Discover a cross-section of content from industry leaders and experts shaping the future of our innovation economy.
Discover a cross-section of content from industry leaders and experts shaping the future of our innovation economy.
CIBC Innovation Banking Podcast
On our #CIBCInnovationEconomy podcast series, hear from leaders, entrepreneurs, experts and venture capitalists about the changing dynamics of the North American innovation economy
Moving Into the C Suite with Benevity CEO Kelly Schmitt
Kelly Schmitt successfully guided the CSR platform for charitable donation management, Benevity, throughout her tenure as Chief Financial Officer, and later President. Today, the Canadian company is a billion-dollar organization with more than 650 employees, two million users, and $7 billion in processed donations to 300,000 global charities, and Kelly has transitioned to the role of CEO. In this episode, Kelly shares her story of assuming the coveted C Suite at Benevity, how she overcame self-doubt, and the true meaning of a growth mindset in business.
People and culture trump all
Kelly shared that while working as Benevity’s CFO and President, the company’s founder approached her about taking over the position of CEO. Initially, she balked at the suggestion, assuming that the role of CEO should be reserved for the best salesperson, thought leader or visionary in the room. However, she quickly realized that being a great CEO goes beyond a solid resumé — it’s about aligning well with the company’s people and culture, and embodying the organization’s overall values.
To Kelly, a growth mindset means embracing the idea of constant and never-ending improvement. She believes that to continue being a leader in the market, companies need to constantly be evolving, innovating, and disrupting. This requires a high level of self-reflection but also a willingness to grow, stay humble, and accept feedback. Kelly notes that a growth mindset is really about looking at things through a long-term lens instead of focusing solely on short-term gains.
Diverse teams are more successful
From the outset, Benevity’s founder made it a priority to build a diverse team, not by setting specific targets, but by building a culture of inclusive behaviours and solid values. The company’s team is now 51% women and 30% BIPOC, which Kelly says has directly translated into a higher performing business. Kelly referenced some of the built-in behaviours that help Benevity maintain this inclusive culture, such as a progressive parental leave program and gender pay equity initiatives.
CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.
CIBC Innovation Banking
Michael [00:00:03] Hello, I'm Michael Hainsworth. The CIBC Innovation Banking podcast explores the world of startups, growth stage companies and late stage companies that have made a big splash in their industries around the world. This is a story about the other side of the founder's dilemma. We often learn of the difficulty a founder has in turning over the keys to the corner office when the time comes. But what happens when the person you want for the job doesn't think they can do it? Benevity Chief Financial Officer, Kelly Schmitt, found herself on the other side of that story. For three years, she helped guide the corporate social responsibility platform as its Chief Financial Officer and later its President. Today, Benevity is a Canadian unicorn or a narwhal, as the case may be, now a billion dollar company with more than 650 employees, two million users, and seven billion in processed donations to 300,000 global charities. But when founder Bryan de Lottinville stepped down as CEO, Schmitt tells me her first thought was to feel sorry for whomever had to fill his shoes.
Kelly [00:01:14] Yes, it's true, I remember quite clearly the first time that Benevity's founder, Bryan de Lottinville, told me that he wanted me to be his successor as CEO. I think I pretty much laughed out loud and then said something like, you know, don't look here. That's not me. Go look elsewhere. And I remember relaying that conversation to my husband and saying that I felt sorry for whoever had to fill Bryan's shoes. And that's because it's intimidating to take over from a founder, especially one like Bryan, who built a business as great as Benevity. He's a great thought leader in our space. And I also thought being a CEO meant that I had to be a certain way, like I had to be the company's best salesperson or a great product visionary or a thought leader. And I just didn't see myself playing that role. What I've since learned is it's really all about people and culture. And my number one role is ensuring that Benevity continues to have an amazing culture where we can attract and develop great people and that I could build an exact team that complements my skill set and I didn't need to do it all myself.
Michael [00:02:23] But before you managed to have that light bulb moment, that realization that you don't need to be a carbon copy of the last person in the corner office, there were candidates, but they simply weren't the right fit. You describe this as organ rejection. What do you mean by that?
