Finding and Developing World-Class Finance Talent
Finance executives from a wide range of businesses meet to share strategies on talent management
CFO Studio recently held its inaugural Executive Dinner Series Meeting at Boulevard Five72, in Kenilworth, NJ. The discussion was led by Richard Veldran, SVP and chief financial officer of Dun & Bradstreet and attended by more than 20 finance executives from dynamic companies around New Jersey, the group gathered to discuss the topic of finance talent acquisition and retention. The event was sponsored by New Jersey- based accounting firm Rothstein Kass and Real Estate Strategies Corporation.
For CFOs, the topic of finding – and holding on to – talented employees is critical. “It is critical for us as CFOs and execs to have a great set of people working underneath us,” said Veldran. At the end of the day, I’m not the expert in every single area of finance, but my job is to find the right talent in those areas, bring them in, help them to develop and grow in the company, and retain them. The CFO’s job is really about talent scouting, talent acquisition and talent retention.”
Hiring for Experience or Character
Andrew Zezas, CEO of Real Estate Strategies Corporation, host of CFO Studio and publisher of CFO Studio magazine, asked the group if past experience in the same industry was an important factor when selecting job candidates.
“I’m not just looking for industry experience because business is business, in any sense,” said Veldran in response to Zezas’ question. “For me, it’s really about leadership, intellectual curiosity, and attitude. Can this person take on a challenge and jump in the pool when they don’t know what’s at the bottom of the pool? Those are the people I want. At the end of the day its about creating value, it’s about driving the top line, it’s about improving the bottom line. Any industry will have nuances, but I expect, if a person has intellectual curiosity, they’re going to jump in and learn to understand the business.”
Mark Mishler, EVP and chief financial officer of Breeze-Eastern Corporation agreed, saying, “It has to do with individual capability, not industry experience.”
Accounting vs. Business Experience
At first attendees were split during the discussion of the importance of past industry experience but, the executives found common ground while discussing the value of candidates with experience in functions beyond accounting. “One of the things I’ve learned is that you have to be really patient when hiring, and not to rush into things,” said Gene Cancellieri, vice president of finance at Oticon, Inc. “If you make a mistake, you’ll pay for that mistake over and over again. It’s a challenge to find managerial accountants. You really need to find people that want to understand the business rather than just be at the office. The career path I grew up with is you start in public accounting and then you go into an industry, but I’m not so sure that model really works that well anymore in private industry.”
Edward Imparato, chief finance officer of St. Dominic’s Home, personally benefitted from leaving finance for a period of time. “I was controller of a public company, then I became the treasurer of a public company and I was sure I was going to be CFO of that public company,” said Imparato. “But, our CEO told me I was going to go run a division. At the time, I didn’t see how that move made sense, but in hindsight, it was the best thing I could have done because when I came back to become CFO I actually knew the business from the ground up. I knew the issues about running plants, running distribution, marketing, and other issues you can’t get exposed to by staying at corporate headquarters. The experience really changed my managerial skills, and when I became CFO … I carried a lot more credibility with the folks who were actually running the business divisions.”
Finding a Fit
Leadership skills, intellectual curiosity, and subject matter expertise are what every boss seeks, but how about finding employees who fit in with the finance group’s dynamics? The meeting participants discussed the importance of a new hire’s dovetailing with fellow workers.
Jonathan Stearns, founder and managing director of Stearns Associated Partners, LLC, discussed conducting a psychological profile of the finance team prior to beginning the hiring process in order to identify the type of candidate who would work well within the group. “We try to do a 360-degree assessment on our group and feed the results back into the hiring process,” said Stearns. “Instead of narrowing the focus to looking for a person with a particular skill or experience, we start with how we work and our tribal knowledge, and then we profile employee candidates who would fit into that.” Many of the other executives had similar, but less formal, methods of evaluating the characteristics of what type of candidate would be a good fit. Stearns will host an upcoming Executive Dinner Series meeting on the topic of “Debt and Equity in the Middle Market: Uncertainty, Opportunity, and Preparation” on February 26, 2014.
Defining the A Team
Shane Kovacs, CFO of PTC Therapeutics, Inc., brought up the question of what makes an A player vs. B player vs. C player and where those players are needed on a team that consists of all levels from clerical to a VP. Many of the participants agreed that sometimes an A player isn’t the employee who is hungry for advancement but one who is passionate about what they do.
Ed Sitar, CFO of Healthagen, added that A player criteria differs from role to role within the group. “There are roles that you want filled by people who are extremely competent at what they do, who enjoy what they do, but who may not be able to or even want to move to the next level,” said Sitar. “They are an A player as long as they’re somebody you can trust.”
