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Executive Dialogue: CFO Engage- Pankaj Vasani Executive President & Group CFO, South Asia of Publicis Groupe

FACT FILE

Joined Publicis Groupe: in early 2018

Core Finance team size: 100+

Education: Chartered Accountant (India), Associate Certified Public Accountant (Australia), Chartered Accountant (England and Wales), Lawyer & Commerce graduate (Delhi Univ., India), EEP (IIM Bangalore, India) & EP Intl. Tax (Leiden Univ., Netherlands)

Honors: Strategy Visionary Leader of the Year 2019; CA CFO of the Year 2018 &CA Professional Achiever Award 2014 – by Institute of Chartered Accountants of India; Doctorate of Excellence in Management (honoris causa)- American Univ.;Official participant and Finisher – Mountain Half Marathon (Guinness World Record)

Interests: Officiates as judge and speaker at various India and international seminars & conferences.  Guest faculty at various professional bodies and esteemed B-schools in India

Passions: Fitness enthusiast (running/trekking/calisthenics/badminton), tie-loathing adventurer, writer, reader&traveler

Formerly: Vodafone, Coca-Cola, Sapient, Subros & in an advisory role

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CFO Engage: An elevator introduction to the Publicis Groupe

PV: Publicis Groupe is the 3rd largest Communications Group in the World. Through a powerful alchemy of creativity and technology, the Company drives business transformation across the entire value chain. The Groupe is organized into 4 Solutions Hubs for easier connectivity and integration: Publicis Communications, Publicis Media, Publicis.Sapient and Publicis Health. In this model, all agency brands still exist but share an operational backbone, which gives them the power and expertise of all the Solution Hubs combined to deliver the scale required to compete and win in new world markets. As a Connecting Company, Publicis is able to deliver as the Power of One – driven by a common purpose, a powerful spirit, shared behaviours, great character and a relentless focus on its clients.

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CFO Engage: Where do you prefer to spend your most time at work on?

PV: In understanding the business and their needs (not necessarily their wants) & building services to support the business, accordingly. I believe in governance around process-people-systems, thereby building rhythm with business & measuring shared outcomes. I also prefer to spend my (& my core team’s) time on setting up robust processes which eventually saves time, that otherwise would have been spent on menial and day-to-day operational maze.

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CFO Engage: Please talk to us about the changing role of a CFO today

PV:Traditionally, accountants played a acquiescent, perimetric role viz. by supporting the process with reporting and budgeting, producing a profit-and-loss and a balance sheet at the month-end, cutting cost to increase the bottom-line,and were slipped up on as key members of the decision-making and strategy team. Evidently, the role of a CFO has now changed exponentially. It is no longer limited to book keeping, number crunching, producing management reports and ensuring compliances. The CFO today is an equal partner to business, having a seat at the strategy table/in the board, negotiating the minefieldand partnering with the operations in finding ways to increase topline to eventually increase bottom-line without necessarily reducing costs. S/he is the financial bridge between operations, CEO and the board.

Today the finance function is not seen as just a ‘bean counter’ but a versatile enabler of modern-day business. As such, the profession needs to respond to this shift and push in the agenda of innovation and performance. With the change in expectations, CFOs needs to transform the tangent of their team’s action plan in order to brave the demands and capitalize on the opportunities of the change. For this, knowledge of business drivers, growth strategy, understanding of the sector/competition, levers to pull, people management skills, analytical skills, ability to foresee headwinds and the ability to manage and adapt to them are all extremely critical requirements.  Amelia Earhart, a courageous aviator, had once said – some of us have great runways already built for us. If you have one, take off. But if you don’t have one, realise it is your responsibility to grab a shovel and build one for yourself and for those who will follow after you.

Newer and newer opportunities are emerging in the garb of challenges. CFOs need to ensure that the decisions made across the organisation are based on sound judgment, that would lead to the development of a coherent corporate strategic plan, including aligned business and functional plans. S/he also needs to be a role model for change – drive and lead it, challenge the status quo, stretch self &the team to go above and  beyond to explore new ideas that create shareholder’s value.

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CFO Engage: Where can a CFO go wrong in today’s times?

PV: Typically, day in and day out, CFOs are preoccupied with getting their job done. Thedowntime is rare/minimumand a small amount of time is left to step back and think creatively and innovatively. Too much focus on the specifics of a particular situation can hinder a CFO’s perspective to look at the big picture – paralysis by analysis, as they say. OgMandino said – never again clutter your days or nights with so many menial and unimportant things that you have no time to accept a real challenge when it comes along…a day merely survived is no cause for celebration. Grasping the big picture, whilst still focusing on the details, should be the cynosureof a CFO.They need to devote a lot of time in developing a conceptual understanding of how the various parts of their organisation operate, both internally and in interaction with the environment and stakeholders outside the organisation whilst not getting lost in translation.