Kelly [00:02:40] Yeah, when I, when I talked about organ rejection, you know, we did have a couple of failed attempts to find a successor for our founder, where we brought in senior executives from the US who had been there and done that before from a resume perspective. And I think we all learned a lot from those experiences. And probably the biggest thing is the fit with our culture and our people really mattered. And not only that, for a founder transition to really be successful, they have to find someone who they can trust their baby with. And so, as Bryan, our founder, likes to say, I had to find someone who wouldn't turn my baby into a smoking, swearing teenager. But, you know, in the end, despite my initial skepticism about taking the role, it became clear that someone who, you know, embodied our culture and our values and who was proven at Benevity would probably work better for us. And that, you know, going beyond the resume is critical for companies, especially if you want to consider diverse talent for these roles.
Michael [00:03:44] All right. How do you determine if someone clicks with the culture?
Kelly [00:03:49] You know, it's a tough one, first off, even describing the culture, I still find it somewhat difficult after three years here because of just how special this place is. I've worked in companies before that I thought had great cultures, but I've never been a part of anything like Benevity. It's a company where people's work is connected with a sense of purpose, of meaning impact, where we really value humility, where we rally together and go the extra mile to support our clients and support each other. And so I'm constantly blown away by our people. It's a pretty high bar for new folks coming in and all. You really have to go on in the interview process, other than talking to someone's references, it’s a gut feeling. And so it's hard to really know till you're working with the person to see how they operate. But if you're attempting to find a successor and it's not a fit right at the outset, it's probably not going to be a fit in one year or two years. So you fail fast and learn from it and move on.
Michael [00:04:50] You told me once that when you anchor your search to your values, two things become important, humility and authenticity.
Kelly [00:04:59] Yeah, for sure, I think generally companies need to assess not just what someone has done, but their values. And at Benevity we actually have an acronym for our values which is HAAAPII. There's three A's and there it stands for, you know, humility, authenticity, accountability, adaptability, passion, innovation, and impact. And we actually assess these through our hiring process. And essentially we're searching for candidates that are unicorn's so people that display the values and have great potential to excel at Benevity. And we do place a lot of importance on humility. We're looking for people to come in with an open mind and listen and learn before asserting their opinions or their prior experience on something they may not fully understand yet. And so, you know, we're looking for people who are open to feedback and act on that feedback. And so for others before themselves and have what we call a “we are we” mindset. So it's about we not just me. And then on the authenticity side, you know, it's typically not too hard to tell when someone isn't giving you the straight goods or saying what's on their mind. But any one of these value misalignments could be, you know, frankly, pretty disastrous for a company if it's coming from the person steering the ship. So you got to pay close attention through the recruitment process.
Michael [00:06:19] So when the founder hands the tiller of that ship over to someone else, that individual needs to understand what a growth mindset means. What does it mean to you?
Kelly [00:06:29] There's a number of things, I think, that factor into a growth mindset. If I start at the individual level, it's realizing that you always have more to learn and continually asking for and taking feedback and just getting better and, you know, essentially putting more energy into learning than trying to look smart. I guess you could say, when you roll that up to the company level, it's really being comfortable with and even aiming for constant change. You know, at Benevity, we have to constantly evolve to continue to lead the market and to lead the market in a certain direction. And that means we always have to be trying new things so that we can continue to innovate and be disruptive.
Michael [00:07:09] So then how do you get around the risks that are associated with a growth mindset? You know, one could easily get too focused on the process and missed opportunities.
Kelly [00:07:19] Yeah. You know, in the context of looking for a CEO successor, the biggest risk is just probably hiring someone who doesn't have a growth mindset. And so, you know, Benevity, it's a high growth software business where the market leader in our space to continue to build that, we have to invest in areas that will propel the business forward rather than nickel and diming on costs or making cuts to try to get to EBITDA or cash flow too quickly. And myself, I have a finance background. So clearly I believe business metrics and cash flows are important. But, you know, I've seen some executives or investors that can be too focused on hitting a certain number or a certain metric and can't see the forest through the trees. And I think a growth mindset is really about building a great business for the long run versus trying to hit short term numbers. And then to do that, you know, you need to keep innovating, adapting. You have to invest in growth areas. They're not all going to work out. Some are going to fail. And you also have to bring people along with you through that change just as things evolve.
