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In October 2020, Malcolm Finn followed his conscience to chemicals company Johnson Matthey, which is transitioning its business model to focus on producing clean energy sources. As Director of Finance Operations and Control, Malcolm has been a key figure in that change.
Guiding a company through such a major transition would have been challenging even for a seasoned leader at the best of times. But not only was Malcolm new to the company, most of the team was working from home, thanks to the COVID-19 pandemic.
It was partly soul-searching provoked by the pandemic that drove Malcolm to make the move to Johnson Matthey. Having worked in important roles for household names like Costa Coffee and Vodafone, the uncertainty wrought by COVID was a wake-up call.
Taking stock, Malcolm realized that he wanted to use his career to contribute to a higher purpose: cleaner energy sources.
The pandemic inspired his new mission, but it also threw a wrench in his ability to achieve it. Building connections and trust with his team over Zoom calls proved to be a novel challenge.
However, Malcolm believes that remote work has forced leaders to incorporate new metrics into their leadership methods: ones that revolve around emotions rather than technical skills.
Everyone has struggled with the world-altering impact of the pandemic to some degree, and leaders can no longer afford to ignore this emotional fallout. And in the midst of such uncertainty, confident assertions that everything will be fine don’t carry the same weight they once did.
Now, the best leaders are those who treat their employees with understanding and leniency, while also admitting that they don’t have the answers to every problem.
On this episode of The CFO Playbook, Malcolm explains the learnings he wants to take from remote work, why companies should question the purpose of digital innovations and why agility has never been a more valuable skill in a leader.
Name: Malcolm Finn
What he does: After spending over two years as Global Head of Group Reporting at Vodafone, in October 2020, Malcolm followed his chemistry background and passion for clean energy to chemical company Johnson Matthey. As Director of Finance Operations and Control, he’s been part of the effort to transition to a new business model that accommodates the company’s switch to clean energy sources.
Key Quote: “Yesterday the world was complicated and you needed technical expertise to get through things. Today the world is complex and you need constant learning and adaptation, where an interdisciplinary approach is the norm.”
COVID has enhanced the need for clear communication.
When your work takes place at home, the boundaries between those two realms blur. Malcolm says that people on his team were eager to prove that they could work just as hard remotely as they had in the office — to the point that they were working longer hours than they had before, while also balancing the demands of home life.
It took open communication and directly asking people how they were feeling to help create new delineations between work and home. And while Malcolm and his team are looking forward to many aspects of returning to in-person work, he thinks that empathy and clear communication should be two COVID-era lessons that stick.
Leaders should always be learning.
Before the pandemic, a good leader was typically defined by their technical skills, their confidence and their ability to inspire a team.
They were someone who could stand up at an all-hands meeting and deliver a speech charting the company’s monumental growth, outline where they were going next and invoke enthusiasm among the staff.
Now that the pandemic has proved that no one can predict everything, honesty and a willingness to learn have become the most highly prized leadership qualities.
“Agility” has long been a buzzword — but what it really means is an ability to adapt with the times. That sometimes means admitting that you don’t have all the answers, but you’re ready to make the best decision you can with the information you have.
Showing your own vulnerability builds trust among employees and cultivates a robust company culture that can weather unpredictable changes.
Wield digital innovation wisely.
The phrase “digital innovation” tends to generate excitement in companies as they rush to test out all the newest possibilities. But just because you can do something doesn’t mean you have to.
Malcolm points to developments that happened during his time at Costa Coffee as an example of using digital innovation like a scalpel rather than an axe.
The company benefited from technology that helped it improve its till system, loyalty program and mobile app, all of which had clear positive impacts on customer experience and retention.
Costa also invested in high-end coffee vending machines. In addition to serving coffee, these machines all featured fancy graphic user interfaces and cameras, and were connected to the internet. They could even play music based on the user’s Spotify playlists.
However, it ultimately became clear that the more outlandish features just weren’t that helpful to customers. When investing in digital, Malcolm says, you must always link what you can do to why it’s beneficial.
