Major changes began at CDW well before the market meltdown of last fall. Formerly listed on Nasdaq, the seller of computer hardware, software, and services went private in October 2007, after the credit crunch had begun but nearly a year before the economic crisis exploded last September. The company, which reported revenue of $8.1 billion in 2008, was bought by the Chicago private-equity firm Madison Dearborn Partners for $7.3 billion.
At the same time, the finance department underwent a change of its own: finance chief Barbara Klein retired in May 2008 and was succeeded by Ann Ziegler, former CFO of Sara Lee’s food-and-beverage division and a onetime mergers and acquisitions attorney at the giant law firm Skadden, Arps. Today, Ziegler is trying to manage the uncertainty in the environment and keep her finance team focused on the future. She talked with CFO.com about her approach to providing leadership in today’s economic environment.
What are your thoughts on leadership in the current economy? Do you think these times call for a different style of leadership?
I think that in times of uncertainty people are looking for leaders. They’re looking for clear thoughts about what an organization needs to do.
It is a difficult time because of the uncertainty. CFOs are used to looking at a lot of historical trend data to help them make decisions, but now the historical data might not point to a clear path forward because we keep hearing that it’s different this time. As a leader, you really need to be communicating what you’re doing and why you’re doing it.
Ziegler: A tester of sacred cows.
The other thing uncertainty creates is the opportunity for leaders to test and retest the sacred cows. If there’s ever a time to lead change and have an organization be open to change, this is it. The uncertainty provides the opportunity to revisit old assumptions.
What are some of the changes you’ve made? Since you haven’t been there for that long, has it been easier for you to challenge some old assumptions that may have preexisted you?
One example is that as the company grew up over time, inventory was actually scarce in technology. As technology was growing and evolving, there would be a hot technology, and it would be difficult for distribution companies to inventory it because the supply was so hard to come by. So CDW adopted the approach that fast pay makes good friends. If an OEM was trying to decide how to allocate its inventory, CDW would get a nice big slug of it because CDW was quick to pay and had a great sales and marketing team that would go through that inventory.
Coming into the company new, I didn’t have that legacy approach. One of the things we did last year was to focus more on working capital generally, and specifically payables management. It’s a very small and tactical example, but it shows how in times of uncertainty you really have the opportunity to test and question whether you should still do things a certain way. In my mind, an organization is more open to making those changes because they understand that the world or the economy is likely to be a bit different going forward.