepchange different from where it
is today. Rates were were on thedescending rate path. Who knows
(02:28):
what the curve of that'sultimately going to to look
like? But I think most peoplethink, at least in the near
term, we're not going back to azero interest rate, you know,
time period. And as a result,the ROI or the threshold at
which you're gonna invest indemand generation and growth is
different.
So the punchline is, I thinkthat companies and workers have
(02:49):
to be much more intentionalabout how do they set themselves
up, and position themselves froma collaboration perspective,
from a growth expectation, and,you know, how do they
effectively, you know, meet inthe middle so that, workers feel
respected? They feel like ifthey found a home where, you
(03:10):
know, they want to to invest forthe next 2, 3, 5, you know, 10
years of their career. And thencompanies also feel like they've
got people that are engaged andbought in and and truly want to
be there. The way in which Iwould say things have not been
is that culture remainsparamount. If you have a group
of individuals that have sharedgoals, shared philosophies, have
(03:35):
a desire to win.
I mean, that's that's that's thewinning formula. That's what
everybody
Announcer (03:39):
ultimately wants to get to. I just believe
Justin Smith (03:39):
that in the current time period right now,
things have ultimately wants toget to. I just believe that in
the current time period rightnow, things are more
challenging. And so it's moreimportant and more incumbent for
leadership to have a clear,concise set of expectations that
are attainable and that theyhave a workforce with leaders
that are truly committed andbased.
Adam Larson (04:02):
To me, you can read any headlines in the last year
or so, and many organizationshave had to tighten the belt.
They've had to let people go.How do you create that culture
and that that feeling of, hey, Iwant you to invest your time in
here and stay here as anemployee. If, you know, just 6
months ago, they're like, oh, welet go, you know, 10%, 30%, 40%
of the staff. And and a lot ofpeople are feeling burnt out.
(04:23):
They have more work on theirhands. You know, how do you how
do you balance that? How do youhow do you help your teams get
there?
Justin Smith (04:28):
Yeah. So I well, there are there's multiple
dimensions to this. I think thefirst part Mhmm. If you are any
company that is that is goinginto a period where a riff is
imminent or, you know, comingout of a period where, they had
a a large reduction force fromthe first the first part's
empathy. Because Yeah.
You know, our our livelihoods,it's more than money is a for so
(04:49):
many people, it's a reflectionof of who they are. And, yeah, I
think you also have to realizethat for the people, it doesn't
just impact the individuals thatare no longer with the
companies. It impacts the peoplethat stay because there's
there's a heightened level ofparanoia about their job. But we
spend, just from a socialperspective, we we spend more
time with the people that wework with than the people that
we that we love and that are,you know, our family members.
(05:12):
And when those individuals areno longer part of an
organization, at times, at nofault of their own, because, you
know, the business environmenthas shifted, it it kinda tears
it its surgical fabric.
So I think empathy is a reallyimportant, you know, aspect to
understand how has this impactedyour team to ensure that, and
hopefully this is the case forcompanies that when you cut, you
(05:33):
cut once, you don't go back for2 or 3 or 4 rounds. We've all
seen examples where that'shappened. And Mhmm. No amount of
empathy and no no amount ofrelating people is gonna give
individuals comfort, confidenceif management doesn't have the
ability to understand the depthof the cuts that that they need
to make and and be one and done.But I think going back to your
your questions to hit it on thehead, clarity is the single most
(05:56):
important thing any organizationcan have.
If you want people to haveconfidence in their in their
role, if you want them to haveconfidence in the company,
confidence in the objective, Ithink management has to, number
1, have clarity around what arethe objectives that you're
driving to? What are the markersthat define success? Whether
those are financial KPIs orwhether those are r and d
(06:19):
milestones or, go to marketmilestones with establishing
partnerships and relationships.You need to understand what is
the end goal, but what are themarkers along those lines? I
would all I think all of uswould like to think that our
goals are 60, 90 days out, andso we can hit them and achieve
and move on.
But Yeah. Many of them are multiyear. And so clarity is what are
(06:42):
the markers that we need to hit,you know, along the way so that
you can tell your team, eventhough we're not we're not at
the the end point of of whateverour immediate objective is,
we're on that path. We're doingthe things that we need to do.
And then more specifically forthe individuals within certain
(07:04):
departments, your department isdoing what it needs to do or by
the way, perhaps it isn't.
But here's the course of activeaction so that we can get back
on it. I think if if leadershave are are very thoughtful and
clear around the most narrow setof objectives and mile markers
(07:24):
along the way, and then they cantactically communicate those to
the rank and file so that theyunderstand what those shared
objectives are. I think thatthat is critically important.
Communication
Announcer (07:36):
Yeah.
Justin Smith (07:36):
And thoughtfulness. I'm really
carried the day for forcompanies that are navigating
transitory, timelines.
Adam Larson (07:45):
I like that. I like thoughtfulness. Communication is
very important and beingthoughtful too because
everybody's going we're allhuman. You know, whether you're
a CFO or whether you're a staffaccountant, you're a human who
has feelings and emotions andbeing thoughtful and being
mindful of those person'semotions and feelings as we're
navigating all these waterstogether is is huge. And it's
almost like you need to haveempathy as well for what people
(08:08):
are going through.
And how do you balance empathy,thoughtfulness, and challenging
with, hey, I still gotta meetthe bottom line. Like, those 2
don't always go hand in hand.
Justin Smith (08:16):
No. But I mean, this comes back to having an
achievable plan.
Adam Larson (08:19):
Yeah.
Justin Smith (08:20):
I mean, they're they're we we we all know the
examples of of companies, where,you know, leadership starts out
the year and they put forth abudget that is less a financial
target that they have. I I Ilike to think about a budget as,
you know, a set of numbers bothfrom a revenue and from a cost
perspective that you have 95%plus confidence that you're
(08:40):
gonna not only be meet, butyou're going to to exceed. There
are there are companies thattake a different approach, and,
they may establish budgets thatare aspirational. And if you,
you know, you look back and say,you know, how many times have
you hit your budget in the last,you know, 2, 3, 4 years? If the
answer to that is never, or ifthe answer to that is, hey, we
(09:00):
get 50% every single year.
You've got a managementexpectation problem.
Adam Larson (09:05):
Mhmm.
Justin Smith (09:06):
This is not about it's not about lowering your
expectations. It's a matter ofunderstanding what is your what
is your TAM, what is your go tomarket opportunity, and and
where is the company positionedtoday? I think companies should
maximize their opportunity set.They should be bullish. They
should be aggressive.
They should have, plans thateverybody should stretch for.
(09:28):
But you should also have a levelof recognition of where are we
today? What what is our go tomarket strategy? What is our
product strategy? Whatinvestments do we have to make
in r and d?
What are the implicit risks thatwe need to, understand and
anticipate? And, you know, thatsense of an achievable plan that
again requires stretch, itrequires effort, but putting
(09:52):
forth an achievable plan,whatever that may be, is
critically important. So thatagain, the team understands
there's a multiyear pathway thatwe're moving toward. And even if
growth this year doesn't soundthat compelling, that's fine.
We're on this multiyear path.
Here's these other things thatwe're doing that may not show up
(10:14):
in revenue today, but they'repositioning us for growth next
year because we've got thisgreat new product that we're
developing, and it's gonna becoming out in the Q2 of of of
2025. And, you know, we believethat in a short period of time,
there's gonna be someacceleration. Making sure that
individuals understand Mhmm. Andare are effectively aligned on
(10:36):
those goals. You don't have toshare financials.
