Building a World-Class Finance Team for a Global Business

The last 2 newsletters have examined how you, as CFO, can support your global operations and how you might structure your finance team to deliver that support. I talked about the need to partner with the business and support strategy both nationally and internationally. I discussed the need to strike a balance between what gets done centrally and what happens locally. Last week's newsletter looked in particular at the role of shared services to handle transactional finance and how to implement this in a global finance team.

However, nothing beats practical first-hand experience. Vineta Bajaj joined me in a webinar masterclass and explained how she achieves all of this as group CFO at Rohlic group. Vineta has restructured her team recognising that the old structure was being stretched by the rapid international growth of the business and wasn't fit for purpose to support further expansion.

Vineta explained the structure of her team, including who does what and where. She walked us through the journey and emphasised the importance of creating a single high-performing team, even though it is physically located across several locations. There are lessons to be learned from Vineta's experience.

So how can global companies build a high-performing, integrated finance function that excels at both the group-wide and local levels? Here are some best practices:

Clear Operating Model and Governance

The starting point is to define a clear operating model that delineates the roles and responsibilities between the central and local finance teams. This should cover areas like financial reporting, budgeting and forecasting, accounting operations, business partnering, and internal controls. Establishing strong governance mechanisms, such as finance leadership councils and service level agreements, is critical to making this model work in practice.

Vineta emphasised the need to change reporting lines so that regional FDs reported to her and not to local CEOs. She also established a central FP&A function alongside the centralised group finance and shared services teams. A clear operating model, with minimal duplication of roles.

Rigorous Talent Management

Assembling the right finance talent is essential. The central finance team requires experts in areas like consolidation, treasury, and controls, who can drive efficiency and consistency across the enterprise. Local finance business partners need a blend of technical accounting skills and commercial acumen to effectively advise the business. An intentional approach to recruitment, training, career development, and performance management is key.

Robust Process and Technology

Underpinning the operating model should be efficient, standardized finance processes and supporting technology. Centralized shared service centers can leverage workflow automation and self-service capabilities to drive productivity. Meanwhile, local teams should have access to the same core financial systems and reporting tools to ensure data integrity and facilitate collaboration.

Vineta described the adoption of a single ERP to replace many local systems and the adoption of a single set of FP&A tools

Culture of Continuous Improvement

Leading finance functions foster a mindset of continuous improvement, regularly assessing their ways of working and driving enhancements. This could involve process reengineering, implementing lean methodologies, and embracing new technologies. Equally important is developing a culture of innovation, where team members are empowered to experiment and implement ideas that boost efficiency and decision support.

The whole team needs to work together to implement improvements. Foe Vineta this is currently about shortening the month end process, enabled by now having the right organisation and systems in place.

Strong Partnering and Communication

To be truly effective, the central and local finance teams must operate as an integrated, collaborative unit. This requires open communication channels, a focus on knowledge sharing, and a commitment to joint problem-solving. Developing strong working relationships between the corporate and local finance leads is particularly critical.

Vineta emphasised the need to bring the whole team together in a single location twice a year. At first this was simply so folk who had never met could get to know each other, but later sessions have been able to look at business problems.

Establishing a Unified Finance Culture

Beyond the operating model and governance, it's crucial to build a cohesive, high-performance culture across the entire finance function - both at the center and locally. This involves instilling a shared set of values, mindsets, and ways of working. Regular face-to-face interactions, secondment opportunities, and global team-building activities can help foster a genuine sense of unity.

Navigating Diverse Environments

When operating across multiple countries, finance teams must also be adept at adapting to different languages, regulatory environments, and cultural norms. Leveraging local expertise, along with clear process guides and training, can ensure consistent ways of working. Importantly, the central team should be sensitive to local nuances and empower country finance leaders to make contextual decisions.

Vineta gave us some great examples of how this happens in the different Central European countries that the Rohlic Group operates in.

There's a replay of the webinar with Vineta Bajaj available in the GrowCFO members area. https://learn.growcfo.net/2024/08/13/support-your-global-operations/ It's well worth watching back if you couldn't attend live.

We're following it up on Monday, August 19th, with a practical hands-on workshop on how you get ready to make a similar change to the one Vineta implemented in your own organisation. https://www.growcfo.net/best-practice-accelerators/support-your-global-operations/

By getting these elements right, global organizations can build a world-class finance function that delivers best-in-class financial management and business insight - both at the enterprise level and within individual markets. The result is a sustainable competitive advantage underpinned by financial excellence.