Ep 7: Competencies & Culture

Speaker 1 (1m 54s): I’m in Toronto. And I just literally today finished my two weeks of purgatory that I was required when I, who turned back to my own country, which is, you know, kind of bizarre. Yeah. What does that mean? Are you ha where you housebound more or less? Are you literally not allowed to leave the house? Wow. Now that’s what the rules were. That’s now what Brett did. I, I figured I’m fully vaccinated just because it takes governance a bit out of sync with their rules and regulations. I wasn’t going to hold that against them.

Speaker 0 (2m 24s): Okay. Well, I’m going to stop you there. We have to record this podcast before the Mounties come to take you away. It is fun. However, to look forward and know that the world seems to be okay.

Speaker 1 (2m 38s): Yeah. I was talking to some guys in the UK this morning are of course excited that we’re about to get, to have pumps open, which in the UK, you know, is, is paramount importance,

Speaker 0 (2m 51s): Right? Yeah. It’s such an important part of that. The culture of the UK, small towns and villages. Yeah. I suppose even the cities, the pub plays such an important social aspect, which by the way, culture is perhaps the, one of the themes that we’ll be touching on today with our business leaders, corporate culture. Would you agree, Brett, having heard some of what was shared, is there something you’d like to share upfront here to help listeners zero in on what some of the likely takeaways from our business leaders will be my

Speaker 1 (3m 25s): Feeling about this is the combination of competencies and culture equals employee engagement.

Speaker 0 (3m 32s): Okay. Yes, that’s right. More, I think more than one of the business leaders zeroes in on competencies. And I guess the emphasis was on, you know, you have to prepare your people to do the job if they’re going to succeed. Is that what you’re you’re getting?

Speaker 1 (3m 48s): Yeah. So think about it this way, right? If you’re in a lousy culture, you’re not engaged, or if you just don’t have the skills to do the job that you’ve been asked to do, you’re also not engaged. So

Speaker 0 (3m 60s): Interestingly, both are, are required,

Speaker 1 (4m 3s): Right? You have the right competencies and the right culture, you end up with engaged employees. But if you have, if you’re missing either one of them, you end up with disengaged employees, which is a huge cost in north America. You know, some people argue over $6 billion a year is the cost of disengaged employees. So I look forward to hearing what they have to say.

Speaker 0 (4m 27s): Okay, well, let me just clarify a little bit. Our first clip is really about building an inclusive culture. So not as much on competencies with this first clip, which by the way, is Harmit Singh, CFO of Levi Strauss and company who his episode recently debuted on CFO thought leader. But I want it to zero in on where he’s discussing some of the diversity stats that Levi Strauss has begun to regularly report on.

And it came out last year with a report. It was rather hard on itself. It stated publicly in a release that it wasn’t doing well enough. It’s not where it wants to be. As far as diversity is concerned. However, they’re looking to improve that. And hence, they’ve begun to really open up and talk about it and expose the numbers. Anyway, this is Harmit Singh, CFO of Levi Strauss.

Speaker 1 (5m 38s): We just incorporated the diversity stats and our focus on driving more of an inclusive culture. And how does the culture evolve as part of a longterm compensation? And the basic idea was that if it was important to us, which we have stated publicly is then it’s important to measure it. It’s important to compensate people and our leaders against that, and then measure progress over time. What we, what we have done is we have publicly, you know, made available our diversity stats.

And so, and, and, and as we looked at ourselves in the mirror, we realized that overall, as a company, as you look at the ethnic mix or the gender mix of our working population, you know, it broadly was in sync with the overall, you know, diversity and gender mix in the U S but as we looked and we looked at different layers, we realize we had opportunity at the leadership level. And so what we, what we said set out to do is as we recruit talent, we ensure that we’ll, you know, we’re looking at a pool of diverse talent as we promote talent.

We ensure that everybody is, you know, being promoted because they’re performing and we’re able to, you know, improve our diversity stats on that basis. We also have training programs now where we ensuring that once people are in, we’re creating a culture that will only ensure that we’re focused on and making sure people are included and we’re growing talent and training talent on that basis. So I think as we roll out our long-term incentive program, we’ve included now, you know, D E and I targets for the organization for leaders to aspire towards over the next couple of years.

