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CFO to CFO: Finance Leadership in the Pandemic

By
March 1, 2021

The CFOs of Ecolab and Blue Shield of California have led their organizations through the workplace changes spurred by COVID-19.

 

Despite the hardship and difficulties wrought by the COVID-19 pandemic, management accounting and finance professionals must nonetheless provide stability, model adaptability, and ensure business continuity and growth. Sandra Clarke, CFO of Blue Shield of California, and Dan Schmechel, CFO of Ecolab, reveal the key elements of strong leadership as the professional environment continues to shift in response to the pandemic.

 

SF: What are the most significant implications of working from home?

 

Schmechel: The first and most significant consideration is the safety of our associates. We make sure that we’re continuing to put our employees in situations that are safe, and so we’ve been clear that only work that must be done from the office can be done from the office. Beyond that, it’s reaching out to our associates to make sure that they have the tools that they need and that we’re hearing them on a real-time basis on how they’re experiencing the pandemic.

 

Dan Schmechel

 

The global real estate function reports to me, and so with our safety and health team, we’ve developed protocols for return to work, including things like temperature monitoring, social distancing, and assignment of floor leaders tasked with safe practices when people begin to come back.

 

Clarke: At the start of the pandemic, we took the immediate steps to protect our 6,800 employees, initiating a company-wide work-from-home policy to reduce risk ahead of local health orders. I’m proud of our teams for making this call; as a result, no Blue Shield of California employee contracted COVID-19 on the job.

 

Sandra Clarke

 

In terms of the implications of working from home, we have focused heavily on providing flexibility and support for employees. That entails making sure we’re giving additional financial support to caregivers and that they have public health emergency leave available to them, which we reset for the beginning of 2021, given the uncertainty of how long the pandemic situation will last.

 

We also made sure that our employee assistance program was leveraging our telehealth partner, Teladoc, so that we could offer employees sessions with licensed mental health professionals. We recognize that there’s a lot of additional stress right now and want to make sure that they have a culture that supports their needs during this time.

 

When it comes to plans to return to the office, we have a return-to-work task force that includes physicians as well as our executives to help advise us on safety. We’re following all the local and federal guidelines and determining what will make us feel comfortable when asking employees to return to an office.

 

We’re going to be very careful to make sure that people return to the office in an appropriate manner and timeline, and we announced to our employees that they’re largely going to have the option during 2021 to remain in a work-from-home environment even after we officially reopen their office because we want them to feel safe. We also want them to not be stressed by other demands, such as children who are still at home in a virtual education situation, so having that flexibility is going to be important to retain staff and maintain productivity at a high level.

 

Schmechel: One of the things that’s so remarkable about the whole experience of the pandemic is how differently the virus impacts people. Some people have quite mild symptoms, some have no symptoms, and for some people, it becomes a real health crisis—and the number of deaths is shocking.

 

If you have young children at home, that has one big set of implications on your life but also in terms of your availability and what’s reasonable to expect from an accessibility point of view to work. Understanding your team and who’s experiencing what is a big part of the requirement to make sure that as we move through this, the whole team is being thought of appropriately and given the right response so that they can continue to be productive and, frankly, engaged.

 

SF: Will the pandemic have a lasting effect on where and how we work?

 

Clarke: We all must adapt to a constantly changing world, which is why we’re planning to primarily implement a hybrid model across our sites, even after 2021 concludes. This means employees will come to the office a few days each week or each month, depending on the circumstances. We had near universal feedback early on from employees that they preferred working from home. Once it’s safe, that may change, but that’s very much in the planning stages right now. We want to make sure that we coordinate a whole host of things that must be right in order to get this done appropriately, maintain controls, team connections, and, most importantly, safety.

 

Schmechel: Where and how work gets done will certainly change coming out of the pandemic. Exactly how is [yet] to be determined, and we’re consequently not fully open but we have opened to a limited number of people to come back into the office with all of the appropriate safety protocols.

 

The number of people that are actually indicating they would like to work from the office is lower than I would’ve expected coming into it. Some of that is perhaps concerns about safety and public transportation and even getting to the office, how safe they feel. They might have young children at home. They might have a spouse who is required to be at the end of a virtual conversation through long parts of the day, and people have got to find their own comfort level and their own way to get back to work.

