Is there anything quite like the love of a grandparent to make a young person feel warm, happy, and secure? Why, no. But what, you may ask, does that have to do with corporate finance?
It’s this: for corporate finance departments — currently besieged by the twin demographic demons of looming baby-boomer retirements and a relative paucity of younger people to step in as replacements — retaining the talent they do have should be of the highest priority. And any CFO who believes that should start acting like a grandparent, according to Tom Gimbel, chief executive of The LaSalle Network, a Chicago-based executive-search firm that also provides succession-planning consultation.
The idea behind “corporate grandparenting” is that, as a retention strategy, CFOs should proactively build relationships with managers two and three levels below them. While members of generations X and Y (not to mention the millennials) are far more likely to job-hop than were their elders, an occasional cup of coffee with the big boss can help stifle that urge, according to Gimbel.
“If the CFO brings star staffers who are really cranking it out into his office to talk about what interests them and what they’re doing, that goes so far in making them feel a connection with senior management,” says Gimbel. In fact, he adds, every manager of staff, not just senior executives, should make it their business to ask their direct reports who their two best people are, and then get to know them. “Usually management’s focus is on who the bottom performers are, buying into the Jack Welch philosophy to cut your bottom 10 percent.”
While knowing which people in the organization are high performers may sound like an obvious strategy, Gimbel says a surprising number of finance executives don’t know. “Too often management is delegated down and there is no corporate responsibility,” he says.
In a recent LaSalle Network survey of 128 clients, 75 percent said they would spend more time with people who are not their direct reports if only they had the time to spend. However, the time spent meeting with the junior staffers is nothing compared with that spent on replacing a controller who just left when no one has been identified internally as the replacement. Making matters worse, the controller is likely to hand-pick some of his former direct reports for roles with his new employer. In the survey, 84 percent of respondents acknowledged that a direct report’s departure would leave a void.
In many cases controllers, treasurers, internal audit chiefs, and the like actively seek to prevent CFOs from knowing much about the inner workings of their departments, according to Gimbel: they may want to take credit for all successes and obscure any flaws. “But if you’re actually spending time with people two layers below you,” he says, “you’ll get a different insight into what’s happening in the group and won’t be blinded from what your direct reports don’t want you to see.”