What began to develop was the need for a finance course focusing “not so much on technical things” but on what CFOs bring to the strategy table and how they present themselves. “My job as a CFO would not be to say no, but rather to make sure everybody knew what the financial implications were,” he says. And among all the possible strategic themes, the most important was growth.
“That was the backdrop for the week,” says Percival. “It was not to be a general management program, but it wouldn’t be technical finance stuff, either. It was focusing on cooperating and communicating positively.”
The new program, which today costs the company sending finance executives to Wharton’s Philadelphia campus $9,200 per head, drew from some existing courses. “We picked some stuff from strategy programs we already had, and from courses like Negotiations,” he says. “But you couldn’t get this in any other program as a package.” Attendees are a mix of “CFOs and CFO wannabes, like controllers.” They come from companies of all sizes.
From the beginning, scenario planning has been among the most popular elements of the course. “As a CFO there are some ‘Yeah, but so what?’ questions to deal with,” Percival notes. A historical look at the railroads early in the century, for example, highlights the industry-changing threat from the automobile. “But so what? If I’m a railroad, should I get into manufacturing automobiles?” The very discussion led to choices like railroads serving to move cars from place to place, for example. “Somebody should have been talking about how we create value and how we earn our cost of capital from that.”
Today’s strategic issues, however, require more contemporary examples than other executive-education courses use. (Professors often like older cases because it takes years to see the consequences of various choices.) Cases now are as recent as 2005, although there’s still a need to be able to discuss outcomes. “People say, Oh my God! That’s what the company did? How did it work out?” says the professor. Without discussing specifics of the cases studied, Percival says they are disguised real situations — though sometimes not particularly well-disguised.
“The companies we look at are sometimes good, wonderful companies, but often their decision-making process isn’t a good one,” says Percival, who has a fondness for knocking the aircraft-development choices of both Boeing and Europe’s Airbus. “Sometimes,” he adds, “they succeed in spite of their poor decision-making.”
Along Comes Sarbox
As Wharton was fine-tuning its program to reflect cries for the strategic CFO to spend less time on traditional scorekeeping functions, passage of Sarbox forced the professors to reevaluate things. “With Sarbox came personal responsibility for the accounting,” Percival notes. “CFOs were certainly feeling this dilemma. Unfortunately, in the short run you have to spend considerable time, if you don’t have the forward-looking systems required by the Sarbox era. Once you’ve got them, then it’s important to think about reallocation of time.”