How a CFO and a Head of People Split the Headcount Decision, With Altruist

00:01 Haris Ikram, CandorIQ
Right at 12pm Eastern, let's get this kicked off. We have an amazing session today. We have Marc, the CFO from Altruist, who I've worked with before, and Katherine, the head of people, also from Altruist. This is a treat because we have the people leader and the finance leader sitting together, even sharing the same laptop in the same room. If that's not real collaboration, I don't know what is. Katherine and Marc, would love a quick round of intros.

00:44 Marc Greenberg, Altruist
Great to be here. I started my career on the East Coast with EY in accounting, auditing, and transaction work. That interest in tech brought me to the West Coast in the late 90s, the first internet boom. My gray hair gives it away a little. I joined a company called Savi Software, then moved to Pixar, where I spent a good portion of my career, 16 years, first on corporate accounting, then FP&A, then controller on the film side, and my last years there as divisional CFO. Pixar is an incredibly difficult place to leave, but I moved to Blend, where Haris and I had the opportunity to work together. Five years there, raised a bunch of rounds, saw the company grow significantly, did an IPO and the public company transition. Then I moved to Altruist about a year and a half ago. One interesting note about the Blend years: I was actually interim head of people during the pandemic, so I'm especially fond of and empathetic toward the HR and finance collaboration.

02:01 Katherine Starros, Altruist
I'm Katherine, VP of People at Altruist. I love working with Marc. I'm originally from Los Angeles, a rare thing to hear, though I spent a lot of time in the Bay Area as most people in tech do. I came up on what I call the recruiting track in San Francisco, eventually moved home to LA to be closer to family, and that was where I took my first role owning the whole people function, HR and recruiting. That was about 11 years ago at a small Series A company in Santa Monica. That's where I discovered my true superpower and niche. I'm very much a builder. I joined Altruist as a Series A too. This is my fourth time joining a company at that very early stage as the first people hire, helping build out the infrastructure for the company to grow and scale. I've been with Altruist four years in January, and helped us scale from 50 people to 450. I own HR, talent acquisition, talent management, and facilities and workplace, because we are a hybrid workforce.

04:30 Katherine Starros, Altruist
The company's needs evolve quite a bit between a Series A and post Series E. When you first join a very early stage company, even in a senior role, it's all blocking and tackling. Setting up basics, benefits, payroll systems, all the boxes you have to check. They're really important and they do impact the employee experience. More broadly in the industry, HR has gone from kind of a dirty word, we've tried to rebrand it as people but that's another story, from paper pushing and mitigating risk to a truly strategic function. Especially at a tech company, you're really only as good as your people. Headcount, the humans who power your business, is most companies' largest investment, as I like to call it, versus expense. So HR and finance have to be super close, not just physically in this particular meeting. We're not only trying to manage the spend, we're trying to evaluate whether we're getting a good return on that investment.

06:06 Marc Greenberg, Altruist
Really well said. I like to think about the CFO's role as a resource allocator. How do you allocate your human capital to build new products, solve problems, optimize costs, create efficiencies? And of course you want to build a lasting and impactful company and a culture you're proud of. That partnership and balance between HR and finance is really powerful. Going back to how Katherine started, you have to start with the basics. We say here, flawless execution of the basics. You have to be able to do the basics in order to graduate to the more sophisticated conversations around engagement and culture and workplace.

07:17 Marc Greenberg, Altruist
It's the same on the finance side. You have to understand where you're spending your money and how, the basics around approvals and oversight and analytics. But you want to graduate to the more dynamic, more creative part of finance, which is business partnering. What products are we building? How are we building them? How do our customers react to them? Do they pay for them? Are they happy when they pay? Do they feel like they're getting value? And then it goes back to resource allocation. We're allocating resources because this product makes sense, or because this is something the customer needs, or because it rounds out our platform in a way that lets us move upmarket or into a different vertical.

08:47 Marc Greenberg, Altruist
I was having a conversation yesterday about the power of AI. The roles on our finance team are evolving. The things that are the basics, there are more and more opportunities to automate those. And then how do we move along the evolutionary curve to provide insights?

09:43 Marc Greenberg, Altruist
When I'm at a cocktail party I say we're Shopify for financial advisors. If you're a financial advisor and you want to run your practice, do performance reporting and billing, trade equities, provide an investment strategy to your clients, we provide that infrastructure. We're about 450 employees, based in Culver City in LA, with our broker dealer in Dallas, so we're multi-geographical, and we have a concentration in the Bay Area as well. We provide technology that allows financial advisors to be more productive and serve their clients better.

11:11 Marc Greenberg, Altruist
It's really important to note that we want to meet those financial advisors where they are, which means providing the best level of service we can. So we have lots of people, and people are an important part of our strategy. It's not just, here's the technology, go run with it. It's about how we build technology that makes advisors more productive and provides better results for their clients.

