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Why finance executives are overworked and under stress.
Kris Frieswick, CFO Magazine
November 1, 2004
What does it feel like to work 100 hours a week? It feels like never doing anything but work. It's being so tired at the end of the day that you don't trust yourself to make good decisions until you get some sleep. It's almost 15 hours a day, seven days a week, where you pay full attention to your employer — and no attention to yourself.
As the former CFO and COO of Propel Software Corp., an early-stage Silicon Valley company, Mary Korn knows exactly how it feels. As an East Coaster, the 44-year-old Korn prided herself on her "incredible work ethic" and put in up to 80 hours a week. But at Propel, it seemed that she was always being dragged into meetings with other department heads who wanted her to sign off on things, examine every contract for potential accounting implications, and, sometimes, just hold their hands through a tough deal. Exacerbating the situation were badly outdated financial systems. She and her equally exhausted controller would routinely double-check each other's work and spreadsheets to make sure they weren't making revenue-recognition errors.
In August, after four and a half years, she finally quit Propel, a move driven by the loss of anything resembling balance in her life. It was a move she now realizes she should have made four years earlier. That was when she was diagnosed with a potentially deadly illness and her boss's first question was, "Do you think you're going to miss any work because of it?"
Korn may have learned a hard lesson, but the majority of finance executives polled by CFO magazine have not. Most are still in the same sort of toxic environment that she fled. Sixty-two percent of senior finance executives responding to CFO's poll indicate that they are under "great" or "very great" pressure at work, and 68 percent say they're feeling more pressure than they did two years ago. They report working more hours — 52.9 hours a week on average, up from 49 two years ago — and 61 percent firmly believe that they and their employees do more work than anyone else in the company.
Perhaps most disturbing, 63 percent believe that all this stress is having a harmful effect on their health. "The expectations for executive productivity seem to be insatiable," says Dr. David L. Roberts, medical director of Emory Executive Health, at the Emory University School of Medicine in Atlanta. "The attitude is that if you're not working 24/7, you may not belong on this team. So these executives are spending their emotional and physical bank accounts faster than they can replenish them. [And they] aren't able to relax, unwind, and recharge their batteries," says Roberts.
Wait a minute. Finance has always been a stressful career populated by Type A personalities. But how did we end up in a world where finance executives are willing to put their health at risk for a job?
Some see the situation reflected in an old adage: toss a frog into hot water and it will jump out. Toss a frog into cold water and slowly turn up the heat, and the frog will stay until it boils to death. The heat has definitely been turned up in finance over the past few years. The scope creep of financial regulations, Sarbanes-Oxley and Section 404 in particular, has added to already heavy workloads and created a new sense of urgency — a source of stress mentioned by 41 percent of respondents. Meanwhile, worsening economic conditions have led to staff cuts and hiring freezes — causing stress among 40 percent of those surveyed.
The bottom line is that most CFOs have never had to do so much with so little. And by most accounts, there's no relief in sight. While CFOs are fortunate to work in high-paying jobs (the people most concerned about their stress levels are those making less than $40,000 a year, according to a survey commissioned by the American Psychological Association in 2004), high pay does only so much to mitigate the heavy lifting. Unlike Korn, most finance chiefs have no plans to jump out of the boiling pot. But unless they can recognize the warning signs of stress and develop skills to cope with it, they are like frogs who aren't aware they're in the process of becoming soup.
Want a Piece of Me?
The precious-metals industry is an insanely stressful world driven almost entirely by the fluctuating price of gold, platinum, and other metals. Depending on the day's price for raw material, Metalor Technologies Inc., the company where Robert Nolan served as CFO of North American operations, was either having a good day or a bad one.
The bad days, though, were made worse by a Swiss parent company that exerted constant pressure on Nolan to perform to profitability standards that were often unrealistic given the variability of the cost structure. Complicating matters, Metalor had five different operating divisions in the United States, and seven total reporting entities, each with a different business model, all of which had to roll up to their financials three days after the end of the month.
Managing the complexity took 80-plus hours a week. Meanwhile, Nolan and his new wife had five of their seven children from previous marriages living with them. The result: Nolan's general health began to suffer, as did his new family. Finally, in May 2003, he quit.
Truth be told, much of the finance executive's stress level is self-inflicted. After years of pushing to be a strategic partner throughout the organization, as well as its moral compass, many CFOs are victims of their own success.
