Should You Take a Lateral Move?

I’ve been interviewed by a very smart, career-enhancing blog – The Glass Hammer – designed for women executives in financial services, law and business. 

It was founded by Nicki Gilmour, one of the original team assembled at the Financial News in London to run The Financial News Group’s online career sites.  She is a Belfast native who transplanted in the US to run the sites, which were subsequently sold, and is now CEO and Founder of Evolved People Media LLC.

The topic of the blogpost is 5 Reasons NOT to Take a Promotion, a savvy, contrarian point-of-view that is both pragmatic and strategic for the current business environment, in particular, and also fits the context of corporate succession planning.  See bullet #4, Tick the Boxes, for my comments. 

Here is the back-story – some of my original comments to the writer, Elizabeth Harrin (London): 

When recruiters go to market for talent on behalf of client companies, they are seeking a matrix of specific requirements.

When a company’s Board discusses succession planning, particularly in the office of the CFO, they are similarly looking for specific “boxes” to be checked regarding what the company needs for the current market environment as well as future challenges and opportunities.

If you are lacking any of the important criteria, you will not be considered for the position. If no one inside the company meets the specifications for the position, it is likely that the company will go outside for talent.

Let’s say your goal is to become CFO of your current organization, a large public company. If you are in the role of plant controller or division finance, as an example, it would make all the sense in the world to create a rotational career path for yourself within your current company and pursue lateral moves that would provide the necessary breadth to be considered for the CFO role.

Getting SEC reporting experience or an assistant corporate controller role would be a valuable move. Doing time in corporate development — even if it is as an M&A; analyst — would also be a plus. Jumping onto a task force involving post-merger integration would be another example of critical experience to access.

Ditto a committee of any type involving a major ERP implementation. I would even go so far as a stint in investor relations — even if it is in a supporting role. Then, look at revenue experience — typically key criteria for a CFO role — and jump back into opportunities at the largest operating units. Add an international posting in a critical growth market. Voila! You have the breadth and been there/done that experience to be considered as a “fly-up” to the CFO position. If you do not have a CPA, that is also a credential to consider.

A caveat: If the Board is mandating a “been there/done that” requirement of previous experience in the CFO slot, you may still get over-ruled for that ultimate opportunity. This is no reflection on you, it’s just how talent is specified, evaluated and selected.    

Boards and hiring decisionmakers are typically risk averse in troubled, uncertain economies. If you vie for the CFO slot and do not make it, this is when it would make sense to explore CFO possibilities at a smaller revenue level company — perhaps in a similar industry where your best practices experience and competitive perspective could command a high value.

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March 25, 2010 by Nancy Keene

Quote of the Day

”I am one of the lucky people in the world. I found something that I always wanted to do and I have enjoyed every single minute of it.”
 – Johnny Carson, during his last taping of The Tonight Show
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March 24, 2010 by Nancy Keene

General Motors — Going Outside the Company for Top Talent

I’ve been quoted in an article in Human Resource Executive Online on the shake-up in leadership at General Motors.  Why should companies go outside the company for a new CEO, rather than promoting from within?

In the case of GM, it’s the ultimate Change-in-Control — with government intervention, a bankruptcy filing, public scrutiny and new independent Directors impatient with the lack of progress and improvement.

Note the fast-paced crescendo of massive change:

  • Longtime incumbent chairman and CEO Rick Wagoner resigns at the request of the Obama administration in March 2009.
  • COO Fritz Henderson ascends to the top slot
  • GM files for bankruptcy protection on June 1.
  • Edward Whitacre Jr., former chairman and chief executive of AT&T; steps into the driver’s seat as Chairman of the Board on June 9.
  • The company exits bankruptcy on July 10.
  • Fritz Henderson resigns as CEO on December 1 — after only five months in the leadership role.
  • Chairman Whitacre becomes interim CEO
  • GM reaches outside the company and the auto industry for a new chief financial officer;  announces on December 21, the hiring of Microsoft’s Chris Liddell as vice chairman and CFO.
  • Whitacre drops interim from his title and assumes CEO role on permanent basis on January 25, 2010
  • On March 4, automotive design icon and ultimate ”car guy” Bob Lutz announces his retirement.

Is your head spinning yet?  Certainly a mode of shock and awe in Detroit.

In the B.W. era – Before Whitacre — doing things the ”the GM way” was very ingrained in leaders who had never worked anywhere else.  The organization was homegrown and in-grown, in the opinion of many.

Stakeholders could not wait for improved results. Thus, going outside the company and infusing new talent and “tone at the top” was the only option.  Continuing the ”promotion from within” succession plan would only guarantee more of the same.

