September 28, 2001
Finance Execs Need Overseas Experience, Say CEOs
Cross-border assignments crucial to career advancement.
by Alix Nyberg
Looking for that competitive career edge? Go away--far, far away-- and
don't come back for a couple of years.
Gaining international experience, says John Wilson, co-head of Korn Ferry's CFO practice, has become increasingly vital to CFO advancement. In fact, he says, it is "probably number four or five on the [CEO wish] list at large-to-midcap companies."
Such experience, say CFOs who have earned it, goes far beyond mastering country-specific tax and accounting codes. "You gain an appreciation for how difficult it might be to do things, like deal with government officials or transfer funds to close an acquisition," says Jim Bass, CFO of $2 billion Sony Computer Entertainment America, who completed assignments in Thailand and Portugal when he worked for Bristol-Myers Squibb. In addition, says Ron Nawrocki, former CFO of PepsiAmericas's Central European Group, "there are enormous opportunities to make changes compared [with] America."
Landing those plum international assignments, however, is harder than ever. Faster flights, E-mail, and the Internet have mitigated some of the need for them, and the costs of relocating an employee can be prohibitive. A rough estimate is that long-term foreign assignments generally cost three to four times an employee's base salary, according to Steven Nurney, director of consulting services at Organization Resources Counselors Inc., in New York. As a result, he says, "we're seeing more commuter and short-term [foreign] assignments."
"There was a time when corporations believed you had to live in a country to understand it. I think that's not the case anymore," says Steve Roell, CFO of Milwaukee-based Johnson Controls, who has helped grow the company's European operations to $5 billion in annual sales without ever living on the Continent.
THE NEXT BEST THING
At Bristol-Myers Squibb, local employees run the pharmaceutical giant's overseas businesses. But CFO Frederick S. Schiff offers his U.S.-based finance team assignments on the worldwide auditing staff as well as in the international mergers and acquisitions group to learn the global ropes. "In a short amount of time, you can be in numerous locations and get a flavor of different operations and cultures," he says.
It's similar to the path Schiff followed to the top. Recently appointed CFO after 19 years at the company, he says he traveled to each of its 80 worldwide locations at least once while he headed the auditing department, and spent a minimum of six weeks a year traveling when he was promoted to controller. Says Schiff: "It is important that you visit the management and finance teams at each location at least once to build relationships."
How skillfully you leverage those relationships, says Blythe J. McGarvie, CFO of Paris-based BIC International, is the key to mastering overseas business cultures. It's a lesson she learned firsthand while evaluating international alliances and acquisitions for Sara Lee Corp. in the early 1990s. Although her trips were short, frequent phone calls with overseas colleagues and involvement in local groups such as the Chicago Council on Foreign Relations helped her understand the undercurrents of business in each country. She recalls one case in which she realized that the projected revenues for a Finnish acquisition target were too high, because they didn't account for several macroeconomic factors, including the curtailment of a government subsidy for receivables. That meant losses, rather than profits, for the targeted firm. "But as a result of knowing what was changing and how the CEO was motivated, we were able to discuss a revised purchase price and reduced ownership percentage," says McGarvie.
Global Substitutes
- Get involved in internationally focused business groups in your area. Her involvement with the Chicago Council on Foreign Relations and the World Council in Maine (when she was CFO of Hannaford Bros.) laid the groundwork for her Paris assignment, says Blythe J. McGarvie, CFO of BIC International.
- Develop an expertise in a particular area, such as U.S. GAAP, valuation, or turnaround management. "I couldn't possibly hire someone for those things in Central Europe — they don't even have a word for turnaround," says Ron Nawrocki, former CFO of PepsiAmericas's Central European Group.
- At most large companies, global audit, treasury, and international M&A staffs offer the best international exposure.
- After traveling to a foreign division, keep in touch with the local staff.