You don't have to, you know, gofull mono with, teams. In fact,
I I think that you shouldn'tbecause invariably, there's
going to be be, volatility alongthe way. Nobody's gonna hit, you
know, everything perfectly. Butexplaining to individuals and
making sure that they recognizethat the company has a plan.
(10:57):
It's multi pronged.
Everybody rose the boat. And aslong as you're focused on
exactly what you should be doingas part of that plan, then
you're achieving success. Ithink again, that's just an
important piece from from myperspective. And and by the way,
the one one other item I'll justthrow out there, as a CFO and
and and I was a former banker, Ispent nearly, a decade at
(11:18):
Goldman Sachs. I I stay veryconnected with what are
happening in public marketsbecause Mhmm.
Private companies, it's opaque.No one ultimately knows, but
public companies, they'reputting out analyst reports,
companies are giving guidance.You know, we should I I share
with our own, employee base thatexpectations that public
companies have for themselves.And these are the biggest
(11:39):
companies that have the bestability to compete. Their own
growth expectations have comedown materially over the last 2
years.
In fact, they've 50 Yeah. Youhave nearly 50%. I'm not sharing
that data to alarm anybody orconcern or lower expectations.
But the point is, if if you'retalking about your forward
(12:00):
growth and your forward growthis coming down from what you've
messaged to employees,historically, being able to go
out and say, hey, this cohort ofbest in class companies, they're
seeing the same they're alsofocused on margin. They're also
focused on these exact samepriorities.
So if we wanna think like, actlike, walk like, and talk like
(12:21):
the biggest and best in theindustry, we're actually doing
that. And our talk track is inline with theirs, even if it may
not feel like that to you incontext of where the market was
18, 24, 36 months ago.
Adam Larson (12:35):
So based on all the everything you're saying, I love
how you're giving your employeesa shared sense of purpose as
you're making clear the thegoals that are attainable.
Because I think sometimesorganizations come out with
these very lofty goals that haveno no stickiness to them. No no
actual, like, substance to them.And being able to address it in
(12:56):
that way, I think, is is hugelyimportant for organizations
because you need that shares asa purpose to make sure
everybody's aligned. Because ifeverybody's not wrong for the
ride, you know, the the traincan't keep going if all the
workers aren't doing the samething.
Justin Smith (13:11):
Yeah. Well, that's that's that's absolutely true.
And, you know, I think about ourour team and and this may be too
obtuse, but just at a highlevel, I think about our team
kind of breaking into 22 core 2cohorts. There are individuals
who come to work because theyneed a job. They're they're fine
with the level they're at.
They don't they don't wannaescalate. They just quite
(13:33):
literally need need a job. Andand those are important people
to have in any organization.There are certain roles that,
you without naming specific onesthat, you know, somebody may go
into that role and they could bethere for 5 or 10 years with the
same role and same title. 1st,the other cohort of of team
member that they're reallycareer oriented, they're
(13:54):
competitive, they wantprogression, they wanna see
success, they need to seesuccess, in order for them to
stay.
That that is the cohort of ofemployee that you really need to
engage with. The best companiesout there are are mission led.
Announcer (14:11):
And
Justin Smith (14:11):
you know, when I was when I was at Goldman, I had
the good fortune. Many of myclients were the successful
companies that broke throughventure stage and growth stage
and private equity and, youknow, ultimately tapped the the
public markets. And there wasdefinitely a success bias of the
companies that that I had theopportunity to work for. You
just see pattern recognitionover and over and over in many
of these companies where itdoesn't matter what type of I
(14:33):
mean, it could be a compliancesoftware or I took public a
company that did back office fortrading and hedge funds. And, if
you sit there on the outsideend, if somebody looks at the
company, it's not gonna getanybody excited.
You're not gonna go to cocktailparties and talk about
compliance software. That's notgonna make you popular, I think,
in anybody's circles. But whenyou get into the curtain and
(14:55):
you're you're engaging with theemployees and you're preparing
them for, testing the watersmeetings and the roadshows and
the, you know, post, your publicworld where they'd be engaging
with the markets, the employeesare just on fire. I mean, you
you walk out of those meetingsfeeling like you grew a foot
because everybody's just excitedand pumped about the
opportunity. And you also haveto sit just, kind of like take
(15:17):
stock back.
But why are they so excitedabout compliance software? Well,
they're not. They had a missionand they felt like they competed
against their competitors. Theyfelt like they had a mission to,
to get to a certain customerbase to prove that they were
enterprise worthy, that theymoved from SMB to enterprise.
And when they do that, everybodyfeels like they have a
(15:39):
collective win.
Those types of things don'thappen by chance. There's not a
scenario where, you know, peoplejust gets 5 customer wins and
all of a sudden, boy, they're onfire. Those are objectives that
were set by a CEO, most likelyin in many instances, a founder
who who had a burning desire toprove, hey, we can be the best.
(16:01):
We can be the industry leader.We can launch 2 new products and
get them up to scale.
Whatever that objective is, itis critically important that
among your cohort of employeeswho are what what I what I
characterize is kind of like theathletes of an organization that
are truly driving newinitiatives, repositioning,
transformation, that cohort ofemployee has to be absolutely
(16:25):
engaged with whatever theobjectives are. And they all
they need to understand not onlywhat is a team win, but to
borrow like a baseball analogy,they need to understand that
their own batting averageexpectations so that, you know,
when they're connecting with theball, they need to know how are
they performing against whatevertheir their expectations are. So
that clarity around companyobjectives, team objectives
(16:48):
Mhmm. And even if there aren'tthese big visible wins as an
organization, our long termobjective is x and you need to
do y and z along the way. Ithink that's just a just a
critical component, to gettingpeople excited, engaged, and
feel mission led.
Adam Larson (17:05):
Yeah. Mission led is is hugely important. And when
you when you switch from, like,goals and it's like that and
switch to a mission as opposedto, like, the tagline or
whatever, it it really kindachanges your your mindset of how
you look at what yourorganization is doing as opposed
to just, well, I just gotta domy task today and get home.
Like, no, I wanna be part ofthis bigger thing that's pushing
this this boat forward, and youhave a better sense of purpose.
Justin Smith (17:27):
Yeah. And and by the way, you also have to
celebrate publicly, you know,within your your organization
when when somebody doessomething. I mean, we had this
is this is going back, but itwas this was a big celebration.
So when I when I joinedFinquery, we had, we had a a a a
day sales outstanding. So ouraccounts receivable, it
basically took us a little over2 months on average for us to
(17:49):
collect.
Over the course of of a year, wemoved that from a little over 2
months to to 1 month. And andthere were a number of things.
So so we did some software. We,we had some new approaches with
our customers and engagement.But that freed up for our for
our for our organization.
So putting aside any new sales,I mean, that was quite literally
1,000,000 of dollars of cash gotfreed up. And we're we're
(18:12):
profitable. So, you know, wedon't we don't have a debt
dynamic. But if you're a companythat is growth stage and you're
using a revolver or you have togo borrow capital, if you move
if you had that type of move,what let's say and I'll just
pick a number. Let's say youfreed up $5,000,000.
Announcer (18:29):
Yeah.
Justin Smith (18:30):
Well, interest rates right now are nearly 10%,
for revolver debt. So freeing up$5,000,000 means not only did
you do you have that cash, butyou caught you cut your interest
expense by half a $1,000,000. Ifyou're gonna go have to raise
money by freeing up $5,000,000,IRR expectations, in venture and
(18:50):
in private equity, they'reapproaching 20%. So you freed up
dilution, in your company. Beingable to frame it to individuals
in a way that they're probablynot thinking about it.
