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An analysis of 100 companies identifies best practices for financial workplaces.
Roy Harris, CFO Magazine
September 1, 2001
When Lisa Drake is recruiting on campuses, her 21-year career in the Cargill Inc. finance department evokes skepticism among students. "They think you must be leftovers if you've been with a company that long," she says. With the notion of corporate family often considered an oxymoron, and employer-hopping now the norm, those studying finance and accounting seem to believe that "staying with one company isn't a cool thing anymore."
Cargill and several other companies are working to change such downbeat opinions. These companies are striving to make the finance environment if not exactly fun, then at least rewarding enough to inspire loyalty and improve retention. Far from a leftover, Drake has had a new finance job every 18 to 24 months, along a clear advancement track. That's not uncommon for high-potential employees at the $49.4 billion, Minneapolis-based agricultural and food products concern, says vice president and controller Galen Johnson, who lists his management priorities as "career planning, individual development, and the blending of work and family" through jobs patterned on a worker's needs.
Such priorities, it seems, can make the difference between a good finance environment and a great one. And while certain elements are needed for success in any workplace--fair compensation, the opportunity for advancement, flexible work scheduling, and innovation, to name a few--those elements must also elevate finance above its still all-too- accepted image as some Dickensian back-office backwater. Fundamentally, says Eugene McQuade, vice chairman and CFO of FleetBoston Financial Corp., finance employees want to "feel that they're adding value to the organization, and that somebody appreciates what they do."
To identify companies that truly value finance employees, this year CFO magazine teamed up with the 14,000-member Association for Financial Professionals and Hackett Benchmarking & Research to establish a system for tracking best workplace practices. Says AFP president and CEO Jim Kaitz: "As finance has changed from tactical to strategic, we wanted to see what role human capital has played." The hope of the Best Workplaces for Financial Professionals program, he adds, is "to give companies a new benchmarking tool, and to encourage them to use it to improve the processes within their organizations."
More than 100 corporations completed a Web survey and employee questionnaires. From their responses, the research recognized Cargill, First Data Corp., and FleetBoston for overall performance. Other companies were acknowledged in five specific categories: Sodexho, for personal and professional development; Johnson Controls, for technology; Putnam Investments, for job satisfaction; the National Council on Compensation Insurance (NCCI), for quality of work life; and First Data, again, for innovation.
Together, these companies demonstrate the balance that must be struck between meeting employees' personal and professional goals and fulfilling the finance mission. Creating this balance, however, requires as much art as science. Hackett's Brian Lowenthal likens the effort to building the perfect house: "You can take high-quality components and assemble them, but a house isn't truly wonderful without the skill of the architect and the builder. And even then, some home buyers like oriental-style houses and some like Early American."
IN THE "PENTAGON"
Until now, the only real standard-setting finance workplaces have been legendary shops like General Electric, PepsiCo, and Ford-- companies with slick finance training and development programs, and missionary "graduates" who leave and help popularize the techniques with new employers. Still, there's been no way to rate the things those companies really do right.
For the Best Workplaces project, the Hackett organization, part of the Answerthink consultancy, developed separate areas of inquiry-- quality of work life, personal and professional development, technology and tools, innovation, and employee job satisfaction--and charted results on a five-cornered "pentagon" scorecard. A 35-page summary, including the scorecard, showed the companies how they stacked up against the others, and into which quartile they fell. First Data, for example, learned it is well above average in formal training hours (part of personal and professional development), but subpar in time allocated to company orientations (a quality-of-life component). It was, however, the only company to rank in the first quartile in all five areas.
Overall, there were several common threads. The best workplaces offered elaborate training, with special programs geared to helping high-potential employees advance. All tended to welcome worker requests for flexible hours and job-sharing. All used technology well. And all had crucial "buy-in from the top," says Kaitz, who adds that "the top CFOs are all really passionate about making [their companies] a great workplace."
