By Cesar Bacani, editor-in-chief of CFO Innovation Asia
One of the more interesting conversations I recently had was with John Henderson, Asia Pacific CFO of Regus, the US £1.9bn a year global provider of business centre office space. For me, it illuminated the emerging issues that finance functions in Asia are beginning to face as domestic consumption, not just exports, become a key driver of economic growth from China to India to South East Asia.
This development means that the business activities of Asia’s emerging multinationals – and those of global multinational corporations like Regus – will increasingly focus on selling into the region’s markets, instead of using them mainly as export bases. And that has implications for the way CFOs manage finance and the kind of finance professionals they need for their team.
Henderson is already in the throes of the transition. Like many companies, finance management at Regus had been centralised in regional headquarters – in this case Hong Kong. ‘What we understand by looking at our strategy, by looking at our opportunity in the markets, is that we need to move from a very much centrally managed business to a country focus,’ he says.
This year, Henderson will be hiring five or six senior finance executives who will be working closely with newly appointed country managers in smaller markets where it sees growth opportunities (the company operates in 16 Asian countries).
What Regus has found, Henderson says, is that it is ‘much more efficient and effective if the finance resources sat next to the CEO, the country manager. It builds a stronger unit to drive business.’ But finance must be strong in both technical and commercial skills, and able to do much more than just transactional process.
Indeed, Regus set up a shared services centre in Manila three years ago to free finance to focus on being a business partner. The objective is ‘to focus on real value-add’ says Henderson, ‘through modelling out acquisitions and other opportunities, looking at our pricing, forecasting, strategy and at financial structures that work best in the local market, and at the same time still being the gate-keeper on things like compliance and cost control.’
It’s tough to find these finance professionals though. ‘We find that quite a challenge,’ the CFO admits. ‘You do get professionals who like to have a very rigid structure. They like to have it all very nicely set up for them and their comfort zone.’ But as a chartered accountant himself who moved up from internal control and controllership to CFO, Henderson is confident he will eventually find what Regus is looking for in China, Indonesia, Cambodia and Sir Lanka.
Henderson will be very hands on in coaching, mentoring and training. ‘At the start, you may have them building financial models and asking the questions about what are the financial levers and what are the business levers that would drive that performance and understanding that,’ he says. ‘Slowly they start to pool more information in and get exposed in project teams to working with the other functions’.
That is so long as they are not wedded to operating only in the silo of accounting and compliance. Food for thought for Asia’s finance professionals and the CFOs who need to have them on their team.
This post first appeared in Accounting and Business, China edition, February 2013