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No More Fuzzy Numbers

As Seen in CFO Studio Magazine Q1 2017 Issue

Monetize talent-related growth strategies

-BY ALDONNA R. AMBLER, The Growth Strategist

Being able to attract, engage, and retain top talent is an important growth strategy of young or realigned companies. Yet most organizations still struggle when talent-related investments are involved because the discussions generally rest on vague information (fuzzy numbers).

Think about what happens when the CFO tries to get quantifiable answers to these HR questions:

How can we tell if a stay bonus was necessary?
Do career development programs pay off or are we just training people to leave and be productive at competing companies?
What degree of fit with our corporate culture does a job candidate need to be hired?
How can we tell if an employee is sufficiently engaged?
How much should our business invest if the typical millennial only stays with an employer a few years?
How much turnover is acceptable to us?
How do we know if we should be utilizing outside search firms or building our own recruitment department?
How much progress do we lose when key position vacancies linger?

Where You Can Start

The Society for Human Resource Management (SHRM), which provides professional certification for human resource professionals, leads the improvement of talent-related measurement, but there is a long way yet to go.

It pays to help your company’s HR professionals generate talent-related ratios to convey their proposed approaches to achieve your goal-related ratios. With such ratios in place, when your HR department wants to invest in a new engagement program, as CFO you can monitor its impact on retention, productivity, and capacity utilization.

Examples of Talent-related Ratios:

$___ cost for recruitment, screening, selection, onboarding/hire

$___ cost for engagement and retention/employee

$___ cost for incentives and bonuses (above base salary or wages)/ employee

#___ average months or years with our company/employee

%___ job vacancies OR %___ capacity

Examples of Company Growth-related Ratios:

% ___improved capacity utilization

$ ___ productivity increase

%___ reduction in people-related operating costs/gross revenue

Increasingly, HR directors must be involved in the process of monetizing desired outcomes. It makes sense to establish realistic baselines for talent-related ratios now, or your company’s decisions revert to fuzzy numbers, and your truly major investment decisions will be based on wishes, hopes, and guesses.

What Is My POB?

As Seen in CFO Studio Magazine Q1 2017 Issue

Like it or not, most of us have and need an online brand

-BY JOHN MOSKONAS, President, The ARGroup of Search Companies

Here’s a new acronym to learn: POB. It’s shorthand for Personal Online Brand. Many people you meet as you network will search online to view your POB. So, although you won’t find this word in a dictionary, it’s extremely important. Your POB is the snapshot of who you are. It includes your online friends, points of view, and professional accomplishments. If you haven’t thought about how your POB stacks up, now might be a good time to work on it. After all, year-end and the beginning of the year are the best times to assess, start anew, and focus.

But before you do that, why do you want an online brand at all?

A strong POB mitigates your risk. Let’s face it, the work environment is uncertain. You want to be seriously considered for any potential career opportunities that may arise. You should have a solid online brand presence that highlights who you are professionally and personally. This way, you’ll be found if a hiring manager or recruiter is looking for someone like yourself; you’ll be taken seriously when your accomplishments are being assessed; and your POB will support the message you are trying to convey about yourself, your expertise, and the value you can deliver. The best part is that your POB, your online brand, is mobile, so you don’t have to start over each time you begin a new job. Now, when you decide to strengthen/focus your POB, you should keep one thing in mind:

A strong POB provides consistent messages about you. If you go to a fine restaurant that was recommended by a friend, you can expect a certain experience. As a matter of fact, that experience is what makes you come back or not. If you go back a second time and you have that great experience again, you’ll solidify your feelings about the restaurant and you’ll keep going back. Why? Because you’ll know what to expect.

How does this translate to your POB? People want consistency when they think about you and your brand and when they consider engaging you for an executive position, project, or otherwise. So, be consistent in your POB and cognizant of the messages you send when you highlight your accomplishments when posting to your online accounts, because those who will consider engaging you like to know what to expect.

