How finance enables other business functions at Aiven
“Other than the CEO, the finance organization is across the entire business more than anyone else. You’re in the best position to have those strategic insights and provide a lot of business value.” - James Black, IVP
It’s been proven that cross-silo work within an organization leads to higher employee satisfaction and better results. So why does the finance team seem cut off from the rest of the company, especially when we know how important a role finance plays in an organization’s overall health?
Aiven, the open source cloud database hosting platform, set out to solve this problem of a siloed finance function. Their SVP of Operations & Strategy Katariina Korhonen, sat down with James Black, partner at IVP, to discuss how Aiven’s finance team has become a strategic business partner in the company.
Meet the experts
Katariina is based in Helsinki, and she joined Aiven last year. She oversees the entire finance organization, but, interestingly, does not have the background typical of a finance leader. Katariina started her career as a lawyer, practicing corporate law in Helsinki for ten years before moving into the startup/scaleup space as general counsel. Her role expanded into People operations and her people experience helps her in her current role: SVP of Operations & Strategy at Aiven, where she oversees the finance and legal departments.
James, based in the San Francisco Bay Area, has worked at IVP since 2019, where he’s currently a partner. IVP is an early-growth VC firm investing across Europe and the US. Aiven was the first investment James worked on at IVP in 2019, when they led the company’s $40 million series B. Previously, he was the first strategic finance hire at Canva, where he spent a year at their headquarters in Sydney, Australia, working on projects across pricing, payments, fundraising, and M&A.
Thanks to Katariina and James for lending their time and sharing their expertise with the CFO Connect community. You can watch the full webinar here, or read on for a recap of their conversation:
Align strategy and vision company-wide
Creating a finance team that functions as a strategic business partner throughout the organization doesn’t happen overnight. Katariina suggests the first thing to do when you join a new company is to understand its vision:
“Everything starts from understanding the vision and strategy of the company. In a fast-growing company, there's always something to do. But being able to focus on the things that move the needle is crucial when you're leading yourself and leading teams. So understanding the big picture of where the company is going helps a lot.”
James agrees and offers insight into Katariina’s strengths: “One of the strongest aspects that Katariina’s brought to Aiven is a centralized view of strategy for the company, and getting everyone on the same page of what the goals are. That’s also so important, as you think about where you can lean into investment and lean into risk in the business.”
James asks how Katariina worked on the strategy and vision for Aiven, whether she’s had experience doing this before or it was new for her. Katariina expands on how she went about helping Aiven develop a company-wide strategy:
“I’ve worked around goal setting and strategy in my previous roles, too. At Aiven, we have a lot of innovative people and we did goal setting and we had the mission and vision there, but we didn’t have a centralized view. So it was a little bit different when you went to speak with other people. In the beginning when I joined the company, I really wanted to understand the business model well: what we’re doing, what’s the value-add, how all the different functions work together, what’s working and what’s not. I learned pretty quickly that what we needed is clarity: where we’re going, the big picture. We created a strategy frame, starting from clarifying the vision, then having long-term targets, and then we rolled out a whole new company-level goal setting frame, which we are monitoring actively.”
James agrees that it was a great thing to do, and that across IVP’s portfolio they’re seeing companies prioritize centralized goals that the whole company takes part in.
Work closely with the data team
Aiven and Katariina opt for a somewhat atypical finance team structure. Finance (core finance, controlling, FP&A), Central Analytics, Legal, and Revenue Ops all fall under the “Finance” umbrella.
Katariina explains how these teams work together and improve efficiency, and how data plays a big part in strategic decisions:
“We believe in data-driven decision making on a company level but also in all functions. At Aiven, we have a central analytics team which is part of our finance team, under the same umbrella as FP&A. We’re lucky to have the analytics team as part of our own team! This has enabled the FP&A team to collaborate very efficiently with the data team whenever there’s a need for more complex data analysis. The analytics team consists of data engineering, analytics engineering, and analytics profiles.”
“We’re also in the process of making data more accessible by migrating to a new business intelligence tool. The previous tool required a lot of SQL scripting skills, which really limited the self-service use of data outside our standard dashboards…but our new tool is very easy to use without coding skills. We are trying to bring the data close to our employees, we want to enable data-driven decision making at all levels and in all teams. But the data has to be accessible.”
James confirms that this particular team structure is a boon for Aiven and makes a big difference:
“It’s quite rare to have data as a central part of the finance team. We more commonly see data or product analytics teams in a silo on their own, and they’ll have a dedicated person or two to collaborate with the finance team. But maybe they’re working on other parts of the business as well, and not working on self-serve data…Having that collaboration that Aiven’s built is a strategic advantage for the company. It helps make key decisions much faster and more correctly.”
Set clear KPIs
Katariina stresses the importance of setting clear KPIs, especially when it comes to risk management. James asked Katariina how her team manages risk and investment opportunities at Aiven, and how they measure ROI on those investments. She says:
“The company is moving fast so it’s important to be able to measure the success and have those success metrics in place. Our KPI framework is key here. We have company-level KPIs, function-level KPIs that we’re monitoring actively, and we also put KPIs on investments.”
“Monitoring only financial performance is not enough, it has to be complemented with operational metrics that are connected to our investment areas. In addition, having a regular cadence for financial planning ensures that we check our course and take actions to course correct when needed. We are planning on a quarterly basis at the moment.”
She continues: “Finance is eager to take calibrated and assessed risks, when we know what we’re doing and how to measure it. The key is to have both financial and operational metrics in place, and then follow those up with product, sales, or marketing. For longer-term investments, the key is to cater for a longer horizon in the planning phase, and have leading indicators to enable early course correction if needed. It’s good to have those milestones in place.”
In concrete terms, Katariina looks at the following leading KPIs at Aiven:
revenue per employee
rule of 40
"We’ve kept it pretty simple, only what we really want to look at.”
And for the rest of the functions? “We defined leading KPIs with FP&A for each function so we can monitor how they’re going against the budget. We have employee engagement, product time to live…it really varies. On the compliance side, we have a huge amount of those key KPIs, and on the sales side it’s pretty standard.”
“We’ve divided it into a company level and a functional level, and we’re monitoring each of those.”
James says that it’s much easier for investors to understand the company’s KPIs when it’s segmented this way.
Find more resources on CFO Connect
The discussion between James and Katariina continued much longer, and included a Q&A session from the audience. They asked questions around Aiven’s finance sub-team structure, getting the rest of the company to see finance as a strategic partner rather than a back office function, the main challenges when it comes to enabling business functions, and more. You’ll be able to hear the answers to these questions in the full recording above.
Massive thank you to Katariina and James for sharing their discussion with us! You can find all our previous webinars and more resources for finance leaders on CFO Connect.
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