Financial Leadership and the
Management Accountant –
Coping with An Uncertain Economic
Environment
by:
Jeff Thomson
IMA President & CEO
November, 2008
IMA – A Brief Background
– Founded in 1919 – Entering our 90th Year!
– Nearly 60,000 members spanning 125 countries
• China and Middle East are the highest concentration of
members outside of US
– CMA Certification - internationally recognized
• Over 30,000 CMAs worldwide
• Exam and related materials translated into Chinese
– Opportunities for students to participate through
scholarships, awards and competition programs;
creation of student chapter; networking with local
chapter; attendance at student leadership conference
– www.imanet.org/membership_helping_student.asp
– Over 1,000 members in China
– Local contacts in China – Linda Li and Harry Liang
Where Is The Economy Now
• Oil - $56.45 vs. recent high of $147.96
• Dow – 8,500 vs. recent high of 13,850
• USD to EURO - $0.80 versus recent low of
$0.63
• Baltic Dry Index - 841 vs recent high of
12,000. (BDI is a measure of the cost of
shipping goods)
• China GDP growth declining from 11% to 8%
and then 6%??
The Past, The Present and the Future
US housing
market bubble
Investor lack of
confidence
US Sub
Prime collapse
Bear Sterns
collapse
Northern Rock
collapse
Lehman Bros
collapse
Fannie Mae
/Freddie Mac
collapse
New risk &
analysis
environment
Credit
market
squeeze
Global
recession
On Going Issues
• Fair value accounting or mark to market
concerns, issues and re thinking
• Difficult access to credit for all industries
hurts investment and growth
• Fear of countries turning more inward to
“protect themselves”
• How to properly manage risk and control
The Role of The Management Accountant
Before, During and After the Current Crisis
• Before
• During
• After (the future)
Is now the time to be a management accountant?
Questions to think about…
 What are some criteria for selecting a career?
 What does an accountant “do”?
What does a management accountant “do”?
 Is certification important?
 Why do I need to care about ethics?
 What should I do to prepare for my first job?
The “Good Career” Checklist ….
 Is the market environment/profession
healthy?
 Is there career growth vs. “just a job”?
 Are salaries competitive and growing?
 Am I helping to create growth in my
organization, looking forward - not
behind?
 Can I have some fun along the way?
Financial Leadership: What Does “It”
Mean???
•For the Young Professional: To grow as a
professional with a cohesive set of hard and soft
skills “tailored to my evolving needs”.
•For the “Seasoned” Practitioner: To be a more
influential finance professional regardless of
position in the hierarchy of an organization.
•For the Manager of Staff: To create a more
influential CFO business partner team supporting
implementation of the organization’s strategy.
Roles of a Successful New Employee
 Team Player
 Student
 Adapter
 Resource Person
 Time Manager
 Representative
 Diplomat
 Dues Paying Member
 Investigator
 Career Planner
 Leader
What is Leadership - The Six “C’s” of
Leadership Credibility
Conviction
The passion and commitment the person
demonstrates toward his or her vision
Character
Consistent demonstration of integrity, honesty
respect, and trust
Care
Demonstration of concern for the personal and
professional well-being of others (building
“followership”)
Courage
Willingness to stand up for one’s beliefs,
Challenge others, admit mistakes, and change one’s
own behavior when necessary.
Composure
Consistent display of appropriate emotional
reactions, particularly in tough or crisis situations
Competence
Proficiency in hard skills (technical, functional,
content expertise) and soft skills (interpersonal,
communications, team and organizational skills)
FINANCIAL LEADERSHIP – A CONTINUUM (illustrative)
Investor and Customer
Relations (S)
Cross-Functional Influencing
Skills (S)
HARD (H) and SOFT (S) Skills
Learn the Business (S)
Cross-Functional
Collaboration, Influence (S)
Leading and Managing
Staff/Teams (S)
Change Manager/Agent (S)
M&A, New Market and
Product Development (H)
Process Management (H)
Enterprise Risk Management (H)
Project Management (H)
Forecasting, ERP Evaluation
(H)
Financial Risk Analysis (H)
Strategic Planning (H)
Effective Communications (S)
Time Management (S)
Cost Accounting, Budget Prep,
Excel Analysis (H )
Audit, Tax, External Reporting
(H)
Entry FP (1st job)
Young FP
Seasoned FP
FP= Finance Professional
Senior FP
What CFOs are Saying …. Bottom Lines
•Aspire to move from counter of wealth and compliance
cop to creator of wealth and influencers of strategy.
But, ….
•This requires a whole new set of MA/finance function
skill sets. But, …
•Sourcing these new skill sets is problematic and
therefore they tend to be “home grown”.
What CFOs are Saying …. Top of Mind
Skill Sets
NOW
SOON
Strategic Planning
Integrated Planning, Budgeting,
Forecasting
Forecasting
Predictive Analytics/BI
Risk Identification
Embedded Enterprise Risk
Management
Customer/Segment Profitability
Marketing ROI/Customer Lifetime Value
Analysis
Financial analysis;
Leading indicators
Sustainability/Non-Financial
Reporting/Triple Bottom Line
What CFOs are Saying … Top of Mind Skill
Sets
NOW
SOON
Moderate IT Integration
Heavy IT integration of data with
standardization to enable “one version of
the truth”
Analytics an enabler
Data/predictive analytics a competitive
differentiator
Soft skills – Communications +
?
