Professional Documents
Culture Documents
CFO
RESEARCH SERVICES
1
TABLE OF CONTENTS
This report is published by Schiff Consulting Group, 127 Route 59, Monsey,
NY 10952. www.schiffconsulting.com
May 2003
ACKNOWLEDGEMENTS
AND DEDICATION
I am grateful to all of the people who encouraged me and supported this
important research project. I offer my thanks to the former chairperson of the
Finance Development & Training Institute (FDTI) consortium, Rich Delcore of
Procter & Gamble, for his leadership, initiative, and interest in the CFO
Leadership Development Practices subject. I am also grateful to the current
FDTI chairperson, Alan Hencky of Intel, for his support of the project and his
valuable comments on early drafts of the report.
Jonathan Schiff
May 15, 2003
INTRODUCTION
WHY STUDY FINANCE LEADERSHIP DEVELOPMENT?
The consortium of large U.S.-based companies that comprise the Finance
Development & Training Institute (FDTI) viewed the topic of talent development
in the finance function as important for four main reasons:
METHODOLOGY
The methodology used consistently throughout this report involved a series of
interviews grounded in a detailed interview guide that is included in the appendix
section of this report. The interviews were augmented by a series of “drill-down”
face-to-face practice-sharing sessions that were held in Chicago and in Boston.
In the fall of 2001, four of the FDTI companies formed a sub-group and
began to focus on the identification, selection, development and retention of
top managers within the CFO function. Following the development of an
interview guide, a benchmarking session was held on this topic.
EXECUTIVE SUMMARY
1. The goals associated with CFO Leadership Development are very common
across the industry for large global enterprises, however the approach to
reaching those goals varies dramatically. Some of the variation is a function
of company culture, some is attributable to the level and quality of human
resource services available to the CFO community, and some is attributable to
an evolving perceived importance of people management within the finance
and accounting function.
3. It is heartening that in many cases the people participating in this study are
actually internal practice leaders, relative to other function managers, within
their organizations. Although often not viewed as innovative, particularly
when it comes to developing staff potential, in several instances the CFO
community is the role model for change and the test bed for new human
resource practices within their respective organizations.
6. Finance leaders in some of the companies “talk the talk,” but fail to “walk
the walk” with respect to transparency of their CFO Leadership Development
practices. There is a perception in some organizations that this process is still
a “locker room” exercise, cloaked in mystery, intrigue and misinformation. It
reflects a politically infused environment where “who you know is more
important than what you know.”
COMPANY A
“We really want to be the Setting
‘go-to person’ to help our Company A has recently appointed a new Corporate Controller. Since this
leaders run their organization appointment there has been an increased focus on strategy-based people
from a business perspective.” development in the function. Like many other contemporary organizations,
Company A’s finance function historically was consumed with detailed
“Six Sigma is working well transaction processing, but is transforming into a recognized center of excellence
for us and even human and a sought-after business partner.
resources processes for
accountants at our company The accounting and finance community at this global manufacturer has a
are being looked at under total of 1,200 staff divided equally between locations within and outside the
the Six Sigma microscope.” US. This Company uses the title Business Manager to describe the finance
leader who is an advisor to the operating vice president in each unit of the
organization. There are about 30 to 50 of these positions, equivalent in other
organizations to a business unit, division or sector–level financial executive.
Company A has also embraced Six Sigma as their primary process improvement
and performance management tool. Six Sigma is used across the value chain
at Company A, extending to all administrative functions including accounting.
Their new Framework, as depicted in Exhibit A-1, has been in place for just
over a year. The response from the internal customer base for accounting and
financial services has been strong with respect to achieving the “business
advisor” role. Although accounting and financial services staff are pleased
with the feedback, they also think that they have more value to deliver to the
business and that they can improve their internal processes from a Six Sigma
perspective.
Exhibit A-1
Corporate accounting services strategy framework
Customer People
Business Process
The company has made its first move to formalizing a systematic structured
“In the past, the important approach to top development, company-wide, by establishing a College
thing for accounting and of Leadership to address the needs of the top of the organization first. As a
finance was to close the books basis for the College, the Company developed a generic, cross-functional
and make a profit for the leadership competency model and assessment tool. They also retain an
Company. If there was time outside advisor to supplement their internal interview process and
left to develop people after 360º reviews for top development selection. The outside review focuses on
that, great!” identification of skill and competency gaps in top development candidates.