They're just saying, hey, look,day sales outstanding goes from
60 to 30, and it's just a numberon a performance metric KPI. I
dimensionalized it in in frontof our entire company to say,
(19:12):
hey, by the way, our accountingteam brought in x percent of the
overall cash earned this year.Accounting never gets revenue
recognition.
Adam Larson (19:22):
Yeah. That's huge.
Justin Smith (19:23):
We we talked about it in that sense. And I'll tell
you my accounting team is welldeserved. They're they're very
smart, talented, hardworking.And I mean, I I think they felt
like that they were walking 6inches taller for for a month or
so. And by the way, welldeserved.
Yeah. We should have felt that.
Adam Larson (19:41):
So we can always we always measure success in an
organization by financial terms.And a lot of times, if the
employees are doing well, a lotof times that reflects in, you
know, the revenue and and thebottom line of what's happening.
But should we, as organizations,be measuring kind of things like
non financial, like, employeesatisfaction, overall
well-being? And should that bepart of our, like, measure of
success? Like, hey.
(20:01):
Yeah. These numbers are lookinggood, but also our employees
feel good about it. Like, isthat something that
organizations should be doing?What are your thoughts on that?
Justin Smith (20:08):
Yeah. I think that, I don't think that anybody
should be looking at spotabsolute analytics, whether it's
a glass door rating to say, hey.Yeah. You know, we need to be
4.2 and not 4, but I think youshould pay attention to trends.
Yeah.
You know, the the to to borrow acliche, you know, the rising
(20:28):
tide raises all 5ths. And and bythe way, the opposite of that is
true. If you look at employeesatisfaction, it was it it was
pretty high in in in 2021 oncepeople, you know, saw and and by
the way, this is sectorspecific. I don't wanna be
ignorant to the fact that therewere there were many industries
actually that were feeling a lotof pain. But within the tech
sector where where I live, workand operate, those fairly robust
(20:50):
time period because everybodywas spending massively because
Mhmm.
On the stimulus money and thentechnology was enabling people
to to work remotely. And so itwas a boom pie. So employee
satisfaction was sky highbecause people were getting
raises every single month. Ifyou left one job, you'd get
another one to work for, by theway. In some instances, people
would have 2 at the same time.
And so the opportunity set washigh. And so Glassdoor ratings
(21:12):
were pretty high. But, you know,post what was it? I think the,
slide in SaaS started inNovember of 2022. So from that
period, on, you know, all thoseratings, you know, started
coming down.
I think organizations need tounderstand what where is the
tide going and what is yourtrend relative to that to that
baseline. For us, you know, wepride ourselves in in a handful
(21:34):
of metrics. So we look at thingslike voluntary turnover. And
we're very proud of the factthat our voluntary turnover
based on we get data from 2third parties on things like
salaries and and in turnoverand, benefits. And of both
benchmarks that we get, we'rewell below the average.
A very important one for us isis engineering and tech talent,
(21:55):
turnover because, yeah,historically, there are a lot of
jobs. Those are easy to moveremote. And our turnover is
about half of what, you know,many of the benchmarks are. So
there's many things that wecould potentially attribute that
to. But we think, and I thinkpeople ultimately vote with
where they spend their time andwhere they spend their dollars.
And, you know, we are veryfortunate, the fact that we've
got an engaged workforce. So Ipay attention to, again,
(22:18):
voluntary turn turnover, payattention to, tenure, and then
we do a full 3 60. So not onlydo I rate my team members every
single year, and it's by theway, not every single year. It's
every 6 months. And it's not forthe purposes of being, critical.
It's for the purposes of makingsure that people understand, you
(22:40):
know, where are they going? Howare they trending? Yeah.
Sometimes people go through, youknow, tough tough moments in
life or sometimes people getpromoted and they're not they're
not connecting with that higherlevel job. Management's not
easy.
It's not for everybody. And sowe wanna make sure that there's
consistent feedback. And by theway, I get that feedback
Adam Larson (22:59):
too. So
Justin Smith (23:01):
if I'm not communicating something, if I'm
not, you know, responding orengaging with people, I'm gonna
get a visible scorecard. And sothat's something that the, SLT
or senior leadership team, youknow, at our company, we
actually look at our ownscorecards. And how are
departments showing in terms offeedback? What's the engagement
of of sales? What's theengagement of of accounting and
(23:21):
finance and marketing?
And if there are gaps, and andthere's, you know, some
disconnect, those are toughconversations we have with each
other and not just just with ourwith our teams. So being open
and receptive to that type typeof feedback is important. And
also recognizing a bad scorecardis likely more important than a
(23:43):
good scorecard because it'd be aleading indicator of some
challenge.
Adam Larson (23:48):
Yeah. I've always been curious about a 360, and
I've always been like, hey, Iwanna work in a realization that
has a 360 so I can see it inplay. Because a lot of times
with the normal feedback is, youknow, you have the your your
your supervisor giving you thatinformation, and then you might
have a chance to, like, give acomment back to them, but it's
not a true, like, 360. And youand and you're not always able
(24:11):
to give feedback to your yourcohort. So I'm glad it's been
successful.
And and had do you feel it'sbeen a successful, thing, at
your organization?
Justin Smith (24:20):
Yeah. So we we had a, just really terrific dynamic,
you know, chief people officer.She predated me joining
Finquery. She put Yeah. Youknow, these actions in place.
I'm very grateful. When I was atGoldman, we we did the same
thing. You know, we did 3sixties. So
Announcer (24:34):
Yeah.
Justin Smith (24:35):
I have worked throughout the majority of my
career at organizations who dothese. The other the other part
of this though is that there'san accountability. So going back
to my comment around engagement,if you give somebody a review in
a 360, so whether it's it's megiving a review to to somebody
who who reports to me, orsomebody giving me feedback,
(24:56):
who's one of my direct reports,if there's something new on that
360, in some senses, that's afailure. And what I mean by that
is if I if if there was an issuein my organization that was
pulled out by, you know, teammembers, whether it's a direct
report or, you know, 2 or 3, youknow, levels down. And I'm
(25:20):
finding out about that on a 360.
I I consider that a failure onmy on my, side. And again, if
it's 2 or 3 levels down, Iconsider that a failure of the
people who are managing thatindividual because we should be
engaging with people to wherethey feel like if there is a
challenge, an issue, or asituation, it should be
percolated immediately. So whenI when I do my reviews with my
(25:42):
team, my goal is for them tocome out of them not only with a
clear sense of where do theystand and, you know, what are
way things that they can workon, But I also want them to say
something to the effect of,yeah, this makes complete sense.
We talked about x and y and zover the last several months. I
I'm making progress on it.
I appreciate the fact that youcalled that out, and and this is
what my path is. I I don't wantthe 360 to be that point in time
(26:08):
where I hold anything new back.Mhmm. Because that's that's a
challenge. That's where I thinkpeople feel like they'll say
something to the effect of,well, why didn't you tell me?
Or they'll feel like potentiallypeople are out to get them.
Right? Because they'll say,well, everything feels fine when
you've been working and yetyou're putting this on my my
review. That's a surprise. A 360in in my view, I when I know
(26:33):
that they're coming up and we dothem in the fall in the spring,
I always make sure it's just agood marker for me to ensure
that I'm gauging with the team.
And I do one on ones with myentire team. That's a full
accounting finance dataanalytics. And then I also run
some of our servicesimplementation and, have
engagement on revenue as well.So it's a broader remit. I
ensure that I'm connecting withevery single person on my team,
(26:56):
you know, during on a quarterlybasis at a minimum.
