Visionary CFOs: who are they, and how can you become one?

• Author: Millman, Gregory J.
• Position: Chief financial officers - Cover Story

George Carlin, the grizzled granddad of stand-up comedy, lampooned oxymorons like "military intelligence" in one of his more memorable routines, and in some journalistic circles Carlin's work is considered good enough to steal. So, to keep the record clear, let's state up front that we can claim full credit for coining the phrase, "visionary CFO."

It's a relatively new concept for the top financial slot. Indeed, Jim McTaggert, chairman of Connecticut-based Marakon Associates, an exclusive little strategic consulting firm whose influence is far out of proportion to its size, says the typical CFO is anything but a person of vision.

"Often, the CFO is an Old Joe from a Big Five accounting firm. Old Joe sits on a narrow functional silo and very competently makes sure the audits are done, the taxes minimized, the company gets the best rates when it has to borrow. If you have a meeting of top executives to discuss major issues that affect the value of the firm, this person is either not invited, or if invited, doesn't sit as a full partner. Old Joe checks the numbers, but Old Joe isn't sitting at that table expressing a view." Of course, Old Joe is no dummy. He or she is very intelligent, understands the core financial issues of the day and how they affect the company, is a good administrator, even a reasonably good executive. In fact, Old Joe is only one card short of a full deck.

The vision card admits the few who hold it into the aristocracy of financial management, a thin upper crust of chief financial officers whose job title could as easily have an "E" instead of an "F" in the middle.

"Old Joe" is a numbers guy and a damn good one. Period. The "visionary" CFOs know the numbers cold, but they don't just focus on the numbers. They have an uncommon breadth of understanding, an ability to see what the numbers add up to in the real world. So the visionary CFO often becomes the fulcrum that braces and directs the many levers it takes to move a corporation in a new strategic direction: the board, the staff, the line executives, the investment bankers, the consultants and others. The visionary CFO is the central point at which all information about the company must converge, so sound measurement and disciplined controllership must anchor the "vision" to give it strength. But an open mind gives it flexibility.

The four CFOs profiled here have what it takes. We identified them through an informal poll that included financial executives and reliable sources in the consulting, finance and human resources industries. Space permitting, we might have profiled as many as a dozen, more, but our objective here is not to provide an exhaustive survey of the best CFOs - only to illustrate through a few outstanding examples the characteristics of this rare breed, the visionary CFO.

HEIDI KUNZ ITT INDUSTRIES, INC.

"I never planned my career," Heidi Kunz said, disarmingly. "Things just came along." They sure did. Things like the undergraduate degree in Russian from Georgetown University, the MBA from Columbia, the fast track that took her from entry-level grunt to vice president and treasurer of General Motors in just 15 years. She left GM in 1995, a year after her promotion to VP, to join ITT Industries, Inc. Among the things that came along then were the CFO job, a multibillion-dollar divestiture, a line business to run, and in October 1998, promotion to executive vice president.

"Well," she modestly concedes, "life isn't entirely an accident, I guess."

People who have worked with Kunz describe her as open, engaging, personable, curious, straightforward, very determined to get to the point, and so self-confident that she doesn't even try to look omniscient in front of other people at a meeting. Marakon's McTaggert is still surprised by the ease with which she says, "I'm not sure I understand. Could you back up and go over that again?" Run-of-the-mill CFOs, it seems, would rather drive aimlessly on than stop and ask for directions. Not Kunz. It's true that she emphasizes listening, building relationships and other elements of what some consider a feminist approach to business management. But those elements of executive style turn up in the work of all "visionary" CFOs, men and women alike. In fact, they are the very attributes that separate the "visionaries" from the "Old Joe's."

"I consider myself a very straight person," she says. "I try not to be harshly blunt, but I think there's rarely a mixed message between me and the people I'm speaking with." She has always worked hard to include in her perspective the motivations and priorities of line managers, and her one regret about her own career is that she didn't get line experience earlier on, because "It's important to understand the other side of things. As much as I try to be in tune with it and listen and appreciate it, living it is different."

But even the most understanding CFO has to stand for something herself. In Kunz's case, that something is shareholder value.

Sometimes the business can live in its own world and forget who owns it and what the real obligations are. I think a business certainly needs to make customers and employees happy and have good relationships with suppliers, but the constituency missing in that list is the shareholder. In order for the company to be successful, the shareholders' priorities must be understood down the line.

In other words, the CFO is an outsider's insider. Playing the position well means keeping line management aware of what providers of capital expect from the company, and defending shareholder value aggressively. That awareness is important in any publicly held company, but ITT Industries needed it more urgently than most when Kunz joined the organization.

"ITT Industries was...