Philippe Georges - CFO Procter & Gamble: `Relationships with distributors not the smoothest`
It was only a few months ago when French Philippe Georges moved to Cape Town. After having lived and worked in several European countries for the past years, this was quite a change of scenery. Philippe was appointed Finance Director for Procter & Gamble in South and East Africa as of January 2012. Although he has only been installed in the position for three months, he already noticed differences between South Africa and Europe. “I find that the relationship between trade and manufacture that’s linked to our industry is less smooth in South Africa; issues regarding payments seem to be somewhat more conflictual and difficult here.”
First a bit of history about this world famous company: P&G was founded in the US in 1837 by two men who met by chance. William Procter and James Gamble were from England and Ireland respectively and were on separate journeys through the United States when the challenges of travel led both of them to Cincinnati. They might never have met had they not married sisters - Olivia and Elizabeth Norris - whose father convinced them to become business partners. In 1837, their humble but bold new enterprise called Procter & Gamble was born. What began as a small, family-oriented soap and candle company; grew and thrived exponentially, encouraged by P&G's Purpose of providing branded products and services of superior quality and value. Currently brands of P&G are sold in over 180 countries.
P&G's South African head office is based in Johannesburg, where approximately 300 people work. The company also has a state-of-the- art manufacturing Pamper manufacturing plant in Kempton Park.
Philippe Georges did his MBA-degree at the Bordeaux Business School in France. He joined a Gillette subsidiary in France as Financial Reporting Manager in 1994 and subsequently worked in several financial analysis positions in Boston, the United States for six years. There he worked on the divestiture of a division of Gillette (Stationery) and returned to France in 2003 as Finance Director for Gillette France/Belgium. As Gillette was acquired by P&G in 2005, Philippe moved to Switzerland to be the Finance Director for the Female Beauty business in Western Europe. As of 1 January 2012 Philippe became Finance Director for P&G South & East Africa.
1) Coming from Europe, is there any thing that you - so far - have noticed to be different within the South African finance industry than what you have encountered in your previous positions in Europe and the United States?
Generally speaking we need to be quite close to the fundamentals, so making sure we have good control on cash collection which is less smooth than North America and Europe Unfortunately relationships with distributors are not the smoothest; there are a lot of deductions on payments which require many transactions and a fair amount of ground work. I find that the relationship between trade and manufacture that's linked to our industry is a bit less smooth in South Africa; issues regarding payments seem to be somewhat more conflictual and difficult here.
2) What do you enjoy most about your job?
I love the breadth of responsibilities, the direct involvement in business direction as well as matters unique to the finance function. Also I greatly enjoy being able to (further) developing talent and teams within the company.
3) How do you perceive the role of the CFO has changed in the last five to ten years?
I feel that the role of the CFO has become increasingly less technical, and much more involved in business direction setting. The CFO's role in risk management has become a lot more critical. Previously the finance people were expected to be finance specialist mainly, or even only, while today the finance people in P&G are considered to be all round generalists that also have very strong financial skills - instead of the other way around. The financial department must be able to provide valuable guidance and advice on all commercial operations and decisions within the company.
Also, our role in risk management has increased - we provide critical insights in the risk profile of all decisions the company has to take. The finance department manages risks in all of them.
4) How do you see the role of the CFO evolving in the coming years?
I foresee the similar trend as the last five years will continue to evolve. For the CFO there will be a further emphasis on information integrity (systems). While we take our other responsibilities for granted - the technical, financial responsibilities for which we remain fully accountable - we will play a stronger role elsewhere in the company. Our contribution herein will be crucial in the foundation and operations of the company, its development and growth.
5) Would you say that accurate forecasting and budgeting is still feasible for a financial department in today's tumultuous financial markets?
Accuracy is challenging, but risk management is key: we need to work with ranges of what is possible, and develop plans to mitigate downsides, as well as take advantage of upsides.
6) What do you see as the greatest challenge for South African companies in the global economic situation and for your industry in particular?
Currency volatility is a key challenge. South Africa needs to continue tackling education and unemployment in order to continue growing the middle-class which will create a virtuous circle of economic expansion. Being a company which does not have its home base in South Africa - P&G's headquarters is based in the US - the current situation and the volatility obviously is a concern, and always present on the agenda. How can we manage growth of the business, how to go forward and which risks will we take? Within P&G we need to focus more on smoother relationships with our distributors.
7) Which skill(s) do you think a finance professional should master to be most successful in his work?
One has to be up to date on information technology, as a way to master enormous flows of information. In terms of technical skills one needs to be fully equipped in the field of accounting, compliance and ethics, as well as correctly assessing risks and reward analysis.
8) Is there something regarding the operations or procedures at P&G South Africa that you intend to change over the course of the coming months?
No, not particularly. I do not see the need for a revolution, but rather believe in continuity. Certainly I will aim to build stronger partnerships with partners and retailers in general, and create opportunities to make our interactions more productive. I most definitely want to play an important role in that particular aspect.
The growing middle-class which continues to grow in South Africa remains our target market, like it is in every country where P&G operates. Therefore we don't need to change the way we target the market, just make sure we keep our eyes on the large consumer group.
9) What three things must you do every single day to feel fulfilled in your work?
- Look after people in my team (coaching/guidance, career planning) - the core of any business success is the strength of the team, which needs to be nurtured;
- Solve a problem/grab an opportunity or at least make progress in either;
- Drive business decisions in a principled, ethical way.
10) What vital piece of advice would you give young ambitious finance professionals?
"Build your skills from the ground up, through multiple experiences in various fields of the finance function, ideally across several geographies if possible. Be patient and always put people and ethical, sustainable business decisions first."
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