Kathy Wagner was appointed in May 2021 as CFO of Kaseya, a global provider of cybersecurity and IT management software. Wagner started her career at Arthur Andersen, moved to Ernst & Young, then spent 17 years at technology company Citrix, where she had different roles in finance.
Global Finance: What makes for a good software CFO?
Kathy Wagner: In the software industry, historically, profit margins have been significantly higher than in sectors such as manufacturing. There’s often a temptation to grow rapidly without due consideration for profitability balance. This trend is evident across the industry, with numerous software companies resorting to substantial layoffs. While the software sector benefits from generous margins, the current macroeconomic environment emphasizes the importance for CFOs to prioritize sustainable and profitable growth. It appears that the era of extravagant valuations may be a thing of the past.
GF: What are the parameters you are looking at?
Wagner: Some companies may have overhired in the past. For instance, when making substantial investments and hiring numerous salespeople, it’s crucial to assess if the yield per representative remains consistent. If there’s a decline, it might be necessary to reconsider the hiring strategy. Similarly, when expanding the finance team, questions about efficiency arise—whether it’s essential to hire one finance person for every 100 new employees or if there are more efficient alternatives. As a CFO, challenging peers and distinguishing between wants and needs is part of the role. At times, it requires being the pragmatic voice in the room.
GF: How is strategy important?
Wagner: Strategy is indispensable for a CFO. Nearly every decision within a company has economic implications, and the CFO plays a crucial role in ensuring that financial considerations are integral to the decision-making process.
GF: How does being privately held shape relations with investors?
Wagner: I think we have a much closer relationship with them. Regardless of whether you’re a public or private company, when you’re dealing with investors, one of the things I learned earlier in my career is you need to have empathy for them. They are not involved in the day-to-day of your business, and having consistent metrics and clear communications is critical in helping them understand what is going on within the business.
GF: What’s another lesson from a past job that’s relevant in your current role?
Wagner: During my time at Citrix, I realized the importance of stepping out from behind the desk. As the head of finance for sales services and marketing, I actively engaged with sales teams, participating in quarterly business reviews and accompanying the chief revenue officer on travel. This hands-on approach provided a deeper understanding of the business dynamics. My advice, particularly to CFOs, is to go a couple of levels below your peers. It’s easy to get caught up in the numbers, but understanding the reality of operationalizing requires getting directly involved in the business.
GF: Do you think there are extra challenges for women CFOs?
Wagner: It’s not uncommon for women to be perceived as petty when the same behavior in a man might be viewed as competence. You have to navigate the delicate challenge of pushing back assertively while maintaining a positive demeanor. This balance is crucial in fostering effective communication and leadership, particularly for women in professional settings.
GF: What keeps you up at night?
Wagner: Interestingly, it isn’t always negative thoughts that keep me up at night. A few weeks ago, I had the opportunity to address the entire sales team about compensation and the importance of securing high-quality deals. I was so thrilled about the prospect of delivering this message that I couldn’t sleep the night before. My enthusiasm had me ready to go at 4 o’clock in the morning, even though my presentation wasn’t until 8:30. Sometimes it’s the positive and exciting moments that can keep you up at night.