Most of them on a on a monthlyto biweekly so that there are no
surprises.
Adam Larson (27:03):
Yeah. Well and that goes back to what you said
before about having that clearcommunication, and that includes
things like coaching and helpingpeople improve on things. And
I'll and the approach of if it'sa surprise, there's a problem. I
think that's a great a great wayto do it. And and as we shift
the conversation a little bitto, like, you know, we know you
can read articles in inaccounting, in different
(27:24):
accounting, publications and seethat, you know, keeping talent
is hard.
Getting new talent is hard. Youknow? How has that impacted your
team trying to keep your talentthere? And also, you know,
younger, people aren't going toschool for accounting very much
anymore. And how do you get newnew accountants in?
How have you been, navigatingthose waters?
Justin Smith (27:42):
Yeah. So look, I I think I think pay is gonna be a
big part of this. Like the Mhmm.The job, the job market,
especially for accountants, likeit's supply and demand driven.
Adam Larson (27:53):
Yeah.
Justin Smith (27:54):
I have long felt that accountants in general, are
underpaid. And what I mean bythat is if you compare what a,
accountant at a big four isgonna earn, you know, 2 to 4
years out of undergrad and youcompare that to somebody who
goes to Wall Street on thefinance side, there's quite
literally probably x differencebetween the finance and the
(28:15):
accounting side. So it's notit's not even close. And and
then you also compare that towhat people could earn in
technology, especially if ifyou're AI oriented. There's
there's gotta be a catch up.
Adam Larson (28:27):
Mhmm.
Justin Smith (28:28):
And over time, when individuals are smart and
talented and and they'refiguring out where they wanna
spend time in their career,they're they're gonna look at
and say, you know, what is theopportunity set? What's the job
look like? And and what does thecomp look look like? So I I
think a big part, theaccounting, especially in big
four, my expectation is thatfees for companies are likely
(28:48):
gonna rise in the future becausethe fees that they're gonna need
to pay their employees arelikely gonna rise or we're gonna
have to accept the fact thatwe're gonna have a slim down
diluted, accounts. Like, we'rewe're gonna have something's
gonna have to give.
This type of dynamic, like,today, it it still probably
works. But if you play this outand you assume that the
trajectory of the trends stay,you know, in in place for the
(29:10):
next 10 years, like, somethingis gonna break. And and and
ultimately, accountants areconservative. The, you know, the
the overseers are conservative.There's discussion around, you
know, reducing the requirementsfrom an accounting perspective.
So the number of hours that youhave to have. I believe that
with education, and andinnovation or technology
combined with education, weshould be able to do things more
(29:33):
efficiently.
I mean, I the the US and and I'mprobably going off on a pitch of
diatribe. Like, why why is, whyis dental school 4 years,
chiropractors 4 years, medicalschools 4 years, medical
school's been 4 years for a 100years. And we've gotten
infinitely better in education.And yet, we can't figure out how
to truncate that. Whereas, youknow, you look at international,
(29:55):
the actual, like, 4 didacticorphan of medical school is 2
years, and yet we're still at 4.
Boy, that doesn't make sense.No. So there's there's a I think
in US education overall, youknow, we need to recognize that
technology, and justavailability of information has
allowed us to potentially trainpeople more efficiently. And I I
think that that's gonna playout, should play out on the
(30:18):
accounting side
Combined with, I just thinkincreased remuneration.
Adam Larson (30:23):
Yeah. How important is things like training and
development for your team tomake sure that they're staying
on top of things? And do youallow them extra time saying,
Hey, I wanna make sure you havetime to do this.
Justin Smith (30:35):
Yeah. So we we do this a couple of different ways
at Edge inquiry. 1, the foundersof inquiry, and this has been
something we've we've done foryears predating me. I'd love to
take credit for it, but it wasadmittedly in place before I
joined. We have a very generous,learning and development and
budget.
So we actually give a couple$1,000 to employees to spend
however they deem relevant totheir job or or to their growth.
(30:58):
So if you are if an accountantwants to learn and go take an AI
course, we'll we'll we'll cover,you know, a few $1,000. And by
the way, we'll also give themthe time to go and do that.
Yeah. So, you know, having theopportunity and the time to be
able to upscale is a is animportant component.
That's an area, frankly, a lotof people in our organization
are spending time isunderstanding AI. Not that we're
(31:20):
all gonna go out and we're gonnabecome, you know, AI engineers,
but I I think we can all agreeit's gonna impact what we do in
some form or fashion. So givingpeople, you know, the
opportunity to invest in that.But some people use it for
public speaking courses. Somepeople use it for, you know,
different types of classesbecause actually, we had we had
some individuals in our companythat wanted to move to product,
(31:41):
and they weren't in product.
They're actually, in accounting.And so they went to a few
conferences and and and learnedabout product and and refined
their skill set and ultimatelymade the move over there. So
it's easy to say that yousupport employees to learn and
develop their skills andcapabilities, but it's another
to put actual dollars behind it.Again, not just not just giving
(32:05):
them a stipend, but alsoallowing them to take time to do
that. And that's I would surmisethat many of the individuals at
Finquery part of the reason thatthey stay is that they know that
they can grow not only linearlyin their job, but they can also
grow tangentially through theopportunities that we we provide
them in that flexibility.
Adam Larson (32:26):
Well, and that's hugely important to staying
connected to the goals, stayingconnected to the company
culture, feeling like thatyou're heard, your needs are
wanted, and that that they wantyou to they want that you want
them to feel like that, hey, wewant you to succeed. We want you
to upskill. We want you tobecome better at what you're
doing, which goes back toeverything we've been saying so
far.
Justin Smith (32:44):
Yeah. That's exactly right. So you've got a
people are smart and and treatthem as such.
Adam Larson (32:50):
Yeah.
Justin Smith (32:50):
They pattern recognition is is one of the
things that human beings doreally well. And if you're if
you're saying something that'sinconsistent with the way in
which you're acting, you couldyou could get grace on that for
a short period of time. But overtime, it's gonna erode
confidence. It's gonna erodeengagement, and you ultimately
get what you get.
Adam Larson (33:08):
Yeah. Well, Justin, this has been a wonderful
conversation. I appreciate yousharing all the things you've
learned in your journey so far,and I hope that, everyone got
something out of it today. Andjust thanks again for coming on.
Justin Smith (33:20):
Appreciate Adam. Thanks so much for having me.
Announcer (33:24):
This has been Count Me In, IMA's podcast providing
you with the latest perspectivesof thought leaders from the
accounting and financeprofession. If you like what you
heard and you'd like to becounted in for more relevant
accounting and financeeducation, visit IMA's website
at www.imanet.org.
Welcome to Count Me In. I'm your host, Adam Larson,
and today, we're joined byJustin Smith, the CFO at
FinQuery. Justin brings deepinsights from the finance and
tech sectors. We'll discuss thepay gap between accountants and
other professionals and thefuture of accounting education
and the impact of technology onlearning. We'll also explore how
FinQuery's investment inemployee development boosts
(00:42):
satisfaction and retention.
Additionally, Justin highlightseffective communication,
transparency in financial plans,and the importance of
celebrating achievements. Sotune in as we delve into these
critical topics with JustinSmith right here on Count Me In.
(01:03):
Well, Justin, I'm really excitedto have you on the, podcast
today. We're gonna be talkingabout leadership and growing
efficiently. And to start off, Ithought we could talk about a
little bit about, you know,what's the current state of
leadership within organizations,especially now that we're a
couple years from the height ofpandemic.
What we did before the pandemicisn't gonna work after the
pandemic.
