Wade D. Miquelon, CFO & President- International, Walgreens
CFOs Role: Moving Towards Developing Strategies and Identifying Objectives
The primary objective of a company is to create and capture value for shareholders and therefore it is impossible to separate this objective from the core role of the CFO. The CFO needs to be the key business partner to the CEO in identifying long-term objectives and then helping to develop strategies that can help deliver these goals. These strategies in turn need to be turned into specific priorities to be delivered on with clear reporting systems, scorecards, etc. Employees want to help create value, but often a company’s business model and levers to create value are not fully understood and being an educator on the context for these goals, strategies, initiatives, etc. is also an enabling role the CFO can play.
The Future of Forecasting
It is important to recognize that the forecast is not the definitive future any more than the map is the territory. A forecast is only as good as the assumptions, so having a robust process to develop these assumptions as well as “what to do/contingency plans” to the extent that things change or get off track is vital. I suspect one of the key buzzwords of the future for business will be “agility” and creating planning, budgeting and forecasting processes to enable this agility will be a required core competency of finance and accounting organizations.
Empowerment and Ownership to Foster Better Results
One of my peers at a CPG company deployed a really amazing concept across his entire F&A organization. Essentially he said that his company had the power of 700 CFO’s. What he meant was that he wanted every single person in his finance and accounting organization to feel the empowerment and ownership of a CFO for their particular part of the business/company. Creating this kind of business ownership culture within finance and accounting function is the single most important thing a CFO can accomplish. At Walgreens we have relabeled our F&A organization VCS, short for Value Creation Services. In part it’s a reflection of some non-traditional F&A teams we represent, but it’s also because I want our VCS team to remember that their job is to create value every day. Sometimes it is through business leadership (putting water in the bucket), sometimes it is through stewardship activities (preventing leaks in the bucket), and other times it is by developing the organization so the prior two activities can be sustained.
Budgeting for Innovation
One thing that everyone should be able to agree on in any company is the need for all employees to make the best possible choices to create and capture value for stakeholders. Once aligned on this objective, then it is just a matter of Finance providing as much transparency as possible to the various ways in which resource allocation decisions get analyzed and made within the organization.
“Creating a business ownership culture within finance and accounting function is the single most important thing a CFO can accomplish”
It probably goes without saying, but also implicit in any world-class organization is the top-down commitment to using management science and driving personal accountability and the finance and accounting organization can play a big role here. If leaders of all functions don’t set the positive tone and example of serving in the company’s best interests at all times then unfortunately too many games can be played with numbers and words. I realize that I am speaking a lot to culture, but early in my career I heard an Asian parable that has stuck with me and can be summarized as “so goes the head of the fish goes the tail”.
Leveraging Technology to Bring in Transformation
Over the past few years we’ve been on a journey to update our financial systems and our IT team has been an invaluable partner. While in some respects I feel we may have historically under-invested in our Finance and Accounting systems, we like to think the good news is that we have an opportunity to jump over interim technologies to the current best systems and practices (akin to cell versus landlines in some developing markets). We are also leveraging other partnerships such as our arrangement with Genpact and our merger partner Alliance Boots to make sure that we leverage best practices, core capabilities, and existing solutions where possible.
Be Open to New Ideas: An Advice
The most important survival mechanism in the future for an organization is its ability to learn and adapt. There are many best practices that exist for these and other challenges and there are more helpful resources than ever via on-line, industry forums, consulting organizations, etc. In this vein, I think a key requisite for being a CFO or any other top executive will be to be open to smart new ideas regardless of where they come from (i.e. without bias to level within the organization or internally generated versus externally generated). It sounds like common sense, but this will require even the most successful organizations and its leaders to be ever vigilant at remaining humble at all times.