Veronica Augustsson: At the Crossroads of Business and Technology

Veronica Augustsson assumed the reins at Cinnober at the age of 33. That she was young, relative to other heads of large third-party technology firms, is not the only noteworthy feature of her rise through the Cinnober ranks. She had also spent almost her entire working life at the firm, joining as a programmer shortly after completing her master’s degree at the KTH Royal Institute of Technology in Stockholm, although the initial part of her career in technology did have its trials. Augustsson studied computer science and did her master’s thesis with Enea, a Swedish IT firm that specializes in real-time operating systems, although as she soon discovered, the storm clouds that had been gathering on the technology horizon for some time were about to rupture. “I joined Enea for six months or so in 2001, but that was after the dot-com bubble burst,” she recalls. “I think I joined in May, and in July they started laying off staff and a few months later it hit us. I was the last one in and the first one out.”

The future would have appeared bright for Augustsson while she was still at university, given the great demand for engineers at the time across numerous industries on the cusp of deploying technology to support their growth and development, and notwithstanding the turbulence created by the dot-com crash and her Enea blip, she was back on track in April 2002 when she joined Cinnober. “As a developer, when I was studying in school, companies would come and try to hire us before we had even graduated,” she says. “They were offering us what we thought were huge salaries, but just a few months later you couldn’t find a job. From the point of view of the dot-com crash, if you were a developer, there were no jobs. I then got in touch with Cinnober through a woman I knew when I was doing my master’s, who was working at the company, and they were hiring. So I sent in my application without knowing anything about the company—of course I went to the website, but I didn’t know much about Cinnober—and I got a job as a developer. I immediately liked the culture and atmosphere.”

First Role 

Augustsson’s first designation was to build the matching and registration platform for NordPool, the Nordic power markets, before moving on to a project Cinnober had with the London Metal Exchange. But it was the American Stock Exchange (now NYSE American) relationship that proved pivotal for Augustsson in terms of cementing her transition to the capital markets, a move that saw her relocate to New York for a year, which she describes as “extremely helpful” because of its position at the very heart of the financial world. 

“Sweden is not a financial center, even though we are good with technology and fintech especially,” she says. “What I learned there I couldn’t learn in Sweden. Just being on Wall Street and mixing with the traders and developing an understanding about how and why systems are used and why they need to be reliable was very important.”

Augustsson explains that her transition from an entry-level engineer specializing in real-time systems to someone grappling and becoming comfortable with the complexities and nuances of the capital markets was not without its challenges. If anything, she says, that transition is still a work in progress. “Yes, it was challenging, and I still don’t know everything,” she says. “I’m a naturally curious person—even when I was a developer, I always wanted to know more than just the project’s requirements of how to build something. And so I always tended to work closely with the customer. I also wanted to challenge them and ask them why they were building something and what the rationale was. My driving force isn’t all about trying to understand everything about the capital markets, but rather about understanding how technology can be used. I want to be at that crossroads.”  

Cinnober’s Hot Seat

While Augustsson’s installation as Cinnober’s CEO in 2012 would undoubtedly have raised some eyebrows within the organization due to her age and lack of experience, she had been at the firm for 11 years by then. By that point, she had developed an intimate understanding of nearly every aspect of its offerings by virtue of hands-on experience when the board came calling. Be that as it may, did the question come out of the blue for her or did she have aspirations of landing the top job? 

“No, I wasn’t really surprised,” she says. “You can’t decide on the timing in terms of when you get that sort of question. I was 33 and I had two young kids, and so I had a lot going on in my life, but it was good because we weren’t a listed company then—now we’re listed on the Stockholm Stock Exchange. Where the company is today, I’m not sure whether I would have got the question due to my lack of experience, but back then, I think I was the right fit and I and the company have grown a lot.”

Indeed, a glance at the two most important measures of a company’s health—staff numbers and revenues—underlines Augustsson’s assessment: Under her leadership in the last five years, Cinnober’s head count has grown from 150 to 350 and its revenues have more than doubled to just over $41 million in 2017. That doesn’t rival the industry’s largest players—FIS ($2.32 billion), SS&C Technologies ($1.68 billion) and IHS Markit ($945 million), for example—but it’s also nothing to be sniffed at. 

