Utilities can attract a new generation of employees by emphasizing the transformation the industry now faces, and the immense opportunity it creates. Matching mature workers’ vast experience with...
The New Breed Of Utility CFO
Strategic transformation demands more than score-keeping skills.
roadmap. Finding a driver—the CFO who isn’t afraid of bumps and potholes to be faced—is another.
Once the business case is made and points of arrival are clear, the CFO must engineer how the transformed finance function takes shape. The CFO must be dedicated to a lengthy transformation that occurs over time and in conceptual phases. Typically, the finance office is first viewed as a transactional scorekeeper. Once it demonstrates technical competency, it’s viewed as a guardian and commentator, particularly on facts of historic relevance to the organization. Only after evaluating facts through statistical and analytical tools and offering solutions is the finance function considered an advocate and partner to business units.
CFOs striving to evolve toward this more strategic role start by changing their skills and the skills of those around them. Once executive management decides to ask its finance department for strategic counsel, leaders in a good finance organization naturally will adapt to the new requirements and surround themselves with the right people for effecting needed changes (see sidebar “Recommended Reading”) . But organic transformational change isn’t enough. Most leaders need the discipline provided by a structured program, so they often develop a competency model that matches their goals, industry issues and situation (see Figure 1) . The competencies typically include technical, organizational and communication skills.
The second step toward transformation is an honest assessment of staff relative to the road map and future needs of the organization. As talent manager, the CFO creates development plans and subsequent training programs.
Finally, a structured development plan essentially provides a succession and advancement plan. The executive who has made it through the appropriate—and stridently detailed—steps in the development plan is usually the next person in line for advancement when opportunities arise. After Young went to TXU, Exelon announced it would fill the CFO office with talent from within, namely Ian McLean and Matt Hilzinger. Most likely they were being groomed for years before their promotions.
As the utility industry rises to meet 21st century challenges, so must the finance office. CFOs like Domenech, Snell, Wilder and Young provide role models for other CFOs. They succeeded in transforming their organizations to perform the role of strategic counselor for their companies by virtue of changing the way their offices functioned. Today’s energy challenges require this sort of transformation.
1. “ Wilder, CEO of TXU, Relates Lessons Learned from Utility Deregulation ,” Oct. 19, 2004, McCombs School of Business .