12:08 Katherine Starros, Altruist
At the very core, both of us sit on the company executive team. We are company leaders first and functional leaders second. Our priority as an executive team is to ensure the company is successful, that we're hitting whatever performance goals, KPIs, and OKRs we've set and our investors have set. What's shared between our two functions but unique to finance and HR is that our functions span the entire company. So we have a better bird's eye view than, say, product leadership or sales leadership. We're able to use that visibility to see how all the pieces fit together, where we should be investing those resources, and we use it to coach and communicate cross-functionally.

13:19 Marc Greenberg, Altruist
The goal is for the company to win and to build a culture that lasts, and you have to make changes. Culture isn't just set in the moment of the founding of the company. It evolves over time, and there are different challenges the company will face. Being able to react to those changes and make decisions in the face of economic, political, and cultural realities matters. These are humans. One of my last bosses said things would be so much simpler if there weren't humans involved. These are real people with real families and real lives, and how you support them at work and build something meaningful as a company is super important.

14:58 Katherine Starros, Altruist
We have the annual planning exercise, we're in it right now, what fun. For us it's not just about our synergy, it's about bringing everybody along to what really matters. I think we have one of the most transparent cultures I've ever worked in. Marc does an amazing job. We have our company OKRs and we share how we're tracking every month, at all hands, via Slack, via meetings. We share financial metrics, a whole dashboard, with the whole company, so everybody can see how we're tracking. That helps put decisions into context. It explains that sometimes there are trade-offs, and sometimes one headcount might be deprioritized because we're allocating a resource elsewhere that ladders up to those goals. While that other team might be disappointed, it helps everybody understand where we're going and the why behind a decision.

16:23 Marc Greenberg, Altruist
I love the phrase context over control. We want to give people the context to make decisions, versus telling them to do something because I said so. It's like raising kids. You want to give your kids the power to make decisions on their own, not always tell them exactly what to do. If you hire people you trust and you respect them, then you should be able to share information with them in a really transparent way. It gets more complicated as a public company, are you an insider, can you trade. But while you can, you should share as much information as possible and give people the context to understand where their role fits in the broader goals of the company. Finance doesn't win unless the company wins.

19:03 Katherine Starros, Altruist
Communication is an evolving thing at any company. I'm not going to say we've completely nailed it every time, but we try, and that's the most important thing. One of the things we're implementing now is meeting people where they are with a multi-pronged communication strategy. Ever since the company was founded, before I joined, we've had at least a monthly all hands, and that's probably our number one touch point. It's led by our CEO, but Marc does a spotlight, I do a spotlight, different functional areas rotate. With hundreds of people on a call it's hard to tell whether information is being digested, and everyone learns differently. So now we've started doing written communications in addition, an and not an or. And smaller meetings for really important information. Marc has done road shows into departmental meetings. That's where we've started to see a deeper level of comprehension. If people have a question they're not always likely to ask it in front of 450 people, but they might in a smaller setting where they feel more safe.

20:54 Marc Greenberg, Altruist
We also try to encourage a level of approachability. An employee pinged me yesterday about a financial question in a one-on-one Slack conversation. You start by thanking them for having the courage and thoughtfulness to be curious and ask. Then you reward them. That employee tells another employee, I had this question and Marc was so responsive. That's what you want. You want to be the change you want to see and promote the kind of culture that's transparent, kind, and respectful across different levels of understanding.

22:36 Marc Greenberg, Altruist
Pulling from my past: if you're not tired of saying something, a lot of times you haven't said it enough. You have to continuously repeat it, say it different ways, record the all hands, post a link, do a follow-up, do a series of town halls, to make sure people understand their equity or our compensation strategy or the engagement survey. Having the HR team has been amazing, helping us communicate and holding managers accountable so they can follow up in their own meetings. Did you do the survey, have you done your performance reviews, does your team understand why we're taking this strategy. That collaboration with the HR business partners, reminding managers and having managers hold their managers accountable, is an overlapping matrix that can be really powerful over time.

25:02 Katherine Starros, Altruist
We're still generally a pretty early stage startup, and HR and finance have worked really closely to roll out a departmental budget process, which is somewhat new for us. Because our teams have that higher level view, the HR business partners sit on the budget reviews for each individual department. Our goal is to make every departmental leader a little mini CFO of their own team and really understand the bigger picture. We also partner on compensation philosophy, benefits, and investments. We're pretty aligned because we all agree that attracting and retaining the people we want is paramount. But every year going through these processes is an opportunity to pull back and ask what type of candidates we're trying to attract. Junior and brilliant, or more senior and established? That impacts how we structure our plans. Do we put more investment in the employee-only category to have a free plan, or more into family coverage? There are trade-offs, so we have to think about what we're trying to achieve with these programs.