However, in smaller companies the terms A, B, and C players really are of little consequence. “I have a very small staff,” said Robert Arnold, VP of finance at MonoSol RX. “I have to rely on my people; so the employees who head up my accounts receivable and accounts payable have to be highly competent in what they do. That person might not be my next general accounting manager or next assistant controller, but if she doesn’t do her job very well, I have a real problem.”
How do the participants ensure that they have placed the right players in the right seats? Most agreed annual evaluation is key. Thomas Bongiorno, VP, corporate controller and chief accounting officer of Quest Diagnostics, shared an evaluation system his company uses. After charting his department’s workflow, he determines what type of employee is needed in each role. Some roles require subject matter experts, some require big-picture thinkers, and others require employees who are on an executive track.
Zezas asked the group for an overview of how they develop key staff members. Cheryl Marks-Young, CFO of Easter Seals NJ, said she developed tracks to create opportunities for employees at every level. For example, Marks-Young created a development track for employees working in accounts receivable who want to stay in accounts receivable and become managers in that function. For those who aspire to become a CFO, she developed a development track for that as well. She explained that creating development plans and career tracks also helped employees, especially those who wanted to advance, avoid getting stuck waiting for a superior to advance. “Employees take their development plans very seriously,” said Marks-Young. “My vice president of accounting was an analyst who wanted to be an executive and now he is.” Marks-Young also created cross-functional teams so, for example, a person’s success in accounts payable is tied to someone else’s success in cash management. This leads to improved knowledge sharing and better preparation for employees working toward management positions.
Many of the meeting participants said their most effective development and retention strategy was to give employees the opportunity to succeed. For Michael Eldredge, EVP, chief operating & financial officer and secretary of American Sensor Technologies, hiring high-level talent with impressive experience wasn’t possible when the company first launched 14 years ago; so he leveraged mentorship and opportunity to secure candidates with great potential. “We couldn’t afford the all-knowing executives with great resumes,” he said. “But I could bring in candidates who were willing to learn and bring them up through the company. We took care of them with bonuses and shared the company’s success with them. People recognize that you carry through on that promise.”
“My team and I have regular communication on my expectations for behaviors, tasks, and priorities,” said Lalit Ahluwalia, CFO of Ferring Pharmaceuticals, Inc. “It is critical for me to let my staff know I have their back and provide plenty of opportunities for their exposure to senior management.”
Another strategy that worked for several of the finance executives at the table was to avoid micromanaging and give employees a chance to prove themselves. “If your staff isn’t seeing you every five minutes [but you are instead] encouraging them to be a leader themselves, to take risks and to take responsibility, it goes a long way toward keeping people happy and engaged,” said Eldredge.
Part of understanding how to develop a staff member is to understand that person’s history beyond what you can read on a resume. “When you’re hiring, you’re not hiring newborns; you’re hiring used people,” said Michael Van Patten, CFO of Princeton Power Systems. “They might be abused people, too. You’ve got to get at it and find out how they were used and how they were abused by previous employers and work through that. Unless you are hiring people right out of school, which I don’t, most people have had a bad experience on the job at some point.”
A good understanding of both history and goals has to go both ways between an executive and his team. Zezas spoke about why it is important to make sure your staff knows how each individual role fits in with the larger goals of the company. “You talked about fit when hiring somebody, but it’s also about the employee or prospective employee understanding where they fit in at the organization and how they impact what happens downstream,” he said. “People want to be connected to other people and they want to have purpose. When people spend eight to 10 hours a day, five days a week doing something, they want to know how that affects the overall business.”
Jay Shepulski, partner at Rothstein Kass, shared his experiences with just taking some of the junior staff out for a cocktail hour and making them feel like colleagues instead of just subordinates. “They felt valued and started to have a conversation about the future of the business,” he said.
Communicating the mission of the company can also help create an ownership mentality among the staff and help create an emotional bond to the company. This type of bond can go a long way toward retaining talent. Rosalie Mandel, principal at Rothstein Kass spoke about getting her staff to become part of the company’s mission and see themselves in the company’s vision for the future. “Our people are like owners of this business and put themselves in the owner’s shoes,” said Mandel. “We ask, ‘how are you going to drive this business into the future? Let’s talk, let’s come together as a team and come up with how we’re going to drive this forward.’ When people feel like they’re a part of the future, there’s a reason to come back to work every single day and not look for another job.”
In the end, the participants agreed that the greatest retention strategy is for the CFO and other members of senior management to personally provide support to their staff.
