Learning never stops: An interview with George Fairweather CA
Walgreens Boots Alliance CFO George Fairweather CA tells Sarah Perrin that leadership success comes from acquiring knowledge from every business transaction.
For those of us living in the UK, the Boots name is long-established on the high street. But the familiar stores are now part of the global business Walgreens Boots Alliance following the completion of the merger between Walgreens and Alliance Boots on 31 December 2014.
As with all such transactions, the success of the deal could not be guaranteed. Walgreens, though enormous and listed, was a domestic, American-centric business, whereas private company Alliance Boots was a multinational European entity with highly decentralised operations.
Together, the company employs over 370,000 people and has a presence in more than 25 countries. It is the largest retail pharmacy, health and daily living destination in the US and Europe.
Interviewed in December 2015 with the first anniversary of the merger fast approaching, Global Chief Financial Officer George Fairweather CA exuded an aura of calm control.
Is the post-deal period going well?
“Absolutely,” he said. “You can see from the numbers that we are on track and well on the way to delivering our synergy goals.”
In the year to 31 August, 2015, net sales increased 35.4 per cent to $103.4bn (£70.75bn), while GAAP net earnings increased 118.4 per cent to $4.2bn (£2.87) compared with the same period a year before.
The success of the merged business is no accident. “We always do our homework when we are acquiring businesses or merging,” George said. “We do a lot of diligence. We always look for industrial value - synergies. And we seek to generate those synergies in a logical way.”
Procurement synergies can be achieved relatively early, he noted. Maximising brand values, for example by introducing No7 products into the US, takes a little longer. “You go through various trials, making sure the offer is right.
"I believe that when looking at transactions, you need to have a robust business case and then when you are bringing two businesses together, it’s important to keep your focus on the customer. Never lose sight of the customer.”
Mergers and acquisitions
George has been involved in numerous mergers or acquisitions during his career, not least that of Boots and Alliance UniChem (where George was FD) in 2005, so he has clear views on what makes for success.
Treat acquisitions as mergers, because that way you retain skills and knowledge.
On the people front, George aims to retain the best finance leaders, regardless of their current roles, moving them across into new positions if necessary. “Treat acquisitions as mergers, because that way you retain skills and knowledge,” he said, emphasising the need for shared values and teamwork.
“We like to work in partnership with colleagues,” he said. “What’s important is having shared values. Over time a common culture evolves, but you have got to have the right values.”
The culture of Walgreens Boots Alliance
“We believe in having at all times an entrepreneurial culture, but combining that with a disciplined financial approach to investment, to spending money,” he said. “So we have this cocktail of entrepreneurialism plus strong financial control that we believe is a key secret of success.”
On processes, George said: “As you get bigger, processes tend to have to be more sophisticated to handle the complexity, particularly around areas like management information; the larger one becomes, the more dependent one is on the insight one gets from the dashboards and management reporting.
"It’s like flying an aircraft. When you are a smaller company you can see out the windows, but as you get bigger you are more dependent on what the instruments tell you.
"In our organisation we bring the management information almost 100 per cent through finance - financial metrics, external metrics, health and safety, our corporate social responsibility. We believe in having integrated reporting – our version of what we look at internally to run the business on a daily, weekly or monthly basis. We are great believers in having one version of the truth for running the overall enterprise, and in presenting information in a common way with clean definitions and business-specific KPIs – in a way that is insightful, actionable and easy to interpret.”
Doing things that are right for the long term, looking after the interests of the people. That’s what the Institute taught me.
The company is continuing to invest in its business management systems. “Wherever we can we want to have management information that’s cloud-based, that’s readily accessible wherever you are across the world,” said George, who spends every other week working in the US.
Keeping up to date
Monitoring cash is particularly important to him. “As well as getting the sales [figures] daily, I get the cash every day across every business,” he said.
“I am strong believer in managing cash as well as trying to grow our profit. That’s something I’ve done all my life. I don’t believe that a lot of large companies, as they grow, keep the right focus on cash flow.”
He also endorses lifelong learning. “Learning is one of the most important attributes of a leader,” he said. “Whenever one does a transaction, one can learn from the other business. It’s like sportsmen – they are always trying to learn. Golfers are always trying to improve their technique.”
Personal life and CA training
George has come a long way from Montrose, the small town in the north east of Scotland where he grew up. His father, after returning from the war, “had no choice” but to join the family business, the fourth generation to do so. “He was determined I would get a professional qualification,” George said.
His interest in business led him to a Bachelor of Commerce degree at Edinburgh, and he then gained his CA qualification because he felt it the “safe” thing to do.
He quickly moved out of the audit profession, attracted to joining Procter & Gamble by its management training scheme. “They moved you around, you could work in different functions,” he said. “And I have always liked consumer products and retailing, which is why I then joined Dixons.”
His career progressed through a series of increasingly senior roles, in the UK, the US and Europe, in UK listed companies, a private company (Alliance Boots GmbH) and now a US listed enterprise.
The CA training has had an impact along the way, and still does. George said: “What the CA qualification and, I believe, the Institute still stands for is some of the old Scottish traditional values – integrity, doing the right thing in the interest of the enterprise, not for self interest; doing things that are right for the long term, looking after the interests of the people. That’s what the Institute taught me, and in the culture I work in it’s been invaluable, because it’s aligned with what we are trying to do here as a business.”