Justin Smith (01:24):
Yeah. Look, I, I think I think in many ways the
game has changed. Organizationsare functioning in a certainly
just geographically moredisconnected, you know, manner.
There's there's work remote,there's hybrid, there's and
there's a lot of tensions, Ithink, that exist within
organizations. You know, manycompanies want what they
(01:44):
perceive as more collaborationand people think about that, in
terms of, you know, beinggeographically co located.
Workers, I think, are, lookingback over the last 3 or 4 years.
And in many ways, rightfullysaying, hey, there's a lot of
great gains that we've had. And,you know, we were able to to
find, you know, levels ofproductivity. And I I think
workers want to hold on to that.And then there's, you know,
(02:05):
other other tensions that we'reseeing out there where, you
know, prior to the pandemic,there was a I think there was a
focus on growth that, you know,people still wanna see in
today's time, but expectationshave come down.
And a big driver behind that is,the fact that cost of capital
prior to the pandemic was a stepchange different from where it
is today. Rates were were on thedescending rate path. Who knows
(02:28):
what the curve of that'sultimately going to to look
like? But I think most peoplethink, at least in the near
term, we're not going back to azero interest rate, you know,
time period. And as a result,the ROI or the threshold at
which you're gonna invest indemand generation and growth is
different.
So the punchline is, I thinkthat companies and workers have
(02:49):
to be much more intentionalabout how do they set themselves
up, and position themselves froma collaboration perspective,
from a growth expectation, and,you know, how do they
effectively, you know, meet inthe middle so that, workers feel
respected? They feel like ifthey found a home where, you
(03:10):
know, they want to to invest forthe next 2, 3, 5, you know, 10
years of their career. And thencompanies also feel like they've
got people that are engaged andbought in and and truly want to
be there. The way in which Iwould say things have not been
is that culture remainsparamount. If you have a group
of individuals that have sharedgoals, shared philosophies, have
(03:35):
a desire to win.
I mean, that's that's that's thewinning formula. That's what
everybody
Announcer (03:39):
ultimately wants to get to. I just believe
Justin Smith (03:39):
that in the current time period right now,
things have ultimately wants toget to. I just believe that in
the current time period rightnow, things are more
challenging. And so it's moreimportant and more incumbent for
leadership to have a clear,concise set of expectations that
are attainable and that theyhave a workforce with leaders
that are truly committed andbased.
Adam Larson (04:02):
To me, you can read any headlines in the last year
or so, and many organizationshave had to tighten the belt.
They've had to let people go.How do you create that culture
and that that feeling of, hey, Iwant you to invest your time in
here and stay here as anemployee. If, you know, just 6
months ago, they're like, oh, welet go, you know, 10%, 30%, 40%
of the staff. And and a lot ofpeople are feeling burnt out.
(04:23):
They have more work on theirhands. You know, how do you how
do you balance that? How do youhow do you help your teams get
there?
Justin Smith (04:28):
Yeah. So I well, there are there's multiple
dimensions to this. I think thefirst part Mhmm. If you are any
company that is that is goinginto a period where a riff is
imminent or, you know, comingout of a period where, they had
a a large reduction force fromthe first the first part's
empathy. Because Yeah.
You know, our our livelihoods,it's more than money is a for so
(04:49):
many people, it's a reflectionof of who they are. And, yeah, I
think you also have to realizethat for the people, it doesn't
just impact the individuals thatare no longer with the
companies. It impacts the peoplethat stay because there's
there's a heightened level ofparanoia about their job. But we
spend, just from a socialperspective, we we spend more
time with the people that wework with than the people that
we that we love and that are,you know, our family members.
(05:12):
And when those individuals areno longer part of an
organization, at times, at nofault of their own, because, you
know, the business environmenthas shifted, it it kinda tears
it its surgical fabric.
So I think empathy is a reallyimportant, you know, aspect to
understand how has this impactedyour team to ensure that, and
hopefully this is the case forcompanies that when you cut, you
(05:33):
cut once, you don't go back for2 or 3 or 4 rounds. We've all
seen examples where that'shappened. And Mhmm. No amount of
empathy and no no amount ofrelating people is gonna give
individuals comfort, confidenceif management doesn't have the
ability to understand the depthof the cuts that that they need
to make and and be one and done.But I think going back to your
your questions to hit it on thehead, clarity is the single most
(05:56):
important thing any organizationcan have.
If you want people to haveconfidence in their in their
role, if you want them to haveconfidence in the company,
confidence in the objective, Ithink management has to, number
1, have clarity around what arethe objectives that you're
driving to? What are the markersthat define success? Whether
those are financial KPIs orwhether those are r and d
(06:19):
milestones or, go to marketmilestones with establishing
partnerships and relationships.You need to understand what is
the end goal, but what are themarkers along those lines? I
would all I think all of uswould like to think that our
goals are 60, 90 days out, andso we can hit them and achieve
and move on.
But Yeah. Many of them are multiyear. And so clarity is what are
(06:42):
the markers that we need to hit,you know, along the way so that
you can tell your team, eventhough we're not we're not at
the the end point of of whateverour immediate objective is,
we're on that path. We're doingthe things that we need to do.
And then more specifically forthe individuals within certain
(07:04):
departments, your department isdoing what it needs to do or by
the way, perhaps it isn't.
But here's the course of activeaction so that we can get back
on it. I think if if leadershave are are very thoughtful and
clear around the most narrow setof objectives and mile markers
(07:24):
along the way, and then they cantactically communicate those to
the rank and file so that theyunderstand what those shared
objectives are. I think thatthat is critically important.
Communication
Announcer (07:36):
Yeah.
Justin Smith (07:36):
And thoughtfulness. I'm really
carried the day for forcompanies that are navigating
transitory, timelines.
Adam Larson (07:45):
I like that. I like thoughtfulness. Communication is
very important and beingthoughtful too because
everybody's going we're allhuman. You know, whether you're
a CFO or whether you're a staffaccountant, you're a human who
has feelings and emotions andbeing thoughtful and being
mindful of those person'semotions and feelings as we're
navigating all these waterstogether is is huge. And it's
almost like you need to haveempathy as well for what people
(08:08):
are going through.
And how do you balance empathy,thoughtfulness, and challenging
with, hey, I still gotta meetthe bottom line. Like, those 2
don't always go hand in hand.
Justin Smith (08:16):
No. But I mean, this comes back to having an
achievable plan.
Adam Larson (08:19):
Yeah.
Justin Smith (08:20):
I mean, they're they're we we we all know the
examples of of companies, where,you know, leadership starts out
the year and they put forth abudget that is less a financial
target that they have. I I Ilike to think about a budget as,
you know, a set of numbers bothfrom a revenue and from a cost
perspective that you have 95%plus confidence that you're
(08:40):
gonna not only be meet, butyou're going to to exceed. There
are there are companies thattake a different approach, and,
they may establish budgets thatare aspirational. And if you,
you know, you look back and say,you know, how many times have
you hit your budget in the last,you know, 2, 3, 4 years? If the
answer to that is never, or ifthe answer to that is, hey, we
(09:00):
get 50% every single year.
You've got a managementexpectation problem.
Adam Larson (09:05):
Mhmm.
Justin Smith (09:06):
This is not about it's not about lowering your
expectations. It's a matter ofunderstanding what is your what
is your TAM, what is your go tomarket opportunity, and and
where is the company positionedtoday? I think companies should
maximize their opportunity set.They should be bullish. They
should be aggressive.
They should have, plans thateverybody should stretch for.
