Chief Financial Officer (CFO), Member of the Executive Management Board, Schüco International KG
Philipp Neuhaus, CFO Schüco, & Horváth Partner Achim Wenning about Role-based Finance Organization
Current & Future Challenges for CFOs A lot of finance departments are replacing their conventional functional structures with a ...
Transcript (9 segments)
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Interviewer0:21
To find an organizational structure that is optimally supporting Finance departments, most of the finance organizations are replacing the conventional functional structures by implementing a role-based finance organization. By doing so, they implement roles like governance, business partnering, data science, and business services. Mr. Neuhaus, coming to Schüco and your area of responsibility, what are your current challenges with regard to the organization of your finance department?
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Philipp Neuhaus0:53
Thank you for the questions. Very good question. I think there are three points mainly which drive the finance function and the responsibility of the CFO as always is mainly first of all that we are legacy driven because we come from a more schoolbook financing perspective: accounting, controlling, tax, and treasury. Second, the finance functions for the CFO are a safe pair of hands because somehow the CFO is dependent on the information he gets, on the compliance of the information, on the correctness, and the trust into the figures. CFOs can lose their heads because of a profit warning, so it's very important to have this kind of safe pair of hands within the organization. And of course, lastly, it's a success. So far here within Schüco, we were very successful with our finance function over the time, and it's very difficult if you're successful to change into a different role model, to change from the classical function approach into the transformation of finance into role-based and agility setups.
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Interviewer2:05
This is very interesting. And against the background of my experiences, I would say the same. Most of the current finance departments are still structured in a functional manner. But how do you address the challenges that you were talking about, and how do you get this momentum of change?
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Philipp Neuhaus2:22
Yeah, it's quite tricky because somehow, as I said, the finance functions within Schüco have this schoolbook approach. They're quite classical and conservative, so you have to find a way to break them up. We try to do this with little steps. So we started first with a vision on 'Next Level Finance' at Schüco. Then we started to look how we can somehow mix up some kind of off-roles. For instance, group accounting is now done within the group controlling department, treasury is in charge of the whole risk management process, and controlling is doing the corporate valuation for the M&A department. So we try with little kind of trial and error somehow to change this classical approach in finance towards a more project- and agility-based setup and mindset for finance.
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Interviewer3:09
Sounds like a very, let's say, structured and integrated approach, and it contains already some elements of the role-based finance organization. But besides that, what is your opinion on structuring finance in an agile manner?
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Philipp Neuhaus3:27
Yeah, agility means somehow that you of course work on your mindset, that you leave your comfort zone, that somehow finance is able to leave this kind of classical schoolbook approach of being a very conservative finance function as somehow the universities taught it. So we try to change this in a way that we say we have to work on the mindset, we have to work on new work culture, we have to give responsibilities to finance guys which are new to them, and to change in a way that they can grow, that they can change, and also that they can fail. I think that's very important for finance guys also to have this kind of failure experience. And in the end, besides all the very talented experienced people on board, we have to find fresh talents from the outside. We have to mix them. I think this is important on our roadmap for next finance level at Schüco.
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Interviewer4:19
I would say so. It belongs together. Agility is the side of the mindset, and organization and structure is on the other hand, and both have to come together and proceed into the future. Mr. Neuhaus, thank you very much for sharing your thoughts and ideas on this important topic, and all the best for your journey to reorganize finance at Schüco.
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Philipp Neuhaus4:41
Many thanks for the talk. It has been a pleasure.
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Narrator4:45
Changing the organization and finance is a meaningful measure to cope with specialties which are historically grown or with upcoming trends. Breaking down the functional silos and shifting more towards a role-based finance organization is a helpful tool to further develop finance to improvement and on into the right direction. In combination with agility, finance departments are very well prepared for the future.