Growing up in Delavan, Illinois, Brad Halverson admired his father’s work on the third shift at Caterpillar’s East Peoria plant. Today, as group president and CFO of one of the world’s largest manufacturing companies, Halverson has responsibility for the Finance Services Division, Human Services Division, Global Information Services, Financial Products Division, Global Supply Network Division, as well as Corporate Auditing. A 29-year veteran of the company, he is heavily involved in the Peoria community through the IHSA Boys Basketball State Finals, Easterseals Central Illinois, Easter Seals Foundation Board of Trustees and OSF Saint Francis Medical Center Community Advisory Board. He also sits on the boards of Sysco Corporation and the U.S. Chamber of Commerce.

Tell us a bit about your background and education.
My first exposure to Caterpillar was through my dad. He worked third shift in East Peoria when I was growing up and had a lot of pride in the work he did there. He took advantage of the apprentice program and retired mid-management with a career focused in manufacturing. He held down two jobs while my mom ran a household with six kids—they were not afraid of hard work. Channeling that work ethic allowed me to get good grades at Illinois Central College while working full time.

I married my high school sweetheart, Mindy, in 1980 between my sophomore and junior year of college. We transferred to the University of Illinois where, thanks to her support, I graduated in 1982 with a B.S. in accounting and passed my CPA exam.

How did you get your start at Caterpillar, and what are some of the key experiences that helped shape your career?
I began in 1988 as a staff accountant. Through this job and each one I held subsequently, I was exposed to experiences which really broadened my view of the role of finance and the value it brings. One of my most memorable development opportunities was helping with the financial measurement system when Caterpillar transitioned to business units in 1990. And my time in our engine business also had a huge impact.

How do you balance your CFO responsibilities with those of the many divisions you are in charge of as group president?
I am extremely fortunate to lead a team of highly capable, world-class leaders who are among the best in their respective fields. Whether it’s in the space of finance or auditing, Caterpillar’s global supply network, human resources, IT, security or our offerings through Cat Financial, there are excellent individuals leading each of those organizations to ensure the company is well positioned for success. I look to provide strategic guidance with a focus on bringing value. The best leaders help people be successful and grow: they are real partners.

What are the potential dangers, or benefits, to the U.S. economy and to Caterpillar of a more protectionist approach to federal economic and trade policy? 
From day one, Caterpillar has been a free-trade company. Ninety-five percent of the world’s consumers live outside the U.S., and it’s essential that we have access to those markets. Free-trade agreements level the playing field for Caterpillar, and we must continue to pursue the best agreements we can. Certainly, existing agreements could be updated to reflect the modern trade rules and environment. We continue to work with the administration and Congress to advance an agenda that opens markets and benefits American companies and their employees.

What are your thoughts on federal regulatory reform and tax reform? What do you believe should be prioritized and why? 
It’s essential that policymakers in Washington, DC create a pro-growth environment. Caterpillar supports smart regulation and a streamlined process. Too often we see regulations that are burdensome, duplicative and extremely costly. A combination of thoughtful regulation that provides for the public good without unfairly punishing businesses is the best approach.

Additionally, it’s been more than 30 years since the U.S. tax code was last reformed. Our current system is outdated, and the U.S. has the highest corporate tax rate in the industrialized world. We need comprehensive tax reform that lowers the rates for everyone and institutes a modern territorial system for international matters. We need to put in place a system that spurs economic growth, creates jobs and boosts our global competitiveness. Caterpillar supports the blueprint that has been offered by the House of Representatives to create the pro-growth atmosphere we need. (For more information, visit caterpillar.nationbuilder.com/corporate_tax.)

Describe your relationship with venture capital groups and how they play a role in Caterpillar’s strategy moving forward.
Technology is very important to Caterpillar today and will be even more so in the future. Venture capital is just one way we can leverage external expertise to help us accelerate innovation and more efficiently and effectively develop and deploy technology to benefit our customers and help Caterpillar be more successful.

We live in a smart, digital age. As individuals and professionals, we are connected to one another, and at Caterpillar, this connectedness goes beyond the people and connects our customers to their equipment. This allows equipment operators to anticipate challenges and use data to increase productivity, sustainability and safety.