(09:28):
But you should also have a levelof recognition of where are we
today? What what is our go tomarket strategy? What is our
product strategy? Whatinvestments do we have to make
in r and d?
What are the implicit risks thatwe need to, understand and
anticipate? And, you know, thatsense of an achievable plan that
again requires stretch, itrequires effort, but putting
(09:52):
forth an achievable plan,whatever that may be, is
critically important. So thatagain, the team understands
there's a multiyear pathway thatwe're moving toward. And even if
growth this year doesn't soundthat compelling, that's fine.
We're on this multiyear path.
Here's these other things thatwe're doing that may not show up
(10:14):
in revenue today, but they'repositioning us for growth next
year because we've got thisgreat new product that we're
developing, and it's gonna becoming out in the Q2 of of of
2025. And, you know, we believethat in a short period of time,
there's gonna be someacceleration. Making sure that
individuals understand Mhmm. Andare are effectively aligned on
(10:36):
those goals. You don't have toshare financials.
You don't have to, you know, gofull mono with, teams. In fact,
I I think that you shouldn'tbecause invariably, there's
going to be be, volatility alongthe way. Nobody's gonna hit, you
know, everything perfectly. Butexplaining to individuals and
making sure that they recognizethat the company has a plan.
(10:57):
It's multi pronged.
Everybody rose the boat. And aslong as you're focused on
exactly what you should be doingas part of that plan, then
you're achieving success. Ithink again, that's just an
important piece from from myperspective. And and by the way,
the one one other item I'll justthrow out there, as a CFO and
and and I was a former banker, Ispent nearly, a decade at
(11:18):
Goldman Sachs. I I stay veryconnected with what are
happening in public marketsbecause Mhmm.
Private companies, it's opaque.No one ultimately knows, but
public companies, they'reputting out analyst reports,
companies are giving guidance.You know, we should I I share
with our own, employee base thatexpectations that public
companies have for themselves.And these are the biggest
(11:39):
companies that have the bestability to compete. Their own
growth expectations have comedown materially over the last 2
years.
In fact, they've 50 Yeah. Youhave nearly 50%. I'm not sharing
that data to alarm anybody orconcern or lower expectations.
But the point is, if if you'retalking about your forward
(12:00):
growth and your forward growthis coming down from what you've
messaged to employees,historically, being able to go
out and say, hey, this cohort ofbest in class companies, they're
seeing the same they're alsofocused on margin. They're also
focused on these exact samepriorities.
So if we wanna think like, actlike, walk like, and talk like
(12:21):
the biggest and best in theindustry, we're actually doing
that. And our talk track is inline with theirs, even if it may
not feel like that to you incontext of where the market was
18, 24, 36 months ago.
Adam Larson (12:35):
So based on all the everything you're saying, I love
how you're giving your employeesa shared sense of purpose as
you're making clear the thegoals that are attainable.
Because I think sometimesorganizations come out with
these very lofty goals that haveno no stickiness to them. No no
actual, like, substance to them.And being able to address it in
(12:56):
that way, I think, is is hugelyimportant for organizations
because you need that shares asa purpose to make sure
everybody's aligned. Because ifeverybody's not wrong for the
ride, you know, the the traincan't keep going if all the
workers aren't doing the samething.
Justin Smith (13:11):
Yeah. Well, that's that's that's absolutely true.
And, you know, I think about ourour team and and this may be too
obtuse, but just at a highlevel, I think about our team
kind of breaking into 22 core 2cohorts. There are individuals
who come to work because theyneed a job. They're they're fine
with the level they're at.
They don't they don't wannaescalate. They just quite
(13:33):
literally need need a job. Andand those are important people
to have in any organization.There are certain roles that,
you without naming specific onesthat, you know, somebody may go
into that role and they could bethere for 5 or 10 years with the
same role and same title. 1st,the other cohort of of team
member that they're reallycareer oriented, they're
(13:54):
competitive, they wantprogression, they wanna see
success, they need to seesuccess, in order for them to
stay.
That that is the cohort of ofemployee that you really need to
engage with. The best companiesout there are are mission led.
Announcer (14:11):
And
Justin Smith (14:11):
you know, when I was when I was at Goldman, I had
the good fortune. Many of myclients were the successful
companies that broke throughventure stage and growth stage
and private equity and, youknow, ultimately tapped the the
public markets. And there wasdefinitely a success bias of the
companies that that I had theopportunity to work for. You
just see pattern recognitionover and over and over in many
of these companies where itdoesn't matter what type of I
(14:33):
mean, it could be a compliancesoftware or I took public a
company that did back office fortrading and hedge funds. And, if
you sit there on the outsideend, if somebody looks at the
company, it's not gonna getanybody excited.
You're not gonna go to cocktailparties and talk about
compliance software. That's notgonna make you popular, I think,
in anybody's circles. But whenyou get into the curtain and
(14:55):
you're you're engaging with theemployees and you're preparing
them for, testing the watersmeetings and the roadshows and
the, you know, post, your publicworld where they'd be engaging
with the markets, the employeesare just on fire. I mean, you
you walk out of those meetingsfeeling like you grew a foot
because everybody's just excitedand pumped about the
opportunity. And you also haveto sit just, kind of like take
(15:17):
stock back.
But why are they so excitedabout compliance software? Well,
they're not. They had a missionand they felt like they competed
against their competitors. Theyfelt like they had a mission to,
to get to a certain customerbase to prove that they were
enterprise worthy, that theymoved from SMB to enterprise.
And when they do that, everybodyfeels like they have a
(15:39):
collective win.
Those types of things don'thappen by chance. There's not a
scenario where, you know, peoplejust gets 5 customer wins and
all of a sudden, boy, they're onfire. Those are objectives that
were set by a CEO, most likelyin in many instances, a founder
who who had a burning desire toprove, hey, we can be the best.
(16:01):
We can be the industry leader.We can launch 2 new products and
get them up to scale.
Whatever that objective is, itis critically important that
among your cohort of employeeswho are what what I what I
characterize is kind of like theathletes of an organization that
are truly driving newinitiatives, repositioning,
transformation, that cohort ofemployee has to be absolutely
(16:25):
engaged with whatever theobjectives are. And they all
they need to understand not onlywhat is a team win, but to
borrow like a baseball analogy,they need to understand that
their own batting averageexpectations so that, you know,
when they're connecting with theball, they need to know how are
they performing against whatevertheir their expectations are. So
that clarity around companyobjectives, team objectives
(16:48):
Mhmm. And even if there aren'tthese big visible wins as an
organization, our long termobjective is x and you need to
do y and z along the way. Ithink that's just a just a
critical component, to gettingpeople excited, engaged, and
feel mission led.
Adam Larson (17:05):
Yeah. Mission led is is hugely important. And when
you when you switch from, like,goals and it's like that and
switch to a mission as opposedto, like, the tagline or
whatever, it it really kindachanges your your mindset of how
you look at what yourorganization is doing as opposed
to just, well, I just gotta domy task today and get home.
Like, no, I wanna be part ofthis bigger thing that's pushing
this this boat forward, and youhave a better sense of purpose.
Justin Smith (17:27):
Yeah. And and by the way, you also have to
celebrate publicly, you know,within your your organization
when when somebody doessomething. I mean, we had this
is this is going back, but itwas this was a big celebration.
So when I when I joinedFinquery, we had, we had a a a a
day sales outstanding. So ouraccounts receivable, it
basically took us a little over2 months on average for us to
(17:49):
collect.
Over the course of of a year, wemoved that from a little over 2
months to to 1 month. And andthere were a number of things.
So so we did some software. We,we had some new approaches with
our customers and engagement.But that freed up for our for
our for our organization.
