Robin Ferracone
Founder and Executive Chair, Farient Advisors LLC

Born 1953 in Englewood, New Jersey.

Robin Ferracone is founder and executive chair of Farient Advisors LLC, an independent executive compensation consulting firm that she founded in October 2007. The firm is based in Los Angeles, California, and New York.

Ms. Ferracone is also CEO of RAF Capital LLC, a private, portfolio-management firm that she founded in April 2007 to make strategic investments in companies within the human resources software, information, and consulting fields.

She was instrumental in commercializing four highly successful companies, one of which was the forerunner to FreeCreditReport.com, and three others that were sold to publicly traded companies.

Given today’s battle over excessive executive compensation, it is a challenge to run an executive compensation advisory firm, yet Ms. Ferracone has taken the high road and, through such innovations as her proprietary Pay Alignment Model, shows top-tier corporate boards how to construct fair and reasonable relationships between executive pay and performance for CEOs and the other named executive officers. Her data-driven model tracks almost 50,000 data points over three-year periods back to 1995 for the entire S&P 1500, including by company size, industry, and performance.

Ms. Ferracone is the author of Fair Pay, Fair Play: Aligning Executive Performance and Pay (Jossey-Bass, 2010). She also is an accomplished speaker and contributor to top-tier governance journals, and was named in 2011 to the Directorship 100, marking her as one of the most influential people in the boardroom today.

Elizabeth Ghaffari: Why did you choose the education that you did?

Robin Ferracone: I’d done pretty well in high school, was valedictorian of my class and had always been very quantitatively oriented. The northeastern colleges—Harvard, Radcliffe, Smith—were impressive, but they seemed a little too radical for me—as a girl from Indiana. I wanted a top education, but was tired of the Indiana winters. I visited the Duke University campus and found it to be absolutely stunning. I said, “This is the place for me.”

Ghaffari: How did you get started in your current field? Did you need to get advanced training or education?

Ferracone: I started in science because I loved the quantitative aspect of it, but the labs were solitary activities that required a lot of patience. I’m short on patience, and I like social interaction. Business gave me the interaction I sought, while an economics major fit best with my quantitative interests. A dual undergraduate major in management science and economics made perfect sense.

I decided to go to business school, applied to Harvard, and was admitted with a two-year deferral. Since there was no other place I wanted to go, I decided to spend a couple of years working beforehand.

Ghaffari: What was your first job after graduation, and how important was your first job?

Ferracone: I had a boyfriend at the time who was graduating from Duke Medical School with a residency at the University of Colorado. I thought “Why not just try to find a job in Denver?” That was in 1975, in the middle of one of the worst economic recessions we’d ever seen. The Denver economy was heavily dependent on energy and was in a deep recession. Undaunted by facts, I traveled to Denver on my spring break of my senior year of college in search of a job—all by myself, knowing no one, staying in some cheap motel, trying to scrounge around for whatever work I could find. It was probably one of the loneliest weeks of my life.

Because I had worked the summer before my senior year as a marketing research analyst at Colgate-Palmolive in New York, I was fortunate enough to get a job in marketing research at Samsonite Corporation in Denver. Their head of marketing looked at my background and said, “This person is perfect for a market research role.” I started work right after Memorial Day.

Ghaffari: Did anything change in your life that led you to your current career path?

Ferracone: I’ve tended to do things more opportunistically than linearly. I started out in marketing, but saw that the consulting firms recruiting heavily at Harvard. They hired the smartest people and offered the plum jobs that paid well. I thought, “Consulting is great. You work with smart people, get paid a fair wage, and work on a variety of assignments.”

I got a summer internship with Booz Allen in their New York office between my first and second years of business school. I liked it very much and ended up working full-time with Booz Allen after graduation. But, I still wanted to live in a warmer climate, and didn’t want to work in New York City at the time. I asked Booz Allen for a job in their San Francisco office, and they gave it to me. I worked for Booz Allen there for the next five years.

Ghaffari: Would you say you purposefully planned your career or reacted to events?

Ferracone: I’m very planful—not serendipitous. I’m purposeful. I actually have a plan. I have a ton of motivations and I’m a self-starter. But, when new facts present themselves, I’ll change. I’ll shift. That’s been the history of my career. I’ll plan to do one thing, but I’ll end up doing another if and when some opportunity presents itself. Then I go for it.

