Financial Development Programs

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For a variety of positions in financial management, among them financial analysts, controllers and chief financial officers (CFOs), certain companies are noted as developers of talent, through a combination of their formal training programs, on the job training and the sorts of best practices that they instill in their staff.

According to the Wall Street Journal, some of the most noteworthy firms in this regard are:

  • General Electric (GE)
  • Honeywell International
  • PepsiCo
  • General Motors (GM)

Indeed, an executive search and placement firm specializing in financial managers, CCL Search, has conducted research indicating that at least 125 companies with annual revenues exceeding $1 billion each have CFOs who are alumni of the financial departments of the above four companies. These companies are known for financial management training and development programs that feature quick rotation of high potential managers through a series of divisions and locations.

General Electric (GE):

The financial function at General Electric believes strongly in promoting from within, and about 95% of its top few hundred financial managers are groomed internally. In recent years, approximately 700 employees have been enrolled at any one time in its global financial management program, a two year course of study that costs about $250,000 per participant, exclusive of their salaries and benefits.

One of the program's stated goals is that graduates will remain with General Electric for at least another eight years and rise to middle management or beyond.

PepsiCo:

The company's in-house Pepsi University administers at least twelve rigorous online courses for the benefit of approximately 10,000 financial managers, with a majority of them completing at least of these course offerings in a typical year.

Pepsi did not disclose cost data, but the company's CFO indicates that using online learning techniques keeps the expenditures far below those at General Electric. Finally, like GE, Pepsi prefers to promote from within, indicating that about 90% of its top financial people rose through the company's own ranks.

Honeywell:

Honeywell has reduced its financial staff by over 1,000 heads since 2003, due to a number of efficiency moves, even as total revenues have nearly doubled over the same period. Nonetheless, the company continues to invest in training and development programs for financial managers. Given the size and autonomy of Honeywell's divisions, they give financial staff experience equivalent to that obtainable in many standalone companies.

General Motors (GM):

As the result of its recent bankruptcy and reorganization, General Motors has drastically cut its internal financial training and development programs. Accordingly, GM's CFO indicates that the company is now oriented towards hiring top talent away from other firms, rather than producing it internally (a trend similar to that regarding financial advisor training at leading firms) and about half of his team fits this profile.

As a result, in the longer term GM is bound to lose its status as an incubator of financial talent and financial executives.

Tech Companies:

Within the realm of technology companies, established players such as Amazon.com and eBay are often eyed by smaller firms as places to recruit financial managers, given their success and large financial staffs. In particular, startups looking to launch an IPO are particularly interested in bringing an experienced CFO on board before making that major step.

General Observation:

Among small, entrepreneurial companies, an experienced financial management professional with a background gained in a Fortune 100 or Fortune 500 environment typically can count on being highly valuable addition, either as a full time hire or as a consultant. Many entrepreneurs lack the knowledge of financial best practices and procedures that members of financial staff typically absorb in leading companies, whether or not they have gone through a formal training program.

Source: "Where Finance Stars Are Born: As Priorities Shift, Some Firms Step Back From Longtime Roles as CFO Incubators," March 12, 2013