Veldran shared a piece of advice he received early on in his career, which was, if you want to get noticed and move up in the company, just do a great job and opportunities will come. “Now I tell people when they start working for me, ‘If you try to over-mechanize your career and find ways to be noticed, it’s going to backfire. Just do a great job and you’ll get noticed. If you make a difference, I’ll give you the experience to succeed. I’ll give you a chance to do different things, to dive into things you’re not used to before. If you fail, it’s okay. That’s just a part of learning. But if you succeed, that’s great. The fundamental way I think about managing talent is to give people a chance to thrive, unleash them …. Let them thrive. They’re going to fail sometimes, but your job as the manager is to actually protect them and to give them the backup and support.”
Sidebar: The Unique Talent Challenges of High Growth Companies
Finance executives at high-growth companies face a unique staffing issue. The needs of their department evolve quickly in order to keep pace with the growth of the business. The employees who may have been considered A players and subject matter experts when they were hired may not be a fit within a year or two. “Most of my career has been in high tech, high growth areas,” said Lisa VanPatten, CFO at Kitara Media. “I was VP of finance and controller of Vonage. When I joined the company, we were a $30 million business. Two years later, we were at $600 million, so the skill set that I needed in employees at $30 million was not what I needed at $200 million, at $300 million, and at $600 million. There was no middle ground to grow. It is such a challenge when you’re in a high-growth industry to develop your staff. Sometimes you can’t. The people who can handle the stress and who can develop quickly are the ones that stay. I’m in the business of getting the talent that I need at the moment.”
Andreas Rothe, CFO at Harsco Infrastructure, also has experience in high-growth companies and said that anticipating the challenges his department would face in the future, and hiring to meet those challenges, is key. “Our company went from $200 million up to a billion within two years,” said Rothe. “You just have to say, ‘What will be my challenge tomorrow?’ That’s what you hire for. You may not be sure what your challenge will be the day after tomorrow but that’s where you have to focus your attention in order to develop the people who can keep up.”
This is also the case in businesses growing through acquisition and businesses actively raising capital. “I’m in the private equity world and we’ve doubled the business three times in three and a half years,” said Brian Giambagno, CFO of Action Environmental Group. “I look out for the next step, knowing that if I have another round of acquisition, another round of finance and another round of growth, the skills that make an A player [will] keep changing. My challenge is, can I stretch my A players today to be A players tomorrow? I give the incumbents the opportunity by making sure they have the necessary resources and by putting the right people below them to help lift the whole organization and see if they’re the right player.”
Lalit Ahluwalia, Chief Financial Officer, Ferring Pharmaceuticals, Inc. www.cfostudio/LalitAhluwalia
Robert Arnold, Vice President of Finance, MonoSol Rx www.cfostudio/RobertArnold
Thomas Bongiorno, Vice President, Corporate Controller & Chief Accounting Officer, Quest Diagnostics www.cfostudio.com/ThomasBongiorno
Gene Cancellieri, Vice President of Finance, Oticon, Inc. www.cfostudio.com/ GeneCancellieri
Michael Eldredge, Executive Vice President, Chief Operating & Financial Officer and Secretary, American Sensor Technologies www.cfostudio.com/ MichaelEldredge
Brian Giambagno, Chief Financial Officer, The Action Environmental Group www.cfostudio.com/BrianGiambagno
Edward Imparato, Chief Financial Officer, Saint Dominic’s Home, www.cfostudio.com/EdwardImparato
Shane Kovacs, Chief Financial Officer, PTC Therapeutics, Inc., www.cfostudio.com/ShaneKovacs
Rosalie Mandel, Principal, Rothstein Kass www.cfostudio.com/RosalieMandel
Bert Marchio, Chief Financial Officer, Edge Therapeutics www.cfostudio.com/BertMarchio
Cheryl Marks Young, Chief Financial Officer, Easter Seals NJ www.cfostudio.com/CherylMarksYoung
Mark Mishler, Executive Vice President & Chief Financial Officer, Breeze-Eastern Corporation www.cfostudio.com/MarkMishler
Andreas Rothe, Chief Financial Officer, Harsco Infrastructure www.cfostudio.com/AndreasRothe
Jay Shepulski, Partner, Rothstein Kass www.cfostudio.com/JayShepulski
Jonathan Stearns, Founder & Managing Director, Stearns Associated Partners, LLC www.cfostudio.com/JonathanStearns
Lisa VanPatten, Chief Financial Officer, Kitara Media www.cfostudio.com/LisaVanPatten
Michael VanPatten, Chief Financial Officer, Princeton Power Systems, Inc. www.cfostudio.com/MichaelVanPatten