Some 52 percent of those polled in the CFO survey, in fact, say that today's stress comes from the growing demands from business units for finance support. Nolan, now controller at Summit Technical Service, a privately owned technical-personnel firm in Warwick, Rhode Island, says that his "to do" list has never been longer. "I have to be involved in so many details of this organization, because who else is going to do it?"
At the same time, the unique position of the CFO in the organization — as the confidant to the CEO and the fiduciary to shareholders — creates its own stresses. "Because the CEO trusts you so much, everything seems to land on your desk," says Korn. Moreover, she adds, everyone looks to the CFO as the "pillar of all ethical decisions."
Being that pillar has a downside, however. Many CFOs, in fact, report that their fellow C-levels have to constantly ask them for permission or approval in this post-Sarbox age. "And a lot of executives are resentful of CFOs," says Korn. "They don't like that we have all this regulatory muscle behind us now. They just want to do all this creative work and not have to worry about their fiduciary responsibilities."
J. David Higginbotham, assistant controller and Sarbox project manager for publicly held TiVo Inc., in Alviso, California, has seen that first hand. "Internal controls are viewed as a hindrance," he says. "Especially in Silicon Valley, there's a very entrepreneurial spirit. They just want to get out there and make the company grow. They don't want people coming in and second-guessing if they did the right thing for the business."
Promoter and Protector
When Bill Brand joined Orica, an international mining-services company based in Melbourne, Australia, the company was looking for great things from its North American division. Those expectations were far north of where the division was actually performing.
Brand, who joined as controller, was named finance director of both the North American and South American divisions after a year, responsible for more than $600 million in annual revenues. One of his first tasks was reducing companywide staff by 40 percent, but ironically, he was also charged with reducing turnover in finance.
To stem the tide, he took on a lot of the staff work himself, not wanting to scare off remaining staff. The result: Brand ended up working 70 hours a week, he gained 30 pounds, and his blood pressure skyrocketed. "I wasn't spending any time with my wife and two children," he says. "I took more on my shoulders than I probably should have to insulate my new employees."
To most CFOs, doing the right thing for the business means leading by example. So it is not surprising that CFOs have led the cost-cutting charge of recent years by slashing their own staffs to the bone. Consequently, there is often not enough talent or experience left to get the job done right, which creates even more stress for the entire department.
"If you run your department without appropriate people, you're always under stress. You're always behind," says Higginbotham. "And when you cut too much," adds Brand, now practice director at Hudson Financial Solutions, a project-based finance outsourcing company, there is additional "pressure at the top."
That pressure is compounded by guilt. Stress, after all, tends to roll downhill. And many CFOs believe that reduced staff and greater regulatory responsibilities are forcing staffers back into the traditional "bean-counter" role — the exact opposite of what they hoped to do. Consequently, when pressed, finance executives admit that much of their work overload stems from a desire to shelter junior staffers, who they fear will leave if the pressure gets too great.
"The biggest challenge for me," says Nolan, "is to let people know that there is a path of progress in their own jobs. But with the pressure to keep the head count flat, how do you help people progress when they still have to handle the same stuff, year in and year out?"
As it turns out, many financial executives have proven fairly adept at reducing stress among their staffers — 60 percent, in fact, report that morale in their department is either mostly positive or very upbeat. And it's mostly their own doing — 38 percent say their company is doing nothing to address the pressure on finance employees.
Instead, CFOs have found that what works is the little things. For example, just setting realistic expectations can keep staffers happy, says Harold Kosakoff, CFO and CIO of the California Superior Court in San Diego County. "I tell my staff, 'You make a handful of decisions every year that are job-on-the-line decisions. With the rest, if you make the second- or third-best choice, you make it and you live with it.' " He says that so far, the philosophy has worked. "I've never had a direct report do something so stupid that it got me upset. It doesn't happen when you hire good people."
Employee recognition and morale programs also reduce staff stress levels, although these programs have been maligned by some as a bandage approach. Fred Stepan, executive vice president of The Scooter Store, in New Braunfels, Texas, for example, says his staff takes off one afternoon a month to go bowling or to a happy hour, among other activities. They also have a tradition of decorating people's cubicles on their birthdays. "I went to Notre Dame, and on my first birthday with the company, my staff decorated my office like a Notre Dame dorm room," says Stepan. "My people are very creative, and they take this stuff very seriously."