Michael [00:08:27] So after two failed attempts at finding a CEO, you took the job. You had that light bulb moment where you realized you could surround yourself with those who skillset fill in your gaps. Are you comfortable yet, do you feel like you've really got a handle on it now that you're in charge and you've been there for a little while?
Kelly [00:08:44] Yeah. You know, when people ask me how I'm enjoying it and I'm about six months in, I sort of joke that for somebody who was so hesitant to do it, I'm actually really loving it. And, you know, if I circle back to that preconception, I had a bit of a CEO that we talked about earlier, you know, big sales person, product visionary, thought leader, all the things that our founder did really well. I just realized my role was to surround myself with talented people who could do those things so I could focus on what I'm good at, which is, you know, inspiring our people, focusing on our culture, scaling Benevity's operations globally. And, yeah, I'm actually, I'm really enjoying it so far. And, you know, because I've realized it's not having to do and be everything to the company, just myself. There's a team to do that.
Michael [00:09:32] No one is closer to the corner office than the Chief Financial Officer. It's a unique relationship and one that evolves over time. CFOs are often tied at the hip to the founder. But when the founder of a company steps aside but remains with the company, what does that mean for the relationship between the former CEO and the new CEO? Schmitt tells me the power shift didn't change a thing. How does the relationship change when the founder steps aside but remains with the company? The CFOs are generally tied to the hip with a founder in the first place.
Kelly [00:10:07] That is true. You know, Bryan, our founder and I have been pretty much joined at the hip for the past three years. And although I did join the company as the CFO, what the company really needed at that time was more of a Chief Operating Officer. And I branched out from finance pretty quickly and took on that role as well. And then a year ago, I became the president and took on responsibility for the go-to-market functions. And so when I slid into the CEO chair earlier this year, the only net new part of the business that I hadn't been leading was product and technology. And so that buildup of responsibility over time made the transition fairly seamless. I did witness a CEO founder transition earlier in my career that didn't go well, as many don't. And we've been joking here that we're going to write a book on how it should be done. But I think the key is you have to build trust both ways right from the beginning. And so our founder and I, we've always had each other's backs. We still talk most days. We both give each other very raw, unfiltered feedback. And from my perspective, having him continue to work in the business in a reduced capacity has actually been fantastic because he gets to focus on his strengths and what he likes to do, whether that's M&A or thought leadership, while I run the business day to day. And also having him there as a mentor and a sounding board has played a big role in making this successful for a first time CEO like myself. And it makes the CEO job feel a lot less lonely as well.
Michael [00:11:41] Right. Just being able to pick up the phone or I suppose once Covid-19’s all behind us, just walk down the hall.
Kelly [00:11:47] Exactly.
Michael [00:11:48] Succession planning, though, of course, there's an end when the CFO takes the CEO role. You know, does everyone just take a step to the right? Did you have your own version of the founder's dilemma, trying to find the right Chief Financial Officer to replace you?
Kelly [00:12:00] I would say here, succession planning for our founder. It started well before I transitioned into the CEO role. You know, we had been putting the building blocks in place for about a year. And so when I first became the President, we hired an EVP of Finance and she ultimately became our CFO earlier this year. We also transitioned our head of marketing into a new role as Chief Impact Officer to pick up on some of the thought leadership and other areas that our founder had previously led. And a little over a year ago, we also hired a new Chief Technology Officer who could carry Bryan's product vision forward. So when the CEO change happened, we actually did just sort of do a musical chairs kind of shuffle. But we already had everyone in place internally that we needed to make it successful.
Michael [00:12:47] So then what's the secret to building that strong internal team that allows you to promote from within?
Kelly [00:12:52] I mean, a big part of it is building a diverse team, and I really attribute that to our founder, his vision from the start was to build a really diverse company, and he really believed it would result in a higher performing business. And he was right. And so our company, for example, is 51% women. It's 30% BIPOC. That's pretty much of unheard of in other tech companies, which are typically, you know, 30, 35% female at best. And to do that, Benevity didn't set any targets. And so from the outset we focused on the behaviours we believed were important for other companies to role model as well. One example of that is Benevity hired me to be the CFO a few weeks after I'd had a child and had to wait six months for me to start the role. We've got a really inclusive and progressive parental leave program that provides support not just for the delivering parent, but the non-delivering parent as well. We regularly look at things like gender pay equity, but building that strong internal team, it ties back to the company's values as well. And so if you've got people with the right skills who really role model the values that are most important to you, like in our case, humility and authenticity, you know, promoting from within is much easier. And then recently, we started to take a longer term view of succession and we framed it in the lens of who will be on the Benevity's exact team 10 years from now. So we've started to talk about Benevity exact team, 2031, and ensuring that for those people throughout the business who we think are our future senior leaders, we find challenges and ways to grow those people and to move them around to learn different parts of the company as well.