Speaker 0 (7m 45s): Well, thank you again to harm it. Sing CFO of Levi, Strauss and company for participating with us recently, in his episode, Brad, I just want to mention, I thought it was interesting now harm. It was the former CFO of Hyatt hotels. He was also a CFO of yum brands international. And at one point in time, he was CFO of PRI pizza hut. He came up through the ranks at yum brands and PepsiCo.

One of the things he shared, he mentioned that at no other time in his CFO career, and again, he’s had multiple CFO tours of duty at no time, has he been as focused on talent? And that’s one of the points I think he makes more than once throughout, but he states it very emphatically. I mentioned that before I pass it to you, Brett, and like to know what you make of what Harmit shared,

Speaker 1 (8m 42s): I think interesting that you move forward there, proverb of what gets measured gets done. So he said, you know, high hopes and high direction on making sure that we’re successful around diversity. And then he’s got a bunch of statements about how he measures diversity, how he compensates according to that, how he sets firm targets. And to me, I like that on several counts. One is we often think that diversity is unmeasurable, but of course it’s not as quite the opposite, and it’s not just diversity of skin or religion, but also diversity of thought, which is what we’re trying to get to enable better decision making in the organization, but also setting targets, setting expectations that we should move in this direction.

And the second part I like about it is I believe as CFOs, we are the score keepers in organizations, but it’s no longer relevant to keep score in dollars and cents. You can’t put a dollar eyes number next to diversity. That doesn’t mean it’s not important. It means we need to score, keep in a different way. I’d be curious to find out what are the measures that he’s using around diversity. Diversity is a slippery topic that could be quite broadly defined or narrow.

And I think it’s super important that each organization sets the appropriate definition and then does what hermit has done, which is determined. What would I see more of, or less of as I move towards those diversity objectives?

Speaker 0 (10m 24s): Wow. Well, thank you, Brett Knowles for some great insight there. I want to move to our next finance leader. I think there could be a nice alignment between harm. It’s saying in our next CFO, who is bill Kelly of Treehouse foods, which is just a giant private label, food producer step into any supermarket today. If they have their own brand, chances are, it might be produced by tree house, bill Kelly, not unlike Harmit Singh has a career routes that lead back to Pepsi.

And he was a VP of finance at Pepsi. He held several different jobs as he climbed up the ladder. He arrives at Treehouse foods when a reorganization is underway, which he’ll provide some detail on. And of course, talent is top of mind. Here’s our next finance leader, bill Kelly, CFO of Treehouse foods.

Speaker 1 (11m 34s): Yeah, I think when I was promoted to CFO, one of the first things I wanted to understand essentially was the company strategy and where were we heading? And I wanted to make sure that finance and it was structured in a way that could support that strategy. So our, our organization right around by my Ascension to the CFO, you know, we, we moved the company from three divisions to two divisions. We organize around those functions. Each of the divisions have a different mandate.

And if you will, our Stacie of beverages division is focused on growth and enhancing customer solutions. Our meal prep division is focused on efficiencies and optimizing from a cash perspective, but we changed the financial reporting relationships. So those business unit finance partners that were hard wire in a finance, we changed that hard wire into the business unit. So they can be part of true business unit teams. We develop and create a revenue management function that didn’t exist prior to.

And then we, we really beefed up our corporate FP and a function as well. So, you know, we have a traditional financial structure, but I think we did a lot of things that step towards the business in order to help support the outcomes of the strategy, the pandemic highlighted the need to connect with your talent in different ways. It also highlighted the need to have the right capabilities and experiences as, as people dealt with, you know, a very, a variety of things for the first time. But I will say talent has always been a top of mind back to my background with the finance academies that I work with.

You know, these are the things that are always are top of mind. You know, when I became, you know, CFO of the organization, it wasn’t just a promotion for me. It was a promotion for essentially a whole new financial leadership team. We have a new corporate controller or a new head of internal audit, a new head of corporate finance, a new chief information technology officer, you know, just a few pieces there. So we have a very deep, talented team at tree house.

We’ve done lots of work around talent. You have a formal mentoring program that we maintain through the pandemic. We were one of the few companies that have an internship program last summer that we maintained through the pandemic. And one of the things that I’m most proud of is one of our leaders drove a process to develop a financial competency handbook, where we have an opportunity to share with our teammates, the various competencies that finance and what’s required in the first level, second level and third level to succeed in those areas.