Like other functional areas, accounting participates in this corporate program.
This corporate program supports both the selection and development of the
future finance and accounting leadership pool, aimed at the top 5% of the
Company’s staff. The expectation is that in the near future this structured
approach will cascade downward and also be customized and detailed to
accommodate specific functional characteristics and needs, including those
unique to accounting and finance.
assignments depend on whether the mentor has innate skill for mentoring
and/or has some high-potential people as direct reports who request being
mentored.
COMPANY B
Setting
“The top seven guys (in the About three years ago, the leadership of this diverse global organization
Company) realized that they that the talent and leadership pipeline within the CFO function was “drying
had an Achilles Heel with up.” This became even more important when the company’s leadership,
respect to our top talent as a whole, began to focus strategically on the “top talent” issue and its
pipeline.” relationship to producing and sustaining a competitive edge in support of
their businesses.
For example:
1. When high performers leave the company precipitously.
2. When individuals with a limited skills portfolio, often with a strong
technical focus, find themselves promoted to leadership positions for which
they are unsuited, and performance issues surface.
Before focusing on CFO top leadership development, Company B first set out
to better understand its own culture and climate and conducted detailed
cultural assessments. One of the significant findings deriving from this
assessment was “the amount of discontent and cynicism towards senior
management present in the finance job families.” This finding significantly
affected the CFO top development plan and practices.
Incentive plans are designed to reward key contributors to results. For finance
professionals, this occurs when an individual holds a position that has three
elements: impact, complexity, and freedom to act. This tends to occur with
someone who has been in the workforce for at least 6 years.
Open Issues
■ One current challenge is that some of the highest potential individuals within
the top development pool at this company are in far flung locations around
the globe. This results in a challenge to ensure both development consistency
and adequate attention from corporate headquarters.
COMPANY C
“While it is not expected that a Setting
senior leader will be performing Company C is a global leader in the manufacture of components intrinsic to
at the Advanced level in every computer and communication products. The Company’s Finance function is
competency, the model provides presently a well-developed business partner, as indicated by other Company
a common language for a leader organizations’ tapping Finance for senior roles in their functions. In addition, the
to discuss his or her performance Company enjoys a reputation of both fiscal conservatism and high integrity.
with their manager, and links to These two indicators taken together suggest that the Finance function balances
resources that can aid in technical expertise with business influence competencies.
developing areas for
improvement.” Nevertheless, an increasing proportion of the Company’s revenue is derived
from operations outside of the continental US, a trend that is highlighting the
need for Finance leaders with “depth and breadth” operating around the
world. Company C’s top development practices, therefore, reflect its concern
with ensuring that there is an adequate pipeline of Finance leaders to address
future needs. The primary emerging issue, therefore, is accelerating the
development of potential senior finance leaders.
Competency model:
The vision for Finance is also reflected in a well developed set of Finance
leadership competencies, which are part of a competency model for Finance.
Retention
Trends and practices already mentioned have helped Company C to positively
address retention challenges. There has been ample opportunity to contribute
to the Company’s growth; in combination with variable incentive compensation,
including the emphasis on stock options for high-potential employees,
opportunity has kept top talent in the pipeline. In addition, the CFO has been
personally involved in coaching senior leaders, which has engendered
loyalty to the CFO. Retention of CFO staff has received the highest attention
from Human Resources staff, with corrective actions prescribed and taken
when negative trends are identified.
Development
Historically, there has been strong commitment from the top downward for
development of managers and leaders at Company C. In recent years, gap
filling efforts have focused investment on entry- and middle-level management
development programs. There is now increasing emphasis on training and
development for the top level.
coming up in the ranks, often from the time a new employee arrives at
the Company.
