SSON Podcast: Ep.54 Philip Woodburn, Schneider Electric

Philip Woodburn:

My name is Philip Woodburn, I work for Schneider Electric, and I am Vice President for finance global services and operations overseeing all of our financial shared services around the world. And you asked me to explain a little bit about my background.

Seth Adler:

Well sure. We'll get into that. But first off we need to know where you're doing this from.

Philip Woodburn:

Okay. Okay. Well that's an interesting question. So personally I'm based in Warsaw in Poland where we have our European center. Why Warsaw? Because it's easier to move around the world from somewhere in Europe than if you're in North America or in Asia. And I'm often traveling because I have teams in Monterey and Mexico, just outside of Chicago in the US, in Bangalore and Mohali in India, Wuhan and Beijing in China, and also Manila in the Philippines. So as you can see I spend a lot of time on the road.

Seth Adler:

Indeed. Absolutely. And I think I understand all of this. As far as the Chicago one, that's the outlier for me as far as shared services is concerned. Right? Why, especially if you've got one in Monterey for time zone, and otherwise, why is that necessary outside of Chicago?

Philip Woodburn:

Yeah, those are good questions. So what we do differently in Chicago compared to Monterey. So four, five years ago we started moving the basic transactional finance, payment of vendors, cash application for customers, down to Monterey but we kept what called the competency centerpiece all around financial reporting, financial closing, giving advice on [inaudible 00:03:04] IFRS differences. We've kept that team. It's not a big team, about 30 people. So it's a small portion of what we do globally, but very close to our business leaders up in North America so that we can keep the engagement with the business. We are a French group, but US actually is our biggest country globally.

Seth Adler:

Uh-huh. And I guess why not? Let's go ahead and continue the tour around the globe. Out of Monterey, what are you doing there?

Philip Woodburn:

Yeah. So Monterey is transactional back office for the US. Although we're actually evolving a little bit our model and moving some of that work in the direction of India. What we're going to be doing more in Monterey in the future is serving Latin America, leveraging the Spanish speaking capabilities of our team in Mexico to serve that particular geography which as you can imagine, is a long long way away from Poland.

Seth Adler:

Indeed. Indeed. And so then let's continue West and I think next stop would be Philippines right?

Philip Woodburn:

Yeah. The Philippines. So the Philippines was a base for us actually, both for manufacturing as well as services over the last eight years. Actually it's a very large call center particularly for our US market because Filipinos speak a lot of English. We built on that and we expanded that as a finance hub for the Eastern part of Asia and for the Pacific to give a little bit of proximity to the customers in that region. We're now starting to see a little bit more synergy between what we do in the Philippines and India on an Asia-Pacific basis, and we're clubbing together more of those operations in that particular geography today. But that's also, as you imagine, a long way away from Europe on the East side of the world.

Seth Adler:

Sure. Yeah. And hitting both then Malaysia and China, right? You said you have both.

Philip Woodburn:

Well Malaysia ... Not for finance. Malaysia is more of a hub for HR for Southeast Asia. But China definitely is an important base for us. China is our second largest country globally. We have a very large operation both in terms of industry, in terms of what we produce, as well as what we sell to the Chinese market and it's probably our fastest growing global market today, and we have a big team in China for Chinese speaking part of the world.

Seth Adler:

Sure. Yeah, no that's extremely believable of course. But moving over to India, you said that there is maybe ... If India and Philippines are a Venn diagram, there's a bit of overlap there. What is distinctly happening in the India operation that isn't in the Philippines I guess?

Philip Woodburn:

Okay. Now that's a good question. Let me compare and contrast a little bit those two. So we found both in terms of our experience and in terms of the market that the strength of the Philippines is really in voice service. So customer care support, interacting in English with English speaking geographies of the world. It's a very strong point for the Philippines. The Philippines has a very strong link with the US for example, and therefore they speak a very normalized English that most Americans would understand. Including New Yorkers.

Seth Adler:

Indeed. Indeed.