And so those are the tools that we roll out and we’re now beginning a job rotation program and just other pieces along the way. So talent is, is top of mind, and I’m very fortunate to have a tremendously talented organization.

Speaker 0 (14m 40s): Well, there’s a nice snapshot of Treehouse foods provided by CFO, bill Kelly. What did you make bread of what bill shared with us?

Speaker 1 (14m 51s): I would, you know, bill is incredibly lucky to have that strong Pepsi background because, you know, he’s basically swapped out his entire leadership team and it’s, it’s tough as heck to keep the wheels spinning when you’re substituting and key players. And so his idea about needing to connect to talent and constantly needing to refresh that, that leadership team and making sure that, you know, we’ve got the financial competencies across the organization and to all levels certainly allows you to survive as you’ve got major changes.

Like, you know, he talked about going from three divisions down to two that’s, you know, seismic shift. He talked about swapping out four of the executive team, another seismic shift, and he describes it as if it was all seamless in the organization. You know, because he’s built this competency pool, it’s easier when those transitions have to occur.

Speaker 0 (15m 54s): So when it comes to building competencies and how organizations go about doing that, our next finance leader, mark shift, key CFO of bill trust had some interesting thoughts and I’ll just tee him up so we can add mark to the conversation.

Speaker 2 (16m 20s): Over 80% of our, of our, the op ex is, is our people. Our people are our most important asset. It’s imperative to us that we hire the best that we train them. And, and that’s why in part, it starts right at the beginning, we hire on start dates on two weeks cycles. So every person who joins the company has a week of training during that training. Every senior executive takes time and has a meeting.

And in this world, that’s virtual with everyone we hire. So there’s an idea that people not only before they get into their specific area, they have to have an understanding of how the entire company operates, what every division brings to the table. You have to understand our products, not just your area of expertise, and you have to understand we’re all partners in this game. So I would say as an organization, we believe in talent as first and foremost, we’ve been in a remote workforce environment and in large part to ensure the safety of our workforce, we now have the possibility of people going back to the office if that’s what they want.

And we’re only doing that because we feel we’re, we’re now in a safe environment to do that, to allow that to happen more specifically in terms of how we focus on, on people. Our goal is to make sure people grow in their roles, to the extent possible throughout the organization. We automate, we use our own products. For example, at NAR, we had only one person in the HR department. It was a person department of one all the way until we hit 80 million of revenue.

And now we have only two. And so no one is doing anything mundane. They’re focusing on, you know, outlier situations that, and then can do other things that are more interesting. So our goal is to create interesting jobs and to train people so that either they grow inside of our organization, or if they choose to go somewhere else or going somewhere else, very well-trained.

Speaker 0 (18m 39s): Okay. Well, thank you. A CFO, mark, shifty CFO of Billtrust for joining us and Mark’s episode is going to be released June 16th. So keep an eye out for that. But in the meantime, Brett, what did you make of what mark shared when it comes to talent?

Speaker 1 (18m 58s): Well, I thought it was of course, obvious and interesting that he’s got a focus on hiring the best and training the best. What I liked though, is the way they expanded to say, you have to understand that the entire company, you have to understand all the products, you have to understand how we work together. And that’s one of the unique things that the office of the CFO brings to the table. You’re you’re naturally cross-functional. And you might be one of the most important groups that work with leadership across your organization.

Yeah. The other two cross-functional groups of course are HR and it, but neither of them are in a leadership advisory role. So I thought it was an interesting mix between being in that advisory role, but also emphasizing this cross-functional nature and how he feels that everyone in the organization needs to have that awareness. I have to believe that when he goes into meetings, that’s one of the drums that he beats. He makes sure that when he hears comments, that indicate part of the organization does that does not understand how another part works.

He’s all over it. Trying to help close that gap.

Speaker 0 (20m 16s): We’ve touched on this before. Is there a role AKR OKR play here? I mean, is this where having specific adaptives to achieve leads employees to better understand how they fit into the bigger picture?

Speaker 1 (20m 32s): Absolutely. OKR is allow us to make the invisible visible. So these things that we ignore, like Mark’s comment about the office based culture or Andrew’s comments about knowing the entire business. I can put key results down or metrics down. What would I see more of or less of if I understood that. So, you know, what would I see more of, or less of, if I understand the cross-functional nature of work, I would see in any meeting more cross-functional representation in that meeting, I would see more movement of people from one department to another department.

