Ensuring financial leadership: one way to ensure a good pipeline of finance talent is to grow it internally. Here's what some large companies are doing to keep their finance staffs up do date--on much more than just accounting.

Getting and keeping good finance talent is a key management issue that is not going to get easier as the workforce shrinks. Indeed, trends predict it is likely to get more challenging. One way to ensure a talent pipeline is to offer employees structured career-planning programs. There are some excellent models of companies that have such programs in place to capitalize on their own finance talent.

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Increasingly, the largest source of an organization's future leaders is its own high-potential employees, and more frequently, companies are taking charge of developing these fast-trackers. A Robert Half International survey found that 60 percent of companies are promoting from within more often now than they were just three years ago.

Check out the financial leadership career tracks at companies such as AT & T Inc., The Boeing Co., Cigna Corp., General Electric Co., General Motors Corp., Johnson & Johnson, Lockheed Martin Corp., Sprint Nextel Corp. and Wal-Mart Stores Inc., and you'll find each company offers a varying type of financial leadership development program.

In an attempt to drive sales growth and return on investment, Wal-Mart--with stores in 16 countries around the globe--perceives "a need to better develop our finance people," said Thomas M. Schoewe, executive vice president and CFO, in his presentation at Financial Executives International's (FEI) Summit 2006. To this end, each year Wal-Mart holds a five-day Business Leadership Series (BLS) in Fayetteville, Ark. The 40 to 50 people who attend are under the tutelage of President and CEO Lee Scott, his direct reports and former Wal-Mart CEO David Glass.

"In developing the business leadership series, we've dedicated two out of the five days to finance," says Schoewe. One is quantitative in nature, the other qualitative; the latter addresses issues of judgment.

Schoewe says Wal-Mart's Financial Development Program includes identifying high-potential associates, creating development plans, assigning special assignments, holding development events and building competencies. An individual finance development plan may include concentration in general accounting and financial reporting; internal controls; business planning and analysis; treasury and cash management; tax; corporate development; or process management. If participants require more on a particular subject, such as the M & A process, Wal-Mart will follow through on that, since development is based on the individual participant's needs.

Sprint Nextel's Approach

Sprint Nextel's 10-year-old Finance Management Development Program (FMDP) entails a three-year rotation of job assignments, classroom training, on-the-job training and continuous performance feedback from managers and mentors. Job rotations may include: corporate audit, financial planning and analysis, mergers and acquisitions, office of the controller, decision support or operations analysis. All assignments involve various aspects of Sprint Nextel's business.

Lynn Badaracco, Sprint Nextel's director of Talent Management, says a strength that sets the program apart from others is its extensive length. In addition, rotations are based on the individual's needs. The program has strong executive sponsorship, especially for the rotations. Alumni are asked to take active roles in the program; they will often be very helpful, particularly to people looking for their next rotation.

Another of the strengths of the program, she notes, is its evaluative strategies. Following each rotation, Sprint Nextel holds an an evaluation panel, comprised of the rotation manager, as well as his or her manager. Managers from other rotations participate as well. At meetings, chaired by a development manager, they look at performance and potential obstacles to the FMDP's success in the next rotation, and what assignment could help round out the his/her leadership and financial acumen. The panel evaluation, with its high level of rigor, has been added within the past two years.

For the classroom-training component, Sprint Nextel has moved away from some of the more technical skills courses, emphasizing instead leadership skills. Courses include advanced presentation, coaching and development and performance management.

"If participants need more financial pieces, we determine what outside courses they can take," says Badaracco. However, she adds, "We have moved toward leadership development. If there is a big initiative, such as Sarbanes-Oxley or new enter-risewide programs, we would add training." Training is customized and includes online support.

They also hold book review sessions on management or leadership topics, where a recent book reviewed was Blink, by Malcolm Gladwell. "The book reviews help FMDPs engage with executives and talk about topics not related specifically to financial skills," says Badaracco. And, at brown-bag lunches, managers discuss current trends, top-of-mind issues and how department roles are changing.

Six months into the program, participants are introduced to a mentor. Mentors and FMDPs meet and then rank-order one another to determine the most effective match of mentor-rotegee relationships. Badaracco says the initiative, in process for the past two years, is "fun and informal." Structure, embedded into the program early on, requires pairs to meet twice in the three months following the match-up. Then, the FMDP is charged with driving the relationship.

Qualifications for the program include leadership interest, three to five years of consecutive experience and preferably an MBA. Badaracco says of candidates for the program: "What we're looking for are people who are willing to take risks."

At Sprint Nextel, employees roll out of the program at a managerial level in the finance department. However, it's not unusual for them to move to other parts of the organization, to different departments. "They will still use those corporate skill sets, which is helpful from the organization's perspective, says Badaracco. "We bring that broader role and financial expertise to whatever they do."

There is no separate succession plan for FMDPs, as each career plan is tailored to the individual and includes an Independent Development Plan. FMDP's career paths are tracked, taking into account their career aspirations--how they wish to grow personally and professionally, as well as course work needed and reading that will be helpful.

Cigna Develops Financial Leader

Employee-benefits industry player Cigna's Financial Leadership Program consists of both an Actuarial Executive Development Program, which has been in existence since the 1950s, and a Financial Development Program (FDP), started in 1991. The former is focused on bringing recent college graduates to the point of receiving a Fellow of the Society of Actuaries (FSA) designation. Graduates of this program include two of Cigna's division CFOs, as well as the treasurer. The FDP is a mid-career entry point for CPAs and MBAs who have three to 10 years of financial experience, a proven track record and leadership potential.

