Bruce McDonald knew early in his career he wanted to be the CFO of a large, publicly listed company. As Executive Vice President and CFO of Johnson Controls, he’s not only achieved that dream, he’s also been named one of America’s Best CFOs.
While he’s quick to acknowledge this recognition reflects his great team, he also credits his career path to a great piece of advice he received while still a financial analyst.
“I remember talking about my career and was told that if I wanted to be a VP of Finance of one of our divisions, I wouldn’t get there by rotating through corporate HQ positions – I needed to go into one of our businesses and get some international experience,” he says. “It’s the best advice I ever got.”
He took the advice to heart, moving to an operational role in the UK with his employer at the time, Varity Corporation, a farm equipment manufacturer. From there, he took on roles of increasing responsibility, which led him to a VP Corporate Controller position at Johnson Controls in 2001. He was appointed CFO in 2005.
McDonald now oversees the IT, investor relations, treasury, accounting, financial analysis and tax functions of the NYSE-listed company from its corporate headquarters in Milwaukee. Johnson Controls is a global diversified multiindustrial company with core businesses in the automotive and building industries.
“We’re a large organization made up of three different businesses and lots of sub-businesses,” says McDonald. With 168,000 employees, the majority of whom are outside North America, Johnson Controls serves customers in more than 150 countries.
Communication is key
Not surprisingly, given such a vast organization, McDonald puts communication at the top of his priorities. “Keeping up with things and letting people know how we’re doing are really important,” he says.
In addition to keeping close to his own teams and ensuring reporting requirements to the board and finance and audit committees are met, he’s also in regular contact with the investment community. “We’re a publicly listed company, so we spend a lot of time with our stakeholders and potential shareholders — we have to know them all.”
And that shows. Johnson Controls has been named one of America’s Most Shareholder-Friendly Companies by Institutional Investor magazine, thanks to its “superstar” investor relations team and the efforts the company makes to be transparent about their business strategy and its financial ramifications.
“We get a lot of credit for admitting we don’t get everything right,” says McDonald. “When things are bad, the last thing you might want to do is talk to shareholders, but in tough times, you need to do it twice as much.”
Highs and lows
And there was no greater time of need than the global financial crisis. McDonald says it was “a very scary time,” particularly the speed with which the automotive industry was affected, and something he wouldn’t want to go through again.
“Over a four-month period, we went from profitability to losing $100 million a month,” he says. “I remember sitting with the CEO, reforecasting. Each time we couldn’t believe how bad it was, it would be worse,” he says. They took some very aggressive actions to get to a break-even level within a few months.
Part of the saving grace was their diversified business and an investment they’d made in 2005 with the $3-billion acquisition of York, a commercial heating, ventilation and air-conditioning (HVAC) equipment manufacturer.
“The acquisition completely transformed our company,” he says. “Within a few years we went from being primarily automotive to a multi-industry company.”
Fortunately, commercial HVAC is one of the last industries to fall victim to a recession, and along with the existing battery business, this helped the company weather the financial storm.
The importance of giving
McDonald started his career with Clarkson Gordon in 1983 and spent two years at our Mississauga office after graduating from McMaster University. “In my first year, everyone had to sign up for the income tax clinics,” he says. “I went to a retirement home and I still remember a sweet old lady was so grateful when I told her she’d be getting a refund, that she started to cry and then wanted to pay me! The firm set the expectation that we would give back, but I quickly learned that giving also feels good.”
That giving has continued, both personally and professionally. Today McDonald serves as Chairman of the board of directors for Columbia St. Mary’s Hospital in Milwaukee, he’s a member of the board of trustees and treasurer for the Milwaukee Art Museum and he serves as treasurer and a member of the board for the United Way of Greater Milwaukee.
“It’s important to set the example at the top,” he says. “We expect our people will participate in the community. We’re the largest public company in Wisconsin and a major employer in Milwaukee — if there’s anything going on in the community, there’s usually someone from Johnson Controls involved.”
With a global team, busy travel schedule, community boards and so many demands on his time, how does he do it?
“I’m incredibly supported,” says McDonald. “I’ve moved a lot and my family has come with me. My wife Antonette is very supportive and understanding of all the things that I’ve missed.”
He admits that he’d love to find more time to golf, an activity he enjoys with Antonette. He also likes to relax by reading, spending time with family and friends and heading to Florida, where he’s currently looking for a boat, which will help him retreat from Wisconsin winters.
Advice for budding CFOs
McDonald says, “Accounting is a great career starter; it opens your eyes to a lot of different things. Most business decisions will go through finance eventually. You have to understand how your business makes money and you need a profit instinct. In today’s business world, you can’t advance your career without international experience.”