The finance year in review

“Unprecedented.” “Uncertainty.” “Disruption.” “Slowdown.” 

These are the one-word labels some of the country’s top finance experts chose to slap on 2022, a year that would be considered the most transformative, unprecedented and uncertain in recent memory if not for the previous two. 

It began with lingering supply chain challenges related to the spread of Omicron; record numbers walking off the job in the “Great Resignation;” an out of control housing market that only got hotter; and forecasts of slowing growth, with a chance of inflation. It ended with a series of aggressive interest rate hikes, a commodities crisis ignited by a major armed conflict in Europe, and whispers of an impending global recession. 

The only major economic trend that held relatively steady was in the labour market, where talent shortages continue to keep unemployment low and talent scarce. In the rest of the economy the only constant was unprecedented change. With inflation at 6.9%, interest rates up 350 basis points in a year (as of October) and the country’s finance minister warning of “difficult days ahead,” the economic headwinds are only recognizable to those who were working in the 1980s. The rest of us can be forgiven for feeling like they’re trying to fly a kite through a hurricane. 

Interest rates took a hike

Since the economy bounced back from the Great Recession of 2008 the world has been awash with cheap money at low interest rates. After the Bank of Canada announced the first of many interest rate hikes in March we have been rapidly transitioning to a world where capital comes at a much higher cost. Six consecutive rates hikes later (not to mention a seventh widely expected on December 7th) Canada now boasts the highest policy interest rate in the G7.

Will [inflation] get back to below 2%? Our bets from the top of the house at RBC are something just above 2% long-term.

Stuart Morrow, chief investment strategist at RBC

With business owners now needing to think twice before borrowing to invest in their business, demand will likely slow even further in 2023. 

Inflation ran away

Like polio and fascism inflation felt like one of those out-dated problems our grandparents had already solved for us, but is now making an unwelcome comeback. The drivers of our current inflation challenge are many, and economists are divided on how and where it ends. 

“The path forward for inflation will determine the path forward for interest rates, which is the key principle in determining the value of stocks, bonds and cash,” said RBC’s chief investment strategist Stuart Morrow. “There are leading indications that inflation is indeed slowing.” 

Morrow is seeing signs that suggest the worst of the inflation nightmare is behind us. Housing costs and rents are starting to come down, as are used car prices, while inventories are back up to relatively normal levels following the supply chain crunch of 2021.

“We think inflation is high right now, definitely — it’s above central bank targets — but it starts to come down in the next one to two years,” he predicts. “Will it get back to below 2%, which is the central bank target for inflation? Our bets from the top of the house at RBC are something just above 2% long-term.” 

CPA Canada’s chief economist David-Alexandre Brassard, however, isn’t convinced the end is nigh for inflation, given our track record on predicting the pattern thus far. He explains that at the start of the year many predicted a brief period of transitory inflation, and given how far off those predictions proved to be, he has trouble trusting such forecasts. 

“Our understanding of inflation, and the limitation to which we can predict it, I think has been highlighted this year,” he said. “I suspect it might last longer than we expect.” 

That suspicion is driven by a newfound appreciation for just how long it takes for changes in the economy to trickle down to the consumer. He says that on one side of the equation price pressure on producers can take months to trickle down to store shelves, and the same goes for interest rate hikes. That means that despite some optimistic indicators it could take a long time to take a serious bite out of inflation.  

War remained good for absolutely nothing (sing it again) 

One of the key drivers of inflation, and by extension rising interest rates, is a trend nobody had on their 2022 bingo card, other than perhaps the Kremlin (assuming they have bingo cards in Russia). 

The economic ripple effects of Europe’s first major armed conflict since the end of the Second World War have touched nearly every part of the global economy, and Canadian businesses are not immune. When one of the world’s largest oil producers invades one of the world’s largest grain producers few corners of the economy are left unaffected. 

“Inflation was already high in Canada, but the war in Ukraine has increased inflation,” said Pierre Cléroux, the chief economist of the Business Development Bank of Canada (BDC). “When you increase the price of wheat the price of almost every food is impacted; same thing with oil, which is not only the gasoline you put in your car but also the energy that’s used by the manufacturing sector, so it’s really having an impact on businesses.” 

