Few finance leaders have had a closer view of how the CFO role has changed more than Karen Walker.
Before becoming CFO of real-time cloud security company Sysdig, Walker held finance leadership positions at PagerDuty, Uber, Pandora, Virgin America, CBS and more. She has made a career helping companies navigate hypergrowth, IPO preparation, public-market scrutiny and the operational challenges that come with scaling rapidly.
During an interview with CFO.com at the CFO Leadership Council’s conference in Boston on June 4, Walker discussed lessons from high-growth companies, the growing demand for CFOs to take on operational responsibilities and the opportunities and risks emerging as organizations embrace artificial intelligence.
Karen Walker
CFO, Sysdig
First CFO position: 2021
Notable previous employers:
- PagerDuty
- Pandora
- Uber Technologies
- Virgin America
- CBS
This interview has been edited for brevity and clarity.
ADAM ZAKI: You’ve worked at several high-growth companies. How should CFOs balance building institutional scale while still moving quickly?
KAREN WALKER: One thing I like to say is, “Don’t spoil good with perfect.”
When you’re in a high-growth environment, the business needs you to stay in step with it, maybe even a little ahead of it. You can’t wait until everything is perfect before you put something out. You have to be willing to move fast and fail fast. Don’t be afraid to be courageous. You don’t need to have all the answers before taking action because the business is going to value speed and progress when it’s trying to scale.
The other piece is pattern recognition. There’s no way you’re going to do everything. You have to understand what’s most important to the business and where your team should focus its efforts. If you try to do everything, you run the risk of never delivering, failing to meet expectations and burning out your team.
Those have been two really useful lessons for me in high-growth environments.
We’re seeing more finance leaders take on dual roles, whether that’s CFO and COO or CFO and CAO. What advice would you give someone stepping into that kind of position?
I’m actually in that situation right now on an interim basis. I’m helping co-lead our company alongside the founder, so it’s very much a COO-like role. (Editor’s note: Sysdig appointed Hatem Naguib to the CEO role on June 16.)
What I’ve learned is that regardless of whether you’re formally taking on another title, you’re going to be a better CFO the closer you are to the customer. You need to understand what your product or service solves for customers and what their pain points are.
It’s one thing to look at insights in a spreadsheet. It’s another thing to understand customer intimacy and what the organization is actually trying to accomplish every day.
That means spending time with leaders across the business, understanding how strategy gets operationalized and helping develop the metrics that matter. It’s about investing time in a deep understanding of the business, the strategy and the customer. Those are the things that help finance leaders evolve into broader operating roles.
Why do you think the CFO-COO combination is becoming more common?
Part of it is that many companies don’t have a dedicated COO. That’s especially true in mid-market and smaller organizations.
At the same time, CEOs often want to spend more of their energy on vision, product strategy and long-term direction. Strong operational leadership becomes increasingly important as companies scale and grow more complex.
CFOs are already immersed in the language of the business. They understand the metrics. They spend time with operators. They understand the resources required to execute a strategy. That’s a strong foundation for taking on broader operational responsibilities.
The CFO role itself has evolved dramatically over the last decade or so. It’s no longer just about closing the books and reporting results. CFOs are increasingly responsible for generating insights, overseeing analytics and helping the organization make decisions. That creates a lot of overlap with operations.
Is there anything in your career that compares to the disruptive potential of AI?
It still feels a little early to say.
If I were looking for a comparison, I probably wouldn’t choose Excel. I might point to the transition from on-premises software to SaaS and cloud computing. Even then, AI feels much broader in scope.
This isn’t just a business story. There are socioeconomic implications. There are environmental considerations. Governments are investing heavily in AI initiatives. At the same time, some of the largest AI companies are scaling rapidly without clear profitability, so there are still a lot of open questions.
One thing I’ve noticed is that last year was largely about personal productivity. This year, companies across industries and functions are leaning in much more aggressively. They’re trying to use AI to improve outcomes, accelerate time to market and increase productivity.
We’re still early. I don’t think we’ve seen a lot of definitive proof points yet, but the pace of adoption has accelerated significantly.
What separates companies that successfully prepare for an IPO from those that struggle?
There are the traditional preparation activities such as audits, financial reporting and prospectus development. Interestingly, many of those tasks lend themselves well to AI use cases. I’ve seen examples where lawyers and accountants have dramatically reduced the amount of time required to prepare documents such as an S-1.
What hasn’t changed is the importance of the narrative.
Management teams still need to explain their business, articulate the metrics that matter and help investors understand why the company is differentiated. You have to explain the opportunity, the tailwinds behind the business and why investors should be excited.
Building that credibility takes time. Management teams need opportunities to engage with investors, gather feedback and refine their story. In my experience, that process still takes 18 months to two years. You need time to understand what resonates, where concerns exist and how to communicate the business effectively.
By the time a company reaches the public markets, investors should already have a strong understanding of the story, the strengths of the business and the areas where they may have questions. Building that trust and credibility remains one of the most important parts of IPO preparation.
What’s a bad habit CFOs should avoid?
I’d say treating your relationship with the CEO as transactional.
It’s a very important relationship, and your time together is limited. I don’t think that time should primarily be spent reviewing forecasts or running through routine updates. Those things matter, but there are other ways to communicate that information.
When you have the CEO’s attention, it’s important to understand what’s top of mind for them. What are their priorities? What challenges are they trying to solve? How can you help advance those priorities?
If they’re struggling with something, how can you be a thought partner? How can you help work through the issue alongside them?
The best CFOs think beyond the functional aspects of finance. They use their relationship with the CEO to help solve the company’s most important problems rather than simply providing updates on what’s happening inside the finance organization.
Are companies moving quickly enough on AI governance?
I actually think many companies are behind.
Governance can’t just be about individual AI products or whether a particular department is using a tool. Organizations need a broader framework that addresses the underlying data, how it’s being used and where the risks exist.
Customer-facing data is probably one of the most important assets companies need to protect. At the same time, many employees are experimenting with AI on their own. They’re swiping a credit card, signing up for a service and using it on their laptop. In many cases, security leaders and governance teams don’t have full visibility into what’s happening.
I think that’s creating a real challenge. Adoption is moving very quickly, but it often isn’t happening through a coordinated enterprise strategy. It’s happening in pockets across the organization.
This is one of the issues I think keeps a lot of leaders up at night. You hear plenty of discussion about productivity gains and the benefits of AI, but I don’t hear as much discussion around governance, data protection and risk management.
At some point, there could be a wake-up call if companies experience data breaches or other issues tied to AI usage. My concern is that innovation is moving so quickly that governance frameworks are struggling to keep pace. Organizations need broader visibility into how these tools are being used and a stronger risk framework to support adoption across the enterprise.
