Pepsi Co Global Finance Conference An Outside Perspective On Financial Officer Capabiltieis.


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Pepsi Co Global Finance Conference An Outside Perspective On Financial Officer Capabiltieis.

  1. 1. Building Future Capabilities and Building ValuePepsiCo Global Finance Conference Christopher Langhoff Managing Partner CCL Search LLC
  2. 2. Introduction / Bio Christopher Langhoff Chris brings a unique perspective to the recruitment of financial officers. With over 20 years of experience as both a financial officer and executive recruiter, he understands the role that he is recruiting for and can communicate effectively to both candidates and clients on many levels during the search process. His industry experience includes the Consumer, Retail, Financial Services and Professional Services sectors. As a human capital expert, Chris has been both a Chief Human Capital Officer for an alterative investment management firm and was a Managing Director at Russell Reynolds Associates. In terms of this financial background, Chris was the Chief Financial Officer of Waterworks, a luxury specialty retailer. There, his primary focus was to drive business results and develop a strong relationship with the companys private equity ownership. Prior to Waterworks, Chris spent more than 12 years in various senior finance roles at PepsiCo. During his PepsiCo career, he was a member of the team that successfully executed the IPO of Pepsi Bottling Group. He also worked in operating finance roles for both Frito-Lay and PepsiCo Food Systems. Chris began his career as an associate in the Equity Derivatives Group at Goldman Sachs. . Finally, in terms of his educational background, Chris received his B.A. from Vassar College and his M.B.A. from Harvard Business School. 2
  3. 3. Building Future Capabilities and Building Value• Finance as a strategic partner• PepsiCo – an academy company in finance• What does the current market value in CFOs• Building capabilities• Finance as a driver of operating performance 3
  4. 4. Finance as a strategic partner While PepsiCo has long talked about Finance as a strategic partner others are just getting around to that idea… Their bosses, chief executive officers, no longer want mere number crunchers; they want them to provide forecasts, manage risks and provide insight into issues ranging from pricing to production. As a result, CFOs are emerging with far greater clout and responsibilities than before. The Big New Role of the CFO – Forbes Magazine Today’s CFOs are expected to play four diverse and challenging roles. The two traditional roles are steward, preserving the assets of the organization by minimizing risk and getting the books right, and operator, running a tight finance operation that is efficient and effective. It’s increasingly important for CFOs to be strategists, helping to shape overall strategy and direction, and catalysts, instilling a financial approach and mind set throughout the organization to help other parts of the business perform better. Four Faces of the CFO – Excelling in accounting, controls and cash management still counts if youre a chief financial officer, but now those skills are just the beginning. Moving Beyond Finance – Wall Street Journal (CFO Journal) Todays CFO is seeing their role and responsibilities evolve rapidly. Increasingly relied on for their financial discipline and insights, these top finance executives also support and even help set organizational strategy Evolving Role of the CFO - 4
  5. 5. PepsiCo – An academy company in finance Number of CFOs of Public Companies with Revenues >$1BN 45 The commonality of the most prolific developers of CFOs 1. Complex multi-line business 40 2. Global in nature 35 3. Acquisitive 30 4. Strong relationship with the street 5. Dynamic – initiatives / change 25 6. Movement 20 15 10 5 0 General Honeywell PepsiCo General Ford Motor Goldman P&G Motorola McKinsey Dell Electric Motors Sachs & Co. Source: 5
  6. 6. Market View: What do companies value in financial officers? Functional Skills Personal Competencies Professional Experience Industry Experience Upside and Potential
  7. 7. Scorecards: Measure & Compare Candidates Candidate A Candidate B Company Current Role Location Knowledge & Functional Skills Investor Relations Treasury/Capital Structure FP&A Tax Accounting / SEC Reporting Operating Finance Business Acumen Analytical Skills Overall Functional Analysis Score Score Professional Experience Vertically Integrated Company Retail Consumer High Growth Turnaround Investor / BOD Interaction IPO International Overall Experience Analysis Score Score Personal Competencies Leading Teams Executing for Results Setting Strategy Drive / Energy Building Relationships Presence / Impact Overall Competency Fit Analysis Score Score 7
  8. 8. Professional Experience: What is required for success? 1. Gain a breadth of finance experience; diversity is more important than vertical focus 2. Develop commercial insight; consider stepping outside finance 3. Build a balance between traditional finance and other skills E&Y 4. Gain international exposure, especially in emerging marketsNext Generation CFO 5. Participate in or lead finance transformation initiatives and major change programs 6. Seek M&A experience — both in transaction planning and post-merger integration 7. Get exposure to the market and its stakeholders; communications skills are a differentiator 8. Proactively build effective relationships with the board 8
  9. 9. Personal Competencies: Suggest how an individual will perform Sees ahead clearly; can anticipate future consequences and trends accurately; has broad knowledge and perspective; is future oriented; can articulately paint credible pictures Strategic Agility and visions of possibilities and likelihoods; can create competitive and break through strategies and plans. Relationship Effective at forging strong personal interpersonal alliances at all levels both within and outside the organization; builds solid relationships characterized by mutual respect, Building & Influence loyalty, and trust. Leads the building of effective teams committed to organizational goals; fosters Team Builder collaboration among team members and among teams; uses teams to address relevant issues. Can negotiate skillfully in tough situations with both internal and external groups; can Negotiating settle differences with minimum noise; can win concessions without damaging relationships. Demonstrates the capacity to change; able to successfully adjust to multiple demands, Flexible/Adaptable shifting priorities, ambiguity, and rapid change; open to the viewpoints of others; willingness to try new ways. Is effective in a variety of public settings: one-on-one, small and large groups, with peers, Public Confidence subordinates and senior management. Is effective internally and with external clients. Intellectual Is bright and intelligent; deals with concepts and complexity comfortably; described as intellectually sharp, capable and agile Horsepower Integrity Is widely trusted; is seen as a direct, truthful individual; can present the unvarnished truth in an appropriate and helpful manner; keeps confidences; admits mistakes; doesn’t and Trust misrepresent him/herself for personal gain.
