How to Hire Influential Finance Staffers: A Case Study

Big railroad company CSX wins points for a unique hiring process that heavily uses a case study to find staffers with strong persuasion skills.
David McCannFebruary 13, 2014
How to Hire Influential Finance Staffers: A Case Study

How do you go about hiring a finance staffer? As when filling any position, you selectively screen résumés. You conduct a traditional one-on-one interview and subject candidates who survive that cut to multiple additional interviews. You thoroughly examine their technical skills. Perhaps you run them through a battery of cognitive and behavioral tests.

But if you don’t also require applicants to make a live case-study presentation to a panel of evaluators, you probably aren’t hiring the best talent that’s out there. Another way to make that point: You probably should emulate CSX Corp., the Fortune 500 railroad company.

A CSX train.According to research conducted in 2012 and 2013 by CEB, the member-based corporate research and advisory firm, only 32 percent of large companies use case studies as part of their process for hiring finance professionals. But even among those, none stands out the way CSX does, CEB contends. “Very few organizations have the kind of detailed, case study-based approach that CSX does,” says Kruti Bharucha, a CEB senior director. “In fact, we haven’t seen any other company that does it in such detail.”

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CSX began working on its current finance-hiring program in 2004 and has been continually tweaking it since. Since 2007 it has used the same case study for each candidate for finance jobs — those in the corporate financial planning and analysis area and those dedicated to providing support for the company’s various business lines. (There is a different hiring process for accounting positions.)

The railroad’s CFO, Fredrik Eliasson, was one of three CSX executives that created the program in a bid to make the finance function more relevant. “We had very smart people, but our influence was limited back then,” Eliasson tells CFO. “It was clear to me that it wasn’t enough to be able to analyze and understand the key economic drivers of our business in order to make better economic decisions. We also had to be able to go into staff meetings, at both senior and lower levels of the organization, and articulate why we had to change.”

The railroad industry, notes Eliasson, had a lot of 30-year veterans who had been doing things the same way for a long time, whether it was dispatching trains, repairing locomotives or putting down track. Technology and processes had to change for financial reasons, putting a premium on finance’s communication and influencing skills.

Says Eliasson, “We had to go to those people and say, ‘I know you’ve been doing it this way for a long time, but if you think through this problem a bit differently with the economics in mind, you will see that perhaps we should do something different.’ That is not an easy thing to do for an operations-based company like CSX.”

“But,” he continues, “while you might have the best analysis in the world, if you can’t make people feel good as you try to influence them to do something different, you have accomplished nothing.”

Perpetual Pipeline
The CSX finance function devotes an enormous amount of time and energy toward hiring its staff. About 50 finance professionals have been hired since 2007. But to find them, the department has evaluated about 1,000 candidates in a “multiple-touchpoint” hiring process, estimates Sean Pelkey, CSX’s director of performance analysis, finance, ­­and an overseer of the hiring program for the past several years.

There are about 80 people on the team and, with a few moving out into the business each year and a few leaving the company, there is room to hire about 10 new ones annually.

“We want to have a constant pool of people coming through so that when we find one who passes through all the touch points and succeeds, we can bring them on the team,” says Pelkey. “Sometimes that happens when we don’t have a specific need. That means we’re finding the right people and not rushing to hire someone because we need to fill a spot.”

At least a third and maybe up to half of the hiring decision is based on the candidate’s performance on the case study, says Pelkey. The case has nothing to do with the railroad industry, which is an important trait of good case studies, according to CEB. In its report on CSX’s finance hiring program, the research firm writes that “cases on topics unrelated to your industry or function can reduce the influence of the candidate’s expertise and experience, ensuring you are evaluating behavior strength, not knowledge.”

In the case, a fictional company is debating whether to open a new plant in Florida, rebuild one in Southern California that was recently destroyed by a brush fire or move the Western operation south of the Mexican border.

Candidates are provided with background information on the fictional company and its present circumstances as well as a set of recent financial statements. They are given a few days to prepare a two-page memo outlining their recommendations and a 10-page PowerPoint presentation to be given live before a group of CSX finance executives, where they defend their analysis as the panel fires questions challenging their assumptions and analyses.

“People who do very well in the traditional interview may simply not be able to support the analysis they’ve done when put in front of a group,” says Pelkey. “It’s a real-world situation. We’ve even modified some of our traditional-interview questions to get at that.” For example, a few years back candidates were asked how they thought it would impact Apple, AT&T and Verizon if the iPhone were offered on the Verizon platform, as of course eventually happened.

