Executive: Michelle Charpentier
An Executive Summary
- Many Procurement departments are miss the bigger picture as to the role they play in ther larger finance process (Record to Report, Hire to Retire).
- By lacking this insight, departments become inefficient and ineffective with everyday tasks as they tend to pay attention to developing and refining processes that support their policies rather than the larger organization.
- CPO’s must take it upon themselves to train their Procurement and Sourcing talent to encourage learning about the entire financial cycle and how their job impacts it.
- Without this type of Executive push and oversight, creating change management projects that focus on corporate-level drivers becomes increasingly difficult
In my first-ever Executive Interview, I decided to stick close to home. As my boss, Michelle Charpentier seemed the perfect person to talk with. As a Senior Director – Global Source to Pay at BioMarin, Michelle wears many hats from oversight of our Global Strategic Sourcing function to the P2P process and Global Travel and expense.
Here’s a brief snippet of just one of her experiences over the past 25+ years of her career: Michelle created a global procurement and sourcing growth strategy and set of related processes to support Symantec’s transformation from a $1B to a $6B+ software company.
She leads a group responsible for the finance process transformation and outsources service provider governance. She also developed cost modeling to assist in work placement decisions for retained, outsourced, or shared services decisions. Michelle also has had experiences at such places as Lockheed Martin, Standford, and Veridian.
So given her broad experience, I was completely unsure of what Michelle would want to discuss. But needless to say, her perspective of this more significant issue that we all are inherently aware of, but hadn’t been well defined before, was insightful! And it started with the question for me. Which was, have you ever heard of the Six Blind Men and the Elephant story? (Spoiler alert, I had!)
Secrets of the Six Blind Men and the Elephant
If you aren’t familiar, here is brief overview. The parable of the six blind men and an elephant originated in the ancient Indian subcontinent. However the meaning of the popular proverb differs in other countries. It is a story of a group of six blind men, who have never come across an elephant before and who learn and conceptualize what the elephant is like by touching it.
Each blind man feels a different part of the elephant’s body, but only one part, such as the side, tail, trunk, ear, or the tusk. They then describe the elephant based on their limited experience, and their descriptions of the elephant are different from each other.
The moral of the parable is that humans tend to claim absolute truth based on their limited, subjective experience as they ignore other people’s experiences, which may be equally true. It’s not that part of the elephant isn’t light a rope (tail) or a brick wall (it’s side), it’s just that in ignoring the other parts, they are missing the bigger picture.
So what does the parable have to do with the interview? It’s quite simple. It’s all about following the money from the ultimate need for external reporting of publicly-traded company financials. A path, so to speak, let’s call it the green brick road. And who is on that road?
Call her Dolly the Dollar or Pablo the Peso, or even Ernie the Euro – it’s all the same when money flows in and out of business. There’s a green brick road it follows, but nobody knows who they are going to meet along the way.
This flow often results in each function developing their own siloed view, just like the parable. Their focus is on a single portion, and they are blind to the other parts (and how their choices may impact them). To make it worse, there’s often no visible incentive for them to think or act differently.
So, what does this matter?
From personal experience in FP&A / accounting, the answer is a lot. Everyone views you as “Finance” when they have any questions, so it leaves you feeling like an air traffic controller. But to Michelle’s point, if we don’t all take the time to learn who does what and why; it is much easier to pass the buck!
Michelle’s point is simple but powerful – it’s the Executives (with the broad overview) responsibility to have here team become more knowledgeable of the entire process.
They should make it fun and viewed as a career opportunity; otherwise, it can impede the company from working less efficiently than it should. Don’t get me wrong, Procurement and Sourcing people don’t need to be accountants – but understanding how Fixed Assets are accounted for and depreciated over time, provides a guidepost for RFP activity and subsequent requisition and PO set up that support those activities.
Executive Insight: Limited knowledge of the entire financial cycle can hinder the broader company vision
This isn’t to say there aren’t people on the floor level who have a better understanding then others. When I played devil’s advocate to Michelle by stating that I knew at Amgen, the other departments and where I should direct traffic, she then posed a question.
Was this something required, or did I do it out of curiosity and need to help others? We both knew it was the latter.
What are the benefits and efficiencies of knowing the entire financial process?
This is where the interview started to wrap up. The question Michelle posed was this: if someone in accounting doesn’t understand the tax implications of the correct accruals and type of asset, or if AP doesn’t understand what the Global Sourcing Team does, they are bound to make decisions that could negatively impact the business and ultimately, the company’s financials.
Additionally, they may send people with relatively simple questions on a wild goose chase to find the right finance person for an answer. And when they do this, they are wasting valuable time and creating an environment of confusion and potentially perception that there’s a lack of accountability.
Layered on top of it all, is trying to move forward with more significant picture ideas. Things such as zero-based budgeting or managing tail spend came to her mind. Her point was this: if finance can’t understand where the dollar is in the cycle, nor what it impacts is – trying to get them to buy-in to a significant change won’t work. They won’t be able to see the ultimate impact for themselves/their department/the entire company.
An Executive Quick Fix
First, if you have the necessary training or need to piece it together from different departments, then take the initiative to do so. The result can pay out ten-fold. And give it to the other departments within the business. Second, find fun ways to incentivize newer employees to learn about the process and how to help others in the organization – Starbucks gift cards are cheap, wasted time is not.
Last, if you are outside of the finance, then find the right person who has a good overview of the company (typically in FP&A or planning).