Job Hunting

Me and My Shadow

Increasingly, bosses are asking departing finance chiefs to school incoming finance chiefs.
Alix StuartMarch 1, 2002

When John Spinney joined Investors Financial Services Corp. last September, CEO Kevin Sheehan handed him an unusual mission: Extract as much knowledge as possible from departing CFO Karen Keenan, who had decided to leave the company upon the birth of her second child.

In taking the job with the Boston-based bank holding company, Spinney agreed to a five-month transition period in which he would be, in effect, assistant CFO. He would mirror Keenan’s schedule, receive copies of her E-mails, and absorb her methods.

The whole idea was to make the changeover as smooth as possible and to avoid any suggestion that Keenan was leaving for any reason other than to spend more time with her family. “It’s just an insurance policy to make sure [Spinney] gets oriented to the company, and all the constituencies he has to interact with, whether it’s analysts, clients, or regulators,” says Sheehan, noting the learning period has been standard practice for the 10 or so other employees who joined the company directly from public accounting firms.

Starting a new job without the full powers accorded to that job can be awkward. Indeed, transition periods for finance executives, while rare, can “create some uncertainty about who’s really in charge,” says Career Development Services Inc. CEO Carol Silver Elliott. But for Spinney, the unusually long training period enabled him to transition from KPMG, where he worked for 14 years in various positions, to first-time finance chief.

One essential difference: focusing on the bottom line instead of the top. It was a “complete change of mentality” for Spinney, after years of considering himself a “revenue-generator” who could boost business by entertaining clients on his ample annual discretionary budget. Now, tutored by Keenan, he’s getting tough on spending, explaining, for example, that “we don’t add head count until we get the revenue to support it.” And since even sales employees have told him the company owes much to Keenan’s tightfistedness, Spinney is committed to maintaining it. “I’m going to put a sign on the door that says, ‘The answer is still no,’” he jokes.

The transition period also allowed Spinney to learn how to work with analysts. At first he just shadowed the other executives on road shows, absorbing their anecdotes about company history. By October, he could make the official presentation by himself. And given that a CFO’s departure often sends a negative signal to Wall Street, the gradual turnover has put analysts at ease. AG Edwards analyst Joel Houck, for example, gives the company high marks for “a well-thought-out transition.”

Few Strings Attached

Spinney was not officially responsible for big decisions until January 1. This approach, say other CFOs, is a major plus. “It’s great because you’re not in the fire right away, and you get more time to think about what you want to do,” says Kevin Collins, CFO of contract management software maker I-many Inc. since October. He joined the company as vice president of finance in May, with the tacit understanding that he would replace retiring CFO Philip St. Germain after a four-month buffer period.

Although Collins had previously held senior financial roles, this was his first CFO stint at a public company. St. Germain gradually ceded responsibilities to him, starting with internal chores and leaving analyst relations for last. That internal focus gave Collins the chance to evaluate certain operating expenses. And through some “subtle” changes, he says, he was able to save $2.1 million, or 13 percent of operating expenses, in his first full quarter.

Given the scrutiny from outside stakeholders, many CFOs are creating some sort of transition period, even when their successors are seasoned pros. CFO Bob Walker, for example, delayed leaving $8.4 billion Agilent Technologies Corp. so that he could help introduce his successor, Adrian Dillon, former CFO of $8 billion Eaton Corp., to Agilent’s culture and reinforce the link between R&D spending and profits at the tech company. “[Dillon] is so bright, I have no doubt he’ll pick up things very quickly,” says Walker, but “if he’s at least aware of my opinions, that could help speed up his learning process.”

What if the former CFO isn’t available to foster that learning? “You can look to other key people in the organization, and be a sponge,” says Elliott. And while you may be able to hunt down your predecessor, “if they left under unpleasant circumstances, I wouldn’t advise it; you may receive skewed information.”

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