Whenever the strategy changes, the model of the business must vary (to adapt) and vice versa. The more dynamic the market environment, it is further imperative to strategise and, as a consequence, tweak or concoct the business model as a usual part of the strategy process. CFOs must develop a strong appreciation of the implications associated with changing any part of the existing business model or innovating it.

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CFO Engage: Please continue. What will be your advice to circumvent the same?

PV: These challenges are not insurmountable given the acuity and pedagogy of a finance professional, they will not accept any of them without any protest or demur. A successful CFO likes uncertainty, thrive on challenges and deadlines amuse him. To continue to thrive as a business over the next decade and beyond, CFOs must possess a world view. S/he needs to understand the trends and forces that will shape their business in the future and be insatiably curious. Also, being agile, innovative, accountable for actions/inactions, showing personal grit, thinking outside the square, focussing on building value and remain responsive to change – as of yesterday, helps.

Also resting on the past laurels could be fatal. One is as good as his/her preceding work. Challenging the human complacency way back in 1825, British essayist William Hazlitt had said, which is relevant even today – the present is an age of talkers, and not of doers; and the reason is, that the world is growing old. We are so far advanced in the Arts and Sciences that we live in retrospect, and dote on past achievement.

Learning from mistakes, being a sponge and communicating/engaging people with a narrative to motivate them to change, building new muscles to withstanding change/grow, embracing technology, leading by example and keeping your people at the centre of all decisions, prioritizing and focus etc. have been some of my mantras.

CFO Engage: Over the years, you’ve donned various hats – CFO/Finance Head, CEO, Tax/Legal/Compliance Head and Member of Board of Directors. What according to you are the top 10 must-have capabilities & attributes of a CXO to be successful in any of these roles.

PV: Naming top 10 capabilities may be difficult, but let me try – with a disclaimer that they’ll not be in the order of appearance:

  1. Integrity, objectivity&authenticity
  2. Collaboration, customer focus & stakeholder management
  3. Thought leadership &accountability
  4. Profit (not a bad word) and productivity
  5. Supporting transformation / strategic projects& value-adding business support,
  6. Surgical advisory & implementation
  7. Professional competence, ethics &governance
  8. Risk management. Also, effectively managing statutory/internal audits, litigations etc.
  9. Managing goodwill & external relationships
  10. Last, but not the least,being humanitarian – keeping your people at the centre of all decisions

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CFO EngageCan you summarily describe the role of a CFO in risk management?

PV: CFOs have been doing risk management from time immemorial and it has been subject to continual change. The issue of risk and risk management has increased many folds in importance today as the number/size of legal claims has increased over the years – and the ramifications it may have on reputation, credibility and status of an organisation cannot be taken lightly. It is sine qua nonin protecting the assets, finances and operations of the brand and contributing to satisfactory legal compliance, corporate governance and due diligence.

What successful organisations today do is to define their risk culture (and risk appetite of the organisation) which stresses upon the momentousness of managing risk as part of each employee’s everyday work while making operational decisions, across the levels. What the finance function can do is risk management and not risk elimination. I say risk management in the sense that if a risk is not capable of being eliminated in entirety, it can be reduced and managed to an acceptable level

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CFO EngageIf ever faced with an ethical dilemma, what steps should a CFO take?

PV: Without a doubt, adhering to ethics is paramount. A few indicative steps to ensure the same, are seriatim below:

  1. Make sure ‘all’ the relevant facts are to hand;
  2. Identify the ethical issues being tested, dispassionately;
  3. Discern the fundamental principles of significance to the occurrences;
  4. Lay the foundations of internal procedures to ensure fair analysis;
  5. Document all relevant information;
  6. Keep your local board and global headquarters in the loop/informed;
  7. Obtaina legal or expert advice; as appropriate;
  8. Identify the possible alternative courses of action and finding the best possible outcome; and
  9. Archive the rationale involved in reaching a recommendation/resolution

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CFO Engage: Your reaction on the recently presented interim budget in February 2019. Did it fit the general expectations?

PV: I had given a byte on the day the interim budget was announced.

While the government may have been under pressure from a resurgent opposition, it was expected to play out a balancing act, at a prudent pace. And so it doesn’t come as a surprise that it introduced a wide range of financial support packages (that includes direct cash transfer for small farmers) & is focussed on rural India: healthcare & housing, road, infrastructure, farming sector to address the agrarian crisis etc. What remains to be seen is where these monies will come from and how well these initiatives are put into effect.

It was expected that the fiscal policy will likely remain overly loose, with the deficit at well above the 3 per cent comfort level, which continues at 3.4 per cent this year. Current account deficit at 2.5 per cent of GDP this year, was again expected.

