Leadership Q&A: Guiding the Global Enterprise

How is globalization transforming finance leaders' role? John Cummings, associate editor with Business Finance, explored that question with Robert L. Lumpkins, vice chairman and CFO of Minneapolis-based food and agriculture giant Cargill Inc.

John Cummings: You've spent more than 36 years with Cargill and 16 years as the company's CFO. What changes have you seen in finance executives' leadership role in that time?

Robert L. Lumpkins: Let's think of this in a couple of dimensions. The world in which a company like Cargill operates has changed. That creates changes in Cargill and, in turn, in the role of the financial officer. I became the CFO back in 1989. In November of that year, an important thing happened: The Berlin Wall came down. That ushered in a whole new era of opportunity and challenge for Cargill, not just in Eastern Europe and Russia but also in places like India and China. We went from being able to serve two-and-a-half billion or 3 billion people in the world to being able to directly serve 6 billion people -- for practical purposes, all but the populations of a handful of international pariah states. Today we can operate in India, China, Russia, Ukraine and the like, which we couldn't do back in 1989. So that's an important development in expanding the global role of financial leadership.

When I think back to my early days in finance it seemed to be primarily operational; it was about accounting, control, budgets, debt management and the like. That became table stakes in more recent years; the emphasis shifted to more strategic dimensions -- things like M&A, business development and decision support. Today, in what I'll call the post-Enron, post-WorldCom era, there's been a restored emphasis on the fiduciary and control aspects. Finance today is well-balanced between what I'll call the value-adding and the value-preservation aspects.

The combination of the changes in Cargill's geographic span, the size of our organization, and the value-adding and value-preservation dimensions has led to a broader leadership role for finance executives generally. Initially, it was about leadership within the function; now it's about leadership within both the function and the enterprise.

JC: What insights have you gained into the nature of leadership during your time with Cargill?

Lumpkins: Leadership has a personal dimension -- "What difference can I make?" -- as well as a collective dimension. At the personal level, if I've learned a lesson over my career, it's to be yourself -- to be authentic. I'm someone who doesn't believe that charisma has much to do with leadership.

The more important issue is that leadership is not about what you personally accomplish; it's about what the team accomplishes. That's the collective dimension. It's about bringing together talented people and building them into a team that's more than the sum of its parts. That's partly about talent. But large organizations have a range of levels of talent, so leadership is also about bringing out the best in everyone. No matter the level, everyone is encouraged to believe they can make a difference and given opportunities to contribute meaningfully.

JC: In 1999 Cargill initiated a massive companywide transformation. What leadership challenges did that present?

Lumpkins: In the late 1990s the company's performance had flagged. We looked at where we were positioned strategically and concluded that Cargill needed to move beyond our traditional trading and low-cost processing competencies. Not only did we need a broader range of competencies, we needed to build those competencies around a broader performance culture, a greater customer focus and a heightened emphasis on innovation.

This was really a big challenge. Cargill was founded in 1865. We have a long history. But we recognized that we needed to change. Doing so posed challenges to our organizational model, business metrics and the way we approached customers. It required extraordinary energy and dedication. We worked with the McKinsey organization at the outset, and then implemented the transformation internally.

Three aspects were key: We had a committed senior management, which we call the corporate leadership team; a real sense of urgency; and deep pride in our company, which was 134 years old at the time. We weren't happy with where Cargill was, and we wanted to leave a legacy of the company back on top. A great deal of energy went into determining and carrying out Cargill's strategic intent.

We are on a journey. We started in 1999 with a vision that takes us to 2010, so we're about halfway there. We've made great progress, and we still have a long way to go.

JC: In a globally distributed organization like Cargill, how can leaders keep in touch with far-flung business operations?

Lumpkins: Keeping in touch is a two-way phenomenon. It's not just a question of people like me keeping in touch with a distributed organization; it's also about our people being in touch with their leaders. The communication needs to flow both ways.

Cargill has a host of ways in which we do this. We have 35,000 e-mail users. We have a monthly corporate town-hall conference call with hundreds or maybe a thousand people calling in from around the world to talk about what's going on in the company. The finance function has a similar global town hall quarterly. It also holds regional and global meetings in locations around the world.

Downstairs in our headquarters today, a group of about 25 emerging finance leaders from various countries are in a leadership training session. These are people with seven, eight or 10 years with the company. I just had lunch with them. I asked, "What are you working on? What's on your mind?" And they asked me questions, too. That's part of the way we keep in touch -- we find opportunities to listen, learn and communicate. We also buy a lot of plane tickets.

In my mind, Cargill's model is not so much a hub and spokes, but a network. We have a lot of savvy folks working in nearly all parts of the world. Most decisions at Cargill are made locally. We work to create a common mind-set and have a limited set of corporate requirements. Then we rely on the good sense and know-how of our employees to carry the company forward.

JC: Cargill is selecting and training its finance people more and more based on leadership. But is leadership teachable? What approach is your company taking to leadership education?

Lumpkins: We believe that some aspects of leadership are teachable skills and some are not. For example, it's our view that you need to select and hire for traits such as character, trust and integrity; these are qualities that are inherent in an individual. But we invest a great deal of energy into leadership training at multiple levels in the finance organization and more broadly within Cargill because many aspects of leadership are teachable -- empathy and candor when dealing with employees, for example. We spend time with our employees in various leadership academies within Cargill to help them understand some of these aspects of leadership.

JC: How is globalization shaping the finance leaders of the future?

Lumpkins: Globalization is shaping both the needs of the organization and the profile of future finance leaders. Global companies like Cargill need people who can carry out financial management in many parts of the world -- not just in the developed world but also in countries such as Turkey, China, Russia, India, Romania and Brazil. We have significant operations there and in many other countries. Most of our future finance leaders will be nationals of these countries, but they need the professional skills, language fluency and Cargill mind-set to operate within our global enterprise.

The senior financial management group needs the experience and insight to lead a truly global organization; in other words, understanding the cultural differences, being able to assess the risks and recognize the different approaches to solving problems, and melding our differences into a global team that carries out the company's mission with professionalism and integrity.