Ghaffari: How did you start your business?

Ferracone: I co-founded SCA [Strategic Compensation Associates] with Gary Hourihan, one of the Booz Allen partners who really deserves the lion’s share of the credit for starting the firm. I had worked with him at Booz Allen and liked him very much. He was leaving Booz Allen to start a company focused on executive compensation.

Gary invited me to come and be his number two and help start the business. We were financed by Peter Mullin in Los Angeles, probably one of the best business development people I know. We moved to LA and started SCA at the beginning of 1985.

Ghaffari: What made you decide to leave the corporate world and take on this venture?

Ferracone: When I first talked about this with Gary, I was concerned about the narrow focus of the new firm on compensation. At the beginning, the subject matter of executive compensation was a negative for me because I was a strategy consultant with more of a big-picture orientation. But I decided that this was an opportunity to start a new business, to get in on the ground floor and to have an ownership stake. All those things trumped the subject matter.

Ghaffari: Were you trying to solve a problem, address an unmet need, or fix something broken?

Ferracone: First, we thought we could differentiate our approach to executive compensation from our competitors. Our competitors looked only at the pay side of the equation. Our thought was to add a strategic and performance orientation to the pay side—“pay for performance,” which constituted a new approach to compensation design. Pay for performance considerations are talked about a lot, today, but were unheard of back then.

Second, we thought we could drive this idea forward in an entrepreneurial environment. We really were upping the game as to how executive-pay programs were designed. We wanted to make it a strategic board and top management activity, as opposed to a technical exercise that lived in the corporate compensation department. We changed the nature of how our field works. We literally “changed the frame” through which companies view executive compensation.

Ghaffari: What were the biggest challenges you faced as an entrepreneur?

Ferracone: We were blessed with a booming economy when we started. Peter Mullin, our financier, had multiple contacts, which generated a lot of business. The biggest challenge was to get people to join a small start-up company, starting from scratch—getting people to come in and learn our craft at the level that we wanted to deliver our work. The people side of the business was the biggest challenge. The business side, getting the business in the door, wasn’t as big a challenge back then. But, just getting the work out the door—that took a lot of time and effort.

Today, it’s different. The economy has turned pretty significantly, so today we face the opposite challenge. Getting business in the door is tough today.

Ghaffari: What were some key turning points?

Ferracone: Key turning points probably were our expansion to five offices. SCA’s growth began with the LA office opening in 1985. The next year, we started the New York office by bringing on a Booz Allen partner as principal. In 1991, we brought in someone else we knew from Booz Allen to head up the Chicago office. Before he showed up, I went to Chicago with another associate, lived there for a month, and started that office.

Gary, and Simon Patterson, another Booz Allen person we knew, set up the London office in the mid-1990s. Dallas, our fifth office, was totally opportunistic. The wife of one of our New York partners needed to move to Dallas for professional reasons, so he decided to start our Dallas office for us.

Ghaffari: What kept you up at night? What kept you going?

Ferracone: In 1989, we’d sold half of our firm to Korn/Ferry. Later, we saw we were not getting the synergies that we all wanted and so decided to buy back the other half of our firm. That was a burden on the partnership because it meant that we had to take the money that we were earning, and instead of putting it into our pockets, we had to put it into buying back our shares from Korn/Ferry.

Four of our partners wanted to reinvest in our business for growth and four wanted to harvest our business. While we all agreed we wanted to buy ourselves back from Korn/Ferry, some partners thought that it was too painful and wanted the cash. They had a “take the money and run” attitude—to just pocket as much cash as possible rather than reinvesting for growth. So, there were some issues and disagreements. It was kind of a tough time, because we were disagreeing about our priorities.

Ghaffari: Ultimately, you did decide to sell. How did that come about?

Ferracone: The sale of SCA to Mercer was an interesting learning process for me. In 1998, Gary decided he wanted to leave SCA to build a leadership solutions practice at Korn/Ferry. Our Chicago partner wanted a value-realizing event—he wanted to sell the company. We looked at a lot of firms that were potential buyers. Mercer presented the best opportunity. We all decided to sell.

