What are the secrets of success of today's high-performing CIOs? Yesterday morning at the MIT Sloan CFO Summit, I was struck by how alike they are to the critical success factors voiced by top CFOs. Rather than the oft-heard natural born enemies that the CIO and CFO are supposed to be, they turn out to be two peas in the corporate pod -- both buffeted by rapid change, beset by complexities no one person could possibly resolve, still...
battling old stereotypes (Bean counter! Poindexter!). The CIO and CFO each must possess highly specialized knowledge to do their jobs, yet, as yesterday's conference made clear, the superstars also function as business strategists, revenue generators and enterprise risk gurus. They are both heralded and reviled by their business colleagues for their tendency to be the "voice of reason."
In a panel on Achieving Sustained Excellence, highly successful CFOs were asked to talk about the professional principles that have helped them excel. Here are 10 of their critical success factors.
Moray Dewhurst, CFO, NextEra Energy Inc., a clean energy company with revenues of more than $15.3 billion. Dewhurst has a degree in naval architecture and marine engineering from the Massachusetts Institute of Technology and a Master of Science in management from the MIT Sloan School of Management.
1. Have a clear understanding of how your efforts make money and create value for your company. There are "endless sources of distraction in business" and countless interesting opportunities for investing resources, Dewhurst said. "It's very easy to go astray." Knowing how your efforts fundamentally help the company make money will guide your resource allocations.
2. Maintain a relentless focus on continuous improvement. "You can always get better," and should get better, he said, because your customers are never satisfied.
3. Don't just measure against internal goals. Benchmark performance against competitors in the industry and against companies outside the industry that do similar things.
Have a clear understanding of how your efforts make money and create value for your company.
Deborah Thomas, CFO, Hasbro: A key player in the toy company's expansion into global markets and numerous acquisitions, Thomas boiled down her critical success factors to three easy-to-remember narratives: the mushroom team, Mr. Potato Head and Bill Belichick.
4. Turn on the lights for your employees, so they can see what they're doing. When Thomas joined Hasbro's finance team she discovered the self-named "mushroom team," so-called because they said they were "always in the dark" on company strategy or even department goals. Employees should be incentivized by the same goals that incentivize their leaders. Once they were out of the dark, her team almost immediately became more efficient, reducing reporting time from over five weeks to two days.
5. Grow your own talent. Thomas told the story of an employee who joined Hasbro at age 16 to work on the assembly line that made the Mr. Potato Head toy. Under a Hasbro education program, she earned a college degree, acquired sophisticated computer skills, received leadership training, and now runs a global department.
6. Provide constant coaching and timely feedback, not annual reviews. "Can you imagine if The Patriots' Bill Belichick only gave team feedback once a season?" Thomas said. Hasbro's mentor program keeps senior people connected to "up-and-comers."
Nicholas Fanandakis, CFO, DuPont: In 1902, DuPont was the country’s main gunpowder supplier, but it almost ceased to exist when its president, Eugene DuPont, died suddenly. With the business on the chopping block, three young cousins (all MIT graduates) bought out the company and proceeded to reinvent it, said Fanandakis, who has been with DuPont since 1979.
7. Look forward, not where you've been. The cousins formulated a vision to become "the big company" and pursued new markets to make that happen. Pierre Du Pont, while not named CFO, functioned as the financial guru of the bunch, developing a series of metrics to guide the transformation, many of which -- such as return on assets -- still guide big company performance today.
8. Form an overarching vision and decide how to make it happen: Science was foundational to moving forward in 1902 and remains a big factor in DuPont's culture today.
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Chris Kreidler, CFO, Sysco: Formerly at Yum!, Kreidler joined Sysco in 2009 at a time when double-digit growth had slowed to less than 1% over the past three years, a reversal the food service provider saw coming, and launched a business transformation to address it. Can a company be excellent while undergoing extreme change?
9. Explain to employees why short-term pain is necessary for long-term gain. "It's hard to communicate and motivate around that," Kreidler said, but it is essential. Especially in a radical business transformation, employees must understand the reason for the changes they are being asked to make.
10. Know the skill sets of your employees. Sysco needed to assess whether the best people of its "excellent years" were the best people for the transformation -- and if not, determine what skills they needed and who else needed to be hired. Kreidler inherited some 3,000 people employed by the finance function and no organizational chart -- let alone a detailed inventory of employee skill sets. He is playing "catch-up ball" to rectify that.