From Q-tips to Wisk laundry detergent, Unilever Home and Personal Care—USA produces a tool for almost every aspect of household management. And its finance organization seems no less thorough when it comes to helping its own 215 staffers manage their careers. “We like our CFOs of the future to be businesspeople, as well as fnancially skilled,” says Joe Wilhelm, vice president of finance at Unilever HPC, a Greenwich, Connecticut-based unit of Dutch consumer-products giant Unilever NV. For one thing, broadening their experience involves exposing finance employees to assignments in other countries and stints outside finance, usually lasting six months or more in each case. The company also uses its four-year-old finance-mentoring program not only for professional and personal development but also for building morale. Further, finance has added a new emphasis on ethics training, focusing on “ethical gray zones”—such as the line between proper and improper competitive-intelligence activities.
“Without the training, employees would be confused about the fuzzy areas,” says Jay Ludy, director of financial reporting at Unilever HPC.
Unilever’s balance of practices for managing human capital in finance—along with a commitment to measuring results internally—stand out in the third annual Best Workplaces for Finance Professionals program, conducted by the Association for Financial Professionals (AFP) and The Hackett Group in conjunction with CFO magazine. In all, 99 companies have participated during the three years. In 2003, Unilever had the highest overall score among 19 companies—edging out Northrop Grumman Corp.’s Integrated Systems (IS) division, in a group that included such companies as Telephone and Data Systems, VHA, Arrow Electronics, and Best Buy.
The program isn’t about competing for top scores, however. Designed to help participants identify strengths and weaknesses in their finance departments, the Best Workplaces methodology allows benchmarking against other finance departments and offers lessons about how to manage better. While focusing the first two years on company practices in five original categories—personal-professional development, quality of life, employee job satisfaction, innovation, and tools—researchers have been learning, too. This year, to boost understanding of how finance departments deal with ethical concerns, the program established a separate business-ethics category and combined the innovation and tools categories for scoring purposes (see “Learning from the Pentagon,” at the end of this article).
Certainly, some of the participating companies have done lots of training in ethics for years. Take Northrop Grumman Corp.’s IS division. Training sessions cite Northrop scandals dating back to the 1970s, and the human-resources department takes a semiannual poll of finance employees to make sure they know procedures for reporting any improprieties they observe. “We try to make it clear that we don’t penalize or punish” whistle-blowers, says Lance Newquist, CFO and vice president for business management at Northrop Grumman IS. “You don’t get fired for identifying; you get fired for covering up.”
But while company finance departments use the Best Workplaces categories to put distinct elements of finance under the microscope, a clear conclusion from this year’s research is that no individual aspect of the finance workplace is totally discrete. Rather, there is interconnectivity across the five areas—manifested in intangible characteristics like team spirit, a sense of organizational discipline, respect for employees’ personal lives, and a willingness to learn from past mistakes.
Sometimes this organizational “glue” flows from the CEO, or from the CFO or other finance leaders. Other times, it originates with members of the finance staff. But either way, leaders have to nurture the spirit if its benefits are to be extended throughout the department.
At Unilever HPC, a structured approach to mentoring grew from a broad, formal program that encourages employees to suggest workplace improvements. Since 2000, finance chief Wilhelm has invited all new finance staffers to meet with him after three months on the job. He asks them for their impressions, he says, including anything at all that “seems odd” about the department. At this time, many also choose a “thrust” among several that finance has designated—from cash management to new finance tools. They’re encouraged to spend from 5 to 10 percent of their time “making finance a better place” from the standpoint of that thrust. “If they’re really passionate about it, it shouldn’t feel like work,” says Wilhelm.
The finance department initiated the mentoring program after two then-junior-level finance managers—Tracey Maus and Katherine McDonald, who had chosen personnel as their thrust—enlisted the advice of a consultant to help them meet the need they saw. Wilhelm says his department thrives on such grassroots proposals. “When initiatives come from the top, it’s very ‘yes, sir; yes, ma’am,’—and then it lasts only as long as the executive who started the initiative is interested,” he says. But by encouraging employees to take charge, managers “institutionalize” the changes, he argues, because the solutions reflect deep needs within the staff.
Mentoring programs are a rarity in finance, according to Buck Consultants, which evaluates such trends, and the few programs that exist suffer from a lack of structure or commitment, says Buck consultant Tom Casey. “They tend to be these amorphous, unarticulated programs that lack managerial commitment and are not particularly effective,” he says.
Not at Unilever HPC. The mentoring program, which evolved at the same time as the orientation process for new finance hires, is managed through formal one-year mentor contracts, during which mentors and the employees they are paired with are encouraged to meet every six weeks. A special segment of the program is dedicated to high-potential employees, and gives them career guidance from a mentor at least two levels above them. (The standard mentor program involves a one-level separation.)
