Be the top 5%: How to achieve your business’s financial strategy
Pleo was a sponsor at our partner's Deloitte’s Annual Shared Services Conference this year, hosted in our hometown of Copenhagen, Denmark. We mingled with brands from all over Europe and felt inspired by the incredible speakers on offer – did we mention that astronaut Tim Peake kicked-off the second day? Talk about fitting the event’s themes of Imagine, Innovate and Impact!
Space travel aside, one of the talks we found most interesting was from Chris Deery, Head of Global Finance Operations at Cargill, one of the largest companies in the world, operating within the global food, agriculture and bioindustrial industry.
He shared insights into how Cargill overcame the challenges of having a finance function that was divided in a number of different silos with no integrated strategy. To today, as a function that acts as a strategic partner in business decision-making with a strong backbone based on process, data, tech and strategic vision.
How many companies that outline a strategy actually achieve their intended outcome?
Chris started off his presentation with a question for the audience based on his research into many businesses in preparation of Cargill’s financial journey: How many companies that outline a strategy actually achieve their intended outcomes?
The answer? Just 5%.
A pretty daunting statistic, but he said the reasoning behind this low number isn’t at all surprising.
“The strategy is vague, there’s a lack of alignment, there’s a lack of leadership, there’s resistance to change and insufficient resources. There are various reasons why companies don’t deliver what they say they’re going to deliver.”
“But the journey isn’t just about the ‘whys’ - the process should be more about: How do we learn from the mistakes of other companies in order to become that 5%?”
The three key elements of a financial journey
Chris broke down the main steps that Cargill took when they begun their financial transformation back in 2015:
1. Establish a strategic vision
Chris stressed the importance of aligning the finance function with the overall strategic goals of the business. With the help of Deloitte, Chris and his team were able to develop a clear vision and roadmap of Cargill’s financial transformation journey, which enabled financial leaders to ensure their teams could contribute to driving growth, knew how to optimise resource allocation and understood how to mitigate risks.
2. Leverage data, process and technology
To ensure streamlined financial processes across the globe, Chris’ team decided to bring
every single initiative under one program, which they’ve coined their Global Finance Platform. They also put in place top to bottom governance that built a set of criteria to score which ones to keep, to pause or to scrap in order to make space for the things that really mattered.
3. Build and maintain key relationships
Finally, they simplified the operating model by moving from a geographical model to an enterprise model. The finance function also started prioritising getting the right talent in the right roles to help financial generalists move to specialists in order to fit in this new operating model. It also meant building a finance competency model that is all about creating a model that will makes sense for today and the future.
Shape up your finance function for the future
Wrapping up this exciting financial transformation journey, Chris left the audience with a couple of important lessons he’s taken away from the entire process.
“Starting with the sponsorship from the top – I’ve operated in situations where the tone was very, very clear”, he explained, “and what it meant was that you decide whether you want to be part of it and then everyone moves to execution. That’s it.”
“I’ve also operated in a situation where the message isn’t so clear, and people then spend time trying to figure out what the message is, trying to figure out if they want to be part of it and debating how long they might resist it.”
Chris’ last point was all about tackling the brand issue.
“[Our] invoice-to-pay went from low 50s to high 80s [after the transformation]... that’s an incredible story. But if you’re not out there telling that story to the business, their perception of your process is based on the noise.”
“If things don’t go well, that’s their perception, that’s their reality. So I would encourage you to get out there and tell your story regularly. Have the metrics, have the facts. It’s pretty demoralising for your [finance] teams when the perception is different.”
Hopefully you found this story as interesting as we did, and it helps you to start thinking about your company’s financial transformation journey – no matter how complex or simple. With any luck, we’ll be back at our partner’s conference next year to learn even more!
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