Cléroux adds that even though the conflict feels a world away it is already hitting home with Canada’s small businesses in the form of inflation, shipping delays and supply scarcity. 

“The fact that the war has increased inflation has forced the bank of Canada to increase interest rates faster, and for businesses it’s not only increasing the cost of borrowing money, but slowing down some sectors of the economy,” he said. 

The venture capital feast turned to famine 

The year began with near record levels of venture capital flowing into Canadians businesses, and ended on the opposite end of the graph. In the first quarter of 2022 Canadian companies closed a combined $3.7 billion in financing, marking the second most active quarter for VC activity on record, behind only the second quarter of 2021. 

I suspect that moving forward we’ll see more reliance on traditional banking channels for loans and access to credit

Andres Vinelli, chief economist with CFA Institute.

In Q3 Canadian companies shared less than a billion dollars in combined financing, marking the first time quarterly fundraising slumped below a billion since COVID took a bite out of the economy in 2020, and a 71% drop from the start of the year. 

“It’s going to be a more volatile environment; the number of deals we are seeing in private equity is down, so I suspect that moving forward we’ll see more reliance on traditional banking channels for loans and access to credit,” said Andres Vinelli, the chief economist of the CFA institute. “I also suspect that this will mean that corporates of all sizes will be looking at traditional IPOs more seriously.” 

Vinelli explains that the low interest environment of the last few years inspired a move towards Special-purpose acquisition companies, or SPACs, rather than traditional IPOs. 

“We saw a sudden stop of those this year, and if that is going to be less available, and the private markets and private equity will be less available, one option that looks more and more enticing is the traditional IPO funding,” he said. 

The business fire sale was temporarily extinguished 

Ownership of Canadian businesses might be changing more frequently in the years ahead, as aging Canadian entrepreneurs look to cash out. According to Cléroux of BDC, companies were starting to change hands at a faster pace at the start of the year, when the economy was still strong and cash was cheap. Despite recent economic developments he believes those trends will pick back up soon, and be a defining feature of small business activity in the years ahead.  

“There’s a lot of entrepreneurs who are getting older — more than 100,000 are over 65 in Canada — so business transition will continue in the next five years, because people are at an age where they need to think about transition,” he said. “Yes the economy is slowing down this process, but it’s going to continue over time.” 

The housing market took its first major step backwards in decades 

Those who have watched the country’s red hot housing regions like Vancouver and Toronto over the last few decades are familiar with a market that only goes in one direction, and aggressively so. 

That bubble finally started to burst in 2022. Toronto’s MLS Home Price Index is down 18% since its March peak, while Vancouver’s dipped 8.5% in just six months. Countrywide the average home price has dropped 20% since the Bank of Canada started upping interest rates. 

“A lot of businesses working in the housing market are seeing the slowdown right now,” said Cléroux. “You could be in the construction industry, you could be selling to the construction industry, or in the real estate market, but this is having an impact on a lot of businesses” 

Despite the recent slowdown in prices and sales activity, however, many — including Brassard of CPA — struggle to imagine the trend lasting very long. He explains that the government of Canada’s recently announced immigration plan, which targets nearly half a million newcomers every year for the next three years, will ensure a steady flow of new home buyers. 

“That’s more than 1% of the population coming in year over year,” he said. “There’s going to be a push on housing, which is going to drive prices.” 

Up until perhaps this year the discussion about climate effects had been quite abstract

Andres Vinelli, chief economist with CFA Institute

Brassard explains the steady flow of immigrants will ensure high demand for housing in major cities, while remote work spreads affordability issues further across the country. 

“Ontario and B.C. are such immigration hubs that regardless of whether people leave, you’re still going to have a big push on housing demand,” said Brassard. “Nova Scotia and Prince Edward Island are seeing a greater push on inflation, and I suspect that’s because remote workers are moving into those provinces.” 

The job market built immunity to interest rates

Prevailing economic wisdom suggests higher borrowing costs incentivize lower headcounts, as employers look to their payroll for cost-cutting opportunities in leaner times. Not so in the bizarre world of 2022, where the job market remained white hot despite steep hikes in the cost of borrowing. 