An International Choice
Mentoring at Unilever is more than just a tool for professional development. Consider Mary Ann Morse, a 12-year Unilever veteran and former director of finance at the laundry-products group, who recently benefited from the high-potential mentoring program. At the time, she was just about to be married. Faced with a tough decision about whether to take a high-profile posting in Singapore—reporting to Unilever NV’s head auditor—she consulted her mentor, Bob Gluck, senior vice president of finance for Unilever US.
“It’s still a promotion. And there isn’t as much travel involved,” she says. Morse also appreciated that at Unilever HPC, turning down a move didn’t hurt her career.
The promotion she eventually took, to Bestfoods, provided the right balance of work and lifestyle, and also benefited the company. Adds Morse: “I think a lot of companies are about ‘face time’ in the office,” but at Unilever HPC, “it’s more important that the work is done.”
Among other programs employees praise are telecommuting and job-sharing, in which two part-time workers split a full-time job. The first three months of telecommuting arrangements are considered a trial, but no minimums or special reasons are required for requests.
In the Best Workplaces program area of ethics, Unilever scored high, in part because a formal ethics code governs its overall organization. It also requires four hours of online ethics training for managers each year—underscoring a feeling at the company that ethical standards apply to everyone, no matter what rank. “We’re always setting the tone from the top,” says controller Guy Gioielli. “Managers here walk the walk.”
As for Unilever HPC’s lead ranking in the 2003 Best Workplaces benchmarking program, it shows that “we’re progressing on the right track,” Wilhelm says. “But we don’t see it as having arrived at the top. The minute you reach the top, you start regressing.”
Happiness Is a 5-Foot Partition
At the Irving, Texas, finance offices of Northrop Grumman IS, a unit of the Los Angeles—based defense contractor, part of workplace management involves making the physical plant work effectively for the finance department. In fact, CFO Newquist aimed high. “We wanted to create an environment where people would work there for free,” says Newquist. While “obviously that’s not going to happen,” he admits, he does believe the building that was created “shows finance the value they bring to the company.”
The design of the 20,000-square-foot facility, completed in 2000, reflects careful planning, including a review of the state of the art in finance offices as well as staff meetings in which finance employees expressed their ideas of what was needed. For one thing, the building was sited to minimize changes in commuting times. But it was in the office-space design that the company made its strongest statement.
Five-foot-high partitions give each of the 75 finance employees at the facility enough privacy to work. The glass tops of each partition let employees see one another from their 10-foot-square cubicles, staving off any sense of working in isolation. Cubicles, major office equipment, and processing centers are grouped by function, optimizing workflow.
A well-designed building was symbolic for Newquist. “We didn’t want to ask finance to be state of the art and then not provide the tools,” he says. And indeed, in the Best Workplaces new innovation-and-tools category, Northrop Grumman IS earned the highest possible score.
Northrop Grumman IS has done its own internal measurements of efficiency and accuracy in a range of finance areas, including timeliness of travel reimbursements, in part to boost morale. “We’re always measuring,” says Newquist. “We want to know, ‘Are you doing a better job today than a year ago?'”
The research goes far beyond worker-satisfaction results. One way of measuring errors in payroll accounting, for example—and eventually improving accuracy—is to calculate the cost per paycheck. “As people have gotten better and seen the numbers, they’ve taken pride in it,” says Newquist.
In the area of business ethics, Northrop Grumman has taken an approach that may seem counterintuitive: studying past ethical failings at the company as a way of helping current employees understand the new environment of transparency and accountability.
The company’s problems stretch way back to alleged illegal overseas payoffs and political-contributions scandals of the 1970s, when it was still Northrop Corp.—before such products as the B-2 stealth bomber and Global Hawk unmanned aircraft, and the acquisitions that have made it second only to Lockheed Martin in the industry.
But such ancient history is very real to Newquist, who joined the parent’s payroll department in 1974. “I’ve seen it all,” he says, recalling that his office once was searched by authorities during an investigation. “I had my grandmother calling and asking, ‘Did you do something wrong?'” Things had to change, says Newquist, adding, “I have a tremendous amount of pride in the company and where it is today.”
To communicate that pride, he has taken to covering the darker side of Northrop history in new-employee trainings. One video shown to all Northrop Grumman employees is “What Went Wrong,” which examines a case of engineering test-falsification to which Northrop pleaded guilty years ago. “We don’t shy away from it,” says Newquist. “Instead, it’s ‘Hey, you weren’t here, but it was ugly, and we don’t want to be there again.’ It’s naÏve to think there are no bad people [at the company], but we make sure people understand the culture here; that is, the culture of an ethical company.”
Such candor brings some rewards, including a high score in the business-ethics component of the Best Workplaces research. But high moral standards also earn it loyalty from employees. “That’s the reason I work for this company,” says Al Trebitz, an 18-year veteran who now oversees cash management at the financial-service center in Bethpage, New York.
