The Wall Street Journal had a great article in Saturday’s (17 May 2008) paper about Erin Callan the CFO of Lehman Brothers. Among other favorable qualities that Ms. Callan brings to bear on the job, the article stresses how she seeks out direct information then uses great communication internally and externally to do her job. It specifically talks about how she uses less detailed top line financial information, and more direct contact with traders to stay informed. Most importantly however, the article shows how by being proactive and highly communicative externally, she is creating value by reducing the market’s perception of the risks at Lehman.
To quash fears that Lehman could face the same kind of liquidity squeeze as Bear (now being acquired by J.P. Morgan Chase & Co.), Ms. Callan has had hundreds of face-to-face meetings and phone calls with investors and trading partners. She aggressively roots out rumors, even while pushing her bosses to disclose more financial information.
I have learned a lot about how to be an HR executive from watching great financial executives. I think that Ms. Callan teaches us that if we want to be successful in HR we have to learn to help our organizations manage risk. Risk is reduced through information. Remember – risk isn’t synonomous with bad things happening – it means not knowing if bad things are going to happen. Sometimes our HR job is to fight to reduce risk by increasing transpaency. Read more at: The Wall Street Journal.
3 Comments, Comment or Ping
I have a friend who’s a quant from U of C. His job is in the corporate risk area. I was always amazed at how he talked about the technical aspects about attenuating risk, but he also talked about public perception as a critical element. It’s kind of like ethics: there’s pure ethics, and as importantly, there’s the appearance of ethics. In HR we have to make sure both parts work.
I really like the entirety of this idea. Transparency and anticipation of risk…essential items for the fully fleshed out HR offering. This kind of thinking happens on the currency and finance side all the time…cool to consider it at the intersection of HR and markets.
May 19th, 2008
AND she has great shoes!
No, really, your review of the article has intrigued me. Especially the “less detailed top line financial information” part. The only time I really understand top line financial info is when I have a definition cheat sheet in front of me.
May 19th, 2008
HR Wench – I guess the shoes really do make the risk manager! I think a couple of books that I am going to highlight in the next week or two are ones that do a great job of being that cheat sheet – even for us ERISA Heads. Thanks for the visit.
Great point Frank – good tie to ethical issues as part of the equation.
May 19th, 2008
Reply to “Tranparency is smart. Clearly.”