Siemens has long been a mainstay in global industry and played a crucial role in shaping the modern industrial world. But with environmental and social challenges increasingly confronting the globe, Siemens is aware that building the future will go beyond innovating new appliances or infrastructure – it will entail rethinking the way we organize our economy and society, addressing issues ranging from climate to diversity to workforce upskilling, and ensuring that growth is sustainable. I covered these topics in a recent Q&A with Marsha Smith, CFO of Siemens North America and Siemens Mobility. Marsha emphasized that as a premier global industrial firm, her company – and the finance function within it specifically – are leading the way on sustainability and adaptation to change.
Jeff Thomson: Siemens is a 175-year-old company, but one that emphasizes modernization and embrace of ESG goals. How does sustainability affect decision making at Siemens? What required CFO competencies are needed to align and integrate ESG and sustainability with financial management? How does ESG impact enterprise performance management, reporting, forecasting, resource allocation, risk management and internal controls?
Marsha Smith: Siemens was founded on the principle of transforming the everyday to create a better tomorrow. We help our customers and our communities solve the most vexing challenges – and one of the biggest challenges currently facing mankind is climate change. Our technologies provide sustainable solutions that are both fighting climate change and ensuring a sustainable future, from public transportation to smart infrastructure to green energy.
Our DEGREE framework, which outlines our ESG and sustainability goals, guides the organization to not only be good global citizens, but also allows it to be a resilient organization prepared for workforce, supply chain and governance shifts in the future. Decarbonization, ethics, governance, resource efficiency, equity and employability are the six key principles which guide our ESG strategy. They are transparent – up on our website for all to see.
In today’s landscape, this is imperative. Corporations – and therefore CFOs – are held to much higher standards. Does our workforce represent the diverse communities in which we operate? Are we decarbonizing our manufacturing process? Are our facilities carbon neutral? It’s no longer enough that only our customer solutions contribute to fighting climate change. We recognize that change must also come from within.
ESG impacts financial management in several ways. We track risk, ensure internal controls are in place to meet the ESG expectations that we publicly set. Our financial team has resources – both people and tools – who are dedicated to tracking our progress, just as we would for other KPIs.
Thomson: You have spoken about the need to modernize internal financial processes so your team can do old things in new ways. How do you as CFO champion digitization? What role does the executive suite have in implementing large-scale changes that affect the entire workforce?
Smith: Being a leader means having the responsibility to get our organization prepared for the future: to upskill employees and embrace automation. To do that, we must change internal processes, carve out resources for automation and digitalization initiatives and encourage a culture of innovation, which sometimes means investing in tools and processes that have not been used before.
I believe leaders must be champions of digitalization, communicating the reason for change. This encourages employees to become more comfortable with new ideas and new technologies.
As a CFO, I’m also focused on ROI, and we are constantly looking at how digitalization can improve both our customers’ investments and our own. For instance, [for] something that we formerly may have completed in Excel, we now have AI tools that are used. This can save individuals hours of manual time.
Recognizing the importance of technologies like chatbots, Robotic Process Automation, automated data analytics, cloud computing, AI and machine learning [is crucial]. Even Blockchain and advanced analytics/forecasting are critical in making sure our financial organization continues to be at the forefront of not just the technology industry, but the financial field. To do that we need to invest in our tools and our talent. Digital companies will always need human intelligence, which is why we encourage our current employees to develop their skills to better work in areas such as analytics and predictive capabilities while we hire new financial team members from non-traditional financial backgrounds, such as data scientists and analysts.
Thomson: Diversity, equity and inclusion (DE&I) initiatives are now viewed by finance professionals as imperative to talent recruitment and retention. What is your approach to DE&I when making hiring decisions? How do organizations benefit from incorporating equity and inclusion into their decision making?
Smith: At Siemens, we believe our workforce should represent the communities in which we operate, and we continue to make progress toward our DEI goals. As a business, we’re doing this in a number of ways. We have a strategic diversity council, with business leaders who represent the largest employee populations. Our executive diversity council works closely with them to find new talent sources to ensure qualified diverse applicants for our job openings, showcase include gender neutral job requisitions and to guarantee that we have the training available to all employees so that diverse candidates are prepared for promotions.
We also have an educational diversity council which is working with key local and national associations to build relationships – with potential employees, suppliers and customers – that allow for more diverse influences within the organization. From guest speakers such as Beverly Scott to remote tours of the Museum of Chinese Americans and Wounded Warrior 10Ks, we are encouraging our team members to break down unconscious bias, become allies and create a more inclusive workforce.
We know that diversity – in gender, ethnicity, sexuality and culture – contributes to diverse ideas. This drives new perspectives, new ideas and ultimately innovations that push our teams and business forward. Diversity is a critical factor in a resilient organization.
Whether building my leadership team or looking at my broader finance team, I look for cultural-adds: people who have not only the skillsets to succeed, but also bring new and different perspectives to the team. In addition, I try to foster this talent through mentorships, stretch roles and recognition for my team. As a matter of fact, our entire North American leadership team has a female mentee. With more than 350,000 employees around the world, Siemens continues to create a better tomorrow, by valuing the viewpoints of its team members, using their insights and knowledge to develop the latest innovations that bring together the real and digital worlds.