Canada’s unemployment rate reached a new record low in May when it dipped to 5.1%, and despite the aforementioned economic forces that have rocked the economy ever since, only increased to 5.2% by October. By the second quarter of 2022 the country’s job vacancy rate had surpassed a million open positions, setting a new high water mark nearly doubling that of the pre-pandemic economy. 

“This is a very unusual situation, because typically when the economy slows down you have more people looking for a job, but this time around is different,” said Cléroux of BDC. “It’s very difficult to recruit workers for two reasons: the economy has been performing well, so the unemployment rate is low, but also because we have an aging population.” 

Even the country’s aggressive immigration strategy won’t be enough to stem the tide of the upcoming retirement wave, said Cléroux, with one in five working Canadians currently over the age of 55. 

The country’s aging population will instead inspire businesses to seek more non-human alternatives, suggests Vinelli of the CFA institute. 

“I think that we’ll be seeing more efforts to automate jobs at the lower end of the pay scale,” he said, pointing to self-checkout kiosks as one example. “That’s the market solution, because there’s just not enough people to do work that is traditionally low pay, low benefits.” 

Climate risks became business risks 

The effects of climate change get a little bit more noticeable with each passing year, but Vinelli believes 2022 might go down in history as the year the inconvenient truth reached the boardroom, and seeped its way into business strategy. 

“Up until perhaps this year the discussion about climate effects had been quite abstract,” he said. “Now it’s a reality, now its palpable; we’re seeing it.” 

Vinelli explains that prior to this year high-level conversations around climate were focussed on managing the effects of a carbon tax, or some other change in regulation. Increasingly, however, he says there is an expectation that climate related risks impact nearly ever business decision.  

“As policymakers and regulators get more serious about incorporating [climate] risks the measures will be more precise, and the market will incorporate those risks in a more efficient manner,” he said. “That will have very important repercussions in how companies are financed, and what options investors have, but it’s not going to be linear; it’s mediated by the political process, and in these polarized times it will be stop-and-go.” 

Supply chains quietly normalized  

One of the few areas where economists are more optimistic is in the global supply chain. Twelve months ago constraints in global supply lines were causing huge delays, driving up costs and making everyone question the wisdom of a globally integrated economy. 

“A big chunk of the economic problems that we saw in the world in general, and in the U.S. and Canada specifically, had been supply-chain driven,” Vinelli said. “They are on the mend, and have been for the last year, and this is something that is quietly happening in the background.” 

We believe that the economy will slow down but we don’t believe it’s going to be a recession, just a slowdown

Pierre Cléroux, chief economist of the Business Development Bank of Canada

Vinelli adds that rising interest rates have slowed demand, as has a transition in spending from goods to services with the end of COVID-related lockdowns. After all, 2022 was the first time since the start of the pandemic that most Canadians needed a vacation more than they did a bigger TV, home office equipment or a Peloton. 

“Because of the pandemic there were delays at ports, there were [production] shut downs in China, and there was strong demand as well,” adds BDC’s Cléroux, explaining that at least two of those challenges have since been resolved. “The cost of shipping a container from China to North America went from $1,600 to $20,000, but now it’s back to normal, and the delays at North American ports are back to normal too.” 

Will the New Year bring a global recession?

Looking ahead to 2023 most economists are fixated on one big unanswered question: will we see a major global recession? 

“I think that inflation has started its path down back to a more normal level. That’s the good news,” said Vinelli. “The not-so-good news is we’re seeing a very real probability of a global synchronized recession.” 

Morrow of RBC, won’t call it either way, though he admits growth is slowing in many sectors across the global economy. “We’re not going to say with certainty that it’s likely the Canadian or U.S. economy is headed for a recession in 2023,” he said. “The risks of a recession are growing, that is for sure, but at this point it’s still inconclusive.” 

“I would say it’s 70-30 — a 70% chance it’s happening, 30% chance it’s not,” said Brassard of CPA Canada, adding that even if we see a technical recession he doesn’t predict we will see anything nearly as catastrophic as 2008. “It won’t be a shock, we’re just adjusting to higher interest rates; but it won’t be fun when you go to renew your mortgage and need to pay two or three times as much interest as you did before.” 

The outlook is more upbeat over at BDC.