I had arguments going on in the partnership. For me, the sale to Mercer was an optimization. The final solution had something for everybody. Anybody who wanted money in their pockets would get money in their pockets. Those who wanted to grow and experience new challenges could do that as well. But the sale was born out of disagreements rather than a decision that we purposefully pursued. After the sale to Mercer, I was determined to try something different at a much larger firm and see how that worked out.

Ghaffari: You went to work for Mercer. How did that work out?

Ferracone: I was at Mercer for six years. They pitched their acquisition of us as a “reverse takeover.” We would be allowed to run certain aspects of the business within Mercer, while they would benefit from our strategic approach and high-level relationships. They said that there would be synergies and that we could help shape the business. One plus one would be equal to three.

I really wanted to play a positive role at Mercer. They wanted to combine the efforts of their strategy group, Mercer Management, with their HR unit, Mercer Human Resources, so I was put into the role of chairing Mercer’s Linkage Committee, which was a committee charged with extracting more synergies out of the strategy and HR business units.

I also was a senior client person, where I was responsible for continuing to grow the executive compensation business. I did all of that, but I really missed having line responsibilities and running a business unit like SCA. In big corporations, it’s very hard to make room for people to play line roles, particularly at the higher levels.

Ghaffari: Were you ultimately successful in dealing with that challenge?

Ferracone: On numerous occasions, I approached Mercer leadership about my interests but did not find any enthusiasm until 2004 when I encountered a person who finally saw my talents, Mathis Cabiallavetta. I really liked him a lot. He said, “Why don’t you do global development in the western US as vice chair of Marsh & McLennan—MMC, the parent company—play a linkage role there, to extract the synergies between all the MMC companies, including Mercer. Why don’t you do that for two years, and after that, we’ll find you a line role.”

Ghaffari: What did you learn from these experiences? Any surprises?

Ferracone: By this time, I’d learned how to do linkage—to deploy what I learned. I was having a very good time in that job. I liked the people, my boss, the impact we were having, meeting new people, and doing new things. I thought at the end of my two years, I would go back to the line.

Things never follow a straight line. Nine months later, Eliot Spitzer—then attorney general of New York—accused Marsh, the insurance brokerage unit of Marsh & McLennan, of bid-rigging and engaging in anti-competitive behavior. It was a very serious accusation. In response to the investigation, the company broke up the corporate center. They decided that all of the units had to act independently to avoid any appearance of untoward practices. The global development department went away. Jeff Greenberg, then the CEO of Marsh & McLennan, was replaced by Michael Cherkasky.

That was a very defining moment. I thought my job was going away, and I was ready to take a severance package. MMC said I could go back to Mercer. I said I didn’t want to go back unless I could have a line job. They brought in a new person to run Mercer named Brian Storms. My last day at work at MMC was supposed to be January 31, 2005. I had accepted my severance package, given up my parking space, turned in my keys. And, literally, at the eleventh hour, fifty-ninth minute, I got a phone call from Brian in New York who said, “You can stay. I want you to run Mercer’s human capital business. Let’s work it out.”

I went into the human capital business as its president and really enjoyed that job. I enjoyed working for Brian. I had a lot of fun. We were growing and inventing new things. It was a line job. It was a global post. I liked the global scope. We spent the next two months working to organize my group and determine how the business would operate and grow.

Ghaffari: Did you make any mistakes? And how did you get past them?

Ferracone: Not so much mistakes as the challenge of organizational upheaval. From 2005 through 2007, I went through multiple bosses. Brian left to go run Marsh. Michael Caulfield was brought in to run Mercer. Then Cherkasky and Caulfield had a falling out, and Cherkasky put Michele Burns in charge of Mercer. Michele added a layer of management between her and me. All these changes in direction were difficult.

At the end of 2006, executive compensation firms were facing major new independence requirements from the government and investors. In order to be considered “independent,” executive compensation companies reporting to boards had to avoid doing other business for management. I wanted to address that conflict of interest issue by spinning off Mercer’s executive compensation business. They finally did exactly that in 2009. But, I was making that recommendation in 2006 with no action in sight.

By early 2007, I realized that things were not adding up for me at Mercer. Changes were not carefully thought through from a succession standpoint. Mercer was in the business of succession planning, but we weren’t practicing good succession planning ourselves. I was not having an impact. I was not being heard. So I decided to “ease on down the road” and leave the company.