Finally, Finance staff know that they are expected to take on projects or task
forces that contribute to the health of the greater Finance organization,
beyond the scope of one’s own position. The expectation is not limited to the
top of the Finance hierarchy; it extends to an expectation that Company
finance leaders model Company values. For instance, leaders are expected to
take an active role in teaching culture classes and the leadership development
curriculum. Other opportunities consist of holding forums, sponsoring
“brown-bag” lunch topics, holding operations reviews, and conducting
cyber-chats.
Open Issues
Given the pressing need to keep the worldwide development pipeline well-
supplied with potential executives, several dilemmas may present themselves.
Finance Charter
• Maximize profits by providing effective analysis, influence,
leadership and control as business partners.
• Keep the Company legal world-wide while maintaining high
standards of professionalism and integrity.
• Protect shareholder interests by safeguarding the assets of the
Corporation.
• Deliver world-class services and productivity.
• Develop effective leaders and partners through career
opportunities that foster improved performance and professional
growth.
COMPANY D
“The candidates for top Setting
development in our This global consumer product giant has a legacy of rigorous selection and
Company are selected development of future finance leaders. The Company has well developed
based on performance, general leadership development practices, as well as those specific and
potential, experience unique to the finance and accounting function. The finance function is an
and skills, in that order.” internal practice leader with respect to people development practices.
Selections for top development are reviewed annually with the CEO and
his leadership team, with each of the 12 business units. These reviews are
conducted quarterly, three business units at a time. The primary result deriving
from this selection and review process is identification of the subsequent one
or two assignments associated with this high-potential pool. There is currently
no specialized corporate training, recognition or public identification of these
individuals.
In this context, the finance and accounting organization identifies its 60 top
development candidates, with a view toward placement in one of the dozen or
so top positions within the subsequent 5-10 years. This Company’s top devel-
opment group includes the direct reports of the CFO, but also includes key line
business CFOs. These 60 represent about 15% of the eligible management
group (associate director and up) and make up about 1% of the entire finance
and accounting staff. These candidates are handpicked by the finance leader,
in this case, vice presidents, of the business unit and are surfaced initially to
identify any “vetoes” from other vice presidents familiar with the candidate.
The selection criteria mirror those of corporate selection criteria highlighted in
the sidebar above. The selections are reviewed annually with the CFO leader-
ship team. Individuals can “roll” on or off in any given year. The individuals
selected for top development within the finance and accounting function…
■ Know that they have been identified and selected,
■ Receive regular exposure to top management,
■ Are “first-up” for the most challenging, broadening, and high risk/high
profile assignments and projects,
■ Are provided with specialized training, and
■ Receive aggressive salary management and option awards.
Development
Certain rotations and job assignments have been identified by Company D as
critical for top development. They include leadership positions in: investor
relations, international finance leadership-country specific, global shared services
and key product line CFO. This select group is also assigned special sponsors and
mentors, as well as outside coaches to aggressively address specific deficiencies.
■ Attrition-Most companies will lose one-third of their executive staff in the next five years.
■ Turnover-58% of top talent change jobs in less than five years.
■ Cost-On average it costs about $1 million to replace an executive in the first year.
■ Lack of Skills-Weakness in key leadership skills: including innovation and change.
■ Shareholder Expectations-Corporate boards expect a systematic, visible leadership
development process.
■ Readiness-Less than one-third of companies are confident that they are fully prepared.
This Company’s development and training approach for future finance and
accounting leaders begins at the early career stage. Every finance and
accounting staff person entering the company is part of their Finance &
Accounting Development Program. The program is run primarily within the
business units. As they progress, strong technical performance is rewarded
through recognition in the CFO Circle. A select group, representing about 10%
of top performers from the early-career program, is selected for the
Accelerated Development Program (ADP). This group usually possesses 2-6
years experience with the Company. Acceptance into the ADP is based upon
the employee’s results, skills, business experience and potential for growth.