“We don’t think we’re going into recession,” Cléroux said. “We believe that the economy will slow down — it’s already slowing down now after two years of very strong growth — but we don’t believe it’s going to be a recession, just a slowdown.” 

Cléroux adds that businesses will undoubtedly feel some economic pain, but says the effects will pale by comparison to the economic collapse of 2008. 

8 ways finance professionals can rise above the stress of the job

The average finance professional’s relationship with workplace stress is one of cruel irony. 

Despite the sometimes-extreme demands of the job they are often most valued for their ability to stay calm under pressure. That means in high-pressure situations, finance professionals are under extra pressure to demonstrate that the pressure isn’t getting to them. 

Most jobs are at least a little stressful, but finance professionals often carry a little extra weight on their shoulders, especially during the busier times of year. Not only are they responsible for ensuring the financial wellbeing of their employer or client, but they are also responsible for untangling the web of (hopefully innocent) mistakes that inevitably land on their desk, and often on a tight deadline. 

“The numbers on the financial report do lie in that sense, because they can be prepared based on incorrect bookkeeping,” said Nilay Savla, a Senior Accounting Solutions Lead for Level Software Inc. “That makes it very stressful.” 

So how do you keep your cool in the most high-pressure situations? We asked a few industry veterans for their best advice.  

1. Jam it out 

Savla says early in his career he discovered one useful tactic that never fails to lower the temperature in times of stress. “When I find myself in stressful situations I play some music, even while I’m at work,” he said. “I find a lot of peace when I listen to songs; they help keep my mind calm.” 

Music can be an effective way to soothe the savage beast that lives within us all, and keep it from emerging in times of high stress. Savla’s favourites include pop groups Boyzone and Westlife, but says anything that can blend into the background and add a little subconscious positive vibes should do the trick. 

2. Always be puzzling 

Another tactic for keeping stress at bay is finding a soothing hobby for after hours. As a self described “numbers guy” Savla says even his hobbies include some light math, but believes any soothing, low-stress activity can aid the post-work recovery, which is vital in times of high pressure. 

“People like to binge watch Netflix, I’m not really in favour of doing that; I’d rather solve a Sudoku puzzle,” he said. “Once I sit down I solve five or six before I even get up, I love to do it. Sometimes I end up spending two to three hours just on Sudoku.” 

Even if Sudoku isn’t exactly your cup of tea, finding a hobby that melts away stress and keeping it on standby for particularly hard days can help you return to work more mentally refreshed.  

3. Know when to walk away 

When you’re operating under a tight deadline or managing a financial crisis it can be difficult to step away from work, but Savla believes you’re not doing yourself any favours by forgoing breaks, especially in high stress periods. 

“Staring at your laptop for hours and hours in a row, looking at spreadsheets, its difficult,” he said. Savla actually puts regular breaks into his schedule to keep himself honest, and believes that stepping away from work is often most necessary during those times when you feel most chained to your desk. 

“It helps me think about certain issues in a better manner,” he said. “I like to take walks every two hours just so that I feel less stress, it helps me, and of course I keep playing songs the whole time.”

4. Sweat it out and sleep it off 

When work starts piling up it can be tempting to let certain aspects of our personal health go by the wayside, but burning the candle at both ends only leaves you in a hot waxy mess. The same goes for surviving on Cheetos or whatever snacks are hidden in your desk drawer. 

“If you don’t get a goodnight sleep you won’t be able to think properly the next day,” says Savla, who also exercises for 45 minutes to an hour everyday, and refuses to let himself off the hook when work demands pile up. 

Savla adds that you can’t underestimate the power of a healthy snack, either.  He recommends sticking with yogurt, cheese, nuts, oatmeal and other nutritious treats over those of the fried, gummy and chocolate variety. 

5. Prepare for battle

Whether you’re in public accounting, corporate finance or working at a financial institution few in the industry are immune from its seasonal ebbs and flows. Fortunately finance professionals are often given fair warning before going into battle (or tax season, or audits, or year end, etc.) but it’s up to them to use that previous period of calm before the you-know-what storm wisely. 