Philip Woodburn:

But if we look at India in contrast, India's strength historically is more in the financial, more in the process part than in the language support part. And therefore we've developed really India from two angles. One as more of a finance hub in terms of financial skills, but secondly as an IT hub. It's our global biggest IT hub today based out of Bangalore, South of India.

Seth Adler:

Right. Which then brings us back to Warsaw which is where you sit at least some of the time.

Philip Woodburn:

Right. Right.

Seth Adler:

And so what's happening in that operation?

Philip Woodburn:

Yeah. Warsaw actually, as a lot of the developing part of Eastern Europe, has become a hub for two things really. First of all providing language support skills for countries in Europe. Especially countries like France, like Germany, like Spain, like Italy, in those different language groups, and there are a lot of talented people in the Polish community, graduates who've mastered those languages and continue to master those languages, very well able to transact in different languages. And the second area that we're seeing building up more in Poland is the ability to upscale in terms of financial analysis, financial management, and we're moving our team more in that direction as well. So those are the two pillars of skills in Poland.

We've also got a third pillar that we've specifically built which is we've located quite a number of our global business process owners in Warsaw. So Warsaw's become also kind of a command center for our global financial operations.

Seth Adler:

Interesting. Where is headquarters actually?

Philip Woodburn:

Well that's a good question. Technically speaking the headquarters of Schneider is in Paris. Although actually Schneider is registered as a European company these days. And it's an interesting question because our CEO is sitting in Hong Kong, and our CFO sits in London, and our Chief Technology Officer sits in Boston. So we have members of the management all over the world.

Seth Adler:

Interesting. So this is truly a global company.

Philip Woodburn:

It is. It is indeed. That's right.

Seth Adler:

And it's starting to sound, if I'm reading this right, that Warsaw is almost where most of the people, in terms of executives, with the exception those C level executives that you mentioned, might be kind of migrating to. Is that fair to say? Or?

Philip Woodburn:

It is stepping up. I don't think we've really reached the end of the journey. And I should mention actually that some of our functions also are building up here in Budapest. Especially when we look at supply chain both in terms of physical flows and financial flows. But yes indeed, Eastern Europe now is becoming more attractive as a more cost optimized place, but also because we see that we're able to have a fairly international team in Eastern Europe, and we're able to leverage the language skills that we need.

Seth Adler:

And you said here in Budapest,  where of course that SSOW Eastern Europe, as we speak ... And that's as we speak. As we go here into 2018, you've just ... And thank you for doing so, kind of given us the overview of the global operation. What are you focused on in terms of what needs to happen or what you need to be focused on simply for 2018?

Philip Woodburn:

Yeah, that's a good question Seth, and I should proceed that by explaining one of the major process areas that we've been working on end of 2016, early 2017 is building what we call a financial accounting blueprint. When we started the journey up to shared services, it was more of a lift and shift approach. And we brought, sorry, the good, the bad, and the ugly of that with us. We've tried to improve it, to infuse some new technology in. To a certain extent that's been successful, but we're still missing the mark in terms of the drive to be amongst the global best. To really kind of continue to aim high. So we finished this financial accounting blueprint first quarter of this year, including a very detailed description of how we want to run processes and the type of technology we want to run processes in so that we can actually now go back to our teams, but also to the business.

And in the future, transformation and transitions that we work on, rather than just doing a lift and shift we have the reference. We have our way of running things, and that really will be our way forward into 2018.

Seth Adler:

So you've given yourself a tremendous amount of work to do here Philip. This is -

Philip Woodburn:

We have. We have. And as I sit here actually, I have colleagues around the world who are beginning to work on this transformation and transition journey, and it is a challenging one because at the same time we're obviously trying to serve and deliver the way we do things now, we're trying to shape the future. So that's given us a lot more to think about and it's challenged us to step outside the box and to try to do more with what we have.

Seth Adler:

Yeah. So some of what you put in the blueprint, of course, is not to be said into a microphone which will be broadcast wherever it goes. However, for some of the basic thinking and some of the just kind of thought processes, what can you share as far as what's on the blueprint and how we're approaching this transformation?

