10 questions for Mohawk President and CFO Jack Haren

Name: Jack Haren

Age: 64

Time with company: 12 years

Education: Bachelor of science in accounting from Fordham University and a graduate of the Harvard Business School's Advanced Management Program.

Company headquarters: Cohoes, New York

Revenue: annual revenue of $300M, with about 12 percent of business overseas

Countries of operation: U.S., Scotland, Shanghai, paper inventory in warehouse in the Netherlands; sell in 60 countries through merchant distribution

Number of employees total: 520

Number of employees the CFO oversees: 31

CFO's areas of responsibility: finance, purchasing, IT, international sales and marketing

About the company: Mohawk is North America's largest privately owned manufacturer of fine papers and envelopes for commercial and digital printing. It operates three paper machines in two mills in upstate New York and two converting facilities in New York and Ohio, with warehouses in New York, Ohio, California, Washington and the Netherlands.

1. Where did you start in finance and what experiences led you to the job you have today?

I began this journey with graduation from Fordham University with an accounting degree and then I joined a large public accounting firm in New York City. At the time Arthur Young was one of the 'Big Eight.' That was an excellent place to begin my career because it exposed me to a number of different industries -- the oil and gas industry, a very broad manufacturing industry, banking, retail.

That gave me exposure at an early point in my career to understand how one's skill set could fit the best and showed me what interested me the most. But beyond that, what it gave me was some very basic skill sets around the practical applications of accounting theory and also auditing.

I was with them for four years. I acquired my CPA, and in 1975 I left and joined Union Camp Corporation, which was a Fortune 250 company in the paper industry. I went through a number of positions of increasing authority until 1996 when I was promoted to controller. At the time, the company had sales of $6 billion and 18,000 employees worldwide.

In the 20 years before that, I worked in a number of financial functions within the company, including heading up their internal audit function. I managed a number of audits around the world and worked closely with our divisions, which were involved in the manufacture of fine paper, kraft liner board, wood chemicals -- so it really was quite a broad experience that I got there.

I also did a fair amount of work on re-engineering work processes, not in the technical sense but in looking at streamlining processes, looking at the most efficient way of getting things done, which goes back to the early '90s when Michael Hammer came out with some of his ideas about re-engineering. We had been closing books on a financial basis in seven days and when we finished re-engineering we were doing that in two days.

In 1996, I spent 11 weeks at the Harvard Business School in its Advanced Management Program, which was a tremendous experience. Half the class was from overseas and it was a case study program that covered over 110 business cases. It was an opportunity to share insights and really opened up my perspective. I came out of there really ready to tack on responsibilities as corporate comptroller. I benefited from that with an appreciation for the opportunities available outside our domestic market and to better understand some of the challenges of the CFO.

The company was acquired by International Paper Company in April of 1999 and I stayed on with them for about six months, helping them put the two financial organizations together. After that, they said you can stay and I said I really was not all that eager to do that, so that's when I stepped into the position I have today.

2. Who was an influential boss for you and what lessons did they teach you about management and leadership?

Looking back, my earliest exposure to leadership came immediately after my graduation from college. I received a commission as a U.S. Army officer in the Signal Corps and spent two years on active duty. I worked with many, many dedicated officers there. It was a fair amount of responsibility, but I had the chance to get really involved in planning, coordination and working as a team.

You read about management and leadership in textbooks and then after you get into the workplace you begin to have a firsthand opportunity to start to do some of those things you read about, but it usually takes maybe 10 years before you get into a position where you really in fact begin to do what you learned about. But that wasn't the case for me. Being in that position, within a year, I was running a 160 man communications company. I look back and it was real heavy lifting as far as getting myself immersed in those leadership requirements. That was my first bit of leadership.

I covered a lot, saw a lot, and it filled me with a fair amount of confidence. It was also the opportunity to work with a lot of different people.

The other thing that comes to mind is that very early in my private industry career at Union Camp I had an opportunity to work with a boss who practiced a management style that would be called management by walking around. I observed that and thought that it was really quite effective. He got out from behind his desk, was quite visible, really was close to what was happening, was involved. Seeing him out there listening, being visible and staying in tune with what was happening -- if there was a bottleneck or some folks were having problems, he was happy to stay with them, to help them. That built trust. I think that is really key to teamwork and effectiveness.

He also put a lot of emphasis on the hiring process. If we had a position opening he would sit down and really understand what were the critical needs. Then he would select managers across a broad range of responsibilities and he would have them do the interview with the [job] candidate. Maybe three or four managers would ask questions in their particular areas. I found that to be really effective at getting at what were the candidate's abilities.

You're really investing in getting the right people -- they are the key to your success. Identifying the right people and then developing them, and just as importantly retaining those people, was a critical insight that I got out of that. On both those measures, that helped me, and I formed my style around that.