“To be selected for the ADP, The ADP includes 80-90 new entrants per year. The ADP is the pathway
they must demonstrate for the first appointed position, Associate Director. The ADP is a carefully
proficiency in both analytic monitored “up or out” high potential program. Less than half will make it to
and people development the Associate Director level. The ADP’s objective is to develop future business
skill blocks and must meet and organizational leaders for finance and accounting and to build broadening
minimum requirements in skills and experiences such as multiple geographic and multiple business
the other skill areas. They exposures. The ADP provides a series of rotations averaging 15-24 months in
must also show measurable length. However, these assignments are almost exclusively within the
contribution to business accounting and finance community. The ADP has won high marks for its
results and be “top” rated in a selection consistency and transparency, valuing top performers, forcing
forced ranked rating process. business unit leaders to share (and develop) talent, distinct recruiting
Finally, they must have senior advantage-- specifically for MBAs—and taking the mystery out of career
management potential.” pathing. The program has provided for a unified global approach to
early-career development. One of the key enablers of the program’s success is
an internally developed detailed finance and accounting skills dictionary,
together with a computerized program for its use, that has provided for a
consistent language and measurement platform supporting a variety of
critical leadership development decisions and training priorities.
“Functions in our company are High-potential finance managers are identified on the basis of their ability to
often like the ‘Roach Motel’ make a series of upward promotions within the shortest time span—for
They check-in but they don’t example, how many upward moves can this person make within the next ten
check-out.” years? Conclusions about high-potential status are based on evaluation of
performance in jobs that average about two years in length. Annually,
Company E evaluates all those in the high-potential pool to see whether they
should remain in the pool. Members of this elite group are regarded as
“corporate promotables”.
“One of the best things to There are several dimensions to Company E’s development practice for
keep anybody interested in “corporate promotables” including:
working in a company is to ■ Annual development discussions and objectives
provide them with an
■ Regular exposure to high-level executives
interesting “stretch” job.”
■ Exciting and challenging “stretch” rotations
■ Invitations to participate in “internal university” programs
■ Rotation in a foreign subsidiary
Bench strength testing within the context of the 1,400-member finance and
accounting team is a front-burner practice at Company E. Of this population,
less than 10% are included in the top development pool. Their success in this
practice space is attributable to a combination of online information and tools
combined with a significant commitment to on-going dialog and human
touch. Their assessment process for future finance leaders is called their
Targeted Development Program. This assessment covers technical and
leadership skills, as well as personality traits and values. One of the most
interesting aspects of this Company’s practice is that they bring in an external
resource, the executive search firm Russell Reynolds, to evaluate their CFO
Top Development candidates. The outside firm has been very helpful
to Company E in identifying new risks and issues with respect to several
candidates that did not surface via the internal process alone. It also enhances
the objectivity of the process.
COMPANY F
“Within three years, we expect Setting
our business decision support The finance and accounting organization of this large national retail chain
activities to grow to 30% of includes about 400 staff, mostly located at the headquarters. Total employee
our resources, in contrast to headcount exceeds 50,000 and they operate thousands of stores nationally.
only about 10% today.” They are the largest retailer in their category. Historically, the development
culture has been focused almost exclusively on future store sales and service
leaders. The interview guide associated with the research project (a copy is
found in the report Appendix) created an opportunity to discuss the future
vision of finance with the CFO. The CFO expressed a vision of a finance
organization that would be “more of a strategic partner providing analysis to
support key business objectives, specifically when it comes to mergers and
acquisitions, partnerships, and benchmarking, and to be more involved in
major decisions and have more of an outside, financial analysts’ perspective
on the company.” For example: The CFO would like to see the finance team
help address and solve typical problems like inventory ‘shrinkage’ at the
store-level linking financial and business issues, managing M&A activity, and
improving investor perceptions. Such functions would of course be added to
the traditional roles of stewardship, transaction processing and financial
reporting.
High
Potential
Solid
Potential
Remains at
Current Level
Definitions
Potential
Solid Potential: Has the potential to assume larger responsibilities beyond cur
rent position or move laterally to increase breadth of
contribution; capable of moving up at least one level
Remain at Current Level: Has limited potential for upward mobility; may continue to
provide valuable contributions at current level
Performance
Outstanding Performer: Frequently and consistently performs well above expectations
COMPANY G
Setting
“With respect to finance’s role
At Company G there has been a focus on a new vision for finance over the last
in integrity, let’s make sure
five years. The challenge in maintaining this vision is the impact of changes
that we are as pure as Caesar’s
in strategy and structure that are significant enough to render a fixed or
Wife in all respects.”
static vision ineffective. The Company has recently concluded that although
what finance will do in the future is about 75% of what they are doing today,
25% of their work will change, often radically, in an accelerated fashion. As a
result, finance leadership has maintained that there should be a unified
focused people-development strategy and practice across their diverse
business units globally. Historically, the Company’s approach has been a
preference for “make” vs. “buy” in leadership development. There is also a
strong consistent culture of integrity.