Philip Woodburn:

Well let me give you some examples of the type of things that we will have in the blueprint for example. Just a very simple example, if you look at our P to P processes, how does a purchase order or some form of e-procurement document trigger the rest of the process so that instead of getting to a stage where we receive invoices and we're trying to deal with exceptions or matching documents that don't match, we've already got the trigger point up front, and therefore when it comes to the matching process we have a higher degree of accuracy and we're able to bring in automation to support that process.

Seth Adler:

So really, you know, this is process excellence at work. Like let's install this and make sure that it goes.

Philip Woodburn:

It is process excellence and it's also going up a step in terms of infusing more technology, in terms of electronic invoicing, in terms of scanning, in terms of having tools to support how we close our books. How we can do that in a more consistent way globally with improved timelines but also overseeing the quality of how we support that.

Seth Adler:

You've mentioned automation a couple of times, let's dive in on where you are in that journey.

Philip Woodburn:

Yeah. So that's ... I will go through the process verticals and explain a little bit of what we've done. So we've had a fairly successful journey so far in terms of how we've worked with scanning, particularly in Europe, particularly in Asia. We've got a very good model today of electronic invoicing in North America with a very high hit rate in terms of documents we receive electronically. But the problem is that when we look at that as an overall design, we've got different solutions in different geographies and none of it really fits into a global strategic picture. So what we'd been working on is a kind of strategy map of the world about how we do P to P, starting from the discussion about which countries are we going to adopt invoicing, which countries are we going to adopt some form of scanning solution with a PDF version of a document.

Seth Adler:

Why not all of them all at once?

Philip Woodburn:

Well we can do it all at once, all right, but you know it's ... Let's say I might call it a dream to imagine that one size fits all. Why? Because you have some countries such as the US, UK and Australia where you're allowed to receive electronic documents without having to file a an original paper version. And with the authorization of the tax office.

Seth Adler:

So some of this is regulation space.

Philip Woodburn:

So some of it's regulation space, but on the other hand you've got countries where you need definitely to receive a physical invoice. I mean China for example where the legal [foreign language 00:16:15] to use the Chinese term for it, is still a mandatory document to support your tax declaration process. So again we have to be a little bit adaptable around the global model around having a suite of technology to support our process. That's talking about P to P. In R to R, well we've used tools and basic tools like work flows and Lotus notes for example to support the closing process. We've really lacked a more rigorous tool to support those processes and now we have signed up an agreement, I won't mention the name of the vendor, but with a global vendor who will provide that technology that we can have a standardized process around the world everywhere.

Seth Adler:

Mm-hmm (affirmative).

Philip Woodburn:

One thing I did notice is that none of the vendors we're working with are here today. So there's a lot of opportunity out there in the marketplace.

Seth Adler:

Sure. Certainly. Certainly. What ... Understanding that you're not sharing who specifically the vendor is, when choosing that vendor what was important?

Philip Woodburn:

So I would list two or three key points all right? One is of course the track record of the vendor. All right? It's not only about nice fancy presentations, but it's about, "Show me an example of a company that's implemented your technology and let us talk to them about their experiences." That's the first thing. The second is we're a very global company, and some vendors may be very strong in Europe, some vendors may be strong in Asia, but we need a vendor to have a presence globally so that when we have concerns, we have somebody local we can talk to in order to get those concerns addressed.

Seth Adler:

Indeed.

Philip Woodburn:

The third consideration is how those vendors work with our ERP solutions and we are mostly an SAP company, and it wouldn't be good for example to have vendors who can only work with Oracle but who couldn't work with SAP.

Seth Adler:

Right. Process, culture, technology.

Philip Woodburn:

Absolutely. You summarized it very well.

Seth Adler:

So easy for me to do after you've explained it, right? So that's kind of where we are, and we're mentioning technology. As far as automation though, with RPA or with maybe even some cognitive solutions, I mean are you ... Where are you in terms of that kind of journey?

