CFO Studio Magazine with Robert Falzon, CFO, Prudential

Q2 2017 WWW.CFOSTUDIO.COM 21 year. “It’s all paid off because people take more ownership and accountability in the overall success of the business.” Crystal-clear Reporting With all employees striving to achieve personal and team-based incentives, “we thought it only fair to provide them with greater financial transparency” in an effort to eliminate what Mr. Baldwin called the “surprise factor.” He explained: “We don’t want to reach the end of a quarter or the year and have people surprised that the company or the region has not done as well as they might’ve thought.” So for the past several years, Mr. Baldwin has been issuing a weekly report to all employees detailing the bookings for the current and next quarter, and comparing that number to the quarterly plan and forecast by region for the entire company. The report also highlights anyone who has sold a new piece of business over a certain dollar amount in the past week. “When people see their name in lights, so to speak, they love it,” said Mr. Baldwin, who also calls or sends an email congratulating those high achievers. “That’s been very motivational, and great for morale.” In addition to this weekly report, Mr. Baldwin and the CEO hold quarterly WebEx events (open to all employees) to provide an update on how the company is doing — both regionally and as a whole —what the future looks like, and how the incentives are shaping up. “We try to be as forward-looking as possible to give people an idea of what we expect the results to be for the year,” all in an effort to keep everyone informed from a strategic, operational, and financial standpoint. “We are as open and honest as we can be with our messaging, and we’ve learned that it has to be repetitive and in terms to which people can connect.” To that end, employees are routinely educated on how to interpret the data contained in the reports, what the trends mean to them, and how the numbers are used by management. “We know we’ve been successful when folks start asking questions, and it becomes more of a two-way conversation. We’ve engaged them, and nobody has been kept in the dark,” said Mr. Baldwin. Joseph Tammaro, Sector President at TD Bank, North America, and a CFO Studio Business Development Partner, pointed out that one of the biggest challenges in any organization is an “us vs. them” mentality. “It’s encouraging to hear the ultimate outcome of such transparency. A strong cultural foundation has been established, along with buy-in from the employee base who, as a result, will do what needs to be done to secure the viability of the company to move forward.” Too Much of a Good Thing? Overall, dinner attendees responded positively to Kepner-Tregoe’s methods, but a few questioned whether it was possible to be too transparent. Mr. Baldwin responded by acknowledging that there are, indeed, risks to transparency. “If a region is having a quarter where they don’t think they’ll make their results, but the next quarter is looking strong, we have to be careful that people don’t manage earnings from a soft quarter into a good quarter, or from one year into the next year.” In addition, he said, there’s a fine line between being open and honest, and not creating anxiety or panic when business is not as good as usual. “We have to be very careful about our delivery because the last thing we want is people worrying about possible cost-containment actions or that their jobs may be cut.” Mr. Baldwin believes the frequency of the messaging helps to quell any real fears. “We’ve been doing this for several years now, and people have matured in their thinking and do understand that there are cycles to any business and sometimes there are soft quarters.” And it doesn’t hurt, he added, that “in good quarters, every employee is recognized with a reward for a job well done.” C BUSINESS DEVELOPMENT PARTNERS Bill Baldwin Principal & CFO Kepner-Tregoe, Inc. Discussion Leader Joseph Tammaro Sector President, TD Bank, North America David Stifelman Managing Director, JLL Alison Barger, SVP & CFO, Mathematica Policy Research, Inc. Joseph Budd, VP Finance, Reagent Chemical & Research Michael Corridon, CFO, Strato Company William Curnan, CFO & COO, Advancing Opportunities David Eatwell, EVP & CFO, Genmab, Inc. Neil Glasser, CFO, Michael J. Hennessy Associates Ronald Kasner, General Counsel & CFO, iCIMS, Inc. Michael Losch, Managing Director, YesCFO Elizabeth Miller, VP Finance & Treasurer, Mauser, USA, LLC Peter Pfreundschuh, VP Finance & CFO, Immunomedics, Inc. Michael VanPatten, CFO, Smart Tuition Petros Xeinis, VP Finance & Administration, & Treasurer, Lavipharm Laboratories, Inc. CFO Studio hosts the Executive Dinner Series, including World-Class Companies CFO Dinners and Middle Market Companies CFO Dinners quarterly in New Jersey, Manhattan, Philadelphia, Chicago, San Francisco, and other markets around the U.S. CFO Studio hosts the CFO Breakfast Learning Series in multiple markets, as well, and hosts online Diginars, CFO Studio Receptions, the annual CFO Innovation Conference and the CFO Innovation Awards. The comments made by these guests are their own and may not reflect the opinions and/or policies of their companies or of CFO Studio and/or its promotional partners. CFO GUESTS