“I’ve learned to be more self aware of those times when heavy workloads are approaching, and make sure I have a solid team built around me of people that are very capable to help manage it effectively,” said the Senior Finance Director of Our Next Energy Inc., Jody Davis.

Davis explains that while finance professionals often know when that next big storm is going to make landfall, they rarely know how much of a mess it’s going to make, which is why he advises to always prepare for the worst. 

“It’s about putting a plan in place to manage the actual workflows with the team, because a lot of variables will be coming at you,” he said. “I find the more prepared I am the less the stress I have.” 

6. Find some shoulders to lean on 

Like most things in life stress is always harder to manage alone. Davis says the best way to alleviate stress is to surround yourself with team members you can confidently pass to when the clock is winding down, knowing they wont drop the ball. 

“You have to have people that you can trust, that are accountable, that are very analytical in terms of their mindset; that ask the right questions,” he said.” If you can have your team to support you it’s actually a massive reduction in stress, because you’re in it as a team, not on your own.” 

Furthermore, while it’s important not to over-burden loved ones with the challenges of your job Davis also emphasizes the importance of finding a shoulder to lean on at home. 

“For me communicating with my wife and my family and my friends releases that [negative] energy,” he says. “I talk with my wife about all the stuff that’s going on and then I don’t feel as alone going through it.” 

7. Make friends with robots

Finance has always been a high-stress function, but it can be much less stressful with the help of some new software solutions and technological innovations. Davis, for one, says his work life has gotten a little bit calmer since he let the robots carry some of the load. 

“When I first started my career companies like Float didn’t really exist,” he said. “It’s only been in the last five to seven years that we’ve seen that level of growth in automation and FinTech and tools that can support finance leaders, and its actually made the job, not easier, but more manageable.” 

8. If all else fails, find a less stressful job

If you do find yourself regularly struggling to manage the demands of the job you may eventually have to consider the possibility that you’re at the wrong kind of company, in the wrong role, or even in the wrong line of work. Davis explains that in order to excel in this business you need to have a thicker skin than most, as others will look to you to navigate through those storms, and some are better equipped to manage the stress than others. 

“There are a lot of different characters in finance, but the biggest thing we have in common is our stability,” he said. “That’s how you become a leader; being more stable and driving decisions with numbers.” 

Davis says that is especially true in the high growth start-up world, where he spent much of his career. “It’s just part of the game, and it’s more pronounced in start-ups than it is in larger corporations, because larger corporations have a lot of processes and infrastructure in place,” he said. 

Savla, however, says his experience in the industry has actually demonstrated the opposite. “It is indeed a very stressful job, and the bigger the business the more stressful the job becomes,” he said. 

Whether you’re working for a large organization with lots of moving pieces, red tape and a lot more stakeholders, or a smaller organization with fewer resources to lean on, a certain amount of stress is inevitable. Unfortunately finance leaders are tasked with rising above the stress more than most, meaning that if you really can’t take the heat, you might need to leave the kitchen; or at least find one that’s less prone to fires. 

Mark MacLeod on rising to the challenge of modern finance leadership

Mark MacLeod has seen the finance world from just about every angle, and he’s got no time for B.S.

“I’m 52, I know exactly who I am, I don’t feel like compromising, and I have no time for a**holes,” he said in an interview with Retained Learnings. “Life’s too short.” 

MacLeod also knows exactly what it takes to build a winning company. He began his career as a CPA in auditing and then moved into corporate finance before making his way into the tech industry. After a series of finance lead and CFO roles he eventually landed the top finance jobs with some of the country’s biggest names in tech, including FreshBooks and Shopify, before dabbling in investment banking.  

In this interview, he reflects on his lifelong experiences in accounting and finance, career transitions to becoming a coach to CEOs, and best recommendations for finance leaders to level up in their performance.

From music to mathematics to moneyman

MacLeod says he first fell into accounting as a high school student trying to make sense of a world that couldn’t be more different than the one he knew growing up. MacLeod was born and raised on a small island in Scotland, and immigrated to Canada at the age of 11. As a kid from a poor family with a funny accent he spent much of his high school years seeking logic, patterns and things that just made intuitive sense, which initially led to music. At the time the longhaired drummer, like many aspiring rock stars, had little interest in academics. 