Ghaffari: What did you do then?

Ferracone: After Mercer, my plan was to form RAF Capital and become more involved with private equity firms, to help them find good deals in the human capital space, to go in and run one of those ventures, and to create value for investors. Here again, the best-laid plans just don’t work out. Private equity deals were slow in coming. It was a lot of work, but deals were hard to find. The reality is that, for the most part, if someone is looking for money, he or she just wants the money—he or she does not want to step down from running the company. Somebody who wants to come in to run the company on behalf of the private equity firm isn’t very popular.

In the meantime, I started Farient Advisors as an executive compensation and performance consultancy. It’s sort of a next-generation SCA. I began to get calls from clients and referrals from people wanting me to do consulting assignments. Then, the recession hit in the beginning of 2008, and it was unlike anything I’d ever seen before.

Ghaffari: Have you decided not to pursue external investments? Might you do so in the future?

Ferracone: The recession was extremely difficult, but we managed to get through all of that. Here I am, financing the company, we were down to our last dollar, and I decided to invest anyway in the business. I invested in developing intellectual capital around performance and pay alignment, and wrote a book, Fair Pay, Fair Play: Aligning Executive Performance and Pay as a result of this research.

During this time, we also opened our New York office. I think we did extremely well. We hired some pretty key people. But, growing the client base and revenues has been slower than I would have liked. It was slower than I was used to at SCA. Doing all of that in the face of a recession, as a new business, was not easy. But, we’ve done it, and I think we’re over the hump—I know we’re over the hump.

Today, I’m now running Farient. We now have about twenty people in offices in Los Angeles and New York, and we have an affiliation with my former partner from SCA, Simon Patterson, in London. We have a good and enjoyable client base.

So far, we haven’t taken external capital because we haven’t needed it.

Ghaffari: What methods do you use to uncover opportunities?

Ferracone: I’m now down the road in terms of start-ups and doing very entrepreneurial things. I’m a lot more at ease doing that now. I think I developed nerves of steel while weathering that last recession.

On the private equity side—RAF Capital—the deals really weren’t happening. So I changed the format. The market has started to pick up a bit with the economy turning around. Today, on the private equity side, I’m starting to capitalize on all those early calls and meetings. I just changed it up—rather than go in and be the CEO, now my format is to make an investment and have an impact usually through a board seat. I can only do a couple of those at any given time. That’s a way for me to have influence with a lighter time commitment because most of my time is given to Farient and its clients. That’s kind of where it is now. It’s been very interesting.

I saw opportunities along the way. In the 1990s, when the capital markets were good, there were entrepreneurial opportunities—I made an investment and took a board seat in two companies of note. One is ConsumerInfo.com, which is now FreeCreditReport.com, which most people know. That was a company I started. The second was A Breed Apart Veterinary Centers, which we sold to Veterinary Centers of America. In the 2000s, I made an investment in and took a board seat on Worldwide Compensation, a company we sold to Taleo last year. These have all been rewarding and gratifying ventures for me.

All these were separate businesses. I was not the lead on ConsumerInfo.com. A good friend and client from my days at Booz Allen had stayed in touch with me, and he brought the idea to me. He asked if I could help him. I helped him with the strategy, went on his board and helped him get financing. It was totally separate from SCA.

ConsumerInfo.com was a real home run, probably my best investment to date—we sold it for ten times my investment. A Breed Apart and Worldwide Compensation were sold for five times my invested capital. Now, I’m invested in, and on the board of, a company called PayScale. The prospects for this company are bright, but it remains to be seen what will happen there.

I’ve also had my failures—they tend to be those businesses that I wasn’t really involved in. I lost more money in the shortest period of time in the dot-com boom in ventures where I wasn’t fully engaged. You go into these things and make mistakes.

Ghaffari: What job/boss had the biggest impact on you, and what did the experience teach you?

Ferracone: Gary Hourihan certainly was one of my mentors. We worked well together. Gary is very sharp and has an expertise in organizational design and compensation. He has a Princeton undergraduate degree, a Chicago graduate degree, and a second graduate degree from the University of Louvain, Belgium.