3. What are the biggest challenges facing CFOs today?

This is a huge question. Nine times out 10 you're going to get the answer that the challenge is the rate of change that's going on and the complexity of change. It doesn't really matter what industry you're in, that's one of the things that is driving the agenda and really requiring folks to stand back and try to understand what is going on. Out of that comes the challenge of change management, because that's something that people need to take ownership of and take control of.

It's one thing to say I know which way we're going and I know our destination and I understand our objective and goals, but it's really the process of getting there. Change management is really something folks need to work at and put time and resources into and realize that it's more than just a cliche. This is a resource that needs to be addressed and filled and monitored.

Many times that falls to the IT group and that's not necessarily where it should be. I think they play a huge part in it, but change management needs to be formal, there needs to be a discipline to it. It can also be driven as much by the customers, so you need to get them involved in the decision-making process.

Running close to that, I think the CFO needs to foster an internal environment that encourages discourse and dialogue around needs and priorities. You have to make sure that people are speaking on the same frequencies and that they're articulating what their needs are. The CFO can help establish that internal environment of meetings, status reports, just making sure that folks aren't going off in their own direction. While the CFO may not be at the center of that, I believe that the CFO should make sure there is a process of keeping those folks within a framework, of making sure that expectations are being communicated, understood and followed up on.

The other challenge, and this is all part and parcel of it, is to take the operational focus and to drive that into a strategic focus. Each group's individual manager may have their own responsibilities and action plan, but you need to evaluate those and make sure they fit inside of a strategic focus.

Another challenge is that there's only a certain amount of resources that are available and you've got to manage those resources -- it's not only cash, but it's time and it's technical skill, it's people resources. These are finite, so let's make sure we are making the best use of those resources. That's where you have to make sure you have efficiency.

I've got seven people in my IT group. I've got a number of projects that require their support -- which comes first and how much time are you going to give?

The other side of that is working-capital utilization, making sure that you're watching your inventories, making sure they aren't just tied up inside the warehouse, sitting on the warehouse floor. This is the old-fashioned issue of blocking and tackling, and it's still there today. It was there in the '40s, it was there in the '60s, it will always be there. It's core to what the CFO has to keep his eye on.

4. What is a good day at work like for you?

This is a good question. It's days where I'm involved in initiating and not reacting -- that's a lot more fun when you've got some ball control. In a very, very general way, that's a good day.

The way I run my day is that I like to start with a rough to-do list. I'm not married to that to-do list, but if I can get through most of it by the end of the day, when I'm putting the key in the ignition I feel good about that.

A good day is also anytime you have the opportunity to see and experience a new business insight. Sometimes that means you've got to get out of the office and make a business trip. I haven't ever come back from a business trip feeling like I would have been better off staying behind my desk. Along the way, you could pick up one, two, three great insights, facts, observations that wouldn't percolate up to you if you were just in the office. Things can get stale and the way to cure that is to spend two or three days out there with our sales staff.

5. How would you characterize your management style?

I believe it's open. I like to get people involved. I like to give people an assignment and then let them run with it. I'll follow up, I'll delegate, but I'd say it's a fairly open management style. I'm a good listener, but at the same time I do have a strong bias towards action. You can study things and contemplate, but really you need to get out there and take some actions and that's important. I think that's one of the things we do well here. We don't have a lot of hierarchy and bureaucracy so we are able to get some actions going and moving along.

I take an interest in developing people. I do take some special pride in how I've been able to develop junior managers and see them progress, give them enough to stretch them but not to break them and make sure they know that I'm not putting them in there to fail, I'm putting them in there because I've got confidence in them. At the same time, I'm just a phone call away and I also pick up the phone and call them. I'm a people person.

I use staff meetings as a good way of also making sure that my direct reports are communicating with each other. It's just as important to manage across and manage down as it is to manage up. Staff meetings are an opportunity to share. I think people feel good that they're plugged in that way.

6. What strengths and qualities do you look for in job candidates?

I look for a few things right off. One of them is, does the person exhibit an inner confidence, because that's going to give me some comfort in their ability to make decisions. I try to measure for just how resourceful they are -- you could use the word creative.

I also am looking for whether an individual sees the broader picture. I don't want somebody whose world is black and white. I think we all start off our careers with a lot of black and white, and the older we get and the more experience we get is when we realize there's a lot of gray out there. That's part of maturity and aging and experience.

I also try to get a feel for can they be a leader. Of course, communication skills are important, so I try to get a measure of just how clearly they articulate their ideas. How many sentences is it taking them to answer an easy question. Can they cut through and give me something succinct, so I can get a measure of their thinking, the clarity of their thinking.

7. What are some of your favorite interview questions or techniques to elicit information to determine whether a candidate will be successful at your company? What sort of answers send up red flags for you and make you think a job candidate wouldn't be a good fit?

I've got some standard questions that I don't think are all that unusual. Hopefully, all of the folks who come in here [for job interviews] are successful, they got where they are because they were able to do things more effectively than someone else. What exactly are the strengths, the skill sets, the traits they rely on to edge out that competition. I can take a look at their resume, but they need to give me some insight, an inventory of how they see their skill sets.

