Employee EngagementLearning & Development

Driver’s Ed

Toyota financial Services builds an effective learning program aimed at keeping internal talent ‘moving forward’ in their careers.

by Russ Banham

Smart finance, treasury, risk management, and accounting professionals, take notice: Toyota Financial Services wants you!

The Japanese automobile giant’s captive finance arm in the U.S. wants the company to be the “destination for employment” in the Southwest. To do that, the firm isn’t raising the pay scale disproportionate to its competitors. It isn’t going overboard on benefits or bonuses, building a new fitness center, or installing a cafeteria run by Wolfgang Puck. Instead, it’s doing something that many other finance organizations evidently haven’t even considered—preparing staff for the best possible careers and providing the means to have them.

Toyota is engaging Affiliated Computer Services, Inc. (ACS), the Dallas-based HRO provider, to ensure its employees have the right skills to climb the rungs professionally. Not only are finance staff given access to diverse course work to make this ascension, they are privy to the appropriate range of courses needed. It all adds up into a simple syllogism: Better educated means better jobs, which means longer tenure and a stronger company.

“In an ever more complex world of accounting rules and compliance responsibilities, you have to have the best and brightest people to succeed,” said Thomas A. Kiel, chief accounting officer of the Torrance, CA-based Toyota unit, which employs more than 3,000 employees.

Kiel is referring to, of course, the post-Enron finance environment, in which companies and particularly their finance organizations are constantly under pressure from new financial reporting regulations such as the Sarbanes-Oxley Act, not to mention ongoing FASB pronouncements, more stringent rating agency rules, and tougher stock exchange regulations. As Kiel puts it, finance staff “not only must ensure the financials are current, they have to work with the business unit to ensure they have the information they need to make sound judgments and decisions.”

Kiel joined the finance company three years ago with a mandate to build a program of talent development. He sought methods to assist people to logically move through the organization, in terms of the skill sets required. The goal was to establish a template for employees to move from one job or function to the next, taking on more responsibility in the process, eventually moving up the organizational chart to more senior roles.

Defined Strategies

While this may seem common sense, not many companies have clearly defined strategies or processes for employees to gather relevant knowledge and expertise to rise through the ranks. According to a study conducted by ACS in conjunction with CFO Research Services, many companies use only informal training for professional development in finance—much of it inconsistent. Such training programs also tend to emphasize technical accounting skills, rather than analytical finance skills—the advice needed by senior decision-makers. Part of this is due to the hidebound view of finance.

“Prior to Sarbanes-Oxley, finance was primarily viewed as a back-office function that accounted for the business,” said Tom Kupetis, vice president of the finance learning practice at ACS Learning Services. “As they got efficient at this, they set up shared services centers and began to outsource more transactional finance tasks such as accounts receivables, accounts payables, and the general ledger. Then Enron hit and the focus shifted to risk management. Now finance is front and center in the spotlight.”

With Sarbanes-Oxley now six years old, many finance organizations have their companies’ internal controls in good order. To maintain the status quo, never mind continuously improve it, finance resources must keep up with the best approaches in evaluation, analysis, and auditing of controls.

“Finance professionals must be mobilized to create value and drive the strategy of the business, offering analytical advice relative to financial issues that will drive key financial measures and shareholder value,” Kupetis explained. To do that, they require continuous learning, via a formalized talent development program. Unfortunately, such programs are few and far between.

While 52 percent of respondents in the ACS-CFO Research Services survey say formal training programs are available in technical finance and accounting subjects such as GAAP accounting rules and regulatory compliance, only 40 percent say that formal training is available for high-value analytical skills such as budgeting, planning and design support.

“Finance executives are eager for broad training that encompasses business management, operations, and technology matters, in addition to training in technical, company-specific financing and accounting areas,” the report found.

Holding On

A formalized learning program for the finance staff at Toyota Financial Services offered another benefit—a way to hold onto all that intellectual capital and its deep institutional knowledge.

“The Los Angeles area is not an easy place to compete for talent; there’s always someone else willing to pay more than you’re paying,” Kiel explained. “If someone knows that this company is a place where he or she can continuously develop his or her talents to move into larger roles with more responsibility, he or she is a lot less likely to leave.”

Nevertheless, he is pragmatic: “Hey, if someone stays here and becomes the CFO at another company in three years, that’s great for me. If they stay for 20 years, that’s even better.”

The firm is investing heavily in the process of growing its talent. Like any good journey, the finance organization began at the beginning, discerning what a desirable career path through finance actually looks like. “There’s no software package to learn this; you have to start at the bottom,” Kiel added.

ACS was pivotal in charting the course. The service provider helped develop a series of career “bands” at Toyota Financial Services, with Band No. 5 describing the highest ranks within finance, the equivalent of a senior vice president of a bank, Kiel compares said. ACS worked closely with Kiel and other finance staff members, talking to each about what they sought in training and development to create a career progression map.

“We wanted a clear view of how people would move through the organization,” Kiel explained. “This sounds simplistic, but until you have the facts and study this, you can’t do this stuff correctly.”

Once a clear picture of career progression emerged, Toyota Financial Services had to provide a step-by-step methodology to get from one job or function to the next; in a word—training. But, what kind of training?