Philip Woodburn:

When I talk to my colleagues in our customer care, in our IT organization, I know that they've already started the journey. I know that our center in Bangalore last year already started to infuse some of the RPA in the standard processes that they support. It's part of our design. It's part of the FAB design. We see that kicking off in half one of 2018. Probably China will be one of our earlier areas to pilot. Some of that technology, it's going to come but we know very well that there's no point taking robotics and putting it into a process that doesn't work. You need the process to work first, and the robotics will bring further efficiency in automation to something that does work.

Seth Adler:

Indeed. Indeed. Why would we start at the tail. Let's start at the head. Right? And then chase the tail around, and around, and around. So quickly, obviously just by listening to the accent it doesn't sound like you're originally from Warsaw. Is that fair to say?

Philip Woodburn:

No I'm not originally from Warsaw, you're right. I'm actually originally from the UK. I was going to say this morning the most beautiful city in England actually.

Seth Adler:

Which is that?

Philip Woodburn:

Which is the city of Bath. Which is famous for architecture, has a lot of very old buildings. I joke with my French colleagues that it's one of the few English cities that the French would accept to be in France. It's a very historical city. It was a Roman settlement at one stage. And actually it's a world heritage city today. You cannot build a building in Bath that is not built with the stone that comes from the Southwest of England. So it's a very beautiful city with lots of curved crescents and circles, and everything else and it's fabulous place. And if you've never been there I encourage you to go there because I think American tourists are probably on the top of the pack.

Seth Adler:

I see. So I certainly will heed your advice and go but it would beg the question why would you have ever left?

Philip Woodburn:

Yeah that's a good question. And I can look at that in a different light, and I can say that my first experience leaving my home base was to move to this big city called London that you might have heard of, and I was just telling somebody yesterday, I remember going for an interview in the early 80's in London and thinking to myself, "How can I who's come from the Southwest of England, from a small city where you know your neighbors, how can you move to a big city where there's seven, seven and a half million people where you're not quite sure you can trust the guy next to you." You know? And it kind of has that more colder feeling ... A bit like New York with all those tall buildings.

Seth Adler:

Yeah sure. Yeah.

Philip Woodburn:

So I did that. I made that move. And then in 1987 I told my parents, I'm going overseas to the US for a two year succumbment. I was working in those days for one of the big [inaudible 00:22:13] and I moved to the US for a couple of years. I moved to Connecticut actually. So not far from New York.

Seth Adler:

In the 203 area code if I'm not mistaken.

Philip Woodburn:

Right. That's correct. And spent two wonderful years there working at Stanford, enjoying the best of Fairview county. And then after that two year period when I thought I was going to go back to London, two of the partners that I worked for said, "Well would you be interested to go to Asia?" And I said, "Well Hong Kong sounds nice." And they said, "What about Singapore?" And I said, "Don't know Singapore. Never been to Singapore, but I'm willing to give it a go."

Seth Adler:

And this was in the late 80's, early 90's?

Philip Woodburn:

This was actually ... Yeah, this was in the late 80's. This was like 89. And you know 89's a very significant period because it was full of Communism. It was the year of Tienanmen Square. It was when Poland became liberated from Communism. And I joke, when I moved to Singapore.

Seth Adler:

But Singapore, very interesting dynamic and unique place. I actually ... You said Connecticut and right up the block from New York City. When I went to Singapore I felt very at home in Singapore because it seemed like a very international, very hodge podge type of place. Everyone from around that neighborhood lives in that neighborhood.

Philip Woodburn:

Yeah. That's true. That's interesting actually that you say that because when I first moved to Singapore actually, Lee Kuan Yew was still the prime minister. He was the founding father of modern Singapore. And I always remember in those days, that was before the metro was fully completed, and there used to be a bus that came up over what was called the Benjamin Shear's bridge and you'd start to see the downtown sky in Singapore, and you know having recently moved from the US I was thinking, "Am in Cincinnati? Am I in Houston?" It was like being in an American city. So deja vu as we might say.