There were occasional surprises, however. "It was remarkable how many organizations have dedicated HR professionals working within finance," notes Kaitz. In addition, companies often promoted employee participation in outside causes--apparently without forcing such activity. At NCCI, for example, a majority of the department recently volunteered for a Habitat for Humanity project.
And while the participants' finance staffers generally viewed themselves as paid fairly, they tended to think of compensation on an equal footing with other components, such as job flexibility and management-aided career planning. "I believe in [psychologist Abraham] Maslow's hierarchy of needs," professes Cargill's Drake. "Pay is important, but if I dreaded getting up in the morning, there's no amount of money that would make it OK."
TRAITS OF THE BEST
In general, a few simple themes set the very best companies apart:
* A sense of finance identity. The best example is CFO Kim Patmore's "branding" effort within First Data's finance department, building employee pride in part by creating its own logo, and promoting the department with a steady flow of newsletters and through numerous performance awards.
* Openness to innovative ideas. In one case, Cargill has taken "option finder" wireless audience-response keypad devices, originally purchased for use in risk assessment within the audit process, and adapted the $12,000 systems to provide instant feedback on organizational effectiveness. It's a way "to find out what's bothering employees," and create action plans to correct the problems, says Johnson.
* Meeting problems head on. Departmental candor helped after FleetBoston Financial made the embarrassing discovery in April that its Robertson Stephens securities-firm unit in California had pumped $70 million more than necessary into its cash-bonus pool. CFO McQuade says he began a dialogue with his direct reports about how finance had caught the misallocation, and was dealing with it. "I had a staff meeting with my direct reports," he says, "and I encouraged them to talk with their employees about it."
* Commitment to the long term. Despite the current wave of cost reductions, leading CFOs in the survey wouldn't dream of paring their cutting-edge employee programs. "There's always financial pressure, and we're constantly trying to take costs out of the business," says Patmore. But these programs are "probably the last things I'd cut back on," she says, noting that such initiatives as mentoring "are very low cost, because it's the people that drive them."
CARGILL: 150 PERCENT RETURNS
What drives workplace policy at Cargill can best be described as "flexibility." "We don't like to institutionalize, mandate, or put things in hard writing," says Galen Johnson, a vice president and controller at the global food-marketing giant, whose 90,000 employees make it the largest privately held U.S. company.
Take telecommuting. When Johnson became director of worldwide audit in 1991, he started opening that department to employees working at home, and was supported by a companywide climate of experimentation. "No one in the organization said, 'No, you can't do that,'" he says. "As long as it produces increased productivity and job satisfaction, that's what it's all about."
It has produced both for Cargill, which is why such experiments as telecommuting, work-sharing, and job rotation for high-potential employees have now become widespread throughout the 950-employee department headed by Johnson and CFO Robert Lumpkins.
A byproduct of Cargill's openness to such arrangements has been strong loyalty. "People here say, now I want to give back so much more to Cargill, because it's done something for me; I want to give 150 percent," says Melissa Dykema, a worldwide audit team leader who works two to three of her five days each week from home, where she's only a short distance from the day-care program her two children attend. When it comes to flexible work arrangements, "the sky is really the limit," she says, adding that more than 70 percent of the employees in her department do some telecommuting after they've been on the job for six months. "And if you have so many employees who feel that way," she says, "you get a lot of value added."
Helping smooth the way for alternative arrangements like Dykema's are several HR liaisons reporting to Johnson's organization, including Lisa Drake. At Cargill--which ranked in the top quartile of the survey in innovation, employee satisfaction, personal and professional development, and quality of life--one liaison works primarily on internal moves within finance and job-posting, while others are more involved with recruiting, training, and salary administration.
Cargill maintains a 90 percent retention rate among salaried finance personnel. But even when an employee leaves, HR liaisons are busy helping improve the finance workplace. A team of senior financial leaders analyzes the departure, why it happened, and what can be learned. "It's not just a raw number that's thrown out" when a departing worker is discussed, says Drake. "I can tell you the ones that hurt and the ones that didn't."