“Our Company’s Finance In the first three years 12,000 people have been through the University. It
University consists of a should be noted that about 25% of those are non-finance and accounting staff
number of Colleges that seeking development in accounting and finance skills. A new program, the
provide financial competency eighth College, is being created to focus specifically on CFO development.
training and development to The CFO of the Company is the “Dean” of this new program. The colleges are
all employees to enable each consistently competency-based using a detailed model. A robust CFO
of them to perform and Development College will help support the identification, selection and
understand their roles and development process.
responsibilities better. The
result of this is proven to be Company G has promulgated a quality standard for the Finance University.
of compelling value to our A description of their Finance University Quality Standard follows:
Company.”
The Company uses a process with very clearly defined criteria for the selection
of employees to participate in future leader development opportunities.
Aside from specialized areas like tax, the approach to development is still
generalist-oriented; future finance leaders need to experience a variety of
finance and accounting jobs across the CFO function to be considered for
top development. Although international experience is not formally
required, many of the high potential managers rise to the top of the
list because they possess that experience and have also managed
departments with large headcount. Another important criterion for selection
relates to the significant commitment—referred to as “energy”—required for
the top development track.
This company values rotational assignments outside the finance function for
future leaders, most often occurring early in staff careers. At Company G, it
becomes more difficult to build such out-of-function rotation later in one’s
career. An emerging consideration that has bearing on selection is the degree
of involvement in the Finance University. This involvement is perceived to be
a very important demonstration of an individual’s commitment to both
technical competency and people growth.
Retention
This company has found that their commitment to job rotations is the best
defense against sudden departure of future finance leaders. Both exposure
to company officers and the “psychic reward” of being invited to assist
the Finance University cultivate competencies that can act to mitigate the
retention issue.
Open Issues
■ As the company continues to evolve as an entity there will be ongoing pres-
sure to maintain and grow a common finance culture across the company.
■ As the quality of the finance staff has strengthened, more of the best are
being invited to join other functions. This effect was anticipated, but not to
the degree currently experienced.
COMPANY H
Setting
The CFO’s stated vision for this large, diversified financial services company
is to become a world class customer service organization, coupled with a
commitment to integrity and professionalism. Interestingly, the Company
recently circulated and socialized the FEI’s Code of Ethics throughout their
finance organization.
The OMR process is coupled with another process that they call Strategic
Staffing. This Strategic Staffing process takes those identified as the highest
potential and the highest performers within the organization and matches
them with assignments and opportunities that will provide them with the
type of experience and skills that they need to move forward. The Strategic
Staffing process has been very successful within the finance function, but has
met more limited success in moving people out of finance and into other
functions for rotation. The focus of the Strategic Staffing process is about 10%
of the total 1,200 headcount in finance in this Company.
The top performers across the Company are invited to participate in the
Company’s “Senior Leadership Forum.” This rigorous program focuses
on strategic issues, and was designed using an action-learning model. The
individuals in the Senior Leadership Forum are not graded or ranked but it is
viewed as a key experience for high-potential/high-performers in Company
H. An overview of the program is described on the following in Exhibit H-3.
Recently, the Company has gone further in its development process in the
finance organization. Finance leaders have been asked to identify their top 10
direct reports by considering the top 10 people that “you cannot live
without.” This process should identify not necessarily the most senior people,
but those most critical in taking the business forward and making sure that
there is a retention strategy at the individual level for key people.
Program Outcomes:
■ Achieving new corporate strategies using current business scenarios;
■ Leadership implications for these businesses;
■ Challenges and barriers to leadership;
■ Personal responsibility as a leader, and
■ Modeling “one step ahead” leadership.