How does the strong dollar impact Caterpillar’s bottom line?
A stronger U.S. dollar has a mixed impact on our results. As a net exporter with more of our cost structure outside than inside the U.S., we generally see lower cost as our foreign expenses translate into fewer dollars. However, a stronger dollar makes us less competitive from our U.S. manufacturing base with our competitors outside the U.S.

What are your strategies for dealing with unprecedented geopolitical uncertainty across the globe?
Global uncertainty is, unfortunately, nothing new. Over 90 years, Caterpillar has weathered many storms and come out the other side stronger and more competitive. Economic cycles, market changes and geopolitical strife are out of our hands, but our structure keeps us well positioned to move forward.

We’ll continue to make innovation and customer success our top priorities. We will review our investment opportunities based on industry attractiveness and strategic fit within our business. Ultimately, we will make decisions on where and how much to invest by looking through an OPACC (Operating Profit After Capital Charge) lens, intentionally allocating resources to growth opportunities that will maximize our share of future market OPACC. This filter takes into consideration the risk and reward associated with investing in various markets around the world, and will help us evaluate and manage our business through the geopolitical uncertainty that will continue to be a part of the world in which we do business.

What do you see as the most important indicators of economic growth in the coming year?
The indicators revolve around supportive policies, clarity around rules and regulations, and promotion of trade and tax reform, which levels the playing field.

I'd say we have accommodative monetary policies around the world, supporting growth. The Fed is hiking at a measured pace. ECB and Bank of Japan remain very accommodative. China’s 13th Five-Year Plan (FYP) focuses on maintaining good economic growth and continuing structural reforms. The official target is to double GDP and per-capita income by 2020 from the 2010 levels, which implies around 6.5% annual GDP growth during 2016-20. Infrastructure investment remains as the priority, and the Belt and Road initiative is an exciting opportunity.

In regards to fiscal policy, we've seen a renewed interest around the world for targeted fiscal support, especially around productivity-enhancing technologies and infrastructure (EFSI in Europe, infrastructure-focused budgets in India and Indonesia). Less fiscal drag compared to the past five years will help support growth.

In the U.S., infrastructure is in dire need of maintenance and modernization. We are encouraged by bipartisan support for a much-needed infrastructure bill, and believe the impacts would be good for both Caterpillar and the country. However, we do not expect a new infrastructure bill to benefit us in 2017. That said, we are hopeful the Fast Act Bill that was passed a year ago will start to have some positive impacts in 2017, as projects appeared to be slow to get started in its first year of implementation.

What leadership advice do you have for our readers?
There are so many things to mention, but here are a few:

1. Have fun, enjoy the journey. Be someone people like to be around.
2. Get the right people in place—then genuinely care for them, challenge them and help them be successful.
3. Lead with values first, and always have the courage to do the right thing.
4. Make sure the team filters all their activity with two simple questions: What value am I going to deliver to our customer? What problem am I solving?
5. Develop relationships, especially outside your respective area. Building relationships and experiencing other perspectives help make work fun, and will serve you well in delivering results.
6. Get uncomfortable! It’s good to be uncomfortable for the right reason—it means you’re growing. Take on new things, embrace change.

Tell us more about your involvement in the Peoria community and your hobbies outside of work.
Having a balance between career, community and family is something I’m very passionate about, and my involvement in the Peoria area is very important to me. I am chairman of the steering committee for the IHSA Boys Basketball State Finals, past chairman of the board and current board member for Easter Seals of Central Illinois, treasurer for the Easter Seals Foundation Board of Trustees, and member of the OSF Saint Francis Medical Center Community Advisory Board. Beyond the local community, I am also a Sysco Board of Directors member, and a board member of the U.S. Chamber of Commerce.

As far as hobbies, I enjoy golfing, playing basketball and spending time with my family, including our three grandchildren.

Anything else you’d like to add?
Caterpillar sells into some great industries that we love. Those industries have been down recently, and I understand the pain this has caused for our employees and the communities in which they live and work. We have survived these types of challenges in the past, and we believe we are well positioned for a strong recovery when it comes. Over the long run, the world needs infrastructure development, power generation, raw materials for the manufacturing of goods and services, and transportation to move those goods and services. We provide the world with the products that help make this possible.

I am truly thankful, as a kid who grew up in Delavan, Illinois, to have been given a chance to work for a company as amazing as Caterpillar. Reflecting back on my career, to know I’ve been a part of a company that has made such a positive difference in our world is humbling, to say the least. iBi