“It’s impossible to go through an event [like the pandemic] without being changed. It has made me question my contributions in life: my purpose and meaning. When I think of purpose, it’s the why of what we do, and we often lose that under the pressures of the whats — the outputs and the targets — and also the hows: the methods and how to do things. Johnson Matthey’s purpose is a cleaner, healthier world, and that is very compelling to anyone: I think everyone can connect to that.”
“Johnson Matthey and our investors are really focused on ESG [Environmental, Social, and Governance] and sustainability. When most companies talk about this, all they’re really talking about is how they plan to reduce the harms coming out of their operations: the emissions or ethical supply chains. JM has committed to net zero and it will get there by 2040. … I get a sense of belonging and meaning working for a company with a purposeful mission connected to larger social values.”
“I only joined Johnson Matthey in October 2020. Leading transformation, leading change, is hard at the best of times. Leading it remotely takes more emotional investment. You have to build trust, you have to build credibility, and you have to transform without even having met the majority of your stakeholders. That is personally challenging, but we’ve got good plans in place, a vision we can convey with conviction, and we can link everything we do to a wider purpose. That creates a case for change.”
“As leaders, we need to default to a position of trust. Our teams are trying to be productive while juggling the demands of being a good parent, lots of emotional challenges, and trying to do their best. We need to have empathy for that and be flexible. We’re probably the most flexible we’ve ever been, and that’s having a great impact on pushing change through and becoming more accommodating. And I think that’s also opened us up to learning from this experience, which will hopefully stay with us.”
“It’s very important for leaders to create a safe environment. It’s a shift away from this heroic, idyllic picture of leadership to [admitting that] leadership’s messy, it’s imperfect. Being real, showing your vulnerability, showing and understanding your emotions creates that psychological circumstance for your team to show the same and feel safe. If your employees and your team feel safe, they’re more willing to change, learn and grow, and be more adaptive, creative and innovative.”
“There’s a real fear of change. Even if things aren’t optimal, there’s a psychological security in having a routine and knowing what works and how things work. So you need a bit of a shock or a jolt to change, or else you create that change yourself. There are a lot of emotional underpinnings to this as well. Change is really hard, so unless it’s forced upon you, it does take a lot of effort.”
Don’t force tech in if it doesn’t fit your needs
“If you start with technology, you can think of use cases, but how practical are they? How will they take you forward? I was reading about Bitcoin, and its loss in value of 20% to 30% over the last few weeks, and that’s just from comments from Elon Musk saying it uses an insane amount of energy. So that’s the other side of the coin: what’s the payoff of solving something if it’s going to use a lot of energy?”
The growing role of the CFO
“I definitely think the role of the CFO is changing. Leaders are under a lot of stress, and the CFO role is only second to the CEO, so it holds the trust of the board and the investors. It’s a very high profile role in itself, but over the last two decades, you’ve seen a perpetual loading. It’s gone from core control, compliance, stakeholder reporting and leading the function to subsuming some of the functions of the COO: strategic thinking, risk management, partnering and advising key management. It’s not just financial: it’s integrating across the organization.”
“Leadership would be an easy and safe undertaking if you only had to face problems you knew the answer to.”
“As leaders, it’s a fantasy to think that everything can be predicted and planned. We need to be more agile — more human.”
“There are a lot of things you can do [with digital technology], but rather than saying, ‘How can we apply blockchain to finance?’ it’s saying, ‘What’s the business need?’”
“Everyone talks about agility, and being agile at an organizational level is actually about rapid learning and rapid decision-making. You’ll often have to make decisions with imperfect information, so you’re always taking risks.”
“We deal a lot with high-stake problems where you don’t know the answer, and you could spend a lot of time trying to research the answer, but you’d still be wrong. There’s no point spending six months trying to look [for it] elsewhere. It is so context-specific that you have to develop the answer yourself.”
“Digitalization in finance is happening, and there’s a preoccupation with ‘How do we apply AI? How do we apply blockchain? How do we make finance smarter and more digital?’ You’ve always got to come back to asking, ‘For what purpose? Why do we need to do that?’ There has to be a reason to do it, and it has to make the customer experience better.”