Our interviewer Steve Player speaks with Joe Householder, SVP, controller, and chief accounting officer of Sempra Energy about his finance career and how the energy company develops its talent.
SP: Joe, you have a fairly varied background, coming to finance really from the legal side and from the tax side. Householder: Yes, I thought I would be an accountant, and I actually went to work for a large regional CPA firm for a short time. And then I switched to work for a local CPA firm, where I was mostly doing normal audit work for small companies.
But I always had it in the back of my mind that I might like to go to law school. My father had gone to law school at night while he was working, and it always kind of intrigued me. So, after a few years, I decided that I would pursue my law degree. I did that at Loyola Law School at night while I was working as a CPA. As I started to go to law school, I got intrigued with tax -- so I switched to become a manager working in the tax area.
After I finished up, I went to work in downtown Los Angeles for a law firm in kind of a corporate environment, and it just didn't seem right to me. I felt bored. One day, I read an ad in The Wall Street Journal. UNOCAL, which had just fought a takeover battle with T. Boone Pickens, was looking for a tax lawyer to come in and run its master limited partnership. I really enjoyed partnerships, so I sent in a resume and the next thing I knew, I was over there in the tax group.
It turned out to be just wonderful for me. I was there for about 14 years, and I just got to do such a wide variety of activities. Because of the takeover attempt, the company took on a lot of debt, so we had to sell a lot of assets. We were investing a lot overseas, so I traveled a lot. I got to do a lot of international finance work, and a lot of M&A activity, and it just was a wonderful place. This is where I met Neal Schmale and he became my mentor. I worked closely with him, and it was a great company. Much like Sempra, it had very high ethical standards and it felt kind of like a family.
SP: What role do you think mentors play in talent development? Householder: I think that mentors are very helpful. I try to be hands-on and work closely with people and help them to understand things. What I look for are people who, number one, have high ethics, but number two, who are inquisitive. I don't really want the kind of person who's just going to kind of come in and do their job that day and follow some task book. I want people who are naturally inquisitive and want to think about things and understand the business.
We have an accounting and finance leadership program that's for new hires. We bring people out of college and we put them through a 3-year program. We're trying to start them all in internal audit because we think that this will be a good way to give them exposure to the whole company. We then move them through a variety of jobs and give them a lot of educational training. We hope that they'll become really top-notch finance people as they move into the jobs within the company.
I'm trying to do the same thing in a less formal program with my direct reports and the managers within the finance organization, to actually get them to rotate. Too often, I see people get pigeonholed, and they say, "Well, I just want to do this." That's great, if you know what you want to do. If you want to be the best cost accountant in the world, then find the best cost accountant in the world and be under that person and learn all you can ... that's fine.
SP: What's the typical time frame that you like to rotate people within? Householder: Well, it really does depend on the job. Some jobs require somebody to be in there for a little while. I think probably as a minimum we would want them there 18 to 24 months. But I hate to see somebody in a job for 5 years. You know, if they haven't mastered it and fixed that area and gone on, I think that they've been there too long.
But if you want to be the CFO, I think that you need a broad variety of experiences. So I'm trying to encourage people to take risk and move around. I've taken some of our best people and moved them within the organization. Last year, we moved about eight people who are pretty senior. It's a little uncomfortable for them, but I'll tell you -- I know for myself, for our CFO, and for our COO -- we've all moved around into different jobs a lot of times and have a lot of experiences. We're all the sum of our experiences.
SP: Are there other development programs for people above entry level? Householder: Well, that's one of the things I just worked on with our organizational development group, which is our HR group. It helps people with their careers and to do succession planning. I just worked with the chief financial officer from our utility group. We spent a lot of time on thinking about how people develop and how individuals have to take ownership of their careers. We've reviewed every job within finance and have put together the critical skills that each job teaches people or that you need for that job.
We've put them on a Web site. Then, when people have their reviews and their manager or their peers say, "You're doing great in these five areas, but you need this experience," they can go and say "Oh, I need that kind of experience. What jobs could I get? What lateral job could I take that would help me with that?" The senior manager can say, "Hey, this other job over here would be really good for you." So we're kind of trying to put a little bit more science and less art into career management. How can people get the right experience to go where they want to go?
SP: How big an effort was it to get all these jobs defined and all that mapping done? Householder: It was a bit of an effort, but we have a small but great team of professionals in our organizational development group. It's just about two or three people there, but they went and interviewed all of the directors, and managers, and vice presidents, and built this electronic tool. We just rolled it out this year, and I am really excited to see over the next year or two how it works.