Soft skills – collaboration on cross
functional teams, KNOWING THE
BUSINESS.
Project management helpful
Business PROCESS management critical
…..
Critical Finance “Areas of Mastery”
1) Strategic Business Partner
2) Champions of Corporate Performance
Management, Budgeting and Planning
3) Custodians and Champions of GRC –
Governance, Risk and Compliance
4) Masters of Flawless Delivery of Transactional
Processing Activities
5) Masters of World-Class Talent Management (Training, Skills,
Certification)
Management Accountants:
What do we do?
 Financial statement preparation and analysis
Management Accounting professionals
 Business case preparation/analysis to support new
perform these and other functions
products.
around
the globe(M&A),
 Support for Mergers
and Acquisitions
 Planning, budgeting
forecastingfor
to support
withand
a passion
operations and the strategy of the organization.
technical competence,
 Implementing internal controls, quality and risk
ethics,
and
driving
business
performance
processes
to report
financials
with integrity
while
growing the business.
The Management Accountant:
Advocacy for Management
Inside
Design
Implement
Manage
The Management
Accountant
Report
Audit
Public
Accounting
Technical Accounting Depth AND Business Operations Breadth
in Decision Support, Planning and Control + Highest
Standards of Ethical Conduct + Commitment to Lifelong
Learning =
A Management Accountant
Management Accountants:
Who are we?
•
•
•
•
•
•
•
CFO, Foundations Behavioral Health
CFO/Treasurer, First Savings Bank
Director of Finance & Accounting, Marriott International
Director of Technical Accounting & Reporting, Microsoft
Finance Manager, Habitat for Humanity
Financial Controller, Johnson & Johnson
Vice President of Finance, Southeast Corporate Federal
Credit Union
• Firms with the most IMA members in China: Caterpillar,
PWC, E&Y, ABB, Motorola …
Business Leader Quotations
On February 4, 2008, David Burritt, CMA, CFO of Caterpillar Inc. provided testimony
to the U.S. Treasury Advisory Committee in a human capital panel discussion the
committee led on the Auditing Profession.
The following quote is excerpted from his testimony:
“I can tell you the Certified Management Accountant
certification or other professional credentialing is key for our
1,800 accountants. And, we have a credential expertise
requirement for our senior leadership team to help ensure longterm, transparent financial reporting and SOX compliance.”
David Burritt, CPA, CMA
Chief Financial Officer
Caterpillar, Inc.
Business Leader Quotations
“The CMA deals with all the relevant areas of financial
management and is a perfect complement to the strategic
way we expect our professionals to perform.”
Stephen Cosgrove, CMA
Vice President and Corporate Controller
Johnson & Johnson
“By passing the CMA exam, we ensure that our staff stays current
with certain standards of management accounting. It also helps to
ensure that we have a highly skilled workforce that can do their jobs
better, faster and with greater expertise.”
William L. Brower, Jr. CMA, CFM
Vice President, Group Finance Business Analysis
Johnson & Johnson
How Does Certification Benefit You?
 Capstone to your educational degree
 Opportunity to assess and demonstrate capabilities and expand
knowledge base
 Distinguishes you from your peers and increases credibility
and productivity
 Recognition of achievement
 Expanded career options and greater earning potential
 CMAs earn 25% more than professionals without
certification (IMA’s 19th Annual Salary Survey, June 2008)
A CMA Professional Has…
 Demonstrated ability to work across the breadth
and depth of the entire accounting process
within organizations
 Proficiency in decision-making, planning, and
control functions
 Agreed to maintain professional competence
through annual continuing professional
education
 Committed to a code of ethics
CMA Statistics
Over 30,000 CMAs issued to date
Pass rates for the four parts of the exam
range between 50% to 60%
Preparing for the CMA Exam
 Make a personal commitment to study
 Don’t procrastinate
 Sharpen knowledge of exam topics
 Restore test-taking skills
 Take self-study or live review courses
 Visit www.imanet.org/certification
Ethics
 Every management accountant has a responsibility to
behave ethically. (IMA Code of Conduct)
 It is essential to be aware of how your personal conduct
impacts your peers, your subordinates, and your
organization’s ethical culture.
 An environment where every employee does not adhere
to the organization’s code of conduct has the potential
for questionable actions to occur.
 Even incidents of even seemingly minor “rule bending”
can be the impetus for someone else to bend the rules
“just a little more next time”
Words of Wisdom
 Relax and be yourself – Don’t go overboard trying to
impress everyone around you
 A handshake and a “thank you” are simple gestures that
go a long way
 Find a mentor (can be internal or external)
 Keep your résumé updated
 Participate in some activity outside the workplace
(community, professional)
 Network, network, network!
Questions?