Michael Riccio has always been a “big picture” kind of guy, and as CFO of Panasonic Corp. of North America — the first non-Japanese executive to hold that position — he gets to satisfy his thirst for knowledge every day.
“We used to provide products, but increasingly we’re focusing on end-to-end business, solar, and other solutions,” says Riccio, who’s been with the Newark-based company — a key component of the Fortune Global 100 firm Panasonic Corporation — since 1986.
“In this phase I’m acting as a change-management leader, reorienting Panasonic from its former vertical product alignment to a horizontal development scope that’s appropriate for the new direction of the company.”
The most exciting part of being a CFO is getting involved in every aspect of the business, he adds.
“As a member of the management team here, I’ve been engaged in a wide variety of financial, operational, and strategic activities, including our 2013 move from Secaucus to Newark. Every day is a fresh one here.”
A Bergen County resident who earned his bachelor’s and master’s degrees at Rutgers–Newark, Riccio served as the company’s vice president and controller before being promoted to CFO in February 2013. Early on, though, he set his eyes on that spot.
“Two of my uncles were CPAs at the then-Big Eight accounting firms — they later went on to become controllers at other firms — and they had a lot of influence on me,” he recalls. “I could see that they both enjoyed their work and were challenged by it, so I formally declared for an accounting major in my junior year at Rutgers.”
But Riccio has a competitive streak, and devised a long-range plan to one day become a CFO. It involved a series of stepping-stones.
The first was to get past the CPA exam, which he nailed right after earning his BA; the second was to get a position at a CPA firm, so he could get solid experience in the business world. The third involved getting an MBA, which he accomplished while holding down a full-time job.
“I was picky about joining a CPA firm,” he says. “I had a chance to join a Big Eight firm, but I was concerned about getting pigeonholed into a set of narrow responsibilities. On the other hand, a small firm wouldn’t give me the national and international exposure I wanted.”
Riccio found a perfect match with J.H. Cohn, a Roseland-based accounting-consulting firm, now known as CohnReznick, which is currently ranked as the 11th largest CPA firm in the United States, according to Accounting Today.
“I was involved, on a hands-on basis, in audit, tax, SEC filings, manufacturing, and other matters, like service and distribution companies, that helped me to develop an end-to-end view of business processes.”
He left J.H. Cohn in 1983 to join Sealed Air Corp. — the Elmwood Park, NJ–based manufacturer of Bubble Wrap cushioning and other products — as corporate accounting manager. It turned out to be a key stepping-stone to Panasonic.
“Sealed Air solidified my exposure to manufacturing,” he recalls. “It also reinforced my project development and project leadership skills.”
Riccio’s perspective evolved as he became a high-level insider at Sealed Air and then at Panasonic. His responsibilities were more hands-on as he helped to develop and implement strategies.
“Today at Panasonic that approach is part of my close relationship with our CEO, Joseph M. Taylor,” says Riccio. “He sets the strategic direction for the region, based on the parent company directives, and then I’m responsible for ensuring that the systems, infrastructure, and funding are there.”
It’s clear that Riccio, who enjoys challenges, has met and overcome more than his share during his brief tenure as CFO.
One recent assignment involved Panasonic Corporation of North America’s decision to relocate from its longtime Secaucus site to a more modern, ecologically friendly, 337,000-square-foot headquarters in Newark that houses executive, administrative, sales, and support staff. But the assignment turned out to involve a lot more than just a move.
Part of the task was logistical: taking charge of site selection and interfacing with contractors who would build the structure, which was designed to meet Leadership in Energy and Environmental Design (LEED) gold certification for new construction, and LEED platinum certification for its interior.
But the move itself — of some 1,000 employees and contractors — was part of a broader assignment involving a “change management” project: aligning the global goals of Panasonic’s consumer, industrial, and service business units with the company’s regional goals and objectives.
“I have to admit that when our CEO handed me the assignment, I thought that it wasn’t exactly a traditional responsibility for a CFO,” Riccio says. “It was a wide-ranging responsibility. The design of the new building reflected the new philosophy — fewer offices, so there would be fewer barriers between departments, and more interaction between employees.”
Riccio was in on the ground floor of the makeover, approving the project plans and other documents that laid out the human resource and physical asset management planning; and he also drew on his extensive managerial experience to bring together the experts who could manage the makeover at a micro level.
