Strategizing Growth


As Seen in CFO Studio Magazine Q4 2016  Issue





Acquisitions are tightly woven into Joe Ritzel’s professional bio. They are career high points, he feels, representing both the biggest challenges and the greatest successes. The Senior VP Finance and CFO of Day & Zimmermann (D&Z), a Philadelphia-based, century-old, family-owned company that provides construction & engineering, staffing, and defense solutions for leading corporations and governments around the world, made his mark navigating a series of acquisitions. Ritzel now oversees a finance team that files “over 50,000 W2s a year,” though many of those are for contract employees. Ranked #179 on the 2015 “Forbes” America’s Largest Private Companies list, better measures of D&Z’s size are the number of worldwide locations —more than 150—and revenues, which were $2.7 billion in 2015. In 2001 when the previous CFO retired and Ritzel took over the job, revenues were $1.2 billion. “So it’s been a good period of rapid growth,” says Ritzel. Two acquisitions in that period were game changers in terms of size and complexity: a 2006 purchase of Atlantic Services, Inc., which consolidated D&Z’s position in the power services market (D&Z has a footprint at 70 percent of the U.S. nuclear fleet); and the 2015 acquisition of SOC, which D&Z co-owned since 2008, in the government services area which added about $350 million in revenue.

After a flurry of acquisitions around 2006 and 2007, Day & Zimmermann concentrated on weathering the recession and then organic growth. And now, says Ritzel, “we’re in a solid position in all four of our businesses (engineering construction & maintenance; workforce solutions; government services & security; and manufacturing ammunition for the U.S. government and its allies). “So it’s the right time to invest.”

Getting Ready to Acquire

It appears that Ritzel isn’t the only CFO with those thoughts. According to a report by EY last October, the acquisition appetite is at a six-year high, driven by the need to expand at a faster rate than organic growth can provide. Markets are changing, whole industries are being disrupted, and sector boundaries are blurring, said the report. The long-term prospects for growth look positive, another factor spurring the interest of senior executives in 19 industry sectors, 59 percent of whom expected to pursue acquisitions in the 12 months following that survey, which took place in August and September of last year.

Ritzel says seeking out “the right strategic fit and the right cultural fit” makes the process of acquisition more of a puzzle than it would seem on the surface. You can buy a business that complements your main business, which is how D&Z got into power maintenance in the 1980s.

Or you can buy a competitor, which D&Z did in 1999. The company acquired, Mason & Hanger, was actually in three of the four businesses that D&Z was in; everything but staffing. For that reason alone, says Ritzel, “it was a great deal and the largest in company history.” Ritzel was on the front lines of the purchase and integration as VP and Controller for the then Government Services group.

In this 18-month period, he oversaw that integration, while at the same time the company experienced a changeover in the CEO’s office as Hal Yoh replaced his father and the third generation took over the reins of the family business. At the same time, with the installation of its first ERP system, SAP, the company hit some bumps in the road. “We were having trouble processing invoices. It was a nail-biter of a time, and we had just done the biggest acquisition we had ever done,” says Ritzel.

He adds the capper: “Put those three things together and that’s when I became CFO,” stepping into the top finance job at D&Z on January 1, 2001.

Handling the Challenges

The integration of the Mason & Hanger acquisition went pretty smoothly. Having been involved from the start, Ritzel says, he worked to “get all of the synergies out of it.” The startup of SAP was more challenging. Some of D&Z’s billing is complex, Ritzel admits. Government invoices, for example, have to be precise, “down into what they call CLIN (contract line item number) level billing.” He convened teams together to focus on “what had to happen,” not just to straighten out the invoicing problem, but to deliver the reports that were needed by the Business Unit management.

He says the hard work was worthwhile. “This truly enabled us to change processes and get people more focused. It was more than just putting in an ERP. By 2003 we got everything streamlined and operating more efficiently, and that really jumped us to the next level.”

Dividing His Time

Ritzel has a document that he hands out to all the folks in Finance. The document outlines in clear color blocks the scope and potential value of the six critical areas that financial work is involved with, from transaction processing to regulatory reporting to management reporting, to decision support and analysis to planning and forecasting to performance/value/risk management. “The key is that in order to accomplish the priorities in all of those buckets, financial leaders need to work in four different roles. And you need to know what percent of your time should be put toward each role: Operator, Steward, Strategist, Catalyst.”

Back in 1983 when Ritzel joined the company as Controller for a newly acquired subsidiary, he reported up through operations and not through the CFO. But that changed. Financial team members now report directly through the Finance chain and have a dotted line to operations. Being a good business partner requires finance executives to perform all four of the above roles regularly, even Operator, which involves problem-solving, customer focus, and building effective teams. “Getting the percentages proper in terms of how much of those roles are devoted to those six critical areas is what it’s all about.”

Says Ritzel, “I try to make sure I am spending more time each year as a strategist and catalyst as the finance team continues to get better. Generally, the higher up in the organization a finance leader goes, the percent of time in these two categories should increase.”

With his interest in seeking out acquisition targets, it’s a given that Ritzel will be spending more and more time as strategist and catalyst.

Johnson & Johnson’s CFO Dominic Caruso Featured in Latest Issue of CFO Studio Magazine



Lorenz Capalad

(732) 868-0000 x118

September 8, 2016


Johnson & Johnson’s CFO Dominic Caruso

Featured in Latest Issue of CFO Studio Magazine

SOMERSET, NJ – Dominic Caruso, the chief financial officer of Johnson & Johnson of New Brunswick, NJ, is guided in his decisions by the company’s Credo, penned by General Robert Wood Johnson II in 1943. When he receives a call from the head of one of J&J’s business units asking him to weigh in on an ethical matter, Caruso says that the General’s words, though written in a far different era, signal the right solution.