Finance staffers also view flextime very seriously. Jim Rea, CFO of American-Marsh Pumps, in Collierville, Tennessee, lets his employees work any eight hours between 7 a.m. and 7 p.m., which is especially helpful because much of his staff gets an hourly wage. "They appreciate it because it puts a lot of stress on them if they have sick kids at home and they have to take a day off and they can't get their normal take-home pay one week," he says.
CFO, Heal Thyself
Several years ago, Rea was the 48-year-old CFO of an automotive-supply company in Detroit. The company was encountering such tough times that suppliers began demanding cash on delivery for shipments. And Rea was dancing as fast as he could, trying to keep it all together. Adding to his stress was the fact that he and his wife missed their families back in Tennessee, as well as the slow pace of the country.
After a year of watching the company hemorrhage money, "I thought I was going to have a nervous breakdown," says Rea. And one day, an intense pain gripped his chest, sending him from the office to the emergency room by ambulance. Luckily, the pain was only an anxiety attack, but Rea calls it one hell of a wake-up call. Three months later, he quit his job and moved his family back to Tennessee, where he landed the job at American-Marsh Pumps, a small irrigation pump manufacturing company, and now works a manageable 45 hours a week.
While CFOs seem to have a variety of techniques to reduce employee stress, they tend to fall down when dealing with their own. Consider, for example, that most senior finance executives in the survey fail to use the easiest stress reducer available to them: taking all their vacation time. In fact, 62 percent of survey respondents admit they don't use all their time each year, and when they take vacation, 61 percent check work voice mail, 55 percent check work E-mail, and 35 percent bring a laptop.
For the time that has to be spent in the office, experts generally preach a few familiar coping techniques — exercise, eat right, get plenty of sleep. But, of course, these practices are the first to go when stress hits. "When you're tired and under stress," says Olivia Mellan, a stress-management expert, "no matter how much self-help work you have done, you will always revert to your primitive mode of behavior, which is always dysfunctional."
The trick, she says, is building a bridge between the dysfunctional you and the rational and thriving adult inside. The bridge can take a number of forms. For some, it's writing down what's stressing them out. For others, it's a creative pursuit, like painting or music. Nolan, for example, is a part-time church musician, a hobby that he says "relaxes me in a lot of ways." He also participates in a monthly men's counseling group, where "work-life balance is becoming a much more popular topic of conversation," he adds.
Taking breaks during work time is vital, too. Jodi Aronson Prohofsky, senior vice president of clinical operations at CIGNA Behavioral Health, suggests that executives avoid eating lunch at their desks. "If you're eating while you're working, you're ingesting more stress," she says. She also suggests putting a picture of your favorite place — a beach, your back deck, whatever — on your computer and taking a few minutes each day to just stare at it. "It may be counterintuitive to stop and stand still, but if you do and then you regroup, you'll get far more done in the course of a day," she says.
Roberts at Emory, on the other hand, thinks the solution may be a little more basic. "I think a half-hour walk every day is the best medicine," he says. "[Executives] relax, they're stretching muscles, and sometimes those 30 minutes without a BlackBerry is the only creative time they have." Higginbotham, for example, despite his mammoth workweek, is totally committed to working out as often as possible. So is Stepan, who runs between 2 and 10 miles a day.
Still, all of the CFOs interviewed agreed that the most important thing they learned during their tenure in high-stress workplaces was that it is vital to push back when things get to be too much. "It's very important to have boundaries on the way into a new job," says Korn. "You're a better employee if you spend time in the outside world." That means setting limits both with the CEO and with the job itself. Says Rea, "I wouldn't ride it out if that kind of [stress] happened here. I'd back out of the job instead. I wouldn't go through what I went through before."
A Hardy Few
As a Green Beret, David Higginbotham spent a year in Haiti as part of a mission sent in 1994 to the tiny nation to help expedite the democratic process. His mandate, and that of the men on his team, was to assist in setting up elections, install a trained police force, and help teach Haitians about human rights. No one, not the team nor the Haitians, was really sure how to properly proceed, or how it would all turn out. Higginbotham's commander would fly in by helicopter from time to time to inspect the troops and see how things were going, and then he would fly right back out again.
"That sort of prepared me for what we're doing now," comments Higginbotham, who in September completed writing all of TiVo's internal-controls documentation to comply with Sarbanes-Oxley.