FIRST DATA: MISSION IS THE MESSAGE
The branding of finance at First Data has helped set apart the department's 1,500 employees--across the company, and even nationally. CFO Patmore's so-called Extreme Teams, as she's dubbed these groups of people, are assigned to tasks that exercise "strategic thinking" at the $5.7 billion company. This program helped win her last year's CFO Excellence Award for finance leadership, training, and development.
Patmore sees much of her workplace development as a reaction to employee needs and feedback. She notes, for example, that branding was meant to counteract the "geographically challenged" nature of her department, which has large concentrations of personnel in St. Charles, Missouri; Melville, New York; and Denver; as well as a small group at its Atlanta headquarters. She also prides herself on getting ideas from employee surveys she conducts every 18 months. "I don't come out and pontificate that we ought to be doing certain things," she says. First Data also maintains a 90 percent retention rate.
But it's the personal way the company tracks individuals--attempting to identify what Patmore calls their "towering strengths" through annual talent audits--that wins the most accolades. Anne Breslow- Davies, who joined First Data in November 1994, found her earliest assignments as a supervisor in general accounting "definitely developmental." In her first months at the company, she had to learn the existing general ledger system for year-end, and then quickly master the new Oracle system that was replacing it. Within a year, she got her first promotion, and she's now director of general accounting.
Another person the audits have recognized is 39-year-old Cort Norman, who became part of First Data through its 1995 acquisition of Western Union. He is now vice president of Six Sigma, a new position at First Data that manages the quality-control system for its payments organization. The talent audits, including some before a panel led by Patmore, were "a great tool," he says. In addition to strengths, he was told of "areas for improvement"--networking, in his case. Not coincidentally, his Six Sigma job, "mainly involving outreach to the businesses," is a networking paradise.
At First Data, much of the training for high-potential staffers takes place in leadership programs geared to specific missions. Right now, 25 of its 1,500 finance staffers are engaged in these enterprises. One project is to identify new metrics for First Data's Western Union operation, while another involves forecasting and planning for the merchant business. "We've selected mentors, and we're doing 360-degree feedback," says Patmore. "But what we're really trying to do is retain employees and create career paths that enable them to feel they can really make a difference."
FLEETBOSTON: BANKING ON TECHNOLOGY
With everything it's been through--merging three large banks into one 60,000-employee, $23 billion behemoth--one might expect FleetBoston's finance department to be in chaos. But attention to changing technology helps keep staffers thinking like a team. And this technological emphasis turned up on the Best Workplaces scorecard, as FleetBoston rated a 3.8 out of a possible 4.0 in technology and tools.
"The youngest employees want more cutting-edge machines; the more- experienced people are less concerned with the hardware, but insist on the state-of-the-art software," says CFO McQuade. Finance desktop technology was standardized last year to a Windows 2000 environment, while "drill-down" tools for management planning and analysis and an activity-based cost-analysis system were also introduced.
The cutting-edge technology is supplemented with strong HR support. Maria Carlino, for example, moved from the corporate tax department four years ago to become one of several finance people focused on HR issues. And as part of that function, she manages the 18-month-long Finance Development Program, which assigns high-potential participants to 2-to-4-month division rotations. Carlino also serves on the 12- member Finance Employee Advisory Team. That group played a role after the FleetBank Boston merger, when the CFO "came to us during the integration process and said, 'You folks are my eyes and ears; I want to hear about problems and what we can do about them.'"
It may be surprising, but like First Data and Cargill, FleetBoston has found that the company's growth--in this case by acquisition--has actually helped advance the cause of job flexibility. "It's much easier to make [flextime and telecommuting] work when you have a larger number of employees," says McQuade, noting that alternative schedules now apply to one in five finance employees. Another advantage of size: it gives him enough staff so that "I can be further from the day-to-day operations, and can focus on the strategic elements," such as planning the environment for finance employees.