27:01 Marc Greenberg, Altruist
We were just debating how we use contractors. How important are they? What weighting do we want to put toward hiring full time employees versus contractors? What are good projects for contractors if we want to use them as part of our overall staffing strategy and our strategy to achieve certain product milestones? It's an evolving and balancing process that changes as a result of any number of things, internal and external.

28:41 Marc Greenberg, Altruist
The budget is an evolving, living, breathing document for us. Sometimes things on the revenue side change your ability to spend, or an inbound fundraise, or a formal fundraising process. Maybe we want to use debt. And how do we use our board to vet those strategies? We have a quarterly board meeting where we go through a lot of that, and the board has been an amazing partner in determining where we pump the brakes and where we put our foot on the gas. At the last board meeting we discussed segmentation. What successes are we having with smaller advisors versus large advisors, advisors with simple investment strategies versus much more complicated ones that use options or alts or margin? How does that impact our product roadmap? How do we earn money as a result?

30:00 Marc Greenberg, Altruist
I don't want people to think we treat the budget as something you set at the beginning of the year and then walk away from. Things change and evolve, and you have to be dynamic and responsive. You do that with transparency and collaboration. If you plan to spend 10 million and now you're going to spend 40 million, you can't do that in a vacuum. But there are circumstances where it may be more important to the company to take an allocation of a resource to the product team and put it toward design, or to HR, or toward product. It goes back to what Katherine said. We're leaders of the company, not leaders of an organization. So divorce yourself from, my team has these goals and we can no longer hit them without this headcount. It's hard, even sitting in the finance role. Our audit has to be delivered, you have this expectation of us delivering within this many days of the close of the month, and without the resources I planned to hire I can't do that. Okay, let's see what makes sense across the company.

32:44 Marc Greenberg, Altruist
It's also important to be transparent with your employees that we set goals and priorities at the beginning of the year or quarter or month, and sometimes those things change. There are some employees for whom that level of change is not comfortable. If your version of the ideal company is that you set goals at the beginning of the year and execute on them throughout, we may not be far enough along in our journey for that. So we hire for that level of dynamism. Not everyone can appreciate or wants to be part of an organization that changes direction multiple times during a quarter.

34:59 Katherine Starros, Altruist
The first tactic might be oversimplifying, but it's constant communication. Things change rapidly at a startup and that's okay, so embrace it. We're big fans of real time updates and over-communicating. That's the foundation, because things can change on a dime and in a good way. Opportunities strike, we have to pivot, and it's exciting to seize those moments.

35:58 Katherine Starros, Altruist
The other tactical mindset thing is making sure your partner understands the dynamics within your core function. An example we're going through right now is a change in our talent bar. We're bigger and more established, we're able to attract and we need to attract a different caliber of talent. That caliber might also have different compensation expectations. Perhaps they're used to bonus programs and at our stage we don't have that. So you give the context: here's why we need this, here's what they're expecting, what can we do? Let's think creatively together. That might also create some outliers, so how can we avoid or mitigate those? Then the HR business partners can coach managers that they might need a diverse team of levels, which keeps everything even. Investing in junior talent can pay massive dividends. That's the long game, and those individuals become your superstars. Being thoughtful about the whole team, not just the hire right in front of your face, satisfies both sides.

37:19 Marc Greenberg, Altruist
One thing I do is I have posted on my monitor, ask questions first. I have a tendency to jump to solutioning, and I try to remind myself to have empathy for wherever the person is coming from. They're going to have a specific perspective I might not have. So before I do anything I keep reminding myself: ask first, seek to understand from the outset. That helps build trust and understanding. Maybe there's something I didn't think of when I was already thinking about the solution. And in the process of me asking questions, it often prompts the other person to ask me why I'm thinking about something a certain way, or what my experience was at a prior company or last quarter when we came across a similar problem. That power of asking is useful in so many situations.

39:32 Marc Greenberg, Altruist
We do look at ARR per FTE, that's fairly prominent. For us, assets under management, number of advisors on the platform, and net new assets for the month or quarter or year are indicators of operational success. So there's financial and there's operational, and we try to balance those with people initiatives. We look at engagement, we have a survey a couple of times a year. We look at turnover, time to hire, hiring success. We balance our KPIs between the pure financial, revenue, net profit, EBITDA, with ones that cross over, ARR per FTE and revenue per FTE, and ones that are purely people, engagement and turnover. We're transparent about those metrics and we show them over time. Is it on an upward trend, a downward trend, or flat, and is that what we expected?

41:31 Marc Greenberg, Altruist
We have a company meeting tomorrow and we were debating some feedback from our advisors. When I saw the slide it had all the positives on it. I said, where is it? There have to be some advisors who are unhappy with us. We have to make sure we're not Pollyanna about something. At the leadership level it's easy to be focused on all the things we have to fix, fix, fix, and you don't celebrate the wins. I think you need to do that. And with employees in a general meeting it's easy to be all positive, win, win, success, success. In both cases there's a balance.

