Why We Changed Our Fiscal Year to January 31st

For over 10 years in building Conductor, our year-end was December 31st. The unavoidable physics of software companies is that a) Q4 is your biggest quarter, and b) the last month of the year is your biggest month. This created a significant amount of challenges and waste, namely:

1. Our sales & account management teams were putting a huge amount of effort into the market to achieve year-end goals and finalize year-end contracts while our customers & prospects were all trying to get away from their desks and have a proper holiday. I would ask myself: Does it make sense for our teams to put in the most effort during a time when our customers are least likely to be available or receptive to this effort?
2. It became hard to be customer-first when asking customers to make special accommodations and take time out of their vacations to do work for us. We had moments of meeting people on the sides of the highway or sending contracts via FedEx to hotels, etc. It can make for good stories, but not a great experience for our customers.?
3. No proper holiday vacation for the Conductor team. From 2007 to 2019, I never took a Christmas or New Year's holiday vacation. I couldn't if we wanted to close out the year strong. (Below is a photo of my daughter in 2018 signing a contract at 6PM on December 31st—then sleeping in my office.)?This leaves an energy void as you kick off the next year.
4. Planning and budgeting get crammed into the already busy Thanksgiving and holiday seasons. While this was workable, it was not optimal.?

In December 2019, we bought Conductor back from WeWork and had a chance to do things differently. One of them was decisively changing the end of our fiscal year to January 31st. This is something Salesforce.com and other SaaS companies started doing over the last 15 years. Why is January 31st better?

Here is what we have found:

1. Double Close Q4: Many companies have year-end budgets and objectives to buy software in December, which we still create energy around. However, our entire team is heads-down in January focused on closing the year. During this time, our customers are a) all refreshed and at work, b) their legal/security teams are less consumed with year-end activities, and c) they often have more clarity on budgets and plans for the coming year. So now when our teams are ‘going all-in’ to close the year, our customers are happily ready and engaged.
2. ConductorCation: I just wrote about Conductor’s new ConductorCation policy—a mandatory 7+ days off at the end of the calendar year. This would’ve never been possible before. Now, our entire organization is rested and can take a true holiday without being disrupted by a sales team racing to close the year strong. It’s hard to relax if your sales team is asking for help to add customers.? This was a huge win for us with many people citing taking the first real vacation in years.
3. Finish Budget & Planning in January: This may be a personal preference, but I found it nice to have all of January to complete annual planning and finalize budgets rather than during the holiday season. Perhaps it’s because I have a clearer head coming out of ConductorCation? Or that we can capture some of the energy of the new year when finalizing plans? It’s just better to do this work with fewer distractions and when your teams and board members don't have end-of-year holidays in mind.?
4. Stronger Momentum & Happy Employees: One more thing…this is subtle, but I remember starting January after closing the year, and it really felt like you were starting from scratch. Your year was over. People were exhausted, and now it's time to ‘kick-off’ the new year. It was hard to get the right momentum going when people so clearly needed a break. Now, January has built-in momentum as we close the year at the end of the month. Then come February, we are ready to kick off the new year—without the exhaustion of working through the holidays and having no real time off.?

If your organization still abides by the calendar year, ask yourself if it’s worth making the change like we have. I’m not sure…However, if you are starting a company from scratch (or buying your company back), then we highly recommend it!