On the tax frontage, though technically nothing stopped the Centre from making sweeping changes on the direct tax and income tax, traditionally, outgoing governments, in interim budgets, don’t tinker too much with income tax rates, deductions and corporate tax rates. Major unexpected income-tax announcements for the benefit of salaried class and pensioners will facilitate increased consumption for the economy. As feared in some quarters, there is no special tax proposed on ‘super-rich’ nor is there any proposal for inheritance tax. Nothing on reduction of corporate tax rate or road map to Direct Tax Code. Government’s move to ‘e-anonymous’ assessment by a centralised cell is a major reform announcement. Targeted reduction in GST to support the dwindling sectors is welcome, although the extent of revival may be inhibited by the short time-frame and sluggish economic activity, as well as weak sentiments.

Any aspirations that this budget could have pandered to everyone’s exhaustive expectations, including using the event to put in place fiscal stimuli, and major breaks for Corporates, were shot full of holes. [reproduced from the reaction given to Taxsutra on 1 February 2019]

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CFO Engage: What do you think about training and up skilling your team?

PV: As they say, upskilling is all about giving people the tools they need to do a great job. While academic qualifications endow you with the basic tools, I am of the firm belief that it’s equivalently important to assist the team in defining and understanding what their job deliverables, expectations & KRAs are in this dynamic environment, and then jointly identifying the tools that will help them deliver.

To meet the heightened expectations, the finance team needs to sharpen their competitive edge by not only constantly updating and enriching their traditional knowledge but also by acquiring new skill-sets, industry and technical expertise and a futuristic vision. They need to become a total business solution providers of the future. Value-addition, diversification, networking and consolidation are a must for the profession to grow bigger and better in future.

I encourage the team to self-assess rather than mandating trainings, playing an enabling role in their professional aspirations. I also exhort them to spend time with their HRBP or a training professional, to determine relevant and useful trainings. However, one area I do recommend a strong focus on is upgrading technological skills, whether ERPs, analytical tools or tools like RPA, as I am convinced technology will be a critical enabler in every function going forward. Alvin Toffler has rightly said – the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.

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CFO EngageOne big focus for high performing Companies is maximizing efficiency of resource allocation. Can you tell me about the strategy a CFO should adopt?

PV:CFO plays an indispensable  role in resource allocation through activities such as costing, revenue measurement and forecasting. Various units/functions/vertical/agency need sufficient resources to carry out their parts in the overall scheme of things. In every organisation, funds and resources are ‘always scarce’. Insufficient funding can impede the implementation process, but excessive funding represents a waste of resources. Most organisation live quarter-by-quarter and there is a constant need to review all competing needs and deciding on the best allocation of scarce resources.

CFOs need to use their financial skills to ensure that budget allocations are linked to strategy implementation. Mobilising the necessary resources and funding are among the first requirements of any project. A CFO should have the ability to say ‘No’. But a no, coupled with explanation of the rationale. This would help the concerned not just to appreciate the limitations of the organisation, but also become a fanatical advocate of the process/decision.

What the CFOs today are doing is collating business intelligence and analysing it, interacting with people to capture data/information,using softer skills which are beyond the traditional focus on financial skill and thereby facilitating successful execution.

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CFO Engage: CFO and leadership, esp. in the context of handling a regional team.

PV:  I endorse the words of wisdom by former American President John Quincy Adams – if your actions inspire others to dream more, learn more, do more and become more, you are a leader.I think that leadership can be exercised from any level or position in an organisation, and does not necessarily involve the need for a position of power within that organisation. Research in the Harvard Business Review suggest that leadership is now less about power, and more about influence and conversation. Smart leaders today engage with employees in a way that resembles an ordinary person-to-person conversation more than it does a series of commands from on high.

While working with teams outside your home country, the ability to understand and work harmoniously with different cultures is of great significance. An ability to develop an understanding of culture that transcends national boundaries is essential for effective leadership. As Peter F. Drucker said – management is doing things right; leadership is doing the right things.

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CFO Engage: You were conferred ICAI CFO of the year 2018 and StrategyVisionary Leader 2019 award earlier this year. How do you feel on being termed an exemplary role models in the industry, creator of value to Company’s stakeholders on a sustainable basis and an outstanding contributor to the society?

PV: it is very humbling. As I said while accepting an award – I might have done well at my job, but these accolades come in consequence of a lot of another people’s work. Special mention of my mentors who unselfishly taught me some of life’s important lessons. A big shout out to my entire team at Publicis and in all my prior organizations. These awards are a compliment, an inspiration and cognizance that I’m on my journey to become a better professional, and a person of greater social significance.

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CFO Engage: Your favorite quote

PV: This, too, shall pass.

 

 

Pankaj Vasani

Managing Director at Caprihans India Limited

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