One pet project has been "You Are My Customer," a finance training program in which staffers learn to treat FleetBoston employees outside finance the same way a teller ideally treats a customer. Operating risk manager Erfan Karim, in Johnston, Rhode Island, says his training taught him to "never say no" when consulting with any fellow FleetBoston employee. The training supplements FleetBoston's concurrent $50 million investment in improving relations with those "real" customers. Says McQuade: "We've had every finance manager go through the program." And now, when an interdepartmental issue does arise that a finance person can help with, "there's a responsiveness to help them solve their problem."
Roy Harris (firstname.lastname@example.org) is a senior editor at CFO.
Rating the Job
The first annual best workplaces for Financial Professionals survey asked participating companies 100 questions covering five categories, and included CFO interviews in the scoring process. A "radiating pentagon" scorecard rated firms on a 4.0 scale, with each point representing a break between quartiles, allowing easy comparison with the 2.0 average.
A separate employee questionnaire offered a check on the finance department's workplace claims, and formed the basis for the job- satisfaction component of the benchmarking. Staffers checked reactions to a range of comments about quality of supervision, co-workers, promotion opportunities, work interest, and the job in general--rating pay from "barely live on income" to "income provides luxuries," for example.
The Best Workplaces survey resumes this month, when Hackett Benchmarking & Research and the Association for Financial Professionals accept applications for the second annual program (see BestWorkplaces.org). It is very much a work in progress. For example, "this year we didn't ask, 'Do you have dedicated HR people in the finance department?'" notes Rick Roth, Hackett's managing director. "We'll incorporate that into next year's study."
The AFP will recognize top performers in this first year of research at its 22nd annual conference, in Chicago, October 14 through 17. -- R.H.
QUALITY OF WORK LIFE: NCCI
A Financial Environment Policy
When the National Council on Compensation Insurance (NCCI), which collects and analyzes workers' compensation data, was evaluating its options for new facilities two years ago, CFO Alfredo Guerra wasn't just looking at bricks and mortar. "Our business boils down to two things: data and people," he says. "We were looking for a source of competitive advantage."
As a result, the Boca Raton, Florida-based firm custom-built a $52.5 million corporate headquarters--including a fitness center, a day-care facility, and a Starbucks coffee bar--to reflect its respect for employees' personal needs. To minimize hierarchy among its 900 employees, all executive offices are glass-walled and exactly the same size, "pretty small" at about 10' x 12', says Guerra, in exchange for a lavish amount of meeting space.
But beyond the tangible amenities, finance employees say they appreciate NCCI's commitment to helping them meet family obligations. A flexible-hours policy has been "a tremendous asset," says Lisa Jarnot, a finance manager who has been promoted over the past seven years from her initial assignment in the call center, while she has raised two sons. And having four hours of work time per month to volunteer has also been enriching, she says, especially a recent project in which the majority of the 62-person finance department helped build a Habitat for Humanity house.
Such perks could cost a pretty penny, but Guerra says he has implemented them in an era of fiscal conservatism. The capital expenditure for the new building was a cost-effective alternative to reupping for leases at three separate locations, he says, and the local YMCA operates the day-care and fitness programs at reduced rates to employees in exchange for free rent. In addition, the community-service hours have provided some meaningful team-building opportunities.
While the flexibility has been popular, Guerra plans to tighten up some processes, namely those that help his finance team chart more comprehensive career paths. He has recently condensed job classifications and identified the skills needed to enter each one. -- Alix Nyberg
PERSONAL AND PROFESSIONAL DEVELOPMENT: SODEXHO
Toughening the Soft Skills
Winning friends and influencing people are hard skills to teach. But for finance professionals in Sodexho's $1.5 billion corporate-services division, these soft skills are crucial to getting accurate financial data from the 1,800 institutional cafeterias and facilities-management venues they service, most managed by nonfinancial professionals.
"The best ideas are the ones that start with the general managers, because they're closest to the customers," says David Scanlan, a 19- year Sodexho veteran who oversees the division's 25-member finance team as its vice president of finance. "And you really need their buy-in, because it's a massive effort to standardize across all those sites."