Know What You’re Looking For
CEB was impressed with the groundwork and planning CSX put into its hiring program. As the company’s  goal was to hire finance professionals with communications and influencing skills, it started out by coming up with a set of 13 desired communications behaviors.

But not all of them are valued equally. They are ranked by the extent to which they can be learned through training and how critical they are to communicating insights. In fact, those behaviors deemed difficult to train for are the same ones thought of as providing the potential for great insight, and vice versa ­­­— sort of a “nature-vs.-nurture” struggle in which nature wins out.

CSX has identified five behaviors it considered most important:

  • Articulates views in a clear and concise manner.
  • Anticipates questions and prepares appropriate responses or answers.
  • Uses narratives, like stories and analogies, to communicate messages.
  • Presents compelling arguments to support positions.
  • Constructively challenges business partner assumptions and goals.


Because CSX has done hundreds of case-study interviews since 2007 using the same case, the finance executives who sit on the panels have become adept at identifying those behaviors during the presentations, says Pelkey. When new people become involved in the evaluation process, it takes them about 10 to 20 interviews before they acquire that intuitive sense as well.

CSX also has a scorecard tool designed to take as much subjectivity out of the evaluation process as possible. Candidates are graded on the quality of their assumptions, analysis, presentation and final recommendations. There are several questions under each of those four areas, each of which counts for a certain number of possible points. The points are added up and the total equates to a final grade on a four-point scale.

Virtually nobody has scored a 4.0, Pelkey notes. Most candidates that get hired record between a 3.0 and a 3.5.

“We find that many people get stuck in the minutiae,” says Pelkey. “They’re like, ‘Here, let me show you 60 different ratios.’ It’s just to show that they know how to calculate them, which may or may not be meaningful. It should be, how do you take the financial information we’ve given you to drill down to only what’s important for the case, and then persuade us to your recommendation?”

Of course, good persuaders might influence people in the wrong direction. Pelkey says CSX is looking for candidates who can operate in the middle of a spectrum. “At one side are people who drink the Kool-Aid, that whatever the business wants to do is always in the best interests of the company,” he says. “At the other side are people who think decisions should always be managed based on what the calculations say. We want somebody who is more balanced, who’s going to challenge assumptions and create dialogue.”

Objective Subjectivity?
It would seem that evaluating someone’s ability to communicate and influence is inherently subjective. Might not quantifying those abilities numerically mislead you into thinking the evaluation is actually objective?

In addition to the experience CSX has acquired on how to rate candidates that Pelkey mentioned, the company “offers a lot of guidance on how to use the scorecard and how to rate people,” says CEB’s Bharucha. What often happens at other companies that use case studies, she says, is that the people who evaluate the case presentation will simply get together afterward, or after seeing a few more candidates, and trade notes about their impressions.

“But they’re not using a specific template and saying OK, on this and that particular trait, did they do X, Y and Z? That’s what CSX does,” Bharucha says. “An immediate, specific assessment is more valuable.  If you see five candidates in a day and do a subjective, informal evaluation at the end of the day, they tend to blur together.”

An important benefit of CSX’s case-study approach is that the presentation tests candidates’ ability to handle themselves under pressure. “It can be stressful, because the panel is firing off questions,” says Bharucha. “So it doesn’t just test communication skill, succinctness, synthesis and analysis, but also the ability to respond in the moment in a high-pressure environment.”

It may be difficult to quantify the results of CSX’s finance-hiring process. One yardstick that’s important to the company is the future paths of those who are hired. Among the 50 or so candidates hired through the process, about 20 percent have been promoted to at least director-level positions within finance, and about the same number have management roles in other areas of the company.

That pipeline of talent feeding the rest of the organization is highly valued, says CFO Eliasson: “I think the people we’ve pushed out into the businesses are making their senior teams better economic thinkers. Our business partners are better at making difficult decisions because they are thinking about problems differently and using financial theories and facts as the foundation for their business thinking.”

Equally important is the reduced “error rate” in the hiring of finance professionals. Taking a world view, rather than a completely CSX-centric view, Eliasson observes that “bringing somebody into the company who is not going to succeed is a very costly proposition, not only for CSX but also for the individual. Having to redirect a career so early on could leave some pretty significant scars for that person going forward.”

The fact that 80 percent of the finance professionals hired through this process are still with the company is a strong indicator of its success, according to the CSX executives. “It shows that we’re able to pick the right candidates,” says Eliasson.

Having confidence in the quality of candidate being hired enables CSX to provide satisfying work right away, says Pelkey. “You’re working on meaningful projects from Day One, not just running budgets. That has an impact on good, talented people.”


Photo: Donald Lee Pardue