Between my strategy expertise and Harvard MBA, and his expertise, we were able to combine that in a pretty powerful way in the marketplace. It was a lot of fun to work with, and to learn from, Gary. It was the two of us combined that really made it work. I felt as if it was always, “Go for it! Grab it!” Gary says that hiring me was one of the smartest things that he ever did.

Peter Mullin is another mentor, probably one of the best business development people I know. He’s also is good at thinking about business models and reinventing businesses. He was our financier for SCA and an incredibly gifted mentor.

Ghaffari: Who or what else taught you important lessons?

Ferracone: There are other people I’ve learned from along the way. I had one client, Kate DCamp, who was always on the client side while I was always on the consulting side. We kind of grew up together. We’d learn from each other as we went along. I feel as if there are people out there with whom you resonate and from whom you learn. Even if an experience is painful, you need to think about, “What are the lessons to learn from this experience?” If you don’t learn the lessons, you’re not going to grow.

Ghaffari: Could you have made it to where you are without mentors/coaches?

Ferracone: Absolutely not. I’m still learning. We all can learn from people. I learned a lot from Gary Hourihan. He was one of the people who told me things I didn’t want to hear. My biggest blind spot is with people. I’m a pretty tough and demanding manager. I tend to put a premium on getting the task done and done well. But, I’ve learned over the years that that is really only part of the equation. Real leadership is inspiring people to co-create, buy into, and help execute a vision.

We need relationships and ways to motivate and inspire people. Gary does that pretty well. He’s been able to tell me when I’ve been too hard on people or when I need to try a different way of working. He’s been extremely instrumental in my success, plus he’s good at what he does and I’ve learned from that. I’ve learned to be a good consultant working with him. He’s definitely a mentor who is pretty significant.

Recently, I hired Gary into Farient as an SVP. I also hired Gary’s son, Ryan. So, we’re growing our own here, so to speak.

Another group of mentors are the people in my Young Presidents’ Organization Forum. They are all terrific. We’ve been a forum for twelve years now, and I’m still learning from them. They will hit me between the eyes when I need it, and then pick me up and dust me off afterwards to make sure I’m better for the wear. I’ve probably learned more from them than anyone since they deal with both the business and the personal side of things, which are inextricably linked.

Ghaffari: What other areas interested you besides business?

Ferracone: Educational and philanthropy. There’s a friend in business, Jaynie Studenmund, with whom I worked at Booz Allen. We kept in touch all of these years. She went on the board at Harvey Mudd College [HMC]. She knew they were looking for women who could bring a valuable perspective to the board, but who also were able to make gifts to the college. She suggested my involvement. I thought it was a good way to be associated with a college with a scientific orientation.

HMC is a very prestigious science and engineering liberal arts college. I liked its mission and the fact that it put a high premium on teaching rather than just research. It just seemed like a really good fit for me. I think I made my mark there since I was on the search committee that brought in the new president, Maria Klawe, former dean of Princeton University’s School of Engineering and Applied Sciences, chosen in January 2006. She’s been terrific. I felt like I had a hand in that. I also headed the personnel and compensation committee while I was there. I think we professionalized the activities of the committee and moved the college in a good direction in that regard.

I’d been on the Harvey Mudd board for ten years and felt it was the time to move off the board in 2009. I’m a believer that it’s good to have new blood on a board. It was a good time to step aside at Harvey Mudd and let someone else add value while I joined the Duke University board.

Ghaffari: How did you get the Duke University board position?

Ferracone: I had been on the undergraduate board—the Trinity College board of visitors. I’d go twice a year to the meetings. I missed very few meetings. It’s basically a development board. I had been giving to Duke over the years, so I’m sure the head of development at Duke suggested me. Nan Keohane, then the president of Duke, came to see me in Los Angeles and asked if I would consider going on the board of trustees at Duke.

So far, the Duke board has been a great experience. I feel that I am making my mark there. For example, they needed to conduct a governance study. I raised my hand and said, “I know something about governance” and volunteered to chair the ad hoc committee on governance.

My view is that you get out of things whatever you put into them. Now, I chair the human resources committee and am a member of the executive committee, as well. Duke has been a fabulous experience and is just a great board. I’m loving my time on it and hope I’m having a positive impact there.