As operator of the largest health-services cooperative in the group-purchasing organization (GPO) industry, privately held, for-profit VHA Inc. sees collaboration as the foundation of its business. So four years ago, when the company began seeing significant gaps in the way its 80-person finance workforce was being managed, it summoned help from its human-resources department. “We recognized up front that in order to make the changes we wanted, we needed someone with a broader skill set,” says CFO Robert Chapel, who was promoted from vice president of finance earlier this year. Finance enlisted Cheryl Zobal of the HR department’s organizational-effectiveness group.
In prior years, the Best Workplaces program has identified assigning an HR liaison within finance as a hallmark of good practice. And VHA—whose overall scores were close to the average recorded by this year’s participants—has been using the HR connection to make improvements. The company, based in Irving, Texas, also sees itself using feedback from the Best Workplaces program as part of an ongoing effort to move to a higher level of performance.
In the past, VHA’s own internal employee surveys had highlighted departmental problems. For one thing, managerial attitudes were undermining the performance-review process, says Chapel. “Supervisors would save up everything for this one evaluation,” he explains. Rather than be direct, managers would “sugarcoat” critical comments for the in-person review—then put them more harshly in the formal evaluation.
Also, older managers became frustrated with young junior staffers, whom they perceived as resistant to instruction or even disrespectful. The newer hires, meanwhile—having been trained to expect explanations rather than simple orders—felt they were not being treated as professionals. “It was a generational gap,” says Chapel. Managers “would think, ‘I’m only asking people to do what I had to do 25 years ago,'” he explains.
Part of Zobal’s answer was to help provide training for managers. It’s a continuing effort, but one that has had some results. In last year’s internal survey of finance, there was a sharp increase in the number of employees answering yes to the statement, “My manager acts as a coach rather than as a boss,” for example.
Survey results aside, Bill Kline, senior director of contract and financial audit, has his own metric for a good workplace. “We have not lost anyone in audit to other employers in the last five years,” he says, adding, “the last five openings were filled internally.” To Kline, a seven-year VHA veteran, that bespeaks employee satisfaction and management’s commitment to develop and promote.
The Best Workplaces research is “the only available source of benchmarking information on other finance departments,” says Chapel, and it has taught VHA some valuable lessons. In the area of finance training, he notes, “we spent less time on training than first-quartile companies.” And since then, finance executives have been looking for ways to increase training opportunities.
For most finance departments that participated in the Best Workplaces program, the results fit nicely with their own analysis. “It’s an open, risk-free environment for people to see opportunities for improvement,” says Newquist of Northrop Grumman IS.
Lisa Yoon is an assistant editor at CFO.com.
Learning from the Pentagon
The corporate scorecard used by the Best Workplaces for Finance Professionals program went through a major upgrade this year. Based on increased interest in how companies deal with ethical issues and training, The Hackett Group added a business-ethics component to the “human-capital management” measurement system. Two categories—innovation and tools-and-technology—were combined in 2003, allowing the program to retain its five-point balance.
Scores on the “radiating pentagon” chart given to each participant now show ratings in the areas of personal and professional development, quality of work life, innovation and tools, business ethics, and employee job satisfaction. Ratings are based on survey questions to company executives and, in the cases of employee job satisfaction and ethics, on questionnaires taken by finance staffers.
The chart uses a 4.0 scale, with scores above 3.0 placing a company in the first quartile. Higher scores are farthest from the center. The sample chart pictured here, for Northrop Grumman Integrated Systems, shows company ratings against a base of 99 companies from all three years of the program—except in the business-ethics category, in which only the 19 companies in the 2003 program serve as the base.
The methodology was developed by Hackett, an Answerthink company. The Association for Financial Professionals and CFO magazine are program co-sponsors with Hackett.
Best Buy Co. presents a strong brand image, from its yellow “sale-tag” nameplate to its publicly stated mission of “making life fun and easy” for consumers. But finance at Best Buy is branded, too—part of a workplace trend that increases finance staffers’ sense of identity within, while broadcasting the department’s role throughout the company.
For the past year, Best Buy’s finance organization has billed itself as a service organization for corporate functions. It puts its slogan—”Powering Decisions, Driving Value”—on all its internal communications, reinforcing the notion of finance as the go-to department when decisions are being made. Finance offers “value-added analysis, and that includes recommendations for actions,” says Tracy McDonald, corporate HR manager for finance at the Minneapolis-based home-electronics retailer.
The branding exercise emerged from this year’s Best Workplaces for Finance Professionals program, in which Best Buy participated. But the program has been watching the approach evolve in finance departments since 2001, when Atlanta-based First Data Corp., the parent of Western Union, talked about its efforts, including the use of a finance logo, newsletter promotions, and numerous performance awards—all helping build employee pride in a geographically disparate workforce of 1,500. Last year, mutual-fund giant Vanguard Group reported a similar approach, building camaraderie and a sense of corporate contribution through the use of a departmental mission statement, different from the corporate one. —L.Y.