So putting aside any new sales,I mean, that was quite literally
1,000,000 of dollars of cash gotfreed up. And we're we're
(18:12):
profitable. So, you know, wedon't we don't have a debt
dynamic. But if you're a companythat is growth stage and you're
using a revolver or you have togo borrow capital, if you move
if you had that type of move,what let's say and I'll just
pick a number. Let's say youfreed up $5,000,000.
Announcer (18:29):
Yeah.
Justin Smith (18:30):
Well, interest rates right now are nearly 10%,
for revolver debt. So freeing up$5,000,000 means not only did
you do you have that cash, butyou caught you cut your interest
expense by half a $1,000,000. Ifyou're gonna go have to raise
money by freeing up $5,000,000,IRR expectations, in venture and
(18:50):
in private equity, they'reapproaching 20%. So you freed up
dilution, in your company. Beingable to frame it to individuals
in a way that they're probablynot thinking about it.
They're just saying, hey, look,day sales outstanding goes from
60 to 30, and it's just a numberon a performance metric KPI. I
dimensionalized it in in frontof our entire company to say,
(19:12):
hey, by the way, our accountingteam brought in x percent of the
overall cash earned this year.Accounting never gets revenue
recognition.
Adam Larson (19:22):
Yeah. That's huge.
Justin Smith (19:23):
We we talked about it in that sense. And I'll tell
you my accounting team is welldeserved. They're they're very
smart, talented, hardworking.And I mean, I I think they felt
like that they were walking 6inches taller for for a month or
so. And by the way, welldeserved.
Yeah. We should have felt that.
Adam Larson (19:41):
So we can always we always measure success in an
organization by financial terms.And a lot of times, if the
employees are doing well, a lotof times that reflects in, you
know, the revenue and and thebottom line of what's happening.
But should we, as organizations,be measuring kind of things like
non financial, like, employeesatisfaction, overall
well-being? And should that bepart of our, like, measure of
success? Like, hey.
(20:01):
Yeah. These numbers are lookinggood, but also our employees
feel good about it. Like, isthat something that
organizations should be doing?What are your thoughts on that?
Justin Smith (20:08):
Yeah. I think that, I don't think that anybody
should be looking at spotabsolute analytics, whether it's
a glass door rating to say, hey.Yeah. You know, we need to be
4.2 and not 4, but I think youshould pay attention to trends.
Yeah.
You know, the the to to borrow acliche, you know, the rising
(20:28):
tide raises all 5ths. And and bythe way, the opposite of that is
true. If you look at employeesatisfaction, it was it it was
pretty high in in in 2021 oncepeople, you know, saw and and by
the way, this is sectorspecific. I don't wanna be
ignorant to the fact that therewere there were many industries
actually that were feeling a lotof pain. But within the tech
sector where where I live, workand operate, those fairly robust
(20:50):
time period because everybodywas spending massively because
Mhmm.
On the stimulus money and thentechnology was enabling people
to to work remotely. And so itwas a boom pie. So employee
satisfaction was sky highbecause people were getting
raises every single month. Ifyou left one job, you'd get
another one to work for, by theway. In some instances, people
would have 2 at the same time.
And so the opportunity set washigh. And so Glassdoor ratings
(21:12):
were pretty high. But, you know,post what was it? I think the,
slide in SaaS started inNovember of 2022. So from that
period, on, you know, all thoseratings, you know, started
coming down.
I think organizations need tounderstand what where is the
tide going and what is yourtrend relative to that to that
baseline. For us, you know, wepride ourselves in in a handful
(21:34):
of metrics. So we look at thingslike voluntary turnover. And
we're very proud of the factthat our voluntary turnover
based on we get data from 2third parties on things like
salaries and and in turnoverand, benefits. And of both
benchmarks that we get, we'rewell below the average.
A very important one for us isis engineering and tech talent,
(21:55):
turnover because, yeah,historically, there are a lot of
jobs. Those are easy to moveremote. And our turnover is
about half of what, you know,many of the benchmarks are. So
there's many things that wecould potentially attribute that
to. But we think, and I thinkpeople ultimately vote with
where they spend their time andwhere they spend their dollars.
And, you know, we are veryfortunate, the fact that we've
got an engaged workforce. So Ipay attention to, again,
(22:18):
voluntary turn turnover, payattention to, tenure, and then
we do a full 3 60. So not onlydo I rate my team members every
single year, and it's by theway, not every single year. It's
every 6 months. And it's not forthe purposes of being, critical.
It's for the purposes of makingsure that people understand, you
(22:40):
know, where are they going? Howare they trending? Yeah.
Sometimes people go through, youknow, tough tough moments in
life or sometimes people getpromoted and they're not they're
not connecting with that higherlevel job. Management's not
easy.
It's not for everybody. And sowe wanna make sure that there's
consistent feedback. And by theway, I get that feedback
Adam Larson (22:59):
too. So
Justin Smith (23:01):
if I'm not communicating something, if I'm
not, you know, responding orengaging with people, I'm gonna
get a visible scorecard. And sothat's something that the, SLT
or senior leadership team, youknow, at our company, we
actually look at our ownscorecards. And how are
departments showing in terms offeedback? What's the engagement
of of sales? What's theengagement of of accounting and
(23:21):
finance and marketing?
And if there are gaps, and andthere's, you know, some
disconnect, those are toughconversations we have with each
other and not just just with ourwith our teams. So being open
and receptive to that type typeof feedback is important. And
also recognizing a bad scorecardis likely more important than a
(23:43):
good scorecard because it'd be aleading indicator of some
challenge.
Adam Larson (23:48):
Yeah. I've always been curious about a 360, and
I've always been like, hey, Iwanna work in a realization that
has a 360 so I can see it inplay. Because a lot of times
with the normal feedback is, youknow, you have the your your
your supervisor giving you thatinformation, and then you might
have a chance to, like, give acomment back to them, but it's
not a true, like, 360. And youand and you're not always able
(24:11):
to give feedback to your yourcohort. So I'm glad it's been
successful.
And and had do you feel it'sbeen a successful, thing, at
your organization?
Justin Smith (24:20):
Yeah. So we we had a, just really terrific dynamic,
you know, chief people officer.She predated me joining
Finquery. She put Yeah. Youknow, these actions in place.
I'm very grateful. When I was atGoldman, we we did the same
thing. You know, we did 3sixties. So
Announcer (24:34):
Yeah.
Justin Smith (24:35):
I have worked throughout the majority of my
career at organizations who dothese. The other the other part
of this though is that there'san accountability. So going back
to my comment around engagement,if you give somebody a review in
a 360, so whether it's it's megiving a review to to somebody
who who reports to me, orsomebody giving me feedback,
(24:56):
who's one of my direct reports,if there's something new on that
360, in some senses, that's afailure. And what I mean by that
is if I if if there was an issuein my organization that was
pulled out by, you know, teammembers, whether it's a direct
report or, you know, 2 or 3, youknow, levels down. And I'm
(25:20):
finding out about that on a 360.
I I consider that a failure onmy on my, side. And again, if
it's 2 or 3 levels down, Iconsider that a failure of the
people who are managing thatindividual because we should be
engaging with people to wherethey feel like if there is a
challenge, an issue, or asituation, it should be
percolated immediately. So whenI when I do my reviews with my
(25:42):
team, my goal is for them tocome out of them not only with a
clear sense of where do theystand and, you know, what are
way things that they can workon, But I also want them to say
something to the effect of,yeah, this makes complete sense.
We talked about x and y and zover the last several months. I
I'm making progress on it.