To teach effective collaboration, Scanlan uses what he calls a "champion" program that turns broad strategies, such as maximizing cash flow, into discrete tasks, such as upping credit-card use. Specifically, he assigns a project to each staff member, and holds him or her responsible for creating a plan, getting colleagues to work with the managers in their geographic area on implementing it, and tracking results. The tasks "develop their leadership abilities," says Scanlan, "because they're having to influence others without having them as direct reports."
The results have been impressive. For example, credit-card use increased an average 18 percent in the first nine months of the cash- flow initiative launched last September. Accountability is also built into the process, since each champion must present results at an annual meeting with the corporate CFO and divisional president.
Harder financial skills are not neglected, however. Sodexho has individualized development plans for each finance member, and offers rotations across its six major divisions as well as at its Gaithersburg, Maryland, headquarters. -- A.N.
TECHNOLOGY: JOHNSON CONTROLS
Speaking the Same Language
Executives say the decision made five years ago to standardize tools across Johnson Controls has carried a number of career benefits for finance, including more opportunities to evaluate data rather than just gather it. Financial professionals benefit from dealing with different co-workers and managers during their careers, says senior vice president and CFO Steve Roell. "Nonetheless, working off common metrics is very valuable in how we communicate with each other."
Thanks to its electronic catalog of financial policies and procedures, and the gains that are coming with the rollout of a global enterprise resource planning system and unified general ledger (both to be completed within the next 18 months), everyone in the 734-person finance department now speaks the same language. And the initiatives led to the $17.2 billion Milwaukee-based company being ranked nearly 40 percent higher than the average company in its use of technology, according to the Best Workplaces survey.
At Johnson Controls, the initiatives have made a "world of difference" to employees, such as Deann Steimle, who recently returned to her role as vice president of finance for Johnson's Atlanta-based integrated facilities-management division after eight years in operations. Now, instead of being "someone who reports history," she says, she is able "to forecast out what we should be doing next." The challenge, she notes, is to preserve the purity of data coming in from the front lines of operations. And to that end, all reporting policies and procedures are available through the company's global intranet, and are updated quarterly.
One of the goals of the initiatives is to encourage creativity. A dedicated four-person IT staff helps implement and maintain the systems, but otherwise they act as consultants on new ideas. "Even though we have standard applications and procedures, if I can make something more efficient, I can go ahead and do it," says David Milton, manager of financial projects. --A.N.
JOB SATISFACTION: PUTNAM INVESTMENTS
Push for Performance
Job satisfaction starts with job content, believes Putnam Investments senior managing director and CFO Irene Esteves. So when she came to the Boston-based company four years ago, her first step was to redefine existing finance roles. Within three months, she was boosting the responsibilities associated with entry-level positions, stripping out middle management, and pulling certain analyst jobs into the department. Along with the structural changes, Esteves and corporate finance head Loren Starr also tended to individuals' career paths, making job rotations and twice-yearly performance reviews standard fare. "One of my objectives was to ensure that Putnam wouldn't have to go outside for a CFO ever again," she says.
The changes resulted in the departures of about half the staff over a four-and-a-half-year period, Esteves says, but helped attract new employees such as Edmund Wright, now vice president and financial planning and administration manager in the operations and administration division. Wright, a controller at a computer services firm before joining Putnam three years ago, wanted to gain a wide exposure to the financial services industry. But, he says, "as an outsider, it was hard for me to formulate a comprehensive career plan." Through six-month progress reviews and weekly one-on-one meetings, his managers have been "very helpful in coming up with that plan," he says. Having held three positions in two divisions since he started, Wright says he's been able to learn the inner workings of the company, which manages $339 billion in assets, as well as its place in the industry.
Since staffers chart their progress so often, Esteves doesn't issue formal satisfaction surveys in the 130-person department. Instead, she relies on more informal "walking around, going to staff meetings, talking to people during the review process." A human-resources staffer dedicated to finance, however, helps provide valuable insight into overall job satisfaction. -- A.N.