I would see better synergies between products or production in different plants and different processes. So it’s easy peasy. Like once you’ve determined what these objectives are coming up with, your care’s a slam dunk, easy. The benefit is it puts a spotlight on those issues and allows the whole organization to gain visibility.

Speaker 0 (21m 35s): And that visibility, it brings me back to what we were discussing in the last episode that Ross Tannenbaum coined the macro to micro continuum, being able to see down and see up, having the board be able to look deep within the organization, having the employee down there, understand where they, they fit into the boards discussion or the performance of the company.

Speaker 1 (22m 0s): Yeah, exactly. Right. You know, what other jocks talked about is, you know, the farther up the organization chart, you are the farther out in time. You look, so the CEO is looking at one to five years, the VP’s one to five quarters. You eventually, I get to the person in the drive-through window. That’s looking at one to five minutes, nothing wrong with that, but it now means the OKR is, are the metrics I have. What I look at has those time horizons. So we’re busy in these chats, having conversations about CFOs. They’re the ones looking out one to five quarters.

And so things like hiring and training, that’s that one to five quarter horizon looking at things like making sure people understand, stay in the cross-functional nature, work again. One to five quarters is not something that you’re going to do overnight, but if you don’t put an OKR on it, if you don’t give the spotlight those above and below, don’t see it.

Speaker 0 (22m 55s): Okay. If I, if I recall correctly, then you said earlier that employee engagement is the outcome of competencies and culture. How, how does, how, how are these things connected then?

Speaker 1 (23m 12s): Well, I think you need to, you know, through the OKR, I need to have objectives or key results that indicate what the business is doing in both those categories. In other words, don’t just measure the competencies of your team, or don’t just measure the culture or, you know, the three sixties and the employee engagement surveys, you need to know both. And the dilemma is those are very dynamic. In fact, culture is far more dynamic than competencies.

So think of last year with COVID, you know, you can imagine the cultural shifts that happened the beginning of the year versus March when lockdowns happened versus April, when we’re working remotely versus June versus July is flopping all over the place. Like a landed fish, says the Canadian a but the competencies don’t change now, but does change is the job function and therefore the mix of competencies. So suddenly in March, when we moved to working remotely, I need a different skillset.

I need to understand how to use slack and JIRA and Santa and whatever those other new tools are zoned for God’s sake suddenly. So my competencies haven’t changed, but the need for competencies has changed. So now we’ve got two dynamic things happening that if you don’t get them done, right, performance lags and, and gives you a problem now what’s cool is we prove to the world that we can turn on a dime.

That magic happened last year. At this time, at this time we were all back at work. It wasn’t pretty, but we’re all back being productive. Those that could still perform in the, the COVID era. So we can change on the time. If, if the, if the burning platform is burning hot enough, we can make it happen. Well, how is it? We can then use that learning to move forward, where we don’t need such a severe jolt to the economy, but the organization can still respond to the need.

So what does this office based culture look like? And what is it gonna look like in a year’s time where, you know, the genie’s not going back in the bottle. We’re not all going to be back in the office. Full-time but we’re not all going to be working remotely. Full-time either, there’s a new manifestation of business. That’s about to come. And if we don’t track both competencies and cultures, we are going to miss that wave. Boom.

Speaker 0 (25m 45s): There’s our ending. We might have had a few minutes left, but we’re not going to top that one. So

Speaker 1 (25m 52s): You’ve told me to do it, man. It wasn’t my fault.

Speaker 0 (25m 54s): No, no, no, no, no. Nicely done. You came full circle and brought it back home. And speaking of home, you sticking around a while, are you once you’re out of quarantine, are you hitting the road or what? What’s your plan?

Speaker 1 (26m 8s): I have no idea why I came up here. Seemed like a smart idea at the time, but you know, I’ll be down there pretty quick. I’m guessing. Okay. My friend catch up with you later, Sarah.

Speaker 0 (26m 17s): Thank you, Brett. And on behalf of workplace champions, I’m Jack Sweeney. Thank you for listening. Hi, it’s Jack. If you haven’t yet subscribed to workplace champions, you’ll find us on apple podcast. Or if you’re an Android user, check us out on Spotify. If you like the show, please recommend it to a thanks for listening to workplace champions, a CFO thought leader production.