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Crisis Management & Long Term Activities – Ulf Lilja, CFO of Sony Ericsson

Balancing Crisis Management & Long Term Activities
Ulf Lilja
CFO, Sony Ericsson

Transcript:

The challenge for me as CFO in the last 12 months—particularly in my company, Sony Ericsson; knowing the significant turmoil in the industry, in the whole economy—has definitely been to find the right balance between working with short term, critical, firefighting type issues and at the same time, not taking my eye off the more sustainable improvement activities that definitely will be needed one day; to find the right trade off between these two areas.

In my particular case, as CFO for Sony Ericsson in early 2009—against the backdrop of what happened in the financial markets in 2008—unfortunately, I had to spend the majority of my time ensuring that the our business partners, customers, suppliers, as well as our own employees felt confident that Sony Ericsson could master the very fact that our top line dropped almost 40% in 12 months, with consequences for the bottom line. This, of course, raised the question with customers and suppliers, “Is Sony Ericsson going to be a sustainable business partner?”

I had to start with that. I had to go and see our customers, key customers, key suppliers, to provide them with the right answer to that critical question: that we will remain a reliable business partner to them. I found it very helpful to be frank, honest, and realistic; but also to come to them with specific activities that would take us to safer ground. Share that with your key customers and key suppliers and thereby convince them that you really know what you are doing.

Notably, then, we have decided to continue to invest money in becoming more efficient in our administrative work by investing in IT systems, by investing in consolidating activities to these so called shared service centers; not being tempted to wait with that, but to move ahead because better times will come. That’s a given for us.

My advice, in terms of the balance between short term crisis management and long term sustainable efforts would be, you have to be very careful in understanding how you are spending your time. It’s very easy to get trapped in the firefighting, short term mode, not realizing that maybe you’re not giving enough priority to the more sustainable long term activities. Be very critical to yourself as CFO, constantly asking yourself, what are you spending your time on?