“I relied on experts, but exercised oversight,” explains Riccio. “We drew up budgets and timelines, and held meetings at least twice a week to … [keep tabs on spending] and resolve any discrepancies early on. At the same time, I had to be careful about ‘scope creep,’ or the desire to expand certain projects beyond a reasonable limit. In those cases, saying ‘no’ could be as important as saying ‘yes.’?” He also had to work with key stakeholders to get buy-in from Panasonic’s business units.
“Everyone understood that we were going to an open environment, and I worked with team leaders to iron out the details with everyone involved,” recalls Riccio. “It involved a different way of looking at your business unit.”
The new paradigm involves merging a global view with a local one, he says.
“My role involves drawing on expert input and integrating the various views, in part utilizing the multifaceted experience I gained during my stint at the CPA firm where I worked with different stakeholders, and at Sealed Air where I helped to manage disparate projects and budgets.”
The idea, according to Riccio, is to align outcomes. A far-reaching overhaul like this could easily get mired in delays and cost overruns. But that’s not the way Panasonic does things. “All of the necessary departments pulled together and we brought it off — on time and under budget,” he adds.
The success of this project, like many others, “is largely the result of building a cohesive team,” Riccio says, characterizing the task as one of many responsibilities of today’s CFO. “You have to consider the basics of hiring, training, and motivating people to make things happen in a timely, accurate manner. But you also have to hold them accountable to established goals and objectives, and doing that means you have to lead by example while communicating your vision.”
At some companies, top management may have an idea and a plan to implement it, but by the time it filters down, the message may get scrambled beyond recognition, resulting in costly delays and do-overs. Riccio avoids this kind of trouble by sticking to some basic principles.
“It’s part of being a trusted partner,” he says. “My objectives cascade to the leadership team and to its members, so we’re all moving in the same direction, while engaging in coordinated action to reach our goals and objectives.
But doing that successfully depends on communicating effectively. I’ve found that if you start with the overarching goal and then break it down into smaller tasks, it’s easier for the individual team members to understand what needs to be done, and where their position in the ‘accountability tree’ is.”
Eye on the Ball
After the move, it was time to forge ahead on the change-management project, which is a work-in-progress. Like a juggler, he’s always got one more ball to keep in the air.
“My ongoing responsibilities include reporting to the CEO and the management committee about our financial and operational progress, including revenue, profits, and cash,” Riccio says. “Along with that, I’m also responsible for supporting the business, which encompasses finance, but increasingly includes Information Services (IS) and other segments, so I’m always interacting with a variety of departments. It keeps things fresh.”
It also keeps Riccio on his toes.
“Before I was appointed as CFO, I was involved in some major IS projects, so I was able to get some hands-on experience,” he notes. “That came in handy when I became CFO, since IS now reports to me. … I have to be conversant with the concepts and issues. Also, I meet with department heads on a regular basis in order to minimize surprises — we don’t have silos of responsibilities here. That puts me in a position to support all of the departments and encourage them to work in a cohesive manner.”
But today, with increasing regulatory oversight, CFOs like Riccio have to balance that support with an understanding of corporate governance issues.
“It’s almost like golfing, where all the players have to understand where the fairway ends and when you’re getting close to moving out of bounds,” he says. “Although the company has checks and balances in place to ensure compliance with corporate governance standards, the board of directors has entrusted the CEO and me with this responsibility; and in connection with that we’re visited on a periodic basis by the internal auditors.”
Riccio is excited about Panasonic’s plans for the future, and his involvement in those plans. “It’s no secret that in addition to streamlining the organizational process, we’re also engaged in another significant transformation: moving from a consumer electronics orientation to one that is more focused on other products and services,” he says.
Panasonic announced late in 2013 that it was ending its production of plasma television sets, while signing a deal to supply nearly 2 billion lithium-ion battery cells during the next four years to Tesla Motors, the electric car manufacturer.
“The first phase of that transformation involved moving from a TV-centric model to one that offers more consumer products,” he says; segments like appliances, beauty care, and home security. “Then in phase two, we’ve been growing our business-to-business solutions,” which include the Tesla batteries and in-flight entertainment systems.
Riccio’s also getting deeply involved in new-business development efforts as Panasonic continues to move in a new direction, evolving into its third stage of change: B2B solutions, where the company offers design and other services to clients, in addition to products. “I’m still tying together everyone’s efforts,” he reports. “Corporate direction continues to be reinforced by CEO Joseph Taylor, and I’m charged with implementing that direction, cascading the responsibilities and ensuring that the systems and resources are there so we can continue to develop new solutions for new markets.”
For Riccio, it’s one more stepping-stone