Michael [00:14:33] Wait, back up, back up, back up. You're telling me that you hire someone on day one thinking maybe 10 years from now they could be the Chief Financial Officer, the Chief Technology Officer, the CEO, and you're giving them these little tests along the way just to ensure that you're on the right track?
Kelly [00:14:50] So not quite, but close. We don't necessarily think that when we hire them on day one. But I'm talking about people who have been in our business for, let's call it six months or a year or two years that really stand out as those shining stars. And we're starting to have more regular conversations so that we all know who those people are at all levels. And we make sure that they have lots of opportunity to build their careers within Benevity versus going to do it elsewhere.
Michael [00:15:18] Do the people who you are working at promoting from within and considering, do they know that they're on this track or is this all kind of a secret thing that goes on behind the scenes?
Kelly [00:15:29] So it's a fairly new lens that we've been applying to succession plan and thinking of people's careers in this lot with this longer term view. In some cases they definitely know, because they randomly get asked to go for walks or have coffee with the CEO. And in some cases they may not know yet, but we are taking quite an active role in helping these people and developing their careers.
Michael [00:15:54] And going for a coffee walk is the new going for a golf game.
Kelly [00:15:58] Exactly.
Michael [00:16:02] The other major relationship a newly minted CEO must maintain is with their investors. Benevity has five private equity investors on its board and that unicorn status was made possible by Britain's HG Capital. It helped Schmitt and Benevity engage in some M&A. Launch Benevity Impact Labs, a research incubator to help companies understand industry trends, explore new issues such as mental health and help enterprise quantify their contributions to society. Schmitt admits she was initially hesitant about taking over a company with so many private equity firms at the table from around the world. You're now running a company with a large majority stakeholder. How do you navigate investor relationships?
Kelly [00:16:47] You know, it's been pretty seamless, actually, in my prior lives as the CFO of a couple of public companies there were actually a lot more investor relationships to manage in that context. Although we do currently have five private equity investors in Benevity and with HG Capital is our majority investor. And at the start I was a bit nervous about taking on the CEO role of having five PE firms on our board. You know, it's a lot of finance types scrutinizing the business, but HG has been great to work with and really shares that growth mindset that we talked about. And so the partnership's off to a good start.
Michael [00:17:25] So then what evolves when you get a majority stakeholder like HG Capital coming in on board?
Kelly [00:17:31] In our case, it's been all good things. HG was a great match for Benevity because as a firm they're focused on social impact and so they really believe in Benevity as a purpose driven impact, as a service business. With HG being based in Europe, we now have investors who will help us focus on our international expansion. They're focusing on organic opportunities such as M&A as well, which is very exciting. And HG also, right at the outset of their investment, they syndicated a portion of their holdings to two world leading impact funds. So the Rise Fund, which is co-founded by Bono and Generation IM, which is Al Gore's impact fund. And so adding board members and observers from those to co-investors has also been fantastic.
Michael [00:18:18] You mentioned mergers and acquisition activity. As the CEO, I can imagine this is a new wrinkle for you, although I could only imagine that it's not unfamiliar territory coming from the chief financial corner of the room.
Kelly [00:18:32] Yeah, it's certainly not unfamiliar territory, but I would say Benevity has mostly grown organically. Benevity has done a couple of acquisitions in the past, but none in the time that I've been with the company. And so I think it's exciting. I mean, the corporate purpose space, as we refer to the market that we play in, it's quickly evolving and it's growing. And, you know, I saw a study recently that said CEOs spend something like 50 percent of their time these days on ESG topics. And I mean, we're really focused on helping companies in that space. And so there's a lot of opportunity realistically to continue to be the market leader. We can't build everything ourselves. There's got to be M&A and partnerships and integrations and other things that add to that growth inorganically.
