Insight Into Financial Transformation

Recently Simon Cordrey met with Manny Gill a financial transformation specialist within globally listed businesses.

Manny Gill is a highly skilled senior finance professional who has turned around the financial performance of businesses across the globe. Manny has delivered significant strategic and financial benefits to organisations, earning a reputation of designing and delivering innovative and deep rooted change.

In the early stages of his career, and whilst completing his accountancy qualifications, Manny received extensive training in business process re-engineering and continuous improvement at Amoco (oil and gas). After establishing a solid career in financial management, he realised that he had established a proven track record in improving businesses. To enhance his affinity to improving businesses Manny obtained an MBA in Warwick, trained in ‘six sigma’ and became a qualified ‘trainer’ in finance and strategy. Manny has worked for a variety of well known organisations, including, BT, British Airways, Dun & Bradstreet, Home Office (NOMS), Department of Health, NHS and BP.

Whilst working for global companies Manny has been able to improve businesses across the globe and in many different business cultures, e.g. North America, Far East (Japan, China, Hong Kong, Taiwan, Singapore), India, UK, EMEA and Africa.

Why did you want to become a professional interim?
When the technology bubble burst in the early 2000s I was asked to implement business transformation for Dun & Bradstreet. This was the first time Dun & Bradstreet had embarked on a financial flexibility programme, and my task was to be was the thought leader in shaping the approach. I thoroughly enjoyed this environment of high intensity, innovation and delivery and as such pursued an interim career.

Why should business transformation/turnaround be high on the agenda for businesses?
It is well versed that the global economy has and is experiencing significant and fast paced change. The main driving forces, technology, lower global operating costs and the appearance of large markets, have led to significant changes in buying behaviour from both consumers and organisations. Organisations that are less flexible compared to their competitors, to respond to such changes will see their market share shrink, revenues fall and profit margins erode. Business transformation/turnaround enables organisations to be ‘nimble’ and respond quickly to both opportunities and threats. It is this ability to respond quickly, which gives organisations their competitive edge and is relevant for contracting, stable and growing economies.

What makes a successful business transformation/turnaround?
There are many tools and techniques that are used in concert with experiential knowledge, however the key to successful business transformation lies in the behaviours of all those involved in its implementation. Instilling the right behaviours lowers the risk and improves the sustainability of improved financial performance. Such behaviours are created by having a clear and structured route map to the desired financial outcome, having the right extrinsic and intrinsic motivators and senior executive support. Finally, a good turnaround uses an appropriate mix of creativity and innovation with pragmatism that delivers results. As always, there needs to be a visible, direct and measurable connection between the change initiatives and behaviours to tangible and measurable financial benefits.

You have turned businesses around across the globe, what are the typical hurdles you have faced?
The key to answering this question lies in ‘people’. People buy, sell and work with people. Whilst it is critically important for senior executives to pursue their goals and look after their staff, the biggest hurdles faced are when the fear of the unknown and desire to look after staff creates dysfunctional behaviour. These manifest in different ways across the globe, for example, a deep cultural care for fellow workers in Asia, tight employment laws in Japan, unions in western cultures and a variety of creative obstacles from C-levels. At the heart of successful business transformation/turnarounds, is in ‘winning’ people, both formally and informally.

You mentioned above that organisations need to be more ‘nimble’, what does that mean on a day-to-day basis?
Business transformation/turnaround is essentially about making organisations more responsive and flexible compared to their competitors. Flexibility means being able to a) quickly identify opportunities and threats both internally and in the market place, and b) be able to quickly act on them.

In addition to re-engineering and redesigning the well known pillars, people, processes, systems etc. it is important for organisations to have ‘financial flexibility’. This means the ability to divest and invest faster than your competitors and without damaging your organisation.

However, with the understanding that competitive advantages are short lived, an organisation’s financial flexibility is key to establishing long-term and sustainable improved financial performance. On a day-to-day basis this could look like having good working capital which is maintained by a variety of means, e.g. lean processes, right talent with a common set of values, efficient systems, M&A, redesigning demand/value and supply chains, organisational restructure, service design etc. to name but a few.

What sort of financial performance do you expect to see from a turnaround?
As mentioned above, business transformation/turnaround has in its centre financial flexibility.

Without question, business transformation/turnarounds must deliver to the bottom line, and this needs to be done in both the short-term and long-term. However, there should be at least two sets of financial measures. The first set is one that delivers to shareholders and all other key stakeholders’ key performance metrics, e.g. quarterly revenue, profit margins, EBITDA etc. The second set looks closely at ‘effectiveness’, such as return on investment, market share, customer feedback etc. and both of these measures ideally need to be integrated into the budgeting and reporting cycles.