1 GE Title or job number

28/01/2015

Maximizing Value through Finance Axel Grippo CFO Publishing Summit NY, Jan 28-29, 2015

“Create value”: helping the business win in the marketplace, in a compliant way

Value Creation

Strategic partnership

Core Activities

Change agent

Key outcomes

Right team structure

Empower the team

How to create

How to maximize

ü  Planning & forecasting

Before talking strategic partnership, Finance needs to deliver on core activities:

ü  Controllership & compliance

ü  Reporting

What is the strategic partnership?

1)  Clarity to break down strategy in its levers and hold people accountable

2)  Constant shedding of light on key dynamics others don’t see / don’t want to discuss

3)  Ability to connect the dots and translate Finance into Operations and vice versa

4) Understand the context: ü  Products & technology ü  External market ü  Customers ü  Internal operations

Finance needs to be a change agent

GE Beliefs

ü Customer focus ü Speed ü  Learn & adapt ü Empower & inspire ü Deliver results Jeff Immelt:

“Look at all you do, question it if doesn’t tie to the GE Beliefs”

With all the requirements, how can Finance maximize value?

=

Free up time & resources

Focus on key outcomes

Build right team structure

Empower the team

How do we free up time & resources?

Simplify

Centers of Excellence

(COE)

Leverage Technology

ü  ERP reduction ü  Solid Business Intelligence tools ü  One single book of truth ü  Foster a system-driven data mentality

ü  Reduction of closing cycle from 15 days to 3 ü  Reduction of account reconciliations ü  Consolidation of legal entities ü  Consolidation of rooftops, plants and offices ü  Approval by one person instead of many ü  Push back on non-added value requests

= Kill waste & bureaucracy

ü  For all specialized activities ü  Best with scale ü  Not easy but powerful

COEs … complex to build but very powerful Examples

•  Collections

•  Payments

•  Accounting

•  Intercompany

•  Supply Chain

•  Taxes

Lessons learnt

•  Really strong linked between COE & business

•  Clear Roles & Responsibilities

•  Work together to lean processes at COE & business

•  Need thoughtful, strong people at COE

•  Career perspective to COE employees

So once we free up resources, what is the right team structure?

ü  Always start with outcomes

ü  Link outcomes with competencies

•  Product / Service •  Commercial finance •  Supply Chain •  Controllership •  FP&A •  Specialized functions (Tax & Treasury) •  Finance IT or Process Improvement Black Belts

ü  Right span and layers

ü  Staff with right people

Some examples of mistakes in team structures

Problem: •  Sub-region structure •  Same people doing same

activities in their countries •  Multiplication of structures

Fix: •  Org based on outcomes •  One central team for

common activities (COE) •  Finance cost â 30%

HQ Forecast?

Region: $200M Prod Line: $150M

Sales force

structure structure

•  Duplicating structures •  Waste in forecast reconciliations

“Extreme” matrix

“Create value”: helping the business win in the marketplace in a compliant way

Value Creation

Strategic partnership

Core Activities

Change agent

ü  Influence levers ü  Shed light ü  Connect dots

ü  Controllership ü  Compliance &

reporting ü  Planning GE Beliefs

ü  Leverage scale via COE ü  Leverage technology ü  Simplify ü  Building teams based on

outcomes & competencies

Key outcomes

Right team structure

Empower the team

ü  Outcomes ü  Competencies

Q&A