Ed Whitacre knows how to operate in a company that was highly-regulated, then de-regulated, with union/labor aspects. He scaled it up to a market leadership position in a highly-competitive, chaotic, margin-pressured environment. He’s leading and mentoring a younger generation of GM talent that might be ready to break out of the old, outmoded “GM way.”

Throughout its history, GM was able to hire the best and the brightest. Young turks would gain traction and and build momentum for innovation – only to be squelched by the status quo, in many cases.

For a fascinating view on the inside culture of GM and the Detroit auto aristocracy, track down a copy of the book On a Clear Day You Can See General Motors.  It is the story of John Z. DeLorean, a young, hot high-potential on the fast track and how his career derailed in light of too much innovating, media visibility and personal controversy.  It was the book Detroit did not want published — very explosive and controversial at the time.

Companies are living entities. They are not static. They evolve through various stages of growth with a wide range of competitive challenges. A leadership team must be able to navigate with certainty and surety.

This is very typical in entrepreneurial companies. Often the founder, a visionary/inventor, takes the company to a certain level, and ”tops off” in terms of ability to move the organization forward. Scaling up to the next level is critical, so going outside for a CEO is the logical path for:

  • Revenue experience at the next level. If the company stalls at the $100 million level, finding a CEO who has grown an operation from $50 to $500 milion would be a good target. The VC-backed high-tech business model typically called for an infusion of ”professional management” at the top when the founder/entrepreneur had reached his/her limit of mastery in company size, operational complexity, etc.
  • Process improvement and best practices. A strong operations leader can deliver consistency and perhaps pick off ”low hanging fruit” — obvious areas for improved efficience — without disturbing the culture.
  • Industry knowledge and experience to match new customer opportunities. If the business evolves and new opportunities arise, a new CEO from that sector can bring credibility, relationships and product ideas that can deliver big results.
  • Leadership in dynastic family organizations when the incumbent generation is ready to step down , but the next generation is not ready to lead. In this case, a CEO or COO can be recruited to lead the company and mentor the younger leaders-in-waiting for a specified period of time. It might be a senior executive seeking one more role before retirement.
  • Positioning the company for a future sale — to a private equity entity or strategic corporate buyer. A new leader can improve the balance sheet, strengthen operational efficiencies, conduct ”bolt on” acquisitions to strengthen the company and its attractiveness to a potential acquiree. When valuations are low, this is often a step taken in anticipation of a more lucrative liquidity event.

If the CEO has never led through a certain type of turbulence, then that is the time to go outside the organization for the best talent to succeed for all stakeholders in the company.

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March 5, 2010 by Nancy Keene

Quote of the Day

“If we meet any terrorists, I’ll text you.”
 – Olivia Williams, as wife of ex-Prime Minister, shunting her bodyguard for private walk on beach with title character in The Ghost Writer
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March 1, 2010 by Nancy Keene

Sally Quinn: The First Social Networker?

Sally Quinn, the journalist, hostess and ”inside the Beltway” social arbiter, has been skewered by politicos and pundits for a Washington Post column in which she shared details of controversy inside her family regarding dueling wedding dates — of her own making.   She scheduled her son’s nuptuals on the same date as her step-granddaughter’s and now, apparently, resolved the date conflict.

She was blasted and critiqued for sharing too much information, using her platform of authorithy as a bully pulpit and denigrating a serious, prestigious news outlet by revealing inappropriate, unpopular information.

Why is this so shocking to people?  Why is everyone suddenly so indignant?

It’s the foundation of Quinn’s personal and professional brand!

She is quite possibly the first social-networker-of-record — reporting the juicy back stories of political power in the Style section of the Washington Post, tracing back many Administrations to the days of Richard Nixon and Watergate.  She would attend parties, observe first-hand how cabinet members and elected officials behaved in private, then report her findings in the newspaper.  It was, at the time, certainly a circulation booster and buzz phenomenon for the WP.

Quinn has lived her life in the epicenter of military, media and political power — replete with bold-faced names and amplification via the news megaphone and gossip grapevine.  She has dished in print, television, radio and on-line.  Love her or loathe her, you have to hand it to her.  She’s always good copy.

Former Secretary of State and globetrotting peace negotiator Henry Kissinger said of her ”[Post reporter] Maxine Cheshire makes you want to commit murder. Sally Quinn makes you want to commit suicide.”

Years before cable news, TMZ and the 24/7 news cycle of the Internet, Quinn captured what everyone is concerned about in the wake of Facebook, iPhones and digital cameras:  The lack of privacy/secrecy we now universally experience in conducting our daily lives.

