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Moody's CFO Linda Huber Has Instituted Changes
June 2006
STANFORD GRADUATE SCHOOL OF BUSINESS—Don't set too many goals, play to your company's strengths, and take advantage of the intelligence you can gather in the ladies' room. These, coupled with using her well-tuned sense of humor, are some of the lessons Linda Huber, MBA '86, has learned her first year as chief financial officer of Moody's Corp., the leading global provider of credit ratings and analysis on debt issued in domestic and international markets.
To keep things simple and manageable for her staff of 200, Huber told a Stanford Graduate School of Business audience on May 25, she's honed her finance and human resource goals down to four: drive growth and profitability, support the line business, create an excellent control environment, and make Moody's a great place to work. Smiling wryly, she added that as a provider not only of credit ratings, but also of market-leading credit opinion, deal research, and quantitative credit risk assessment and management products, "the opportunities to annoy clients are extraordinary in breadth and scope."
Speaking at the School's annual CFO lecture, endowed by former dean Arjay Miller, Huber reported that upon moving from U.S. Trust to Moody's last summer, she helped the company firm up its areas of strength by acquiring new businesses such as Economy.com and bolstering its finance team. Now that team includes human resources, corporate development, and real estate functions. "You want some people from the inside and some from the outside," she explained.
Huber also instituted changes to the company's balance sheet, including working down Moody's cash balance from nearly $1 billion to $605 million, reducing the coupon on long-term debt nearly three points to about 5 percent, and increasing market capitalization from $13.5 billion to $20.8 billion. In three quarters, Moody's stocks went from $44 to $77.
But, she warned the MBA students, "you have to keep in mind that sometimes you just have a bad day." For Huber, that day was last April when, despite Moody's optimistic earnings call for first quarter 2006, the company's stock price lost $4.5 billion in value. "It's a difficult situation to manage through, and you can't let your emotions get the best of you," Huber said. "My army training was good for that," she said, referring to the four years she spent in the ROTC where she eventually achieved the rank of captain.
Knowing that bad days can come should keep one humble and respectful of everyone in the company, Huber advised. "I get some of my best information in the ladies' room by just being approachable and positive," she said. "Being a jerk is a very '90s thing."
At the same time, when you're solicited with hundreds of emails, vendor cold calls, and phone calls from investment bankers and consultants every day, you've got to learn how to say "no" with grace. Part of prioritizing means making time for family. "I don't do professional dinner events during the week," she said. "I'm at home with my four kids doing geometry, reading, and complex fractions."
Being the public face of an organization is a huge responsibility, she acknowledged, but in the end, she told students, "remember to have fun!"
—Marguerite Rigoglioso