That all changed during the final year of high school when MacLeod took an accounting class and immediately saw parallels with what was then his primary passion. “I’ve often felt those two worlds were very aligned,” he said. “Music is highly mathematical, and highly structured.” 

Accounting also came with another perk; unlike most academic pursuits the university program included a co-op, which allowed MacLeod — the first in his family to attend postsecondary — the opportunity to earn tuition money from articling while pursuing his degree. 

MacLeod graduated from Brock University in 1995 and earned his CPA designation in 1995, then spent a few “boring and painful” years in auditing before transitioning into corporate finance. He’s been studying what makes businesses successful, or not, ever since. 

“That’s what made it interesting for me,” said MacLeod, who recalls taking his clients’ paperwork to restaurants after work to study their financials, challenging himself to determine their break-even. 

MacLeod got his first opportunity to join the high growth start-up world in 1999. “I ended up helping a client raise a Series A funding round, and then joined them as their first finance leader,” he said. While working for the start-up MacLeod also pursued his MBA at McGill University, a decision he came close to reversing at least three times before eventually graduating in 2003. 

During the pandemic MacLeod, like many, took some time to reflect on his career, and concluded the aspect he most enjoyed were the one-on-one coaching and advisory conversations with business leaders. That is ultimately what inspired his latest career transition. 

“I bought my first book on coaching back in 2002 and concluded that I lacked the gray hair and moral authority to crush it as a coach,” said MacLeod. “You can be the judge on moral authority, but I’ve got some white hair now, so I can check that box.” 

Now, as an executive coach, he’s sharing his more than 30 years of experience, a series of battle-tested guiding principals and his no-nonsense attitude with those who need it most. MacLeod says his role as an investor and coach has provided insight into how expectations of finance leaders have evolved since.

“More and more businesses are data-driven, and I think the CFO’s role is to be that one source of truth for all the different functions of the business, and help them make more data-driven decisions.”

The role of the CFO is expanding: Here’s what to expect

“There’s been a huge expansion of the CFO role over the last few years, and it’s something I welcome,” he said. “More and more businesses are data-driven, and I think the CFO’s role is to be that one source of truth for all the different functions of the business, and help them make more data-driven decisions.” 

At the same time MacLeod says finance leaders are under greater pressure today, especially given the current state of the market. He explains that start-ups and tech companies are under more financial scrutiny, particularly those that raised capital in the overinflated pandemic market. The cooling of capital markets, coupled with the rising cost and competitiveness of talent, has put an onus on finance leaders to improve operational efficiency across the board. 

“There’s a huge imperative now to find ways to do more with less,” he said. “Reduce headcount, eliminate things that aren’t adding value, automate, streamline and generate more revenue per employee than you had done in the past in order to rationalize your business model and get the margins back.” 

MacLeod adds that such responsibilities go well beyond those of finance leaders of the relatively recent past. In fact, when he began his career professionals like himself were expected to stay in their bean-counting lane, which usually didn’t include a seat at the decision-making table.  

“Finance used to be quite distant from the business, and didn’t deeply understand how the business works,” he said. “Now finance needs to deeply understand how the business works so it can be a trusted advisor to every function.”

Crafting a distinct leadership edge: It’s about guiding principles

MacLeod is accustomed to balancing his responsibilities as both a departmental leader and a top advisor. Using that influence responsibly is also something he takes from his side-career as a DJ, which he developed in parallel with his day job.   

“When I’m DJ-ing I am in complete control of that room; I decide when we go up, I decide when we go down, I will look at a track and instantly know ‘yeah, that’s going to work,’” he said. “As a CFO you need to have deep command and mastery over the business; you know all the knobs and levers, you’ve got the early warning signals, you know exactly how it works so you can be a sounding board to the executives of the company.” 

Whether making music, practicing yoga, martial arts or cross fit training, serving as CFO, running a venture capital firm, or coaching business leaders, MacLeod doesn’t believe in putting in any less than his full effort. He continues to preach the value of mastery — and the idea that all pursuits are a journey with no final destination — to the executives he coaches and the artists he signs to his record label, Deep Down. 

As someone who has always sought out logic, structure and predictability — and as someone who has been entrenched in the startup world for over 30 years — MacLeod has developed a few guiding principles that, when applied correctly, can be instrumental to a business’s success. 

