The Serial Transformer

Steve Player interviews Gary Crittenden, CFO of Citigroup, Inc.

Player: From a CFO point of view, you've had a varied career. You started in consulting with Bain and then you've been the CFO of some very different organizations, including Sears Roebuck, Monsanto, American Express, and now you're here at Citi. What have you done to enable yourself to transition across such diverse industries?

Crittenden: Well, I was in consulting for 12 years -- and one of the nice things in consulting is that you actually work in many different businesses and industries. When you're a strategy consultant, the primary skill is to understand what the levers are that will influence the financial performance of the company, because you have to go in within a relatively short period of time, usually within 30 to 60 days.

You have to understand what the key financial levers are so that you can sit down with the CEO and have a conversation with him and have him feel like you're actually adding value to his thinking. It's kind of an audacious thing really for a strategy consultant to try to accomplish, but this is what most strategy consultants are trying to do.

I had 12 years of immersion in consulting before I had my first CFO job. In each of these different businesses there were very different elements, but there was also a lot of commonality. The levers that drive financial performance were different. The key factors for success were different, but the finance was essentially common.

The complexity of finance increases as you move from one business to another, and I would argue that financial services is one of the most complex types of finance. This is particularly true when you're involved in the markets and banking portion of finance, with derivative trading and securitization and all that goes along with that.

It probably would have been less interesting to start with Citi and to go in the other direction to retail. So I started in retail and then moved from retail to manufacturing to credit cards, to now one of the largest financial institutions in the world. These roles have provided new insights to learn from. Each one of these roles became increasingly more complex, and I had to learn just what the initial complexity was.

Player: In certain companies, finance people are sometimes relegated to a down-and-dirty transaction processing function -- and not the kind of organization I think you were trying to aspire to. How do you design a program to lift up the finance organization and literally transform it into the forward-looking strategy support unit that you seemed to describe?

Crittenden: Well, the first step is to make sure that the way people spend their time is dedicated toward higher-value-added activities. If you take a traditional company -- and go back 10 years or so -- you will find that reporting was done in lots of different communities. Each one of these supported an individual business line. If you had different divisions, each of the divisions had a different practice in the way that they approached their reporting.

In order to roll all that up, you had to have an army of people, and basically all that army could get done was to pull that information together and make sure that the information accurately reflected where the financial results of the company were. So the first step is to make sure that you pull all that less-value-added information together and put it into a few locations.

At Citi today, for example, we're in the process of migrating out of our business lines and into a few centers around the world -- Costa Rica, Manila, Tampa, and Buffalo -- where we can do things in a very common way with common processes, where we can measure and control the quality around each of those processes.

Two things happen when you do that. One is that your costs go down because you're doing it with lower cost resources. As a result, you're able to do it with fewer people and you can now get scale effects that you didn't have before. The second thing is that the quality goes up at the same time -- because you're now doing things in a controlled environment, with process control measurements.