All in the Grooming

GE and American Express have developed fast-track programs for the top talent in their finance teams. But is the star system the best approach?

It’s not every day that a CFO fresh off the plane draws a line in the sand. But Wayne Chang, who became CFO of General Electric’s Medical Systems China unit two years ago, walked into the job in Shanghai with a certain confidence that people would listen to him.

He needed it, because GE’s China goals were typically big. His mandate: pushing company sales to US$1 billion from US$200 million in five years, or to 30 percent from 20 percent growth a year. Chang’s strategy for growth involved customer financing, the first time that GE had tried this outside of its aircraft leasing activities in China, which structured deals in US dollars.

The customer financing at the medical unit would be in renmimbi and would involve close relationships with Chinese banks.

Customer financing naturally bolsters growth, but also carries the risk associated with arranging loans for customers in boom markets. The practice came under fire in the US after many technology companies’ customer-financing programs went bust after the tech bubble burst.

Ultimately, Chang was able to overcome reservations and built confidence in the plan. “A lot of people would like to buy our products but need financing to be able to do so,” says Chang, who is 34 years old. “So we have to find an external third party, say banks, to provide financing. But China being an immature financing market, we have to carefully manage risk in order to successfully drive growth,” he says.

The success of the project hinged upon the capacity to pore through balance sheets of potential business partners and instill risk management skills to his staff. Chang had good experience to contribute here. He had spent long hours as an internal auditor to GE units around the world as part of the company’s fast-education training program for finance executives. As for meeting those Herculean goals: Chang says he’s on schedule. GE Medical Systems China is growing at 25 percent per annum with a projected US$600 million revenues for yearend 2003.

Leadership, or Effrontery

Chang’s confidence might have struck some long-time employees as effrontery, but GE has made a policy of encouraging its finance professionals to assert themselves. Chang is one of 15 CFOs in GE’s worldwide operations that entered the company in a special training unit designed to instill leadership into a finance team—and make those skills transferable across hemispheres and cultures. Other global companies, including American Express, Proctor & Gamble, and Microsoft, have also developed leadership and fast-track career programs, and swear by them as costly, but ultimately, value-building long-term investments. In Asia, the concept is relatively new but several companies with global reach have created their own campuses to train the cream of their recruits. These range from Infosys, the Indian IT service provider which runs a leadership institute at its campus in Bangalore, to Legend, the Chinese computer maker, which has its own management school on the outskirts of Beijing.

Discuss

Your email address will not be published. Required fields are marked *