Leadership Q&A: A Passion for the Business

Managing finance for a giant railroad with 40,000 employees, 32,000 miles of track and untold pieces of equipment requires a CFO who's willing to delve deeply into the business. Thomas Hund, executive vice president and CFO at Burlington Northern Santa Fe Corp. (BNSF) in Fort Worth, Texas, tells Business Finance editor Donna Nabel how he meets the many requirements of his leadership role.

Donna Nabel: During the 23 years you've worked in finance in the railway industry, that sector has undergone profound changes. How have these changes affected the finance function in general and your work in particular?

Thomas Hund: The biggest thing that has happened is we have changed from being a company that was viewed as relatively stagnant and without great growth prospects, and -- from a returns standpoint -- was probably viewed more like an annuity. Over the last several years, as the railroads have improved and as BNSF specifically has improved, we have gotten a lot more interest in our company, especially from the financial community.

DN: Which high-priority duties have risen to the top for you, and why?

TH: We analyze different pieces of the business as to their profitability and also their leverage. And by leverage I mean, if you earn a dollar of revenue, how much of that dollar should flow through to the bottom line? That's something we're definitely focused on because we are a high-fixed-cost industry, and so as we grow the top line, we should expect a greater percentage of that dollar to flow through to the bottom.

Another area that has really started to rise to the top of my radar screen is capital spending. When you're a growth industry, you begin to put more money into your own business -- and that's money well-spent, because the returns certainly justify it. But you also need to keep an eye on your return on invested capital to make sure that the capital spending is prudent and the levels are appropriate.