COMPANY I
“With respect to top Setting:
management development, A new Chief Financial Officer has been in place for almost a year. His focus
I would say development in is transitioning the Company’s finance function to be more of a business
the past that’s been handled partner and play more of an internal consultative role to the business while
in what I might call ad-hoc remaining uncompromisingly faithful to the objectives of financial steward-
fashion. In contrast, starting ship. This is a balancing act that the new CFO regards as crucial to the success
about a year ago, there was a of finance, both in supporting business decisions and in assuring the integrity
concerted effort to really look of accounting, financial and business practices.
at how deep are the pools of
talent across the organization Although this Company’s bench-strength with respect to succession planning
from an enterprise-wide at the manager and director level is considered both “strong and deep,” the
perspective.” bench-strength at the most senior level in the finance organization is currently
a concern—resulting in the Company’s interest in this study. Several senior
level finance managers are nearing retirement age, resulting in a stronger
focus on succession planning. One of the changes driven by the new CFO is a
significant focus on the strategic value of the development process to the
whole finance organization. Finance development will shift from an
ad-hoc approach to a more enterprise-wide and systematic process for talent
identification. There are several reasons, aside from the new CFO’s interest,
which have prompted the focus on leadership identification and development
for the Company’s CFO community. These include:
Five or six of the most senior level individuals receive the highest level
of development services in order to prepare them for senior vice president
positions. A regular succession planning and talent review process has also
been initiated to assure continuity across finance and the Company. From a
development standpoint, there is also an Executive Academy designed to
focus on common development issues of newly appointed directors. About
30% of eligible candidates currently take advantage of this learning event.
Open Issues
Company I has:
■ Established a more consistent approach in its selection of targeted future
leaders
■ Improved by consistently offering appropriate assessment and development
activities for the developing leaders.
There is room for improvement in how the company defines and measures
successful completion of the customized assessment and development
activities. In addition, Company I will continue to focus on the development
and communication of short- and long-term measures of success. These
measures will illustrate the impact on the individual’s performance and the
company’s performance. The measures can be consistently communicated to
the future leaders’ executive sponsors.
COMPANY J
“Going forward, the skill Setting:
sets requisite for effective Company J is a large-cap diversified defense aerospace contractor that provides
financial leadership are likely high technology products and services across the entire procurement
to be quite different in the spectrum of the Department of Defense of the United States and those of its
nuances from the skills nuances global friends and allies. During the past ten years, its remarkable top line
that characterize today's CFOs growth has been achieved primarily via acquisition. From a management
but the basics probably won't standpoint, the Company’s vice president and chief financial officer is
change as much.” responsible for the traditional finance and accounting functions. In addition,
the office of the CFO is responsible for strategic planning, mergers and
acquisitions, and contracts pricing and administration. The term business
management has been used to characterize this group.
Development
Responsibility for development of Company J people is delegated to the
sectors and administered through their respective HR organizations. While
this applies also to business management people, the business management
community, in some of the sectors, performs a strong lead role in development
initiatives such as rotation, mentoring, and diversity.
The spate of acquisitions in recent years has strained the resources available
within the sectors for training and education and has added to the challenge
of achieving and sustaining a single culture with respect to the Company J
business management community. In recognition of this strain, the corporate
vice president and CFO, along with the sector CFO’s, are committed to move
towards an environment in which the development of business management
people is done according to a more common approach and criteria. Efforts are
underway to identify best practices within the company and to share them
across all sectors. This may and probably will include education and training
efforts of business management people.
Retention
Retention, to the extent it can be influenced by a Company, is a function of the
effectiveness of people development efforts, primarily within the sectors.
These are designed to attract and retain top caliber business management
people. In general, the company has experienced retention issues only in
periods of defense spending cuts. These periods, the last of which ended
about two years ago, create an unavoidable atmosphere of uncertainty and
risk for employees. This causes some to seek other employment opportunities
where the risks and uncertainties are more to their liking.
Open Issues
■ Whether the decentralized approach to business management people
development continues to be appropriate for a Company, like Company J,
that has attained substantial growth and people via acquisition in a
relatively short period of time.