“There’s a bazillion technical courses out there, a veritable library,” Kiel said. “ACS helped us organize the course load and provides many of the technical courses. We built the web-based portal (so employees can see what’s right and available for them).”

ACS got into the learning game following its June 2006 acquisition of Intellinex, which was at the time a subsidiary of Ernst & Young. Kupetis had formed the finance learning services within Intellinex.

“It made sense to create the unit, since E&Y was serving as the auditor or advisor to approximately 30 percent of the Fortune 2000 and was always looking for value-added services to bring to clients,” he said. “When ACS acquired Intellinex as part of its HRO business, they got this little gem (finance learning) as an added bonus.”

His idea then and now was to create a learning environment for finance executives to make good on the finance organization’s promise to be a trusted advisor and business partner—a philosophy aimed at helping business units achieve the company’s strategic goals.

“You’ve got someone leading the businesses, sales, marketing, operations, and so on, and they all use financial data to make business decisions,” Kupetis stressed. “The best subject matter experts internally are the finance and accounting people. Most, however, tend to crunch numbers and throw them over the wall. There was a need to retool and reshape the way finance employees think about how they support the business.”

This required a new skill set—how to partner with people, communicate with them, analyze strategic goals, and perform what Kupetis calls “basic blocking and tackling to be sure they technically understand all the accounting rules out there.”

Nevertheless, most finance functions have had little to no formal learning of this ilk to provide career development, much less a sense of how they should rotate through an organization and the job experiences required along the way.

“For example, a lot of companies are requiring global experience to become a CFO,” Kupetis notes. “The question is how does one prepare himself or herself to be in a position to get that global experience?”

Outsourced learning provider can help. The finance and accounting learning and development practice within ACS assists finance organizations in the following areas:

  • Creating the learning and development strategy for finance;
  • Defining a finance learning and development governance structure;
  • Creating a 3- to 5-year learning and development strategic plan;
  • Executing against that plan; and
  • Implementing a finance learning curriculum aligned at all levels of finance, including managers, directors and executives.

Up the Rung

Kiel said Toyota Financial Services has completed the first phase of what is expected to be a continuous learning strategy. It called for developing the job bands and the courses guiding the migration from one band to the next that can be perused by finance staff on its intranet.

“Say you’re in Band No. 3, which is a senior financial analyst in treasury or a senior financial analyst in accounting,” Kiel said. “You go into the web site, click on your role, and then see the various technical courses (offered by the learning provider) that you need to be prepared to move to Band No. 4. These courses are then linked up with our big learning facility, which we call the University of Toyota, and the courses provided there. That was round one.”

This year Toyota Financial Services will be unveiling the second phase, called “Managing Your Career.”

“We plan to put all associates through a two-hour web-based training program that is essentially an introduction to financial services,” Kiel said. “A message from our CFO will welcome them to Toyota, followed by messages from the parent company’s CFO, myself, the treasurer, and the chief risk officer. These key executives will explain that, ‘While we’re very happy you’re here, we have certain expectations of you in your career. We will give you tools to assist your career growth, but you will have to show effort.’ ACS is helping us design this message … so people understand their responsibility and ours.”

The relationship with ACS is critical to the effort. In putting together the learning practice at Toyota Financial Services, Kiel said he was unsure initially where to go for help.

“If I needed new software, I called Oracle. If I wanted computers, I called Hewlett-Packard. I know these companies. But, when it came to finding help around learning, I had no ideas. We did all sorts of google searches and couldn’t find anyone. We called other big companies such as Kellogg, and they gave us the name of a bright guy at a small firm. But, we wanted to look at other folks.”

Kiel called former colleagues at Bank of America, where he worked until 2004, and they mentioned ACS Learning Services. “They’re really a conscientious objector,” he said of his provider. “They don’t let me paint something green just for the sake of painting it green. And since they have a wealth of other clients in this space that we’re benchmarked against, I get the chance to implement others’ best practices.”

Among ACS Learning Services’s multi-process outsourcing clients—who outsource learning in a variety of functional areas—are Kraft Foods, CalPERS, Beckman Coulter, and the University of Miami. Point-solution clients include Toyota Financial Services, Western Union, Enterprise Rent-a-Car, Amgen, and Mellon Financial. At present, ACS boasts more than 55,000 hours of custom learning courses, in addition to the annual development of 3,000 learning hours. The firm has amassed more than 700 hours of pre-developed content, including a specialized CFO finance content library. More than 100 full-time instructors are on the firm’s staff, offering scalable contract resources in design and delivery.

Kiel is optimistic that the learning program will do what he intended—guide the best and the brightest to the firm and then keep them there. “My resources are people,” he said. “I needed to have a plan to grow and develop this talent, as well as attract talent. For me, personally, it helps me think of how I am going to take my organization from where it is today to where it needs to go in the next 10 years. We’re not doing this just because we’re a good corporate citizen.”

Indeed, today’s outsourced learning engagements are often driven by a bottom-line mentality—a desire to either reduce vendor and content spend or to improve operational efficiencies. But regardless of the size of savings, one thing is for sure: Toyota Finance Services America through its learning outsourcing initiative is ensuring that its F&A staff will be well prepared as talent needs ratchet up from workers retiring and as its business grows. And that’s one benefit that could easily dwarf its back-office savings.

Tags: Engaged Workforce, HRO Today Global, Learning

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