Leading companies recruit and
rotate financial managers in the same way that they do marketing and operational talent.
If companies groom a network of finance
professionals who are comfortable in various
environments—and have rotated through positions
at the country, region, and corporate
levels—the dynamic between the financial
headquarters, where most expertise resides,
and the subsidiary can be a powerful resource
in difficult times. Drug giant Novartis is an example.
In 2001, the company had to decide
whether to continue financing its Turkish subsidiary,
which had repeatedly delayed payment
to Novartis during periods of crisis. On
the numbers alone, the decision would have
been straightforward: Force the managers to
fund locally or deny shipments of life-saving
drugs to the subsidiary. Complicated negotiations
ensured that the subsidiary would continue
to operate, capitalize on the weakness of
its competitors, and ultimately pay back the
parent. A successful outcome was achieved
only because of the trust built up over many
years between finance managers at headquarters
and those in Turkey, many of whom had
spent time at Novartis subsidiaries around
the world.