Work in Progress

As mentoring and ethics training evolve, finance learns how to boost team spirit.
Lisa Yoon, CFO Magazine
November 1, 2003

From Q-tips to Wisk laundry detergent, Unilever Home and Personal Care—USA produces a tool for
almost every aspect of household management. And its finance organization seems no less thorough when
it comes to helping its own 215 staffers manage their careers. "We like our CFOs of the future to be
businesspeople, as well as fnancially skilled," says Joe Wilhelm, vice president of finance at Unilever
HPC, a Greenwich, Connecticut-based unit of Dutch consumer-products giant Unilever NV. For one
thing, broadening their experience involves exposing finance employees to assignments in other countries
and stints outside finance, usually lasting six months or more in each case. The company also uses its
four-year-old finance-mentoring program not only for professional and personal development but also for
building morale. Further, finance has added a new emphasis on ethics training, focusing on "ethical gray
zones"—such as the line between proper and improper competitive-intelligence activities.

"Without the training, employees would be confused about the fuzzy areas," says Jay Ludy, director of
financial reporting at Unilever HPC.

Unilever's balance of practices for managing human capital in finance—along with a commitment to
measuring results internally—stand out in the third annual Best Workplaces for Finance Professionals
program, conducted by the Association for Financial Professionals (AFP) and The Hackett Group in
conjunction with CFO magazine. In all, 99 companies have participated during the three years. In 2003,
Unilever had the highest overall score among 19 companies—edging out Northrop Grumman Corp.'s
Integrated Systems (IS) division, in a group that included such companies as Telephone and Data
Systems, VHA, Arrow Electronics, and Best Buy.

The program isn't about competing for top scores, however. Designed to help participants identify
strengths and weaknesses in their finance departments, the Best Workplaces methodology allows
benchmarking against other finance departments and offers lessons about how to manage better. While
focusing the first two years on company practices in five original categories—personal-professional
development, quality of life, employee job satisfaction, innovation, and tools—researchers have been
learning, too. This year, to boost understanding of how finance departments deal with ethical concerns,
the program established a separate business-ethics category and combined the innovation and tools
categories for scoring purposes (see "Learning from the Pentagon," at the end of this article).

Certainly, some of the participating companies have done lots of training in ethics for years. Take
Northrop Grumman Corp.'s IS division. Training sessions cite Northrop scandals dating back to the
1970s, and the human-resources department takes a semiannual poll of finance employees to make sure
they know procedures for reporting any improprieties they observe. "We try to make it clear that we don't
penalize or punish" whistle-blowers, says Lance Newquist, CFO and vice president for business
management at Northrop Grumman IS. "You don't get fired for identifying; you get fired for covering
up."

But while company finance departments use the Best Workplaces categories to put distinct elements of
finance under the microscope, a clear conclusion from this year's research is that no individual aspect of
the finance workplace is totally discrete. Rather, there is interconnectivity across the five areas—
manifested in intangible characteristics like team spirit, a sense of organizational discipline, respect for
employees' personal lives, and a willingness to learn from past mistakes.

Sometimes this organizational "glue" flows from the CEO, or from the CFO or other finance leaders.
Other times, it originates with members of the finance staff. But either way, leaders have to nurture the
spirit if its benefits are to be extended throughout the department.

Bottom-Up Change
At Unilever HPC, a structured approach to mentoring grew from a broad, formal program that encourages
employees to suggest workplace improvements. Since 2000, finance chief Wilhelm has invited all new
finance staffers to meet with him after three months on the job. He asks them for their impressions, he
says, including anything at all that "seems odd" about the department. At this time, many also choose a
"thrust" among several that finance has designated—from cash management to new finance tools. They're
encouraged to spend from 5 to 10 percent of their time "making finance a better place" from the
standpoint of that thrust. "If they're really passionate about it, it shouldn't feel like work," says Wilhelm.

The finance department initiated the mentoring program after two then-junior-level finance managers—
Tracey Maus and Katherine McDonald, who had chosen personnel as their thrust—enlisted the advice of
a consultant to help them meet the need they saw. Wilhelm says his department thrives on such grassroots
proposals. "When initiatives come from the top, it's very 'yes, sir; yes, ma'am,'—and then it lasts only as
long as the executive who started the initiative is interested," he says. But by encouraging employees to
take charge, managers "institutionalize" the changes, he argues, because the solutions reflect deep needs
within the staff.