In the Q4 2016 issue of CFO Studio magazine, a cover story about Caruso’s leadership offers a case in point dating from 2007. Caruso was at that time CFO of the company’s medical devices segment and had to make a decision that was “gut wrenching” and “financially painful,” but was ethically correct. “Our Credo has lots of constituencies: doctors, nurses, patients, employees, and our shareholders. Our shareholders are listed last, but it’s really just another of our responsibilities,” he says in the article.

The cover story also describes Caruso’s role in developing leaders in the finance area, describing J&J’s Finance Leadership Development Program, a two-year rotational program that gives recruits new to public company finance the chance to work in multiple areas of the business in three eight-month assignments.

Other points touched on include Caruso’s thoughts about building long-term value versus reacting to short-term shareholder demands, and the ROI of J&J’s significant sustainability program.


About Johnson & Johnson

Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. The company embraces research and science — bringing innovative ideas, products, and services to advance the health and well-being of people. Approximately 126,500 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.


About CFO Studio

CFO Studio and CFO Studio magazine deploy the best of new and traditional media to promote finance executives as business and strategy thought-leaders. The magazine, published quarterly by CFO Studio and underwritten by great promotional partners, features business profiles and strategic advice for CFOs in the New York, New Jersey, and major metropolitan areas including Philadelphia and Chicago. Andrew Zezas is the host of CFO Studio and the Publisher of CFO Studio magazine. The company’s third annual CFO Innovation Conference & Awards will be held in spring 2017. Nominations are now open at

Visit to watch interviews with New Jersey area CFOs, and to register for Executive Dinner events in New Jersey, Manhattan, Philadelphia, Chicago, and San Francisco, and for the CFO Breakfast Learning Series. All events are available to CFOs at no cost. To read articles that have appeared in CFO Studio magazine, or for subscriptions and advertising opportunities, visit


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De-risking Pension Plans


As Seen in CFO Studio Magazine Q3 2016 Issue


De-risking benefit and pension plans, a trend set in motion by the recession, new reporting requirements for pension liabilities, and waves of baby boomers reaching retirement age, was the discussion topic at a World-Class Companies CFO Dinner held recently at MetLife Stadium, and hosted by CFO Studio. The unfunded liabilities that pensions represent on a business entity’s balance sheet can hurt the company’s ratings from debt agencies and its attractiveness to investors. De-risking strategies are intended to mitigate three primary issues: the effects of market volatility on monies invested in the pension fund, interest rate risk, and consequences of events that do not meet actuarial assumptions, such as having a large number of employees reach retirement at the same time.

“There are always differences between reality and those assumptions,” explains Claude Draillard, Vice President, Finance, Dassault Falcon Jet Corp., the evening’s discussion leader. Two frequently encountered discrepancies are “when the population changes dramatically and when the rate of return on the assets is much lower than planned. In both cases, you need to fund those differences at some point … and that could impact your cash.”

There is no one solution related to de-risking a pension plan. “De-risking can take widely different forms once you have analyzed your population,” said Mr. Draillard.

Some de-risking strategies include offering retiree buyouts or purchasing an annuity that effectively transfers pension obligations to a private insurance company. “Is it in your company’s best interest to offer retirees a lump-sum payout instead of monthly pension payments? These are questions that must be kept in mind,” says Mr. Draillard. “It’s important to analyze the situation all the way to its final outcome.” He adds, “Decisions made today about pensions will have their full effect for the company’s financials in as long as 30 or 40 years.”

New Job for CFOs

Pension plan management, once an assignment of the benefits department, is now on the finance agenda. The actions the CFO takes depend on the circumstances of the company’s populations and how the pension plan relates to your long-term strategy, explains Mr. Draillard.

“There are many questions regarding this. Where is the emphasis in your company? Is it in keeping cash for the short term or is your company more interested in making sacrifices with an eye to the future?” he asks.

“Pensions are an important tool in the box to help with retention,” says Mr. Draillard. His company’s plan is richer than most in order to do so. “It has become not only a retention tool but it helps us attract seasoned professionals. Aircraft mechanics make up a shrinking population. A pension is meaningful to a mid-40s [FAA-licensed] professional. It isn’t as important to millennials as it is to these seasoned professionals.”

Cash-flow Negative

According to Cerulli Associates, a leading research firm specializing in asset management and distribution trends worldwide, America’s pension system will turn cash-flow negative this year. This deficit will continue to increase as baby boomers retire. “This has significant impact on CFOs and must be kept in mind when creating a de-risking plan,” asserts Mr. Draillard.

A CFO Studio business development partner, Isaac Buchen is Leader of PwC’s Pension Risk Management practice. At the dinner he recommended “a series of steps that will allow plan sponsors to understand the nature of risks embedded in the current plans, establish key risk-management approaches, and embed a culture of periodic monitoring to make sure that the risk-management steps are having the desired effect.”

Mr. Buchen explained in an interview that “plan sponsors generally have four levers at their disposal to address pension risk:

• Benefit lever or changes to the plan design, including offering lump sums to terminated vested participants,

• Investment lever or changes to the overall asset allocation,

• Contribution lever or developing a strategy of how to fund the plan and potentially making non-cash contributions, and

• Insurance lever or buying annuities for participants from an insurance company.”

As the dinner discussion drew to a close, the group gathered in the Jets Green Room at MetLife Stadium overlooking the field where the CFO guests watched the New York Jets play the Buffalo Bills.

Participants left the discussion with an understanding that there is a clear trend toward de-risking benefits and pension liabilities, and that the actual approaches taken are many, depending on the industry, the composition of groups covered by the pensions, and strategic priorities.

Copyright 2017