That’s something I think about more today. When I start something, the issue, for me, is: “How can I make an impact? What do I want to say happened?” It doesn’t always turn out—what actually happens is different from what you might expect in the beginning. But to have some kind of intent is really powerful.

Now, what I’m trying to do is to give back. I really like mentoring young adults. Dennis Rohan, head of the Entrepreneurial School at Stanford Business School, has me in his contacts He’ll just call me if any of his project teams at the Stanford Business School ever need help in the field of HR. I’m here for them if they need me.

Ghaffari: How would you describe your decision-making style?

Ferracone: I’m fairly decisive. I feel like I sort through things. At the end of the day, a lot of decisions end up being more emotional than analytical. I am a very good analyst, and I certainly look at the facts, but at the end of the day, career and investment decisions have an emotional component as well.

As I’ve gotten older, I’ve decided I’m only going to work with people I like, trust, and respect because life is too short to spend time on the ones you don’t. A lot of deals can get into trouble and are painful. So, you want to be in the boat with good people. I’ve put a much bigger premium on that in my later years than I probably did in my earlier years.

During the recession, I knew I couldn’t always control the “outputs,” but I knew I could control the “inputs.” As long as I was behaving well vis-à-vis the market, my people, and myself, like keeping myself healthy, I knew I would figure it out.

Getting through the recession is one of the hardest things I’ve ever done, but also one of the things of which I’m proudest. I look at what came of it. We continued to build our firm, opened our New York office, developed a significant body of research, and wrote a book.

Ghaffari: What were some of the key initial strategy decisions you made?

Ferracone: The name of the company, Farient, is a made-up word that combines f-a-r, which is my initials backwards, together with “ient,” which sounded sort of scientific and intelligent. We liked the feel of it. It was unique enough so that we could get the domain name. We went through many names before we came up with that one.

I decided to start a business that wasn’t about me. It was Farient, not my name. A lot of people in this field name the business after themselves, not a generic name. I chose a different name on purpose because I wanted the business to be more than me. The problem is that most of the business comes back to me and through me as the point person. While I wanted to be out of the limelight, I’m sort of back in it. That’s why I hired a senior cadre of people to take up the charge. I also decided to create a clear mission and focus in our business and our marketplace. Our mission has guided us throughout.

Ghaffari: How do you design longer-term strategies?

Ferracone: I design long-term strategies with my partners, but I retain veto power. I founded Farient. I’m the sole owner and financier. I’ve brought in partners and given then “phantom ownership,” but the control is with me. I chose that because of the SCA situation and because I really wanted to control the quality and integrity of what we’re doing in the governance marketplace, which is delicate to navigate.

Will I always need to retain control of the business? I don’t know. I’ve learned too much to know that you can’t plan everything. So you do the best you can with the information you have and where you are at that point in time. It doesn’t mean it can’t change.

Ghaffari: What is your succession planning strategy?

Ferracone: When I started Farient, I was not going to run it. I was going to just sponsor it like Peter Mullin sponsored SCA. That didn’t work out because I couldn’t find anyone willing to take the risk. I ended up just running it myself. I would love to find a successor at some point. I have a cadre of four good senior partners and a CFO, some of whom might be candidates to run this some day. I don’t know. I’ll decide on my exit when the time comes.

I’m deeply steeped in this. I have a format that works right now. I know I’ll invent it when I need to. I think I’ll figure it out when the time comes because to try to plan for it too much probably is not worth it. I’m not planning an exit at this juncture.

Ghaffari: How do you manage senior managers and key partners?

Ferracone: I’ve decided on a highly developmental approach—I have a coach who works with me and all of my people—that takes people wherever they want to go. One person might want to emphasize building skills in business development. Another might want to build technical skills. And yet another might want to build writing skills. People get assignments and resources that help them realize their potential. We’ll see where it goes.

Ghaffari: Do you find it easy to work with, or influence, key stakeholders?

Ferracone: Can other people do more of the business? Can I get leverage for the business? It’s happening to various degrees—but it’s not as complete as I would like. I want this business to outlast me. I don’t want the business to fold up when I leave. A lot of founder-led places do that. I really want Farient to have a life of its own, where it goes on beyond me. And I want to leave a legacy of what this business is all about—that it stands for good governance, best-in-class consulting, great intellectual capital, and multiple revenue streams. We want to have some recurring revenue around both consulting services and products. That’s what I would like to happen. That is very different from what it looked like at SCA.