It’s messy.  Sometimes awkward.  Always revealing.  Definitely dishy.  And certainly altering the protocol by which people act and perceive others.  Maybe.

Back in the pre-Internet, pre-Quinn days, it was known — but not reported — that many public figures  conducted themselves with duplicity, even in the power structure of national politics.  In the book on John Edwards by former political aide Andrew Young, he interviewed various senatorial sources.  One in particular was excerpted in a book review, waxing sentimental about Washington in the early 1960s:

“It used to be civilized. The media [sic] was on our side. We’d get our work done by one o’clock and by two we were at the White House chasing women. We got the job done, and the reporters focused on the issues. . . . It was civilized.”

Quite so.

Those days are gone. Not the behavior, necessarily.  But no longer is there a guarantee of confidentiality.  There are too many technologies that lead to leaks, whether deliberate, accidental or “not for attribution.”

I’m not for or against Quinn’s position or reporting of family Olympics. But I think the outcry as a result is fascinating.

And Quinn does have fabulous party tips.  She knows what universally attracts and intrigues.  In her book The Party, she describes a Valentine’s Day soiree:

I got somebody to read palms and tell people about their love lives.  Many of the guests were what you might call important and powerful Washington types, but the line for the palmist in the upstairs bedroom, which included the director of the CIA, formed at the bottom of the stairs.  I could just as easily have had a regular dinner party, but it wouldn’t have been nearly as much fun.

I borrowed this idea for a New Year’s Day open house.

Try it.  Just Google fortune teller and your local geography.  Have the seer come in costume.  Preferably turban and caftan, of course.  Give a hint in the invitation.  Be sure to budget her for the entire evening, as everyone will want to know in detail what the future will hold.  Prognosis for party success:  Guaranteed.  Your guests will talk about it for years to come.  But you can’t repeat it, as it is the element of the unexpected that delights.

As always, Quinn delivers the buzz!

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March 1, 2010 by Nancy Keene

Tiger, Tiger

Photo Copyright Nancy Keene, 1997

My husband and I witnessed firsthand the ascent of Tiger Woods into global sports superstardom and the velocity of the buzz that it entailed. It was Monday — Martin Luther King Day — during the week of the 1997 Phoenix Open, the beginning of his first full year on the PGA tour.We were driving from a hotel near the Phoenix convention center to the Scottscale TPC, where we had scored a tee time.

En route, traffic came to a screeching halt. We inched along and finally approached the clubhouse. There was another traffic jam in the parking lot. Trucks, vans, buses.  We raced into the pro shop and apologized for our lateness. No problem, we were told. “We’re running an hour behind. We’ll start you on the back nine. Tiger Woods is leading a golf clinic and you’ll pass him on the way to your tee box.” Indeed.

We were observing sports history. It was a huge crowd, demographically and racially diverse. Young children rapt with interest and attention. Resort visitors and the PGA gallery set. The air was E-L-E-C-T-R-I-F-I-E-D!

You could see and feel the magic that was Tiger. He was tall and handsome with a powerful, but calm presence. He had the hip Nike look — a lean, toned, strong athlete.We were visitors in Tiger’s kingdom and thrilled to see the king. It was an Elvis or Michael Jackson kind of rock star happening.

By comparison, when we watched Nick Faldo win his third British Open at St. Andrews in 1992, it was exciting, but a more subdued experience. Faldo had great dignity and presence. Walking down the fairway, he had the stride of a champion. But it was more like seeing former GE chairman Jack Welch or another vaunted CEO in action. More reserve. Less rock.

Tiger had an off-the-chart, “hockey stick” trajectory in his pursuit of success. He broke the barriers and redefined the boundaries — nailing win after major win. He was a high-potential star from childhood and proved himself as a high-performance champion as soon as he exploded into the professional arena.

As a talent advisor and aficionado of leadership dynamics, I was in awe of the Tiger phenomenon since that day in Arizona. But I wondered about the psychological impact of such huge and early success.

If you’re in your twenties at the threshold of a career that could feasibly span half a century, how do you maintain such a high level of motivation and desire when you’re already nearing the gold standard of major tournament wins? Once you’ve outpaced the record-holders, it is just a matter of putting more and more numbers on the board?

Is it all about the quantitative?

It certainly wasn’t competitive ennui that befell a superstar’s downfall from glory, a story that unfolded after a fateful car crash in his private gated community.

The technology that amplified Tiger’s reputation and celebrity delivered an equally broad and rapid deployment of breaking news tidbits and salacious gossip items.