Pipeline

When Augustsson assumed the reins at Cinnober, the firm had a strong sales pipeline and her initial strategy entailed growing its presence in its core market: exchanges and clearinghouses. However, she also had designs on establishing a presence in the investment banking and brokerage sectors, while also amending the firm’s revenue model, which at the time was heavily reliant on—and therefore exposed to—large, one-off deals. 

“I have taken our revenues from about 20 to 25 percent recurring up to about 75 percent,” she says. “But we also wanted to use the assets that we had in other segments. I didn’t have a clear picture of what those segments were and how we were going to do that, but after a year or two we started looking at the banks and brokers. Back then we were focused more on growth than profitability and we were also focused on innovation and building new solutions. But I learned that profitability is a challenge when dealing with engineers; we’re on that journey right now, but we’re not there yet.”  

Another key focus for Augustsson is the acknowledgement that as a service provider, Cinnober has to work in partnership with its clients such that they have a hand in driving much of the development around the firm’s technology and services, and by so doing increasing the general transparency throughout the organization, especially when it comes to monitoring the status of development work. “When it comes to our traditional focus [exchanges and clearinghouses], we deliver the heart of their business and so it’s natural for us to work in partnership with them,” she explains. “I think we’re a very transparent company; we always invite our clients to participate in projects if they want to, and we also open all our tools to them. For example, we open our issue tracking system to them so that they have 100 percent transparency into everything that is going on.”

No Surprises

Augustsson insists that transparency is important in order to build trust, as is delivering on promises and developing an intimate understanding of the client’s business so that all future development can be supported. “If I promise the client that we are going to deliver something on a specific date, we must do that and it must have the right scope. It’s also important to understand where they see their business and what their books of work look like for the next, say, three years. We have a monthly steering committee meeting where I or someone from senior management participates, and likewise from the client’s side. We go through the status of the projects and how we are running in terms of production. We try to ensure that there are no surprises and we try to be as transparent as possible.” 

Given Cinnober’s stance on transparency and collaboration, it’s safe to assume that Agile plays a prominent role in all its development work and the communication thereof, an assumption Augustsson confirms, adding that as a developer, she has known no other way. “We’re totally Agile,” she says. 

Cinnober uses Slack and Jira extensively and even utilizes electronic scrum boards as a core feature in many of its projects, allowing clients to continually assess their projects on a daily basis if they so wish. “Even though they might not monitor things on a daily basis, the fact that they are able to provides them with confidence that we are doing what we said we were going to do,” she adds. 

Scope Creep

Considering the closeness of the collaboration Cinnober is happy to foster and maintain between itself and its clients, some might warn that scope creep is an almost inevitable byproduct, a concern Augustsson is aware of. However, she argues that collaborating, flexing and regularly pivoting (when necessary) during the course of any project is normal and that, if anything, it should be encouraged, given that the look and feel of whatever functionality is delivered by way of regular sprints is likely to reflect what the client wants at that specific time rather than what it might have wanted at the inception of the project. “It’s a challenge from time to time, but you don’t want to sit down and spec everything out in great detail because then you’re back to the Waterfall model,” she explains. “When we start a project, we have a pretty good understanding of what it entails and we develop a fairly detailed scope document, but we are keen—both from our point of view and the client’s—to minimize scope creep. I think this goes back to the trust issue; we’re not here to screw clients on price and we trust that they aren’t here to try to increase the scope just because they might have that opportunity.” 

As an engineer, Augustsson unsurprisingly manages her professional life along the lines of one continuous Agile project, complete with sprints and regular feedback loops to ensure that scope creep is kept to a minimum and performance and delivery are optimized. “The way I tend to work is that I prepare fully for every meeting for the week ahead. I try to define what success means for each of those meetings and what I want the ideal outcome to look like. Before I go to sleep, I give myself feedback to assess whether I achieved what I wanted to. If not, I try to work out why that was and I include frequent feedback loops instead of a yearly review.”