Mentoring programs are a rarity in finance, according to Buck Consultants, which evaluates such trends,
and the few programs that exist suffer from a lack of structure or commitment, says Buck consultant Tom
Casey. "They tend to be these amorphous, unarticulated programs that lack managerial commitment and
are not particularly effective," he says.

Not at Unilever HPC. The mentoring program, which evolved at the same time as the orientation process
for new finance hires, is managed through formal one-year mentor contracts, during which mentors and
the employees they are paired with are encouraged to meet every six weeks. A special segment of the
program is dedicated to high-potential employees, and gives them career guidance from a mentor at least
two levels above them. (The standard mentor program involves a one-level separation.)

An International Choice
Mentoring at Unilever is more than just a tool for professional development. Consider Mary Ann Morse, a
12-year Unilever veteran and former director of finance at the laundry-products group, who recently
benefited from the high-potential mentoring program. At the time, she was just about to be married. Faced
with a tough decision about whether to take a high-profile posting in Singapore—reporting to Unilever
NV's head auditor—she consulted her mentor, Bob Gluck, senior vice president of finance for Unilever
US.

"It's still a promotion. And there isn't as much travel involved," she says. Morse also appreciated that at
Unilever HPC, turning down a move didn't hurt her career.

The promotion she eventually took, to Bestfoods, provided the right balance of work and lifestyle, and
also benefited the company. Adds Morse: "I think a lot of companies are about 'face time' in the office,"
but at Unilever HPC, "it's more important that the work is done."
Among other programs employees praise are telecommuting and job-sharing, in which two part-time
workers split a full-time job. The first three months of telecommuting arrangements are considered a trial,
but no minimums or special reasons are required for requests.

In the Best Workplaces program area of ethics, Unilever scored high, in part because a formal ethics code
governs its overall organization. It also requires four hours of online ethics training for managers each
year—underscoring a feeling at the company that ethical standards apply to everyone, no matter what
rank. "We're always setting the tone from the top," says controller Guy Gioielli. "Managers here walk the
walk."

As for Unilever HPC's lead ranking in the 2003 Best Workplaces benchmarking program, it shows that
"we're progressing on the right track," Wilhelm says. "But we don't see it as having arrived at the top. The
minute you reach the top, you start regressing."

Happiness Is a 5-Foot Partition

At the Irving, Texas, finance offices of Northrop Grumman IS, a unit of the Los Angeles—based defense
contractor, part of workplace management involves making the physical plant work effectively for the
finance department. In fact, CFO Newquist aimed high. "We wanted to create an environment where
people would work there for free," says Newquist. While "obviously that's not going to happen," he
admits, he does believe the building that was created "shows finance the value they bring to the
company."

The design of the 20,000-square-foot facility, completed in 2000, reflects careful planning, including a
review of the state of the art in finance offices as well as staff meetings in which finance employees
expressed their ideas of what was needed. For one thing, the building was sited to minimize changes in
commuting times. But it was in the office-space design that the company made its strongest statement.

Five-foot-high partitions give each of the 75 finance employees at the facility enough privacy to work.
The glass tops of each partition let employees see one another from their 10-foot-square cubicles, staving
off any sense of working in isolation. Cubicles, major office equipment, and processing centers are
grouped by function, optimizing workflow.

A well-designed building was symbolic for Newquist. "We didn't want to ask finance to be state of the art
and then not provide the tools," he says. And indeed, in the Best Workplaces new innovation-and-tools
category, Northrop Grumman IS earned the highest possible score.

Northrop Grumman IS has done its own internal measurements of efficiency and accuracy in a range of
finance areas, including timeliness of travel reimbursements, in part to boost morale. "We're always
measuring," says Newquist. "We want to know, 'Are you doing a better job today than a year ago?'"

The research goes far beyond worker-satisfaction results. One way of measuring errors in payroll
accounting, for example—and eventually improving accuracy—is to calculate the cost per paycheck. "As
people have gotten better and seen the numbers, they've taken pride in it," says Newquist.