 

It will be a challenge, but it’s something that we have to face when the time comes and when it’s safe to get people to come back to work. We’ll need to manage against the expectation and, frankly, the largely positive experience that people had around the ability to do their job working from home. It will change, and it’s going to be a balancing act between the needs of the company and of our customers and the interests and safety of our associates.

 

Much of what the finance team does at Ecolab is what I’ll describe as muscle memory. You close the books. You provide the reports. You prepare for board meetings. You provide metrics and information to the business, and it’s an understood content of work. The marvel, when everybody was told to work from home, was that it worked almost seamlessly, although people were working their tails off to make it work.

 

There was a feeling of both surprise and that this really isn’t so bad; there are some real positive aspects to this, and the work was getting done. But what people really miss is not only the socialization and stimulation of regularly encountering workmates, but things are harder when you don’t have the opportunity around the edges of meetings to say, “You’d asked me this question and I didn’t get back to you and so let me tell you how I’m thinking about this.” Things are harder and [missing] the stimulation of having workmates around is beginning to tell.

 

SF: Has the necessity to work remotely during the pandemic spurred any innovation in the adoption of new technology or software?

 

Schmechel: We have much greater reliance on collaboration technology and platforms. Also, social media has played a bigger part of how we work together.

 

In terms of business analytics, much of what we do in finance is muscle memory, but all of it is driven by technology, and so it has driven us to roll out faster, scalable technology tools at the analytical level, meaning, how are we thinking about the business? What metrics are now more important to us than they were before [based on] demand patterns by customers? We have significantly invested and accelerated the rollout of digital tools that integrate views of how the economy and our customers are performing and the implications of that on our innovation efforts, production plans, and inventory management.

 

It’s remarkably impressive to me how quickly the teams have adopted [these tools] and how quickly they’ve gotten to new sets of metrics that are scalable globally. So we have the same information on how China is recovering in the launching business vs. Germany vs. the United States, etc.

 

The communication aspect is interesting. It’s different when everything is a Microsoft Teams meeting or a [Cisco] Webex call or a text than it is to have conversations when you’re together or walking past each other and that is what, at the management level, is so time-consuming about the pandemic because of the need to stay in touch with your teams. So much of it [is] happening one-on-one, regardless of the ramp-up of collaboration technology. It’s less efficient, but we’re really leaning into it because that communication is absolutely vital to alignment and engagement.

 

There has to be an element of project management around work that isn’t absolutely mapped out, and so getting more structure in place to make sure that the teams are understanding what the intent is, what the objectives are, and to stay aligned.

 

Clarke: We already had a big push to accelerate our technology levels across the company—and that included finance. We worked cross-functionally across finance to reduce silos and improve information sharing. The team identified bottlenecks causing delays in the close process, such as manual workflows and approvals that resulted in faster processing times and reducing manual labor. As a result, we now do our period financial close 40% faster, a reduction of four days.

 

My team is also heavily engaged in the company-wide process transformation efforts where we’re trying to automate several processes and make them as touchless as possible. Coming back to making sure you have an adequate control environment, when you can automate more of this, you can build those controls in and make the overall organization and those particular processes much more secure from a controls perspective.

 

We’ve worked collectively across the company to try to accelerate in some of those areas, including data analytics and scenario planning, in order to take advantage of the time that people had available. Many of these tools needed help from the providers because the automation started there, so some of them have had more capacity to be able to work with us on accelerating that. All of that tied together has an impact on the finance organization.

 

Our use of technology has amplified, and we’ve had some good learning experiences around scenario [planning and figuring out] which factors really matter and which ones don’t. Also, we’re using a lot more web conferencing tools such as Webex and Teams, and it’s more time-consuming as a leader because you’re scheduling those one-on-one [virtual meetings], making sure you have enough time for people instead of being able to have those short touchdowns with people in a live, face-to-face manner. A lot of these tools will continue their usage, maybe in a more balanced way, once we have a safe environment where more people can be in an office together.

 


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