■ The identification of a suitable alternative in the likely event that the
decentralized approach is determined no longer to be appropriate.
■ The rate of change toward the optimal alternative should the Company
decide to move away from the decentralized approach.
COMPANY K
“In finance we have something Setting
called Accountability Alignment. The finance organization has developed and disseminated “overarching
It is actually a tool that we use values and guiding principles.” Instead of a stated mission or vision, it is a
to assure the accountabilities graphic image that is divided into four components: people leadership,
and objectives of the finance customers, competition, and processes. Exhibit K-1 provides a perspective and
leaders are in alignment with detail on the rapid evolution of the Company’s finance culture.
leadership accountabilities.”
These are the four items that managers are held accountable for. This graphic
model is unique to the finance function, although it parallels in concept
models in use by other functions. Shareholder value is at the bull’s-eye. This
approach has been in place for over four years; it was developed in response
to the perception that finance needed to become more customer-oriented. One
positive manifestation of the change is that finance now only spends about
10% of their time in transaction processing activities with the balance
available for compliance and regulatory services and for business decision
support. Company K, because of the nature of their business, is going through
its roughest time in its history. Consequently, finance is challenged to both
sustain the integrity of their systems and accounts, and at the same time
support the business. Supporting the business means increasing effectiveness
with customers and improving productivity as well as profitability.
We
We collaborate
succeed & learn We provide
when our from each opportunities
customer other for career and
We bring succeeds personal
the A-Team growth
We expect
to every open and
deal honest
dialogue
We drive
“win-win”
Customers People
We reward the
deal closure outcomes that we
Shareholder influence
Value
We learn Our Financial
from our processes are
competition forward-
Competition Processes thinking, time-
sensitive & add
value
We focus on
the drive for
market We value
share speed and
We expect flexibility
We compete effective
to win and timely
decision
making
Two years ago, Company K developed and rolled out a new model for
managing the company, called Key Accountability Leadership roles. They
identified the top line accountability for outcomes for every leader in the
Company. Outcomes are aligned with the income statement. This process
is supported by an intranet online tool. The reason for developing this
approach was rapid growth in a large matrix-type organizational structure.
Responsibility became less than transparent and roles were confused.
1
7
SKILLS & EXPERTISE
Breadth Range
Experience Need
M/FJCIOthExpertiseExpertise
5
3
4
2
Skill
3
4
Avail.
2
3
PERF. & CONTRIBUTION
External Beha- OutputSustainedAppliedChange Cust.
vior
5
6
5
4
Contrib.Learning
6
3
4
2
4
6
ATTRIBUTES
5
3
Ldr-
6
4
P&C
16
13
TotalAction
Orient. ship Score Score Code
50
47
2
4
Accountabilities (IVP)
JJ Brooks 1 3 2 2 6 6 6 5 2 2 6 3 17 44 3
Jo Smith 3 4 1 1 3 4 4 2 2 4 4 2 10 34 5
Value
Global Leader
Current Role:
Business Leader
Performance Leader
Mentor:
Leadership Edge
Proposition (IVP)
43% 54% 32% 36% 50% 75% 68% 57% 36% 57% 64% 54% 67% 52%
Josephine
Overall % For Item Summary
Fix - It Projects Yes of Key No
Contributions Yes No _________________
& Impact on Business (last 1 -2 years)
Completed By (manager/leader name): Anthony Leader Employees Entered 4 Start - Up Projects Yes No Yes No _________________
Average Performance & Contribution Score 4.7 (Calculated Automatically) Large - scale Projects Yes No Yes No _________________ BROWN
Average Total Performance & Contribution Score
14 Project Management Yes No Yes No Global ID:
_________________
Policy/Strategy Formulation Yes No Yes No _________________
Current Role:
Merger & Divestiture Yes No Yes No _________________
Location:
Cross- Functional Roles Yes No Yes No _________________
International Assignment Yes No Yes No Manager:
_________________ Mobility:
P&L (profit & loss) Accountability Yes No Yes No _________________ Attrition Risk:
BU:
E Sponsor:
TIV
Education and Training