In the area of business ethics, Northrop Grumman has taken an approach that may seem counterintuitive:
studying past ethical failings at the company as a way of helping current employees understand the new
environment of transparency and accountability.

The company's problems stretch way back to alleged illegal overseas payoffs and political-contributions
scandals of the 1970s, when it was still Northrop Corp.—before such products as the B-2 stealth bomber
and Global Hawk unmanned aircraft, and the acquisitions that have made it second only to Lockheed
Martin in the industry.

But such ancient history is very real to Newquist, who joined the parent's payroll department in 1974.
"I've seen it all," he says, recalling that his office once was searched by authorities during an
investigation. "I had my grandmother calling and asking, 'Did you do something wrong?'" Things had to
change, says Newquist, adding, "I have a tremendous amount of pride in the company and where it is
today."

To communicate that pride, he has taken to covering the darker side of Northrop history in new-employee
trainings. One video shown to all Northrop Grumman employees is "What Went Wrong," which examines
a case of engineering test-falsification to which Northrop pleaded guilty years ago. "We don't shy away
from it," says Newquist. "Instead, it's 'Hey, you weren't here, but it was ugly, and we don't want to be
there again.' It's naÏve to think there are no bad people [at the company], but we make sure people
understand the culture here; that is, the culture of an ethical company."

Such candor brings some rewards, including a high score in the business-ethics component of the Best
Workplaces research. But high moral standards also earn it loyalty from employees. "That's the reason I
work for this company," says Al Trebitz, an 18-year veteran who now oversees cash management at the
financial-service center in Bethpage, New York.

Generational Clash
As operator of the largest health-services cooperative in the group-purchasing organization (GPO)
industry, privately held, for-profit VHA Inc. sees collaboration as the foundation of its business. So four
years ago, when the company began seeing significant gaps in the way its 80-person finance workforce
was being managed, it summoned help from its human-resources department. "We recognized up front
that in order to make the changes we wanted, we needed someone with a broader skill set," says CFO
Robert Chapel, who was promoted from vice president of finance earlier this year. Finance enlisted
Cheryl Zobal of the HR department's organizational-effectiveness group.

In prior years, the Best Workplaces program has identified assigning an HR liaison within finance as a
hallmark of good practice. And VHA—whose overall scores were close to the average recorded by this
year's participants—has been using the HR connection to make improvements. The company, based in
Irving, Texas, also sees itself using feedback from the Best Workplaces program as part of an ongoing
effort to move to a higher level of performance.

In the past, VHA's own internal employee surveys had highlighted departmental problems. For one thing,
managerial attitudes were undermining the performance-review process, says Chapel. "Supervisors would
save up everything for this one evaluation," he explains. Rather than be direct, managers would
"sugarcoat" critical comments for the in-person review—then put them more harshly in the formal
evaluation.

Also, older managers became frustrated with young junior staffers, whom they perceived as resistant to
instruction or even disrespectful. The newer hires, meanwhile—having been trained to expect
explanations rather than simple orders—felt they were not being treated as professionals. "It was a
generational gap," says Chapel. Managers "would think, 'I'm only asking people to do what I had to do 25
years ago,'" he explains.

Part of Zobal's answer was to help provide training for managers. It's a continuing effort, but one that has
had some results. In last year's internal survey of finance, there was a sharp increase in the number of
employees answering yes to the statement, "My manager acts as a coach rather than as a boss," for
example.

Survey results aside, Bill Kline, senior director of contract and financial audit, has his own metric for a
good workplace. "We have not lost anyone in audit to other employers in the last five years," he says,
adding, "the last five openings were filled internally." To Kline, a seven-year VHA veteran, that bespeaks
employee satisfaction and management's commitment to develop and promote.

The Best Workplaces research is "the only available source of benchmarking information on other finance
departments," says Chapel, and it has taught VHA some valuable lessons. In the area of finance training,
he notes, "we spent less time on training than first-quartile companies." And since then, finance
executives have been looking for ways to increase training opportunities.

For most finance departments that participated in the Best Workplaces program, the results fit nicely with
their own analysis. "It's an open, risk-free environment for people to see opportunities for improvement,"
says Newquist of Northrop Grumman IS.

Lisa Yoon is an assistant editor at CFO.com.