VideoFor finance, the central theme of the 1990s has been transformation. Every change initiative from reengineering on has set as its ultimate goal the notion that finance staffers would become more valued and play a more strategic role in operations. But an increasing number of CFOs are realizing that something important has been left out of that equation.
"Finance has to be a service function, and the only way you can transform a service organization is to transform and enhance the capabilities of people," argues Donald R. Shassian, senior vice president and CFO of Southern New England Telecommunications (SNET), in New Haven. "Reengineering processes and implementing new systems is just changing the cost structure. It takes people to be more-effective, better business partners. And you can't talk about a total transformation of finance without an investment in people." For finance, the central theme of the 1990s has been transformation. Every change initiative from reengineering on has set as its ultimate goal the notion that finance staffers would become more valued and play a more strategic role in operations. But an increasing number of CFOs are realizing that something important has been left out of that equation.
"Finance has to be a service function, and the only way you can transform a service organization is to transform and enhance the capabilities of people," argues Donald R. Shassian, senior vice president and CFO of Southern New England Telecommunications (SNET), in New Haven. "Reengineering processes and implementing new systems is just changing the cost structure. It takes people to be more-effective, better business partners. And you can't talk about a total transformation of finance without an investment in people."
SNET is one of nearly two dozen companies contacted by CFO that have begun in recent years to revamp their training and education efforts within finance. Those efforts range from the all-encompassing, complete with thick catalogs of courses for all of finance, to the narrowly focused. Some companies have done most of the teaching internally; others have turned to the executive-education arms of university business schools. "A lot of folks are embarking on this, and you have a whole raft of [approaches] out there," comments John Boquist, a finance professor at Indiana University who has consulted with Whirlpool Corp. and other companies on their educational plans.
In part, the divergent strategies reflect cultural and company-specific distinctions. But they also reflect widespread uncertainty. There is precious little evidence of what works. Education-minded CFOs instinctively understand that their people need to be business partners, and they're sure that training can help them reach that elusive goal. But there's also a yearning to know how best to get there. Indeed, in several interviews, executives turned the tables and asked how their efforts compared with those of other companies.
"We're in the embryonic stages, in which companies are trying to imbue in the learning process the link between finance and the corporation's strategic goals," says John Shank, a visiting professor of accounting at Babson College, in Wellesley, Massachusetts. "There has been an acknowledgment of the need for something new, but no models are dominant yet."
Classic finance education, as epitomized by Ford Motor Co. and its post-World War II "whiz kids," was built around an intense focus on control issues. Even as recently as October 1991, when CFO reported on the so-called Corporate Ivy League, what truly distinguished the companies that were best at training future CFOs was the technical mastery of the students who went through their in-house education programs.
"Ford was good at finance training to the extent that it taught the controllership stuff," says John Percival, a finance professor at the University of Pennsylvania's Wharton School. Today, he says, "the criterion for 'good' should be training that attempts to build a culture within finance and is focused on the role finance ought to play in the organization."
New Skills Needed
When finance is expected to play a greater role in other corporate functions, more is needed than technical prowess — especially when business conditions are shifting rapidly.
"We had to change from being bookkeepers and policemen to being business advocates," says Robert Vodzack, controller of GPU Generation Inc., the deregulated non-nuclear power unit of General Public Utilities Corp., in Johnstown, Pennsylvania. "When you have a guaranteed revenue stream, and investments go into the rate base and get a fair rate of return, you don't have to think about managing assets effectively or about concepts like shareholder value."
"There is a big competency gap out there," asserts Jonathan Schiff, an accounting professor at Fairleigh Dickinson University and a consultant who launched the Montvale, New Jerseybased Finance Training & Development Institute consortium in 1994. "Many finance people don't have the skills to sustain the changes that CFOs want to effect." The institute's main initiative has been to benchmark learning practices at large, global enterprises. Schiff expects to release his first study of more than 100 companies in June.
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