Michael [00:19:13] When it comes to an industry that is as quickly evolving as yours is, what does that mean when you have a board of directors with investors on it who have certain expectations? To your point, five private equity investors very focused on KPIs and making sure those key performance indicators are met and all of that kind of stuff. I can imagine that makes it challenging in such an evolving world.
Kelly [00:19:43] My advice, I guess, to entrepreneurs out there who run companies and are looking at bringing PE investors in and adding them to their board is really just pick your investors carefully. You know, I've been in situations where the relationship isn't great, and if the spreadsheet doesn't spit out the numbers that someone wants, you're not running your business properly. And sometimes that feedback is often coming from people who have never worked in an actual business, which makes it doubly frustrating. And so you have to kind of try to figure out as you go through this what the firm is really going to be like to work with. And in our case, we had an opportunity that came up right at the start of our relationship with HG, which was Benevity Impact Labs. And so it's kind of an incubator and a resource hub for bringing new data and research and insights to help companies and nonprofits and individuals maximize their impact. And we launched it in February of this year, and it was a brand new investment that HG approved right out of the gate. So, so far, so good from our perspective with having new investors on our board.
Michael [00:20:43] Why launch Benevity Impact Labs?
Kelly [00:20:45] Benevity Impact Labs, it kind of exists to focus on the SN ESG. And so if you think about ESG historically, you know, it's fairly straightforward to set science based goals around reducing your emissions. Or if you want to focus on the G, you can boost diverse representation on your boards. When you get to the assets. It's sort of the squishy middle and companies aren't entirely sure what to do with it or how to measure it. And, you know, Benevity had done some limited research in the past. And one of our studies indicated that those who participate in their corporate giving and volunteering programs were actually fifty seven percent less likely to leave the company. So there's huge business value there. Another recent survey we did indicated that employees of Fortune 1000 and other mid-market companies as well, they'd be more likely to recommend their company to others if that company took steps to address social or racial injustice as part of its corporate culture. And so we really wanted to look at measurement in this area just more holistically and connect things like employee satisfaction and net promoter scores, pride productivity to a company's social impact initiatives. And I think what resonated with our new investors was just I mean, there is a real tangible business impact here in addition to the social good that comes from these initiatives. And it's definitely something that's going to resonate and is resonating a lot with the c-suite when we take this lens to the approach. And so from that perspective, the investment that we actually plan, we ended up adding more resources through that process.
Michael [00:22:24] So where do you, Kelly Schmitt, take Benevity next?
Kelly [00:22:28] You know, thankfully for me, taking on the CEO role, Benevity was already on a great path and we sort of right now have a lot of tailwinds behind us with the evolving role of companies that it's more about just your shareholders, it's about all your stakeholders, the focus on ESG, on doing good, on the role that companies actually have to play in solving these big societal issues around equity and climate change. And so, you know, thankfully for me, we're on a great path already. We just have to keep executing very, very well. But when I think of success and if somebody asks me in five years as the CEO, looking back, what will I feel good about? It will be that people think of Benevity not just in their work lives, but in all aspects of their life. You know, people, they do give at their companies because often those companies have matching programs. And that has historically been where we focus. But people do good in their lives with their friends, with their family, with their kids, sports teams at their kids schools, church, whatever it is. And there's no reason that people shouldn't pull up their phone and use the Benevity app when they think of doing good in all aspects of their life. And so that's the path that I think we're on, is just, you know, we want to impact as many of the nearly eight billion people in the world that we can with a lot of these small acts of goodness that together add up to huge impact.
Michael [00:23:56] Kelly, this has been fascinating. Thank you so much for your time and your insight.
Kelly [00:23:59] Thank you, Michael, for having me.
Michael [00:24:04] Kelly Schmitt believes in Benevity. She wouldn't have taken the top job if she didn't. But first, she had to believe in herself, lean into her strengths and acknowledge her weaknesses and recognize she didn't need to be a carbon copy of the founder. Today, she's her own leader with a strong sense of purpose and drive. With fifty one percent of the company female and one in three employees BIPOC, Benevity continues to put its own money where its ESG mouth is. I'm Michael Hainsworth. Thanks for listening.