If you’re unsure of how your POB reads right now, just google yourself and you’ll find out pretty quickly. The online world is transparent, so the consistency of the message you send about yourself should carry through to your LinkedIn, Facebook, Twitter, and other online brand platforms.

Create a strong POB yourself, or get help with it. When you do decide to strengthen your POB, you can do it yourself or you can hire a professional online marketer who can do it for you. If you decide to do it yourself, you can get tips online and/or, since imitation is the best form of flattery, you can certainly see how peers in your industry are building their POB, and then replicate their approach.

Whichever way you choose, however, keep asking yourself: What is my POB and how well is it working for me?

Principles for Growth

As Seen in CFO Studio Magazine Q1 2017 Issue

THE CFO OF JOHNSON & JOHNSON LINKS ETHICAL DECISION-MAKING WITH STEADY, STRONG RETURNS

Dominic Caruso, CFO of Johnson & Johnson, told CFOs gathered at a recent CFO Studio Reception held in his honor that the company bases all its important decisions on the Credo that General Robert Wood Johnson II wrote in 1943. But he said he realized that the audience might be a little bit skeptical. They might wonder “How stringent are you? Do you ever bend? Do you ever flex?”

“We do flex these principles,” he said. “We constantly challenge ourselves. We go to Credo challenge sessions to make sure we understand what [the Credo’s wording] means in the new environment.…But we generally stay pretty close to those principles.”

He noted that the Credo is “not an aspirational statement,” but a set of responsibilities by which “we live our lives at Johnson & Johnson and make business decisions.”

Each of its four paragraphs talks about “what we must do for each of our constituencies.” First, for patients; then for employees — their welfare and careers; next for the communities where the company lives and works around the world; lastly, for shareholders. General Johnson was a shareholder, “and he placed himself last.”

Mr. Caruso said that the 32 consecutive years of adjusted earnings growth that J&J has returned is “the proof in the pudding” that the company’s firm principles are properly guiding J&J through turbulent times and changes in economic circumstances.

An attentive group of around 60 finance leaders from New Jersey and the tri-state area formed the audience at the Heldrich Hotel in New Brunswick, NJ. CFO Studio Publisher Andrew Zezas introduced Mr. Caruso, who was profiled in the Q4 2016 cover story, stating that under Caruso’s stewardship, Johnson & Johnson has strengthened and built upon its position as the world’s largest and most diversified health care company.

“During his 10-year tenure as CFO, Johnson & Johnson’s share price has appreciated over 90 percent,” said Mr. Zezas. “Speaking as a shareholder, thank you, Dominic.”

Finance’s Pillars

In his remarks, Mr. Caruso said, “I owe a lot of credit to my predecessors. I’m fortunate to be in a long line of previous CFOs at Johnson & Johnson who have done outstanding work.”

He went on to enumerate the four principles by which J&J’s Finance organization operates. These are: to drive competitive profitable growth, generate sustainable cash flow, allocate capital to maximize shareholder value, and manage enterprise risk.

Regarding that third principle, allocating capital to maximize shareholder value, Mr. Caruso said, “We have very strict principles by which we do this. We have a set of hurdle rates and analysis that we use to ensure that each decision we’re making is maximizing the value that we set for the deployment of our capital.”

Mr. Caruso runs a global finance team of 5,000. He spent part of his time at the microphone discussing the role of “the great financial people at Johnson & Johnson.”

Finance professionals at J&J “are asked to do three things,” he said: “To drive sustainable, superior financial performance. And, I say that very clearly: to drive it, not to monitor it, or to measure it, or to report on it. To actually drive it. They’re also asked to develop great leaders,” he said. “And they’re asked to do one more thing, which is without compromise the most important thing that they do: To assure the financial integrity and compliance in what we do as a finance organization for Johnson & Johnson.”

Mr. Caruso and the finance leaders at J&J have assured the company’s financial integrity such that Johnson & Johnson remains one of two companies in the world with a AAA credit rating. The CFOs in attendance gave him rousing applause for that accomplishment.