43:38 Katherine Starros, Altruist
Something we've become much more active around is succession planning. When companies grow quickly, suddenly you look up and you have some single points of failure. Those people can be great, and it's not that we don't want them. But you have to look at that very consciously, and it's a real balance from the finance side of not wanting to be bloated but also not wanting single points of failure. So how can we identify the really key seats where, if that person were to leave or retire or have to move because of their spouse, we'd be in a real pickle? And how can we mitigate that risk with complementary skills or better org structure? That's been a focus this last year in particular. Maybe we've had to learn the hard way once or twice. It's also about illustrating the cost benefit: if we don't do those things there could be a very serious financial implication down the line.

44:54 Katherine Starros, Altruist
On efficiency metrics like ARR per employee, we've gone a level deeper within the functions. That's top line at the company, but let's look at our support or operations teams. They have all kinds of data and are really focused on how many accounts a person can handle within a comfortable range of our service levels. That makes adding headcount very formulaic. We can predict a rep can handle a certain amount, and there are only 24 hours in a day, so we know we need to add resources. Or, and this is another place finance, HR, and the functions work closely, do we need to build product efficiencies that reduce our need for headcount? That's a different kind of investment, and what is the return on it, because one is a long-term gain. Those are the conversations we're having quite a bit now as we enter this next phase.

46:23 Katherine Starros, Altruist
We're looking at a lot of benchmark data. For benefits that data is frankly more consistent. The last five years on comp has been a little wonky within our industry. We ask what's standard and where we want to really flex. We don't want to just check the box and be bare minimum, you're not going to attract and retain the talent you want that way. We take a holistic approach to total rewards. It's not just your cash or equity or bonus, it's all the benefits, paid leave, a lot of things that motivate people. We invested in paid parental leave for birthing and non-birthing parents pretty early on, and that's not a federal requirement. The feedback has been incredible, and not even from people with children. They just say, I like working for a company that does that. It's a retention play as well. People are more likely to come back if they feel they've had a great leave and were taken care of. That costs quite a bit of money, but it's an area we wanted to invest in well above the benchmarks.

48:16 Katherine Starros, Altruist
On the comp side you can do surveys, but everybody wants to make more money, that's human nature, so it's not always the best indicator. We've tried to dig in with our talent team who are talking with candidates to see what's top of mind. One thing we identified was a lack of understanding around our equity packages. Equity is apples and oranges, a thousand shares at one company could be the same as a hundred thousand at another. Marc and our COO did a fantastic job educating our existing staff. My team came to finance and said we're really struggling here, and they did a comprehensive road show in small groups to get the information out. Marc and our COO are also open to helping close candidates. They will go through a very intricate discussion and model of our equity with a candidate so they really understand what they're getting. That has helped us overcome gaps where we don't have a company-wide bonus program.

49:26 Marc Greenberg, Altruist
I also think about how compensation fits within the context of the goal, which is achieving the company's goals. How does the compensation program align with our workplace strategy? How does it align with how we hold managers accountable for giving performance feedback? How do we make sure people feel like they're working with other really smart people on a common goal they're connected to and engaged with? We want to be a mission driven company, so how do people align with the mission? Are they mercenaries? How do we think about the employee type we hire and the employee type we retain, and how is compensation part of the motivation for people to work really hard and stay?

50:56 Katherine Starros, Altruist
Looking ahead, tools, whether that's AI or otherwise, will become more and more important for being efficient within the HR function. Getting out of spreadsheets, so to speak, because it allows us to be more efficient with our time. So much is already starting to get automated and that will continue. Creating ways to offload the tactical questions, what are my benefits, those types of things, allows us to focus on the human side and the bigger strategic things that an AI bot isn't there for yet. Probably will be in a year, but we'll see.

51:57 Marc Greenberg, Altruist
I'm really excited by problem-solving. When you feel like people are working with good purpose, coming from a good place, assuming positive intent always, what's exciting to me is the problem-solving part, and knowing that the problems of today won't be the problems of tomorrow, and having people around me who are excited about and motivated by solving those problems in a collaborative, productive, and kind way.

52:28 Haris Ikram, CandorIQ
This was such a great session. A few things I wrote down: the people team and the finance team are ultimately there to serve the company, and it's less about your individual functions. Being aligned on the same business goals, communicating those KPIs, context over control, and hiring people who fit that, more missionaries and fewer mercenaries. Then empowering them with the tools, being transparent, and communicating when plans change. There's a lot other companies can learn from here, dashboards and KPIs and reporting, town halls, business KPIs, comp programs, headcount budgeting. But the best way to end this is to do it with positive intent and empathy, because on the good days these are great jobs and on bad days they can be tough jobs. If you have that as the compass, it usually works out.