Seth Adler:

Yeah, deja vu all over again. Like [inaudible 00:24:22] So over to Singapore. How long did you spend there?

Philip Woodburn:

I lived ten years in Singapore.

Seth Adler:

Oh my goodness. All right.

Philip Woodburn:

And during that ten years I moved from [inaudible 00:24:34] to Coopers and [inaudible 00:24:36] it used to be called in those days. Part of PWC now. And then in '95, two things happened. I became a permanent resident of Singapore, and I decided to stop out of the big four and move into the commercial world of finance and I joined Schneider Electric.

Seth Adler:

Oh really. So you've been there quite some time.

Philip Woodburn:

Yeah. So actually Singapore is my contractual home, and I am actually a Singapore expat.

Seth Adler:

To this day.

Philip Woodburn:

To this day.

Seth Adler:

Interesting. So you know, you gave us a sense of where the executive team is, and where the rest of the team is as far as Schneider's concerned now, and when you joined kind of give us in a sentence or two the pathway to where we've gotten. How and when did the thinking start to occur to actually become this truly global organization where we kind of spread everybody around?

Philip Woodburn:

Right. Right. Well that's a very good question. If you were to enter into Schneider, in fact in those days we used to be called Groupe Schneider, G-R-O-U-P-E as the French call it. And I remember that there was a guy who's ... British guy who was in Australia who's never tied and he told a former chief executive, "Well if you're an Anglo-Saxon company, you don't need to put groupe in front of your name if you are big, because you are big." So we changed in the late 90's early 2000 from being Groupe Schneider into becoming Schneider Electric, emphasizing more of the energy part of what we do.

In those days our current CEO Jean-Pascal Tricoire was a rising start in the organization. He was actually in charge of the international operations and really driving a kind of new vision for the way the group works. We went from being Groupe Schneider that was a French speaking group, to Schneider Electric that became an English speaking group between the late 90's and the early 2000's. And when Jean-Pascal became the chief operating officer around 2002, 2003 if my memory serves me correct, that was really when things began to evolve a lot more and we started to become more global. We started to have people in our Senior team who were not just French, but people from other cultures.

I guess we were one of the first European companies to have somebody from China as part of the executive management. And started to introduce a more balanced gender mix amongst the senior executives as well. With that diversity of thought, what did you notice in the change? Well a couple of things that were very visible, one was that language evolved, and English was becoming much more the language of communication. We started speaking in French, translating into English, communicating bilingual in French and English. And then mostly communicating in today, 98% of the communication is in English. Probably the only exceptions are communications sometimes in France itself.

That was one dynamic of change. The other thing that was very visible was that we started to see people in the international leadership coming from different parts of the world. Historically you had people from Europe or the US who were amongst this expat population. We started to see people from China. People from India. People from different developing countries in this leadership.

Seth Adler:

Yeah. Was there a noticeable change in the direction of the country ... Direction of the company from there in terms of the diversity of thought? Once we did have folks from Asia, folks from North America, folks from Europe, folks from all parts known, was there a change in the thinking? Or not necessarily a recognizable one.

Philip Woodburn:

No I think it did visibly evolve. It visibly evolved why? Because you're putting together different cultures which enriches your thinking base, and your ideas base. And we've moved away from becoming a Eurocentric global company to a really global player.

Seth Adler:

Truly global.

Philip Woodburn:

Truly global. Integrating the ideas that how things work in China, or how things work in India, or how things work in Mexico work the same as in the US and Western Europe. And we began to draw on some of those experiences and to develop things differently. I'll give you a very practical example. We have a product called Indria that is a product we use in very developing parts of the world. That offer actually originate din India. The idea originate in India. Somebody once gave a very famous talk called reverse innovation. Innovation was coming from the West, so now innovation's going back the other way from Asia to the rest of the world. So those types of new offers came out of the Indian context.

Seth Adler:

And it wouldn't have happened before.