I'll ask them about their disappointments and most of all what are the lessons they learned. We all have disappointments, but hearing about the lessons they learned tells me a lot about the individual. Were they able to take the inner look and what did they do to respond. What are they going to do differently next time. Folks a lot of times have a very difficult time with that question. The ones who are able to dig deeper are the ones who score higher points with me -- what are you willing to share? Those are the individuals who show a level of trust in giving the answer and also have the confidence that they can articulate accurately how they are better for the experience.

Another question I ask is how do your subordinates describe you. Sometimes they will give just the top of the cream [for an answer], but I'm looking for something with a little more depth. Also sometimes, with a question like that folks have to think back and then come up with a rapid response. It causes them to process quickly, so how quick are they on the draw when they get a question like that.

Of course, I ask open-ended questions and listen and watch the body language. Some people are better at interviews than others, but that doesn't necessarily mean that what you see in the interview is how they're going to perform. You have to really quarterback the interview.

I also look for individuals who are life-long learners, who show evidence of trying to take the extra measure to gain an insight, gain expertise, make a job switch that maybe was a bit of a detour or side step but broadened them out. I think it's very important for that to continue right on through all the decades of one's career. Just because you get to a certain level doesn't mean that stops. What do you do to stay abreast, did you go to any seminars last year. Questions like that.

As far as red flags, sometimes you just can tell. Some of this is gut reaction. But what I watch out for are those folks where things just seem too cut and dried. I need people who are willing to realize that problems that come up are not going to be all cookie-cutter types, so you need someone who has a broader view.

The other thing I look for is how much the individual uses the pronoun I -- do they take success through the group's success, so it's not all about them. Someone who is able to admit that they had a really good team, who is really broad enough to bring in others, I think that's good.

8. What is it about your current job, at this particular company, that sets it apart from other chief finance positions?

This is a privately held, family-owned business. We celebrated our 80th anniversary of operations last year. We're into the fourth generation of the O'Connor family. That alone is very, very different. There's a culture here, there's a respect here that they show to employees that you don't find in many larger corporations just because of their size. Here, we've got a fair number of longer-term employees on both the executive and hourly and non-exempt levels. We have individuals down on the machine floor who are third-generation employees. That gives our company a cohesion. We have a fairly large union workforce here, but we've never had a strike. You can count on the fingers of one hand where there's been any kind of grievance -- maybe twice. That's really rare.

The fact that we are privately held also allows us and allows me to take a longer-term view. I'm not just thinking about the next quarter and what does the outside world expect. We're not just running this company for the short-term bottom line that the marketplace is expecting. That longer-term view is particularly helpful when it comes to what investments we're going to make and what is the payback.

Another thing is because of our size, we don't have a lot of layers of management, so we are quite agile. What sets us apart is that we can make a decision very, very quickly. There have been times when we've made some fairly significant decisions within a few business days, as opposed to having to work up the line. That bureaucracy is not there. We meet face to face. It's very open management that is practiced here. The CEO is very, very accessible. That helps.

I also have responsibilities as president of Mohawk. When I go out on business trips, I'm really going out of the office as president, so I get a much different response out there. Someone sees the CFO coming to visit and wonders how far they are behind on the bills. But as president, I'm paying someone a compliment when I go for a visit. I couldn't do that as effectively as CFO.

I come back from those trips with a lot more insights and get a lot more openness, a lot better feel for the business. The president is also on the operational side, so that's a very helpful edge I have. Add to that the international sales -- I spent two weeks in China, Hong Kong and Shanghai for an opportunity to see firsthand the growth prospects, but also very importantly I was sending a message to our Chinese customers that their business is real important, that Mohawk viewed this marketplace as one where we saw growth. All of those things give me a real leg up.

9. What do you do to unwind from a hectic day?

I take long walks if I can at the end of the day, especially if we have daylight like we are at this time of year. I'm an avid hiker in my spare time. On vacation, I take weeklong treks, particularly in England. I've walked along Hadrian's Wall, which took me from the North Sea across to the Irish Sea in seven days.

If it's too late or if things just don't work out for a walk, another way for me to unwind is that I love to read. I love historical nonfiction books. I recently finished "Unbroken" by Laura Hillenbrand and "The Path Between the Seas" by David McCullough. I feel cheated at the end of the day if I don't have my 20 minutes to an hour sitting there in my chair and just diving into a book that I've got going.

10. If you weren't doing this job, what would you be doing?

Teaching. Between when I left Union Camp and when I joined Mohawk, I taught as a substitute teacher at our high school in Morristown, New Jersey. I had tremendous fun doing that. I told the principal that I would teach anything other than music, art or gym. So for a couple of months I taught creative writing, earth science, history, English. I even taught a class in English as a second language.

That's what I would like to do -- teach.

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