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At a variety of companies, a creative meeting of the minds aimed at bridging finance's generation gap seems at hand.
David M. Katz, CFO.com | US
November 6, 2007
The generation gap between many CFOs and new accounting and finance pros often seems unbridgeable. On one side are executives in their late 30s to their 50s raised on notions of company loyalty. Many also have a deeply rooted sense of hierarchy dictating that underlings must keep a respectful distance from their bosses.
Across the divide are younger folks who seem sometimes to assume that a mutual disloyalty pact exists between them and their bosses. Operating under that set of assumptions, many feel that employers' ability to lay off employees at the drop of a hat entitles them to leave at will regardless of the time and money the company has doled out in training them. Paradoxically, the same interviews with CFOs and comments posted on CFO.com that suggest such attitudes are the norm also suggest that these younger workers crave strong, immediate interaction with their bosses.
Such urges, coupled with a tendency to question authority, can lead to stiff interpersonal challenges for some senior finance officers. John Brausch, the 47-year-old property controller of Edens and Avant, recalls that rigid chain-of-command structures were much more prevalent when he was starting out. "Twenty-five years ago, would I go talk to the CFO right out of college? Probably not. But that happens every day today," he says.
Regardless of how much those attitudes go against the grain for many CFOs, however, they're finding that they must come to grips with them. The reason? The labor market can be brutally competitive for companies in the market for young accounting and finance hires with even a modicum of talent. Many corporate finance departments, faced with the necessity of putting "butts in the seats," are hiring grads who have taken a minimum number of accounting courses, according to Rich Houston, a University of Alabama finance professor.
Few finance chiefs, in short, are in any position to enforce a my-way-or-the-highway attitude on their staffs. Indeed, at a variety of companies, a creative meeting of the minds seems at hand. The new paradigm, however, requires an increased commitment by CFOs to the development of talent.
Faced with a 20 percent annual turnover rate in his finance department, William Kurtz, the 50-year-old CFO of Novellus Systems, a semiconductor maker based in San Jose, Calif., says he's had to focus a great deal more attention on developing the careers of new recruits.
Such involvement is his way of competing with the fast-growing IPOs he must vie with for talent in Silicon Valley. Kurtz's efforts have included one-on-one talks with new finance hires about their career objectives and educational needs and shepherding them to an understanding of the company beyond finance. "By providing a clear path of development, we've seen we can have a better rate of retention," he says. "And then there was the time that I contributed to that as CFO. That meant a lot to them."
To provide entry-level employees with a sense of direction and career advancement, Novellus has installed a two-year training program for the eight or so new finance and accounting graduates it hires each year. In the first year, the recruits are trained in the company's core financial systems and processes, says Kurtz, noting that each is assigned "a very specific role in corporate accounting," as well.
Each participant is assigned a mentor (other than the direct supervisor) for the two years. In the second year, the employees spend two six-month periods working in different disciplines, such as financial planning analysis or investor relations. After completing the two years, the employee is promoted. Sporting three promotions in two years, "someone can see progression in their career," says Kurtz. "It becomes clear to people that they'll be developed."
Some CFOs may go so far as to restructure jobs to appeal to the new breed. Melissa Morales, the 36-year-old finance chief of The MC Companies, a Scottsdale, Ariz.-based real estate developer, manager, and construction firm, has made changes aimed at stressing a team approach and the potential for promotion at the company. To emphasize teamwork, for instance, she's been "blurring the lines" between the company's three activities — previously an employee would be rigidly slotted into one of them — "so that everyone does a little bit of everything."
Morales, who has spent the bulk of her two years at the company hiring and devising ways to retain talent, has also slotted her 15-person staff into two levels. At the entry level are accounting associates, who are responsible for basic tasks like handling accounts payable and accounts receivable and reconciling accounts. Next are general accountants, who perform higher-level tasks and report to the controller and director of finance. The new structure "gives people the ability to work toward promotion" and enables the company to promote from within, the finance chief says.
The process of accommodating the new finance crop can lead to growth for the boss as well as the employee. At Edens and Avant, an owner of retail shopping centers, Brausch has lately been mentoring two senior finance managers in their early 30s — one of whom is likely to become his successor — who have never been through the budgeting process. Having trimmed his staff from three to two, the property controller has been forced to become more involved. Rather than Brausch acting as the strict supervisor, "we're in the kitchen together, baking the cake," he says.
The finance executive's goals have been to shorten the process so that it can be completed closer to the end of the year and to "produce a better product." One of the biggest challenges in meeting that goal had been to find a way to streamline the company's budgeting for cost reimbursements for such things as snow removal and insurance costs agreed to in the various leases of the company's 2,300 tenants, which range from Stop 'N Shop and Target outlets to smaller retail stores.
Would the company have to create 2,300 different invoices to be loaded by a hired administrator? Brausch wondered, surmising that such a job could take 10 weeks. One of his possible heirs-apparent, a whiz at Excel, however, created a macro in less than two hours that could do the job. "It was miraculous to watch," the finance chief said.
More and more, says Jay Jamrog, senior vice president of research for the Institute for Corporate Productivity, a firm that tracks workplace trends, relations between CFOs and their new staffers, has "got to be a two-way street."
To be sure, CFOs, controllers, and treasurers can remain true to their values in dealing with younger finance employees, according to Jamrog. But, he adds, "you have to challenge some of your assumptions about how work was done in the past." (To hear more about how senior finance executives and newer employees can communicate better, see CFO.com's video interview with Jamrog.)