And every new alleged transgression on the scoreboard prompted a full, follow-on seismic wave of more news and repetition of the full story and fallout. It was a 24-7 repeating news loop. Pundits and psychologists pondered and analyzed. How could he have such a high volume and frequency of indiscretions and infidelities.

Is it all about the quantitative?

Think of the hours and repetitions he clocked during a lifetime of practice at the driving range.  How did he perfect and manage his swing and every shot?  How much is enough?  How much is too much?  The mathematical calculations had to be staggering.

We mourn the human tragedy.  We empathize with his beautiful wife, the mother of his children.  We are shocked and sad to see a hero show a side of himself that is all too human.

We await atonement and hope for redemption.  There will be judgement, according to the laws of public opinion, which are intriguingly rooted in the religion and rites of the Catholic Church that many of us know.

Public opinion will continue to weigh in. But sins and trespasses can be forgiven.   A priest in the confessional would offer absolution, penance and a reminder that the Church can always be a haven.

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February 19, 2010 by Nancy Keene

Prosecutorial Priorities — A Litigation Laundry List for 2010

If you want to fill a ballroom with corporate officers and board members, invite the SEC and Department of Justice for breakfast.   

Larry Ranello of PricewaterhouseCoopers and Paul Bessette of GreenbergTraurig led the annual Directors Roundtable outlook on securities enforcement and litigation, featuring a local perspective by Stephen Korotash, associate regional director in the Fort Worth office of the U.S. Securities and Exchange Commission and Alan Buie, assistant U.S.Attorney, Criminal Fraud Section for the Northern District of Texas.

It’s a heads up on areas of compliance-related hot spots for the coming year — a very helpful stay-out-of-jail guide, if you will, for those charged with governance of public companies and investment vehicles, as well as those professionals inside the company in accounting finance and audit roles.  This will not be the year for a CFO to scrimp on a skeleton crew.   

Here are some highlights:

  • A new multi-agency initiative has been formed, The President’s Corporate Fraud Task Force.  This is the prism through which the federal government will view fraud, with much more cooperation and collaboration of various government agencies.
  • Hot buttons for the Department of Justice local federal prosecutors will include scrutiny of financial reporting, SEC filing misrepresentation and close attention to insider trading.
  • Electronic media has provided a ”treasure trove” for the U.S. Attorney’s office.  Company emails are quick and easy to obtain — with evidence neatly laid out and sortable by subject, sender, recipient, date/time.  ”That’s where the bodies are buried,” declared Buie.  ”You can’t beat it.”
  • The SEC, chastened by the failure to note or stop Bernie Madoff’s high-end ponzi scheme is poised to come roaring back, prompted by an internal re-organization and the aggressive leadership of Robert Khuzami, former chief of the securities fraud unit at the U.S. attorney’s office in Manhattan, as the new head of the Enforcement Division.
  • Already the SEC has increased its enforcement activities — with double the formal orders, emergency actions and 50 more investigations than in the previous year.
  • The ”tone at the top” of SEC is prosecutorial.  They are targeting tough, swift action and a surge in productivity.
  • Expect an emphasis on individuals, not just corporations, particularly what Korotash describes as the gatekeepers — board members and company officers.      
  • The SEC has restructured with emphasis on specialization, decentralization and less bureaucracy.   Opening a case no longer requires Washington approval.  It only takes one day to launch an investigation.
  • Hedge funds are at the top of the list for potential SEC investigations, as their purpose is to seek an “unfair market advantage,” according to Korotash. 
  • Other areas of focus for the coming year include:  private equity, investment advisors, insider trading, market abuse, structured/new products, municipal securities and public pensions.
  • The SEC is expanding its arsenal of prosecutorial tools, taking a cue from traditional criminal investigations that cooperation and plea bargaining.  They will be seeking whistleblowers (i.e., controllers, financial reporting managers, internal auditors, etc.) who will “come in first” to help with the investigation in exchange for favorable sentencing consideration.  There will be more effective subpoena power available to the agencies under the new Task Force umbrella.
  • There will also be an emphasis on returning money to shareholders as a result of restatements.  Watch for actions requiring reimbursement of bonuses paid to C-level executives.  No wrongdoing need be demonstrated in order to enforce this correction in favor of investors.  

In general, the governmental agencies are adding teeth to their enforcement oversight.

Best sound bite of the day was from the SEC’s Korotash, recounting a discussion with his young daughter on the importance of a strong work ethic:  ”Why does Daddy work so hard?”

“To make up for Madoff,” she postured.  How perfectly fitting.

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January 1, 2010 by Nancy Keene

Copyright © 2012 Nancy Keene