I appreciate the fact that youcalled that out, and and this is
what my path is. I I don't wantthe 360 to be that point in time
(26:08):
where I hold anything new back.Mhmm. Because that's that's a
challenge. That's where I thinkpeople feel like they'll say
something to the effect of,well, why didn't you tell me?
Or they'll feel like potentiallypeople are out to get them.
Right? Because they'll say,well, everything feels fine when
you've been working and yetyou're putting this on my my
review. That's a surprise. A 360in in my view, I when I know
(26:33):
that they're coming up and we dothem in the fall in the spring,
I always make sure it's just agood marker for me to ensure
that I'm gauging with the team.
And I do one on ones with myentire team. That's a full
accounting finance dataanalytics. And then I also run
some of our servicesimplementation and, have
engagement on revenue as well.So it's a broader remit. I
ensure that I'm connecting withevery single person on my team,
(26:56):
you know, during on a quarterlybasis at a minimum.
Most of them on a on a monthlyto biweekly so that there are no
surprises.
Adam Larson (27:03):
Yeah. Well and that goes back to what you said
before about having that clearcommunication, and that includes
things like coaching and helpingpeople improve on things. And
I'll and the approach of if it'sa surprise, there's a problem. I
think that's a great a great wayto do it. And and as we shift
the conversation a little bitto, like, you know, we know you
can read articles in inaccounting, in different
(27:24):
accounting, publications and seethat, you know, keeping talent
is hard.
Getting new talent is hard. Youknow? How has that impacted your
team trying to keep your talentthere? And also, you know,
younger, people aren't going toschool for accounting very much
anymore. And how do you get newnew accountants in?
How have you been, navigatingthose waters?
Justin Smith (27:42):
Yeah. So look, I I think I think pay is gonna be a
big part of this. Like the Mhmm.The job, the job market,
especially for accountants, likeit's supply and demand driven.
Adam Larson (27:53):
Yeah.
Justin Smith (27:54):
I have long felt that accountants in general, are
underpaid. And what I mean bythat is if you compare what a,
accountant at a big four isgonna earn, you know, 2 to 4
years out of undergrad and youcompare that to somebody who
goes to Wall Street on thefinance side, there's quite
literally probably x differencebetween the finance and the
(28:15):
accounting side. So it's notit's not even close. And and
then you also compare that towhat people could earn in
technology, especially if ifyou're AI oriented. There's
there's gotta be a catch up.
Adam Larson (28:27):
Mhmm.
Justin Smith (28:28):
And over time, when individuals are smart and
talented and and they'refiguring out where they wanna
spend time in their career,they're they're gonna look at
and say, you know, what is theopportunity set? What's the job
look like? And and what does thecomp look look like? So I I
think a big part, theaccounting, especially in big
four, my expectation is thatfees for companies are likely
(28:48):
gonna rise in the future becausethe fees that they're gonna need
to pay their employees arelikely gonna rise or we're gonna
have to accept the fact thatwe're gonna have a slim down
diluted, accounts. Like, we'rewe're gonna have something's
gonna have to give.
This type of dynamic, like,today, it it still probably
works. But if you play this outand you assume that the
trajectory of the trends stay,you know, in in place for the
(29:10):
next 10 years, like, somethingis gonna break. And and and
ultimately, accountants areconservative. The, you know, the
the overseers are conservative.There's discussion around, you
know, reducing the requirementsfrom an accounting perspective.
So the number of hours that youhave to have. I believe that
with education, and andinnovation or technology
combined with education, weshould be able to do things more
(29:33):
efficiently.
I mean, I the the US and and I'mprobably going off on a pitch of
diatribe. Like, why why is, whyis dental school 4 years,
chiropractors 4 years, medicalschools 4 years, medical
school's been 4 years for a 100years. And we've gotten
infinitely better in education.And yet, we can't figure out how
to truncate that. Whereas, youknow, you look at international,
(29:55):
the actual, like, 4 didacticorphan of medical school is 2
years, and yet we're still at 4.
Boy, that doesn't make sense.No. So there's there's a I think
in US education overall, youknow, we need to recognize that
technology, and justavailability of information has
allowed us to potentially trainpeople more efficiently. And I I
think that that's gonna playout, should play out on the
(30:18):
accounting side
Combined with, I just thinkincreased remuneration.
Adam Larson (30:23):
Yeah. How important is things like training and
development for your team tomake sure that they're staying
on top of things? And do youallow them extra time saying,
Hey, I wanna make sure you havetime to do this.
Justin Smith (30:35):
Yeah. So we we do this a couple of different ways
at Edge inquiry. 1, the foundersof inquiry, and this has been
something we've we've done foryears predating me. I'd love to
take credit for it, but it wasadmittedly in place before I
joined. We have a very generous,learning and development and
budget.
So we actually give a couple$1,000 to employees to spend
however they deem relevant totheir job or or to their growth.
(30:58):
So if you are if an accountantwants to learn and go take an AI
course, we'll we'll we'll cover,you know, a few $1,000. And by
the way, we'll also give themthe time to go and do that.
Yeah. So, you know, having theopportunity and the time to be
able to upscale is a is animportant component.
That's an area, frankly, a lotof people in our organization
are spending time isunderstanding AI. Not that we're
(31:20):
all gonna go out and we're gonnabecome, you know, AI engineers,
but I I think we can all agreeit's gonna impact what we do in
some form or fashion. So givingpeople, you know, the
opportunity to invest in that.But some people use it for
public speaking courses. Somepeople use it for, you know,
different types of classesbecause actually, we had we had
some individuals in our companythat wanted to move to product,
(31:41):
and they weren't in product.
They're actually, in accounting.And so they went to a few
conferences and and and learnedabout product and and refined
their skill set and ultimatelymade the move over there. So
it's easy to say that yousupport employees to learn and
develop their skills andcapabilities, but it's another
to put actual dollars behind it.Again, not just not just giving
(32:05):
them a stipend, but alsoallowing them to take time to do
that. And that's I would surmisethat many of the individuals at
Finquery part of the reason thatthey stay is that they know that
they can grow not only linearlyin their job, but they can also
grow tangentially through theopportunities that we we provide
them in that flexibility.
Adam Larson (32:26):
Well, and that's hugely important to staying
connected to the goals, stayingconnected to the company
culture, feeling like thatyou're heard, your needs are
wanted, and that that they wantyou to they want that you want
them to feel like that, hey, wewant you to succeed. We want you
to upskill. We want you tobecome better at what you're
doing, which goes back toeverything we've been saying so
far.
Justin Smith (32:44):
Yeah. That's exactly right. So you've got a
people are smart and and treatthem as such.
Adam Larson (32:50):
Yeah.
Justin Smith (32:50):
They pattern recognition is is one of the
things that human beings doreally well. And if you're if
you're saying something that'sinconsistent with the way in
which you're acting, you couldyou could get grace on that for
a short period of time. But overtime, it's gonna erode
confidence. It's gonna erodeengagement, and you ultimately
get what you get.
Adam Larson (33:08):
Yeah. Well, Justin, this has been a wonderful
conversation. I appreciate yousharing all the things you've
learned in your journey so far,and I hope that, everyone got
something out of it today. Andjust thanks again for coming on.
Justin Smith (33:20):
Appreciate Adam. Thanks so much for having me.
Announcer (33:24):
This has been Count Me In, IMA's podcast providing
you with the latest perspectivesof thought leaders from the
accounting and financeprofession. If you like what you
heard and you'd like to becounted in for more relevant
accounting and financeeducation, visit IMA's website
at www.imanet.org.
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