The knock-on effects of increased oil prices and unstable financial markets have led to some changing job roles within GE Commercial Finance. Sarah O’Carroll speaks to managing director Kerri Thompson and head of HR, Megan Nettleton to find out how they’ve been affected
Of all the factors contributing to the current global economic turbulence, the increase in oil price has impacted on GE Commercial Finance the most, according to Kerri Thompson, managing director, equipment finance.
Although world oil prices have dropped in the last couple of weeks, prior to that GE’s customers were feeling the strain of the continuous price increase. Providing services such as lending products, equipment leasing, cash flow programs, and asset financing, GE Commercial Finance found that it had to quickly readjust a few things to meet rapidly changing customer needs.
First the increase in oil prices caused stressed cash flow among its customers, especially within the transportation industry. This in turn had a series of knock-on effects for both management and HR.
“People last year and in previous years would have replaced trucks and mining equipment and other things more regularly than they are replacing them this year. There’s a little less confidence in the market,” says Thompson.
Because customers are taking a more conservative approach to their borrowing and spending, this has led to a changing role of some staff, particularly the sales teams, whose jobs have become more complex.
Although writing a deal for a new piece of equipment for example is relatively straightforward, says Thompson, customers’ cash flow today is more under pressure than it was and, therefore, a different style of financing has to be offered. Until last year most of the time was spent doing up new equipment deals, but the mix has now changed and more time is spent on restructures.
“We’re finding that there’s a lot more of that refinancing and restructuring of financing with our customers today,” says Thompson.
Thompson describes how customers are feeling the pressure in today’s economy, particularly in the transport industry – for example, with a transport company who is trying to pass on the increased oil price to their customers. These, along with increased interest costs and a tight labour market, are all impacting on their businesses. Therefore the HR team has to constantly retrain staff to be aware and equipped to meet customers’ needs.
“Some of the customers are experiencing some cash flow strain. That means that our people need to be out with them more regularly and helping them and working through what that means to their financing options. So there’s a lot of that going on at the moment,” says Thompson.
Three key strategies
At times like this it is the company’s strongest core traits that often help it through. From a business perspective, the rigour and discipline GE has around its operating systems is one of its core strengths, according to Thompson.
“We have a great annual process for analysing our markets and our customers and ourselves and then reinventing our growth plans and saying ‘What do we want to do differently in the next three years?’,”she says.
“We’re really focused on that and developing it throughout the world …in each of the markets we play in we ask ‘How can we operate differently to get a better outcome?’”
This rigour leads to a very competitive climate within the company. According to Megan Nettleton, HR leader for GE Commercial Finance in Australia and NZ, the reasons the operating rhythms are so strong is that people are held accountable. This, in turn, leads to a very strong performance culture.
“So it’s not just that we have a process – which GE typically is very well known for,” says Nettleton. “There’s numbers and plans and income and revenue that are tied to that. The people that are coming up with these ideas are very much held accountable to that.
“So from there, you actually create a very strong performance culture, which I think forms part of the package and part of the attractiveness for employees.”
Diverse leadership development
Leadership development within GE is all about giving employees the opportunity to operate in different industries. Thompson has spent 25 years working in the financial services industry but prior to that spent three years running a plastics business.
She believes that the experience you get running a completely different business, and being put into a leadership challenge that is very different, really tests you out and develops you.
“I certainly feel like I came away from that three years experience –after running a factory and a marketing team and an industrial sales team – [that] coming back into financial services I have a whole different understanding of some of our customers that are in manufacturing today,” says Thompson.
Therefore, particularly in core areas such as HR, finance, marketing and IT, this sort of movement is encouraged and offered as an opportunity, according to Nettleton.
“It’s not something we state is going to happen to every employee. Again, not every employee aspires to that either,” she says. “But we put it out there to people that it’s something that’s available.
“So a lot of senior people in the business have done that. I think people take comfort in that other people have done it, so they can as well,” she says.
Third their environmental strategy –“ecomagination”– is something that has helped in both recruitment and profits. Some of the projects include a drive lightly product, a GEnx engine to improve aircraft fuel efficiency, and a solar powered system and wind turbines.
Thompson makes no secret about the fact that although this corporate social responsibility strategy is keeping new environmentally conscious candidates happy, it’s also making money for the business. This is, for any commercial company, the ultimate goal.
“It’s all about developing new products and processes to help our customers meet what’s going on in the environment today and the challenges that are out there,” says Thompson.
“But it’s also about making money for our shareholders. So we’re doing something great for the environment and for our customers – but we’re also making money out of it.”
Although GE has a centralised HR function, which plays a big part in rolling out these strategies, it works very closely with Thompson and the business end. According to Thompson it’s vital to have HR sit in on business and strategy decisions.
“I have someone who works for Megan (in HR) who actually works as part of my business, She’s on my leadership team. She’s a part of all sorts of strategy discussions that are about the business and has input to those discussions. But she is also, obviously, an advocate for the employee in those discussions,” says Thompson.