Ghaffari: How do you define success?

Ferracone: I’m a pretty tough critic. I look at whether the business is highly profitable and growing, and whether it has a good reputation. To me, that’s success in this business. If we’re making money, then we can attract the best people, and pay them well.

But, I also want to feel good about the business, the clients, the work we’re doing, the delivery system. Ultimate success is going to be me feeling good about how everyone else—the clients and our people—are doing in this business.

Ghaffari: What do you think are secrets to becoming a successful entrepreneurial business leader as a woman?

Ferracone: Women in my era were not on sports teams. There was no Title IX when I was growing up. I was more of an individual contributor and didn’t cultivate a team mentality. Men have had that for a very long time. They call it “the old boys’ club.” You have men supporting men, talking in the locker room or going out for drinks or golf. Women do more of that now, in this environment.

My advice to women is to pay attention to forming relationships and mentorship. It’s not just about getting the task done. It’s about doing the work through and with people. It’s important to put as much energy into that as it is to just get the job done. I did not do that as much in my career. It was something of a barrier for me. But I’m learning.

Ghaffari: What are your biggest achievements?

Ferracone: We grew SCA by having a better capability around the performance side of the executive compensation equation. I’ve continued that at Farient, but I’ve also invented new things here. I want people to think about innovation and pay for performance when they hear the name “Farient Advisors.” That’s what Fair Pay is about—the emphasis is on performance. I put performance ahead of pay in the title on purpose. The book is very practical—trying to differentiate ourselves in a very crowded market. It’s a very fragmented business and very competitive. It’s tough to break through all the noise. I think we are succeeding.

Ghaffari: How do you define your position as a “leader?”

Ferracone: As a leader, one has to have vision, courage, follow-through and compassion. I have vision as a thought leader in our industry and in seeing the possibilities of what our firm can be and the role it can play. Sometimes that takes courage because it requires me to be unconventional—to think unconventionally. In addition, I need to make investment decisions for the future in order to back that vision and execute against it. That also takes courage. Finally, I think a good leader, at least one in consulting who hires knowledge workers, operates a sort of upside-down pyramid. I need to be there to support others—give them the tools, processes, and environment they need to realize their potential on behalf of our clients. It also requires me to have compassion so that I can be attuned to their needs.

Ghaffari: Has your family been behind you? How do you manage family expectations or commitments?

Ferracone: My parents have been extremely supportive of me. My dad was his own tough taskmaster. I got a great deal of drive and competitive verve from him. My mother was extremely supportive and always told me I could do anything I set my mind to. Those were the people who continued to give me strength throughout my early background and career.

I have a wonderful husband, four great step-children, and two “feline” children. My step-kids range in ages from twenty-two to thirty-two years old. My husband, Stewart Smith, manages investments—the family office—for his family. He is very involved in philanthropy and gives generously of his time, skill, and money.

Ghaffari: Do you find it easy to balance work and the rest of your life?

Ferracone: I don’t see it as work-life balance. I see it as successfully blending work-life priorities. I work extremely hard and a lot of hours. The entrepreneurial thing kind of lends itself to this. It has no boundaries. There is always more that can be done. My husband has been very good at helping to set priorities and does it in a way that preserves our relationship without destroying my entrepreneurial verve. He knows when to let me loose and just let it roll, and when to reign me in, saying, “Hey this is getting dysfunctional.” He’s very supportive.

For example, when I wrote the book, I knew I would go through some very tough, manic phases. Toward the end, I warned him, “You’re not going to see me for six weeks. I’m going to be writing my book as my priority.” He just said, “Okay.” It was just a deal we made. He’s been very good at that. It hasn’t been easy, but he’s been terrific. Sometimes he feels as though I am not paying enough attention to him or giving him what he needs. I am more mindful of that now than I used to be.

The step-kid route has been terrific for me. I’m not their primary caregiver as their mother is, but I can be the career coach, provide another role model for them, and be their friend without having it conflict with what their mother wants. I’m very appreciative of my step-kids—they’re really nice, and I like them all.

Ghaffari: Have you experienced any negative reactions? How did you deal with them?