Cigna believes that what sets its FDP apart from similar programs is the range of potential leadership opportunities open to graduates. Its presidents of group insurance and healthcare, as well as the CFO of international business, all went through the FDP.

Amie Benedict, director of Cigna's FDP, says that, all told, 37 graduates are now in executive-level roles within the company. "The FDP is competency-based, not a program where people come, do four rotations, and graduate," she says. Cigna's five competency modules include leadership, communication, technical, analytical and business knowledge.

All program associates move through the program the same way, through three to five job rotations, with formal and informal training and corporate and peer support. Training and job rotations are individually mapped, depending on work experience, competency level and Cigna's business needs.

Associates work through three to five job rotations of 18 to 24 months each. These include: corporate finance generalist, audit/risk-management specialist or controller, with responsibility in financial functions such as planning, pricing, reserving, research, strategy, project management or reporting and analysis.

Benedict also cites the length of rotations as a strength. "The thought is that when you're initially starting in that role, you're just learning. After about six to nine months, you move into a leadership role and then give back to the organization."

Training consists of "professionalism" courses having to do with presentation, negotiation and positive power and influence, as well as homegrown courses such as financial interrelationships and competing for customers of capital. Much of the training has been converted to a Web-based platform.

Additionally, there are brown-bag meetings with speakers, and associates also meet to listen to quarterly analyst calls and then discuss the calls with a guest speaker. While no formal mentorship program exists, informally, senior financial members of the Financial Task Force serve as coaches and mentors. Even financial officers or other top-ranking executives continue to be coached and mentored by executives senior to themselves.

Preferred entry requirements for the program include an MBA or CPA certification and three to seven years of financial experience.

These are but a few examples of the value that the largest corporations place on finance training. As companies demand excellence in their financial executive suites, financial leadership development must become increasingly "well-rounded." For companies to operate successfully on the world stage, they must fill their benches with strategic and analytical thinkers, and players who can step up and lead their organizations into the future. In order to do that, acceleration of financial executive capabilities is a crucial element in the process.

Susan Schott Karr is a freelance writer based in San Francisco. She can be reached at [e-mail] or 973.668.9611.

RELATED ARTICLE: The Accounting Leadership Pipeline: Educating the Next Generation

Regardless of what you may have heard, the news is not all bad: there is, indeed, a strong and growing talent pool of Gen Y-ers interested in joining the accounting profession. But as we reach out to bring this fresh talent to our fold, we find that a real responsibility lies with business and academic leaders to shape that talent into leaders who will face the new challenges of the business world. Yet, since Gen Y-ers are marching to their own tune--and not following in the footsteps of their Baby Boomer parents--a new approach is required in order to attract and retain this next generation of leaders.

Statistics show that entrance into university-level accounting programs continues to grow. The American Institute of Certified Public Accountants reports that for the four-year period 2000 to 2004, enrollments were up 19 percent (to 171,000 in 2004) and continue on the upswing. And, the profession appears to be attracting more women and minorities than ever before.

While encouraging, challenges remain. For example, how is the education pipeline helping Gen Y-ers prepare before they interview with organizations like yours and mine? Let's take a step back into accounting education history. In 1989, a group called the Accounting Education Change Commission was funded by the then-Big Eight to join with educators to encourage innovation in education. This group was probably the strongest force in broadening education beyond the "sage-on-the-stage" method of teaching, and one of the first to foster the teaming and group learning activities that we benefit from today.

Now, 17 years later, we face a different future. While we still look at the core competencies that Gen Y-ers bring to our firms, we know that accounting and financial skills are just the table stakes. When we interview, we are also looking for interpersonal and communications skills, critical thinking and the ability to solve problems--not just the ability to work with numbers and charts. As a profession, we are working with universities to make these skills part of the students' full course of study.

Here are some of the things we can do to help academia keep pace with business:

* Engage with professors/faculty. While it is often difficult to offer professors internships that we feel should be earmarked for students, relationship managers for universities and colleges should develop more opportunities for professors to have more intimate experiences with our organizations. In turn, professors can have more relevant discussions with their students.

* Continue to strengthen ethics and social responsibility education. While some schools have cut back on ethics education budgets, many universities, such as the University of Illinois, are developing curriculums that build ethics into many of the core business and accounting studies.

* Personally get involved in university education. Just as the workforce sees the departure of baby boomers, the academic community is experiencing the same trend. There is now opportunity for business to support and stimulate doctoral business education and for our leaders to take adjunct teaching positions to bring to classrooms hands-on perspectives that textbooks cannot provide.

So what attracts students to accounting? Is it the headlines? Are we suddenly seen as "cool"? Perhaps, but it's more likely that students now feel this is a profession where they can have an impact and make a difference. As the senior members of a growing profession, let's assist them in raising our standards with their fresh thinking and problem-solving skills. And, let's work with them and their professors to build relationships with us, and to learn the new requirements for success so they can be better leaders.

Barry Salzberg is Managing Partner of Deloitte & Touche USA LLP, based in New York. He can be reached at [e-mail].

By Barry Salzberg

RELATED ARTICLE: takeaways

* Increasingly, companies are looking to develop bench-strength in the finance area from their internal staff. A Robert Half International survey found that 60 percent of companies are promoting from within.

* Most large companies have in place structured career-planning programs to capitalize on their own talent. Wal-Mart's Annual Leadership Series focuses on finance for two out of the five days of the program.

* Sprint Nextel's Finance Management Development Program involves a three-year rotation of job assignments, classroom and on-the-job training and continuous performance feedback from managers and mentors.