While most finance executives would embrace a lower-stress workplace, a few are like frogs who really enjoy a nice, steamy bath. It seems no amount of work or family stress is too much for these outliers, who thrive in conditions that would make others wither.
Higginbotham, 44, typically puts in 60-hour weeks, but he logged 100-hour weeks in August finishing up TiVo's documentation. He still finds time to work out, be with his six children (whom he and his wife home-school), attend the kids' sporting events, and complete his monthly service commitment to the Army Reserve. He attributes his ability to withstand all the stress to his 14 years of training as a Green Beret — a form of education that not many finance executives share.
"It's been a mental challenge more than a physical challenge," he says of the workload and, especially, the uncertainty surrounding the internal-controls documentation requirements. Once his Sarbox-compliance work is completed, he says he intends to reduce his weekly hours and spend more time with his family. His wife remains understandably skeptical.
"I told my wife that I was cutting back soon," he admits. "She said, 'That's not the first time you've said that.'"
Kris Frieswick is a senior writer at CFO.
Living with Terror
When U.S. Companies locate offshore divisions in Middle Eastern and other terror-prone locales, a whole new type of executive stress develops. Just ask Lee Skidmore. As the regional controller of the Middle East and African divisions of Lucent Technologies, he was deployed to Riyadh, Saudi Arabia, in 1997 to help run a major telecom project with the Saudi telephone company.
The culture shock was "very stressful," he says. "At the airport, they hand you a list of things that are illegal, under punishment of death." The job was stressful as well, demanding that he adjust to an entirely new way of doing business, including attending business meetings over tea until 1 a.m.
Eventually, Skidmore moved his wife and daughter to stay with him in Riyadh. But with the Iraq war looming in February 2003, he sent them back to New Jersey — a decision that may have been lifesaving. On May 12, 2003, terrorists attacked three housing compounds in Riyadh, including the one where Skidmore lived. A bomb blew apart his daughter's former bedroom.
"For 40 minutes," he says, "I have never been so scared in my life. For the next hour, I didn't know who was shooting whom, who the people with guns were, or if they were shooting at me. The phones were out. Half the house was blown in."
A week later, after helping his staff relocate to the United Arab Emirates, Skidmore flew home to Newark. Several weeks later, he made the trip back to the UAE, but it didn't take long for him to realize that he no longer felt comfortable in the Middle East.
Today, Skidmore, who now works as a consultant with Hudson Financial Solutions, a project-based finance outsourcing company, looks back at his time in Saudi Arabia with a new perspective. "I still keep in touch by E-mail with people who are there," he says. But as far as the attack goes, "it's hard to talk about. I'm doing better with it now." At the time, he says, "I [was] such a workaholic, I just let work take care of my fear." —K.F.
Finance under Pressure
Findings from CFO's survey of 227 finance executives.
|How much pressure do you feel at work these days?|
|Very great pressure||13%|
|Very little pressure||1%|
|How has this pressure changed over the past two years?|
|Pressure has increased||68%|
|Pressure has decreased||6%|
|If the pressure or the hours worked in your department have increased, what do you see as the root causes?*|
|Greater demand for finance support from our businesses||52%|
|New regulatory requirements||41%|
|New business initiatives at my company||41%|
|Staff cuts and/or hiring freezes||40%|
|What steps is your company taking to alleviate the pressure on finance employees?*|
|Implementing new finance technology||27%|
|Splitting up job responsibilities||15%|
|Increased use of temps or interim finance executives||11%|
|Average hours worked by finance executives|
|Two years ago||49.0|
|* Respondents allowed to choose more than one.|
|Do you think that finance employees have more work to do than others in your company?|
|Do you think the rest of your company values the contributions of finance sufficiently?|
|Do you think that work-related stress has had a harmful effect on your health?|
|Do you use all of your vacation days each year?|
|When you do take a vacation, do you do any of the following?*|
|Check my work voice mail||61%|
|Check my work E-mail||55%|
|Read business publications (print or online)||53%|
|Watch business news on TV||43%|
|Bring my laptop||35%|
|Do office work||21%|
|Bring my BlackBerry/other wireless E-mail device||19%|
|Are you currently looking for a new job, or do you plan to in the next year?|
|If you could do it all over again, would you choose a career in finance?|
|* Respondents allowed to choose more than one.|