Skills & Talents
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Facts & Trends
Facts and Trends
- The job outlook in corporate finance is bright.
- A recent surveys by Robert Half found
a very strong occupational outlook in this field.
Shortages in a variety of job categories
are taking place. Hot job
categories include international and operationally-oriented positions. Hot industries
include manufacturing, high-technology, environmental management
services and distribution.
- Strategic and Global Thinkers Wanted
- "Asked to name the qualities that finance executives should have, CEOs top their
list with strategic thinking, fresh perspective, and candor. The demand for finance
executives who can formulate strategies and foment change on a global scale will only
increase in a world where trade barriers are crumbling." CFO Magazine.
- Team Players Thrive
- It is crucial that a financial officer be a
team player, whether at the bottom or the
top of a company. At the top, relationships are especially important. For a CEO, the chief
financial officer is financial whiz, strategist and partner. The relationship needs to be
tight. Consider the role played by Marcus Bennett at Lockheed Martin, the largest defense
firm in the United States: "As a key member of [CEO] Augustine's inner circle,
[Bennett] is intimately involved in hashing out the company's strategic plans. And when
the group decides on a major acquisition or merger, such as the recent linkup with
Lockheed, Bennett serves as the primary negotiator. Once a deal is done, he oversees the
melding of the balance sheets of the two companies, the combining of employee benefits
programs, the squeezing out of cost savings and the overall financial operation of the
five current major operating units -- aeronautics, electronics, energy and environment,
and space and strategic missiles." ("Stealth CFO", Institutional Investor)
- Make a Difference
- A good financial officer can create enormous
value. For example, when
Jerome York switched from being the CFO of IBM to being the CFO of Chrysler, Chrysler's
stock gained $1.3 billion the next day, while IBM's stock fell sharply.
- Door Wide Open to Women
- While still largely a male world, women are
making rapid inroads in corporate finance
positions around the United States. According to the Detroit News:
"Finance has become the first field of opportunity for women because promotions are
based on merit - not the old-boy network. Experts say accounting and its natural offspring
- finance, treasury, budgeting - are less obstructed by the macho cultures more prevalent
in manufacturing and engineering, other traditional paths to the corporate pinnacle."
There a wide variety of examples of women who have succeeded in corporate finance. For
example, Heidi Kunz engineered General Motor's turnaround plan in 1992 and jumped to
become CFO of a new ITT spinoff in 1995. And Judy Lewent is widely credited with creating
large amounts of value at Merck as a thinking CFO and strong leader. Mina Brown, CFO at
Aviall notes that it is very important for women who want to rise far to get management
positions in line divisions.
- Value-Based Management is a Huge Trend
- Corporate finance professionals are increasingly
getting involved in value based management--the
practice of figuring out if shareholder value is being created in each of a company's
activities. Look for this practice to get hotter and hotter over time. Some of the
most innovative companies in the world are now using value management.
- Integrated Risk Management Growing in Importance
- There is growing interest in integrated methods
of risk and liability management. Many
companies have decentralized risk management activities where each division or plant can
hedge away price and interest rate risk. Companies are increasingly permitting this, but
aggregating positions into a book at the corporate level and adding controls.
- Quantitative Skills Trade at a Premium
- Many corporations are looking for quantitative analysts
in their finance group. Merck now
employs dozens of rigorous finance professionals who use techniques like Monte Carlo
simulation to assess new R&D projects. There will be more and more firms who
quantitatively make financial and operating choice. For example, choosing a capital
structure by balancing off the expected costs and benefits of debt.
- Pay is Rising
- Pay throughout corporate finance areas is up. In particular, Chief Financial Officer (CFO) pay is rising.
Average annual pay of CFOs in Fortune 100 companies exceeds
$1 million. The compensation includes salary, bonus,
'other' income, stock options exercised, and restricted stock. Superstar CFO's can make more than $5 million
- Carry the Torch for Shareholder Value
- A company's finance group is the bridge between the
investment community and the shop
floor. In a day and age, when institutional investors are increasingly active, it's
crucial that managers get the message that their job is to create shareholder value. The
job of the finance group is to make sure that happens.
- A Benefits Focus Can Help
- Twenty to forty percent of employee costs now
come in the form of benefits. Managing
benefits cost-effectively has now become a major challenge for financial officers.
- Be Sure to Develop Negotiation Skills
- A key skill for financial professionals
is negotiating ability. Persons who can put the
other side at ease at the negotiating table, while still getting a good price are
invaluable. Many firms are actively engaged in acquisitions strategies and require
employees who can evaluate possible partners and then negotiate transactions.
- Get Ready for Challenge
- Being a financial officer can sometimes be
more challenging than usual. For example,
Barry Weintrob, CFO of the Port Authority of New York and New Jersey had to deal with the
aftermath of the World Trade Center bombing on February 26, 1993. From a World Trade
Center command center Weintrob and others put together an immediate cost estimate for
rebuilding, made sure insurance carriers were notified and kept on paying all bills
despite a massive disruption.
- Leadership Skills are Highly Valued
- Company's want more and more leadership ability in their financial officers.
The financial leader of the future will have more and more experience with the dynamics of the
financial markets and be innovators in that market as well. She must be a strategic
planner, a problem solver and an innovative leader.
- Some Companies are Centralizing Corporate Finance Function
- Leading-edge companies such as General Eletric are
centralizing their finance functions
under a system known as shared services. Instead of each business unit having its own CFO
and accounting operations, the businesses become customers of a centralized finance
- Corporate Finance isn't Bean Counting
- The oftentimes
derogatory view of finance professionals as "bean counters" is
changing fast. Technology means the computers count the beans. This
frees up time of executives to interpret the results of bean
counting. In the words of Roberto Goizueta, the late CEO of Coca-Cola:
"The secret isn't counting the beans. It's growing more
beans." Ultimately, this means that the demand for smart,
communicative and thoughtful people in finance positions will increase
even more in the future.