At a very basic level he says companies die when they run out of money, simple as that; everything else in an organization’s early days should therefore come second to literally buying time. “You can keep screwing up as long as you have money,” says MacLeod, adding that having more runway allows the business to keep working towards developing a winning formula. “When you have a proven repeatable machine and the market is pulling you, go as aggressive as you can.”

MacLeod adds that CEOs and executives can’t unlock the full potential of their business until they develop that repeatable recipe for ongoing revenue growth, the importance of which can’t be overstated.

“In my experience, the rate of revenue growth is the single biggest driver in valuation — it is the thing that attracts investors, it attracts ambitious talent, it attracts strategic partners and buyers — it’s a magnet,” he said. “Unlock revenue growth in your business, and hang on for dear life.”

MacLeod adds that his responsibility as a coach is, in part, to teach executives how to cling to the rocket ship as it’s taking off. Specifically, he says CEOs and executives must learn to grow their own expertise at a pace equal to or greater than the growth rate of their business, or risk dragging it down.

“If your business is doubling every year, then you need to at least double as a leader, so that you are as effective in a year from now as you are today,” he said. “You look at all the biggest outcomes in the start-up world and they tend to be founder-led start to finish, so there’s a 100% correlation between your performance as CEO and the outcome of the business. That, to me, is the purpose of coaching.”

“In my experience, the rate of revenue growth is the single biggest driver in valuation — it is the thing that attracts investors, it attracts ambitious talent, it attracts strategic partners and buyers — it’s a magnet,” he said. “Unlock revenue growth in your business, and hang on for dear life.”

Mark McLeod

The power of professional coaching

When MacLeod left his job in corporate finance to help a start-up raise its Series A he had high hopes for the company, which he describes as “DocuSign, but two decades too early.” Its ultimate struggles demonstrated the importance of timing, a lesson MacLeod carries with him to this day. 

That’s why, despite having an interest in coaching for much of his career, he felt the timing was finally right in 2020. Not only was he confident in his own potential as a coach, but MacLeod says he had also witnessed how the industry’s attitude towards the practice has evolved since he began his career.  

“Back then it was a stigma; If your board said ‘hey, I think you would benefit from working with a coach’ it was perceived as ‘you have a deficiency or are lacking in some way,’” he said. “What CEOs are coming to realize is this is actually just a key tool, given the expectations on their shoulders.” 

MacLeod explains that the CEO who raises a $30 million funding round should dedicate the same resources towards their own development as a professional athlete that earns $30 million in salary. They should also strive to put in professional sports-level care when building out their team.

The CEO-CFO partnership

When it comes time to pick their finance leader — which MacLeod believes shouldn’t be given a CFO title until the company is mature enough to truly need one — he advises CEOs to find someone with complementing strengths. He explains that there are two kinds of finance leaders: “technicians” like himself, who typically come from a CPA background and have a strong understanding of accounting and finance rules; and “deal makers,” who typically come from a venture or investing background, and are more focussed on strategy. 

MacLead advises CEOs to pick their finance leaders based on the kind of expertise they need at their disposal, and to help fill any gaps in their own expertise. “Either persona can work,” he said. “It’s about assembling a complete team around the strengths of the leader.”

Beyond numbers: What it takes for finance leaders to master their role

No matter their background, however, MacLeod believes all finance leaders need to master more than just finance, and seek to really understand how the business works. That, he says, will eventually enable them to create a dependable, repeatable formula, akin to a math equation or a piece of sheet music, that just makes sense.  

“You need to understand, for example, that for every 1,000 customers we add we need a new customer support rep — you need to figure out that formula so that you can turn the business into a recipe,” advises MacLeod. “That’s why it’s not enough for a finance leader to only know finance; you actually need to have some base level understanding of all the other functions.” 

Being a well-rounded finance leader isn’t limited to business operations, either. MacLeod knows how hard it can be for executives to pull themselves away from their work, but cautions against that sort of isolation. He explains that the industry has long maintained an unhealthy culture of fetishizing work, but has some hope that the pandemic gave everyone, including those at the top, the opportunity to re-evaluate what’s important in life.