Sandeep Reddy, Chief Financial Officer, Guess?, and Dean Ditto, former Chief Financial Officer, KARL STORZ Endoscopy-America, explored the value of succession planning during a fireside chat with Argyle's CFO membership at the 2015 Chief Financial Officer Leadership Forum in Los Angeles on October 8th.
Sandeep Reddy, Chief Financial Officer for Guess?, and Dean Ditto, former Chief Financial Officer for KARL STORZ Endoscopy-America, sat down to discuss succession planning during a fireside chat with Argyle's CFO membership at the 2015 Chief Financial Officer Leadership Forum in Los Angeles on Oct. 8. During the interactive discussion, "Perspectives on Succession Planning," Ditto interviewed Reddy about the importance of succession planning for today's organizations, Reddy’s insights on this important topic from his career thus far, and the unique initiatives currently underway at Guess.
Early on in the discussion, Reddy commented that most people don't realize Guess is a global lifestyle brand valued between $4 billion and $5 billion. Upon joining Guess, he introduced a new succession planning process to the organization, stemming from his time at Mattel, which focused on building a process based on organizational development and succession.
Reddy noted that the succession planning process at Mattel started very early - typically, top executives would identify talented employees early on and determine how to actively retain these workers. By leveraging training and rotational programs and mentoring, Reddy noted, Mattel was able to provide a clear path for career growth.
"Getting people with those skill sets who have actually been through a global, multinational company experience … is going to be critical."
Stepping back from Mattel and Guess, Reddy expanded on the importance of succession planning in order for any organization to stay healthy and productive. Despite the obvious value that executives acknowledge without hesiatation, Reddy noted that many organizations fail to actually prioritize succession planning, instead leaving it at the bottom of their to-do lists. Reddy further reflected that these organizations are opening themselves up to significant risk, turmoil, and loss of productivity.
"If you don't follow it up with action, people don't believe there is any integrity to what the executive leadership team is saying," Reddy explained. "It is very essential not to make a promise to the employee base unless you're able to follow up on it."
So what skills does a financial organization need to achieve its succession planning goals? Reddy reflected that leadership development should start early, and should aim to identify the employees who not only demonstrate a passion for financial planning and driving value, but also indicate a clear interest in the the organization’s long term goals.
"If I don't care about [the organization], why should [employees]?" Reddy asked. "It's the people who make [a succession plan] happen."
"If you don't follow it up with action, people don't believe there is any integrity to what the executive leadership team is saying."
Continuous learning is also critical, Reddy added, regardless of whether it occurs inside or outside a traditional office setting. For example, Reddy noted that he commonly takes employees to visit Guess stores to learn about their day-to-day operations and how workers promote the brand and build customer loyalty. By doing so, this enabled Reddy to connect and engage with retail employees directly while also helping his team better understand the realities of the business' daily operations.
Shifting gears, Ditto asked Reddy to expand on his insights on running a global finance team. Reflecting on the challenges that face many global organizations, Reddy highlighted the inefficiencies that can arise when multiple platforms are being utilized in different geographies, often leading to a lack of centralization and ultimately limiting growth.
Stepping back from specific platforms and processes, Reddy commented that building a strong organizational culture that is understood and trusted globally is paramount for organizations of all sizes, as it enables employees to collaborate more fluidly across geographies. Engaging and retaining those employees who understand the culture and have experience collaborating globally are invaluable, Reddy added.
"Getting people with those skill sets who have actually been through a global, multinational company experience … is going to be critical," Reddy commented. "It doesn't have to be all outside hires and can come from within … but this is experience that can't be easily bought."
Circling back to the challenges of building and maintaining a financial team, Reddy noted that the financial organization consists of many roles, some of which are tougher to fill than others. While natural curiosity is crucial for any financial professional, Reddy commented that it is not always easy to find in candidates. Even though many financial professionals "go with the playbook," Reddy mentioned that he frequently looks for applicants who are "off the wall."
"I'm looking for someone who … would talk about totally different things than I'd expect," Reddy said. "And if I don't find that in the candidate, it doesn't excite me."
"If people have learned things within Guess and can offer these to the outside, we'll just become a more valuable employer, and people will come to us."
Circling back to the organization’s succession planning efforts, Reddy noted that Guess in Finance possesses a strong focus on rotational programs, which ensures its top employees have mastered multiple skills. As a result, the skills at the mid-management level maybe higher than those of middle managers at other companies, Reddy said.
Building an eclectic skill set among management has helped Reddy identify people who can support his company's finance organization along with other departments. Guess also strives to serve as an "exporter" of skills, which makes the company increasingly valuable in a highly competitive global marketplace where businesses compete with one another for the top applicants.
"If people have learned things within Guess and can offer these to the outside, we'll just become a more valuable employer, and people will come to us," Reddy added.
Sandeep Reddy was appointed to the position of Chief Financial Officer of GUESS?, Inc. in July 2013. He has previously served as the Company’s Vice President and European Chief Financial Officer, since 2010, where he was responsible for all aspects of the Company’s European finance functions, including financial planning, treasury, accounting and tax. From 1997 to 2010, Mr. Reddy served in a number of positions of increasing responsibility for Mattel, Inc., a leading global toy manufacturer, ultimately serving as Vice President Finance and Supply Chain for Southern Europe (France, Spain, Portugal, Italy). Mr. Reddy has an MBA from Cornell University, a BA (Hons) in Economics from Delhi University and is a Chartered Financial Analyst.