As CFO of an East Coast insurance company, Dennis Bandish never could find the time to schmooze with other financial executives just for the sake of making connections. Then he found himself out of work four years ago. Without a lot of doors to knock on, he languished for 14 months before landing his current position as CFO of Michigan Millers Insurance Co. through a former colleague. The lesson? “I made a commitment to myself to start actively networking,” says Bandish, “and to not let myself get so out of touch again.”
Job-hunting is only one reason financial executives are staying in touch these days, however. As their role becomes increasingly complex, peer gatherings have become a place to pool expertise in such areas as human resources and technology management, get the inside track on regulatory compliance, and bounce new ideas around before presenting them to the CEO.
Judging by the growth in national finance-focused associations, social capital is becoming a popular investment. Last year, Financial Executives International boasted its largest membership gain in five years, according to FEI director of marketing Chris Allen. Meanwhile, the Association for Financial Professionals (formerly the Treasury Management Association) says its ranks of senior financial executives swelled by 15 percent last year. In addition, the Financial Executives Networking Group (FENG), sponsored by the AFP, is growing by 5 percent a month, reports chairman Matt Bud.
And these numbers don’t capture the many informal local groups that meet over breakfast or lunch to help financial executives in companies of a similar size or within a particular industry digest hot topics. In Boston, for example, financial executives from a group of fast-growing New Economy firms meet to see how group members are building investor relations departments in the wake of Reg FD. In Silicon Valley, CFOs of venture-capital firms can call on the Venture Capital Bean Counters (VCBC) to find out about everything from international investing perils to how often they should draw capital from partners. “There’s no one else in the firm who does what I do; I often have to look outside to get answers to my questions,” says VCBC member and Blueprint Ventures CFO Ashley Read.
Measuring the benefits of networking is difficult, but many say the payoff is evident in the consultants they haven’t hired, and the mistakes they haven’t made. And in his book Achieving Success Through Social Capital, Wayne E. Baker has gathered evidence that broad networking helps professionals keep their jobs, get promoted faster, and, in some cases, secure better rates in the capital markets. “People with the right networks,” he explains, “know where to get information when they need it.”
Access to such information is especially critical when a big business change comes down the pike. James J. Abel, CFO of electrical supply maker Lamson & Sessions Co., and a 20-year member of the FEI, says having access to the FEI’s panel discussions on the SEC’s blue-ribbon committee on auditor independence helped him “see what the SEC’s real intent was.” The information sessions from the Big Five accounting firms weren’t nearly as useful, he says, because “they didn’t have the same feel as talking with peers who are [facing] the same issues in their companies.”
It’s the peer contact, in fact, that financial executives typically cite as the major benefit of networking. As a member of The Conference Board’s selective financial officers networking group, Clayton Daley, CFO of The Procter & Gamble Co., finds the quarterly meetings useful. However, he adds, “just as important, or more important, is the time you get to spend with other people who are in a similar role.”
What peer exchanges offer, says Eggers Industries Inc. CFO Dick Forsythe, who helped establish a 12-member group of private-company CFOs about eight years ago, are “unvarnished” opinions. “None of us has anything to sell the other folks, so none of the baggage that comes along with outside advice is there,” he maintains. When a colleague recently nixed his idea of using a captive insurance structure, Forsythe was actually pleased. “He knew I liked to keep my expenses predictable, and that this type of insurance would contradict that,” he says, adding, “I hadn’t really put the two ideas together before.”
Such peer contacts, of course, are invaluable for financial executives looking for new opportunities. So invaluable, in fact, that in major metropolitan areas, such groups as ExecuNet and FENG offer special sessions to help previously unnetworked job seekers build contacts and confidence with fellow seekers.
But whether they are looking for a job or just for information, financial executives agree that networking involves some dedication. Bandish, in fact, had been a member of the FEI since 1983, but says it had little effect until he stepped up his commitment to the group two years ago.
Now, Bandish spends at least 12 days a year in meetings as the national chairman of the group’s committee on finance and information technology, as well as chairman of its executive committee. He also heads the Alliance of American Insurers’s uniform accounting committee. It’s a fair amount of time, he acknowledges, but “you develop more of a relationship with your peers when you’re actively involved than when you act like a wallflower.”
– Alix Nyberg
FATTENING THE ROLODEX
Groups that foster financial community connections.
|Name||No. of Members||Membership Criteria (Annual Fee)||What It Does|
|Assoc. for Financial Professionals||14,000+||Midlevel finance title or above ($195)||Lobbies federal gov’t., supports 64 regional associations, offers career services.|
|The Conference Board’s CFO Council||31||CFO of a Conference Board member company ($4,000)||Meets three times a year for economic updates from national experts.|
|ExecuNet||10,000+||$100K+ executive in any field ($349)||Posts jobs online daily, supports monthly networking meetings in over 20 cities.|
|Financial Executives International||15,000||Senior finance title ($435)||Lobbies federal gov’t. supports 85 regional chapters, offers outplacement services.|
|The Financial Executives Networking Group||5,500||Sponsored by current member (free)||Provides outbound E- mail; 25 local groups hold monthly meetings.|
Source: The Associations