Philip Woodburn:

No. No. Clearly the change of mindset drove people to look at things differently, to understand things differently. Another example is we actually were legally combined with another French group at one stage. But thanks to the European commission, we were not allowed to move head with the transaction, although it went to a legal case that we finally won. But having missed that opportunity to globalize that brand, we then started to build that business from brands from other parts of the world. From the Pacific, from Northern Europe for example. From the Nordics. And that was a different entry point to making our offer a bit more globalized.

Seth Adler:

Yeah. It turned into actually a benefit that you had to exit that relationship. Just to use a random word. Anyway, I could talk to you all day, but we certainly don't have that type of time. So I will tell you the three final questions, and then ask you them in order. So what has most surprised you at work? What has most surprised in life? And on the soundtrack of your life, one track, one song, that's got to be on there. But first things first. We've just gone with you and around the world as well as through a few decades, along the way what's most surprised you at work?

Philip Woodburn:

I think the thing that has most surprised me at work is definitely the way that countries like China and India have risen so quickly. I mean, when we go back ten years, 15 years ago, it was nothing.

Seth Adler:

Not even a thought.

Philip Woodburn:

I still remember ... And we're going back to the late 90's when we had the CFO of India coming to Singapore for a training session because little India needed to be developed. That would be completely in the reverse today. And I still remember going to Dalian in the Northeast of China back in '97, '98. We were working on a project there and passing by Shanghai on the way back. It was basically a building sites, and then moving to Shanghai ten years afterwards and everything completely changed. So that probably is the thing that's really mostly surprising. You mentioned your second question, what surprised me in life.

I think that you know the thing that I've learnt mostly in life is that we have cultural differences around the world, but the good, the bad, and the ugly is everywhere. And if you really want to work with people, you need to get beyond the cultural differences and start understanding the individuals. And then you'll be able to better judge who's a great employee , who has potential, et cetera, et cetera. And I think having lived in so many countries, has given me that kind of glimpse of how that is.

Seth Adler:

Mm-hmm (affirmative). Go ahead and step over those cultural boundaries to get to the who so that we can find out which character in the spaghetti Western, The Good, The Bad, and The Ugly, that person is essentially.

Philip Woodburn:

I'm not actually a very big fan of Westerns actually.

Seth Adler:

Oh no? Okay.

Philip Woodburn:

So that's probably a poor comparison, but I guess that -

Seth Adler:

It was you that said good, bad, and ugly.

Philip Woodburn:

Well that's true. I did quote that. I did quote that. I guess if I could come back to a kind of childhood comic character, which would be Tin Tin as we called in in English, or Tan Tan as the French say, that character has now become somebody with either an Indian or a Chinese face and that's how the world's evolved basically. And I think that's probably the best way to describe my experiences.

Seth Adler:

Fair enough. We're going to have to go back and look online and find this. So this leads us to the final question which is, on the soundtrack of your life, one track, one song, that's got to be on there.

Philip Woodburn:

I think one song that would be very much on there is the song Yesterday.

Seth Adler:

By the Beatles.

Philip Woodburn:

By the Beatles, and I am British. I don't come from Liverpool. But I have now been to Liverpool. And the reason why Yesterday, first of all it's good to look back sometimes in life even if things do move ahead. And the second reason is because I remember some colleagues recently telling me that the one thing that they remember when they first ever went on a business trip with me to the Philippines is that we had an employee event and at the end of that, because the Filipinos like to sing, they ask people ... You can just get up and sing anything. And I had forgotten this particular case, and they said, "Do you remember that you sang Yesterday by the Beatles? And we've never forgotten this experience."

Seth Adler:

And there you have it. Right? All my troubles seem so far away.

Philip Woodburn:

There we go. Yes.

Seth Adler:

Yesterday. Philip this has been an absolute pleasure.

Philip Woodburn:

Thanks Seth. Thanks a lot.

Seth Adler:

And there you have Philip Woodburn, obviously with a remarkable amount of information and insight that has been output to at least, in part, the conversation that we had. So very much appreciate his time, very much appreciate yours, stay tuned.