Ferracone: In my first marriage, I experienced some similar themes. But, Stewart and I have been married now for fourteen years. He is great—a real keeper. Some of the same issues emerge, and I have to watch myself. You have to learn to watch out for the pitfalls and pay attention.

Ghaffari: What key advice would you give to other women?

Ferracone: My advice is to have self-awareness about what gives you energy, then do some homework around exploring pathways to follow in that regard. Sometimes I see women who are afraid to give up security to follow their dreams. But, to me, not taking risks means not growing. I encourage people to take some risks, to grow, and not be afraid of failure. Because when you do fail, you learn a lot. The question is, “Can you learn from that and take it forward?” Most things—successful and unsuccessful—have value to them. To frame it in those terms—as opposed to more traditional, linear terms—that’s what I tell people to think about.

Ghaffari: What advice, especially, do you have for young women?

Ferracone: I just advised a young woman the other day about her career and opportunities. I listened to where she gets her energy. I think it’s good if people have an awareness of where they get energy and what drains their energy. That’s how they can follow their passions.

One young person I advised is in the financial services arena, but loves food and wants to shift to being in the restaurant business. She has a lot of good insight and self-awareness around that. She’s doing research right now, and I’m helping her make contacts. How fast this happens and when it happens is open. But if she’s purposeful about it and explores various career opportunities, she will find her next place that brings her joy, happiness, and energy.

Ghaffari: Would you give any different advice to men?

Ferracone: There’s no advice that I would give to women that I wouldn’t give to men.

Ghaffari: What do you see as the area of greatest opportunity for young women professionals?

Ferracone: There are many opportunities into which money will flow. Financial services is much more open to women than ever before. Traditionally, it’s been a testosterone-laden industry, and still is to some extent, but the acceptance and prominence of women in the industry are much better than when I came out of business school. That’s always a good business.

People are clamoring for women in the sciences areas. Harvey Mudd College really wants women students. All the science and engineering schools do. And organizations want women with a scientific bent. So, if you’re at all interested in the sciences, following that passion is great. That path can take all kinds of twists and turns, from healthcare to environmental studies to business.

If you look at the economy, healthcare is growing because baby boomers are getting older and spending all of their remaining wealth on healthcare. And there are government mandates to do that. Clean energy is an alternative because we’re ruining the planet.

Having a global perspective is extremely important, today. I have always traveled extensively. And the global brief or “portfolio” was a terrific asset for the Mercer job. I enjoyed it, and it was a great part of my arsenal. I understand global opportunities much more than having simply a local or US-centric perspective. It gets you out of your own backyard, both in terms of responsibilities and reach. Extensive travel is an important piece of this.

Ghaffari: Would you do anything differently if you were starting out today?

Ferracone: I sometimes wonder what may have happened had I not sold SCA. I may have reinvested in and grown the business. Other times, I wonder whether I should have gotten a degree in engineering, rather than management science and economics. There are more “what ifs” rather than deep regrets.

Ghaffari: Where do you see yourself in the next five to ten years? Any political or governmental or other leadership role for yourself in the future? Why? Or why not?

Ferracone: I went to the White House last year because Duke won the NCAA tournament. Obama wanted to congratulate the team, and the trustees were invited. I said, “This is the only time I’ve ever been invited to the White House. It may be the only time I ever will be invited to the White House.” I’m not that politically correct. I speak my mind. I have a feeling that politics is not in my future.

Nevertheless, one of the people I’ve gotten to know better is Meg Whitman. She was my client when she ran eBay. I got to know her better and saw her in action during her campaign for governor of the State of California. There are women like her from whom I can learn. As a role model, I think she is outstanding.

Jaynie Studenmund has been another great role model and inspiration. She took a different path. She decided to become a mom and makes conscious compromises while working her way up the corporate ladder. She adapted her career to what she wanted out of her personal life and did it very successfully. I think this paradoxically put her on top. She now sits on a number of boards.

There’s another woman named Georgia Nelson, who has a really interesting story. She was a secretary at Edison International. She was offered a challenge that nobody else would take on—to run a very difficult plant and turn it around. She successfully managed to accomplish that and eventually became one of the top executives at Edison. She ended up running a power generation division. Now she serves on a lot of boards. There are many women like that who are more than role models—they’re inspirations.