  10. 10. Personal Competencies: What most companies valueCompetency / 1 2 3 4 5Rating Unaware of Some awareness of Understands business Often evaluates Emphasises shareholder competition competitors model for success decisions in financial value Unaware of financial Some knowledge of key Knows current market terms Uses market knowledgeBusiness Acumen metrics financial metrics conditions Will sometimes to advance business Misses Opportunities Knows the difference leverage commercial Consistently evaluates between own org & relationships business impact competitors Thinks inside own Will contribute ideas Knowledgeable about Prepared to challenge Develops innovative area Thinks medium term market trends convention strategies Focuses solely on Will analyse plans Derives plans from the Will look broadly for Thinks cross functionSetting Strategy execution strategy ideas Anticipates long term Fails to contribute to Demonstrates some Considers trends trends business conceptual thinking Visionary Fails to deliver Will tackle some Track record of solid Meets stretch Distinctive track record Does not prioritize obstacles performance objectives Resets performanceExecuting for Results effectively Generally prioritizes Acts on opportunities Translates missions benchmark Gives up Often delivers Establishes clear plans into actionable plans Does not delegate Will address some Delegates to Direct Promotes Direct Develops strong Micromanages performance issues Reports Reports on merit succession plans Does not coach or Experiences staff Uses team talent Builds high performing Builds highly effectiveLeading Teams mentor turnover effectively teams diverse teams Can run effective Clear objectives & Creates a vision meetings priorities Defers to others Relies on positional Articulates ideas Builds rapport and has Negotiates win-winBuilding relationships Will not voice ideas power to influence Solicits opinions a highly adaptable solutions in seemingly& influence Does not adapt others Effectively influences communication style impossible situations communication style Sometimes uses logic some groups Significant Area Area for Meets Job Very Strong Towering Strength for Development Development Requirements 10
  11. 11. Personal Competencies: What most companies valueCompetency /Rating 3 4 • Understands business model for success • Evaluates decisions in financial termsBusiness • Knows current market conditions • Will sometimes leverage commercialAcumen • Knows the difference between own org & relationships competitors • Knowledgeable about market trends • Prepared to challenge conventionSetting Strategy • Derives plans from the strategy • Will look broadly for ideas • Demonstrates some conceptual thinking • Considers trends • Track record of solid performance • Meets stretch objectivesExecuting for • Acts on opportunities • Translates missions into actionableResults • Establishes clear plans plans • Delegates to Direct Reports • Promotes Direct Reports on meritLeading Teams • Uses team talent effectively • Builds high performing teams • Clear objectives & prioritiesBuilding • Articulates ideas • Builds rapport and has a highlyrelationships & • Solicits opinions adaptable communication styleinfluence • Effectively influences some groups Meets Job Requirements Very Strong 11
  12. 12. Core Function Skills for CFOsSkills & Capabilities Opportunity ExpertOperating Finance (FP&A)Technical Accounting / Internal ControlTreasury / Capital Structure ManagementBOD / Shareholder InteractionTax Compliance / PlanningInformation SystemsM &AStrategy 12
  13. 13. Functional Skills – the market narrows its focus/requirementsSkills & Capabilities Opportunity ExpertOperating Finance (FP&A)Technical Accounting / Internal ControlTreasury / Capital Structure ManagementBOD / Shareholder InteractionTax Compliance / PlanningInformation SystemsM &AStrategy 13
  14. 14. Operating Performance: Finance as a driver & partner• Market savvy - internal and external understanding• Collaborative effort leading to more effective execution• Risk management – planning for unexpected events• Global perspective 14
  15. 15. Operating Performance: CFOs as CEOsThe landscape for CFOs continues to change.Ten years ago, companies wanted a strategist, 61 Fortune 500 CEOs were CFOsperhaps a dealmaker, as their CFO. of their companiesFive years ago, with the passage of Sarbanes-Oxley, companies looked to recruit CFOswith strong functional accounting skills,ideally with a Big Four background. As wework our way though the worst economicenvironment in the last 40 years.Companies now require more — a greatleader and communicator with strong strategyskills and the ability to drive performance.They want an individual who can rise up inthe organization and be a solid contender forthe CEO spot. 15
  16. 16. Operating Performance: CFOs as CEOs Learnings from our research Experiences to get you in position Once in the role what is the focus  Get out into the business Focus on People   Put the finance house in order Focus on Growth   Prepare for higher stakes and greater Interpersonal Skills  personal demand Communicating with the Street and   Cultivate ―Big Picture‖ Thinking Board  Anticipate and align top executive support The difference between CFOs and CEOs is narrowing as the key elements of both roles come together resulting in succession opportunities 16
  17. 17. Building capabilities: awareness, discipline, effort & opportunityFunctional PreparationDevelopment of core analyticalskills of finance and an in-depthunderstanding of theories/practicesthat help to drive shareholder value Capability Development Wheel
  18. 18. PepsiCo Finance a Winning Team with Great Tradition Christopher Langhoff Managing Partner CCL Search LLC