Strengths: Development Needs
Has completed before? Recommend attaining? Comments
ST
LBS/HBS Strategic Leadership Yes No Yes No _________________
Leadership Solution Selling/ABE Yes
U No Yes No _________________
ILL
Other Yes No Yes No _________________
Page 3
10
NORTEL NETWORKS CONFIDENTIAL 06/02/2000
Talent Reviews
External
Candidates
•Rewards- financial/
Key Jobs Ready Now 6-12 Months 12+ Months Identified
IV
Joe Bloggs P.J. Smith (Microsoft)
AT
VP Internet Sales
non financial
Mary Doe R. Gustavson
TR
VP Optical Marketing
GAP
Leadership Edge
Harry Hussein
VP Optical Sales
S
LU
Jane Title J. Cameron
VP Wireless Internet
IL
F. French
VP International Sales
GAP P. Kerns
Top Talent Leaders ready Job Challenge Profile Fix-It/Turnaround - possible Determined by individual Leaders in other parts of
for a move to Key Novations Stage 4 roles Account Mgr., Sales Executive Educational organization
Emerging Accountability Role in 6-12 Assessment Director, R&D Director, Experience Leadership Development
KAR Leaders months with some targeted International Assignment Coach
development. Accountability Profiler
(accelerator Track 2 participants feeder IVP
pool dev’t) pool + others who
demonstrate potential
A subset identified as Job Challenge Profile – possible roles Functional Determined by individual Leaders in other parts of
having the potential to Novations Stage 4 roles, Sales Director, IPT need organization
LE Track 2 move into a Key Assessment Leader, PLM, NPI IDP Continued Leadership Development
Accountability role within 2- Manage Track 1 initiatives Coach
3 years. IVP GEL specialty courses
Assessment Centre Build Leadership Culture in Executive Sponsorship – Key
Track 1 alumni who Nortel – Leadership Accountability Leader
demonstrate real potential Messages and initiatives
+ others who demonstrate
potential
Top Talent (or feeder pool Job Challenge Profile Project and Task force Individual Development Group mentoring with Advisory
for TT) identified as having Novations Stage 3 leadership planning Workshop and Council (Executives) members
strong leadership potential Assessment Line to Staff switches discussions with One-on-one mentors LE Track
early in their careers and manager and HR prime 2 and Emerging KAR Leaders
LE Track 1 the willingness to make the IVP Networking Opportunities define formal and
personal commitment to Priorities Action Learning Projects / experiential training HR Prime / Coach
become a Leader at Nortel Leader for Hire requirements – GEL,
Networks Business courses, LE
– possible roles – training events
marketing, finance,
business development, EA,
Business Development
Retention
Since the decline in the economy and more drastic effects in Company K’s
industry, retention of staff as an issue has mitigated. It is not being ignored,
and the online tools are helpful in reducing the incidence of losing high
potential top development candidates.
Open Issue
A significant challenge going forward will be the ability to sustain the “peo-
ple centric” focus during increasingly challenging and turbulent times.
APPENDIX A
Characteristics of Primary Interviewees for this Report
APPENDIX B
CFO Top Development Practices Research
Interview Guide
10. To what extent does CFO Leadership Development practice leverage and/
or participate in general top management development practices
including:
(a) identification
(b) retention
(c) development
11. What is working well, with respect to practices in this space in your company?
12. What aspects of CFO Leadership Development practice present
challenges in both the short-and long-term?
APPENDIX C
About the Research Report Author
Jonathan B. Schiff
Jonathan received his Ph.D. from New York University. Before completing his
Master’s degree in accounting at NYU he worked as a staff auditor with Price
Waterhouse. Recently, Jonathan completed collaboration on a new Harvard
Business School Case with Professor Robert Kaplan on business turnaround
and completed a sponsored research study for the Consortium for Advanced
Manufacturing-International, titled, Enhancing Research and Development
Productivity Through Aggressive Financial Management. Jonathan is also a
regular commentator for the Financial Management Network monthly video
and e-learning service sponsored by the Financial Executives-International
and the Institute of Management Accountants. The series reaches over 950
companies.