CFO Studio | Monthly Archives: June 2016 | Page 5June 2016 - Page 5 of 6

Hiring Outside the Box

As Seen in CFO Studio Magazine 2015 Q3 Issue

Recent trends have shown that C-suite executives increasingly recruit talent from industries outside their own. Executives often find that people from varying sectors can have an excellent handle on best practices, more so than those with deep experience in a single field. One example is the former CEO of Louis Vuitton who, according to the Harvard Business Review, hired executives from Toyota to improve supply chain management and IT integration. Thanks to input from experts outside of the luxury-brand field, today Louis Vuitton is ahead of most of its competitors in sharing with suppliers real-time information about customer demand.

Career mobility often helps transfer best practices across different sectors and products. A skill set that at first glance may seem irrelevant to a particular field, may actually help inject new life into a management or design team. For example, an executive formerly with Apple, a company known as much for its design and style as its technology, may have excellent ideas for the development of high-tech clothing or jewelry lines, or to run a luxury watch brand that looks to meet precise performance benchmarks. The possibilities for this type of cross-pollination are endless once C-suite executives expand their views of what comprises a valuable skill set.

The X.Q. Factor

As Seen in CFO Studio Magazine 2015 Q3 Issue

Can companies achieve the perfect workforce by analyzing the psyche of prospective employees? The big-data companies designing these tests say yes, and more and more employers are inclined to agree. Everyone from the Chili’s restaurant chain to the world’s largest hedge fund, Bridgewater Associates, administers personality tests to prospective and current employees looking for the correlation between people’s answers and their job success rate.

Relying on equal parts psychological assessment, New Age questioning, and mathematical algorithms, this fast-growing $2 billion industry purports to define and measure the behavioral, cognitive, and cultural traits that make up a successful employee.

But can these tests really predict job performance? Like the I.Q. (Intelligence Quotient) and E.Q. (Emotional Quotient) assessments, the X.Q. test is supposed to match the best people to the jobs at which they will most excel. However, algorithms cannot always account for the human factor. People have the capacity to learn and take on new skill sets, even becoming extremely successful doing jobs that go against personality type. (Case in point: We are all charging our iPhones right now thanks to Nikola Tesla, the ultimate loner and recluse. How would Tesla have fared on an X.Q. test?) Until the effectiveness of “people analytics” passes the test of time, a good vetting of the resume and face-to-face interview may still be the best ways to find successful employees.

Reengineering Accounting

As Seen in CFO Studio Magazine 2015 Q3 Issue and CFO Studio On-Camera Interview

-INTERVIEW BY ANDREW ZEZAS-

Luke McKinnon has spent much of his career in the engineering industry, and since 2009 he has served as executive vice president and CFO of New York City–based consulting firm the Louis Berger Group, which provides architecture, construction management, and economic development services. Though his focus is on finances (previous roles include chief financial officer at AECOM and operations controller at URS, which are both in the same business areas as the Louis Berger Group), he approaches his work like an engineer, building or developing an accounting department to support the operational departments. Mr. McKinnon will be leading the CFO Studio Middle Market CFO Executive Dinner on “Preparing for Private Equity” on Sept. 10, but in the meantime, he sat down with Andrew Zezas, publisher of CFO Studio magazine and host of CFO Studio On-Camera, to discuss how aligning people, processes, and technology can yield broad benefits.

(ANDREW ZEZAS) You were brought in [to the Louis Berger Group] to kind of shake things up. How have you improved the accounting department of the company?

MCKINNON: When I got there, we were touching an invoice 15 times when it would come into Accounts Payable. Vendors would send me bills for every transaction. So we looked at technology where we could have our vendors submit electronically to us, in one bill at the end of the month. We went from approximately 5,000 invoices a month and nine people in the department, to 3,000 invoices a month and three people in the department. Vendors were no longer saying, “Did you get my invoice?” because they could see that they submitted it to us electronically, and it was going through the process.

Tell me about how these improvements benefited operations.

MCKINNON: I’ve got project managers that are sitting all around the world, so if they’ve got an employee that submits an expense report, before, it used to be in Excel format. We went to electronic software. Now, an employee can submit, and it goes to the project manager immediately. It was taking six to eight weeks to get an employee paid, [and now] if he submits his expense report on a Monday, the employee could have payment by Friday. You get an employee who no longer has to worry, “How am I going to pay my credit card?” The other benefit is, now, when those charges go onto a project billed to our client, the accuracy is not six months old, it’s from within the last week or two. They know it’s a timely bill.

In your whole career, you’ve been a guy who’s either been building accounting departments or rebuilding accounting departments. What’s the attraction to you there?

MCKINNON: I like the challenge. Whether it was fixing the AP department or a monthly close, or our timesheet process: You’re making sure it works for everybody, making it more efficient, making it more accurate. I find it exciting, I really do.