In a 19-year career to date, Vic Tan has worked in more than a dozen Asia-Pacific countries and in half-a-dozen business sectors, but he believes that there are a number of critical skills that are applicable across the board that need to be mastered by any finance professional with ambitions of climbing the corporate ladder.
And as chief financial officer of the Ralph Lauren Corporation, Japan, Tan’s insight into what marks out the best in the business from the rest is telling.
Sitting in his bright and spacious office in the swish Nagatacho district of Tokyo, where the heavy police presence on the streets outside indicates just how close we are to the prime minister’s official residence and the Japanese parliament, Tan, 43, sits back and ticks off the attributes that are required on the fingers of his left hand.
Quickly it becomes clear he needs to re-use his hand more than once.
‘Dealing with ambiguity is the first that comes to mind,’ says Tan, replete in a dark grey, pinstripe suit and tie. ‘From my experience working in advanced and developing countries, I have developed a capability to deal with ambiguity and am able to shift gears comfortably, to effectively cope with change, to comfortably handle risk and uncertainty, and to structure things for my teams to break down and then to create a vision for them to get rid of any ambiguities.’
He moves on to another requirement.
‘Having the perspective as you go up within a company, having a “helicopter view” of the whole business and the ability to discuss multiple aspects and impacts of issues – and then project them into the future,’ he says, folding another finger into his palm.
‘You need good problem-solving skills to add value, to look beyond the obvious and not stop at the first answer, to be able to see hidden problems and probe all fruitful sources for answers, and then use rigorous logic and methods to solve difficult problems with effective solutions.’
Another digit folds.
‘You have to learn on the fly, to learn quickly when facing new problems, you have to be a relentless and versatile learner, open to change and with the ability to quickly grasp the essence and the underlying structure of anything.
‘And – last but not least – having the drive to achieve results is critical. You need to be counted on to exceed goals successfully, to be very bottom-line-oriented and steadfastly push yourself and others to achieve results.’
‘In my position, you also need to be able to size people up very quickly and be a good judge of talent,’ he adds. ‘When I started with Ralph Lauren in Hong Kong, I had to recruit 45 people in my first four months, all of whom I met personally. But to select those 45 people, I had to meet three times as many candidates, and for each of those interviews I had to look at 10 resumes.
‘I did the interviews and I had already looked at the people’s attributes, but it was also a feeling. These people had to be flexible, they had to be ambitious, demonstrate good commitment, and they had to have perseverance in overcoming obstacles.
‘Most of them were CPAs and with master’s degrees – and believe me, there are a lot of people like that in Hong Kong, where they all seem to have a hunger to succeed,’ he said. ‘So they were all qualified, but some lacked the “X factor” that comes down to personality, the ability to deal with ambiguity and a clear sense of perseverance.’
Tan knew what he was looking for in the 45 people that he did hire, because he has a very exact idea of the people who can make a positive difference to the business.
‘I was 16 when I chose what I wanted to study in university and decided that I wanted to be a CFO,’ says Tan. ‘I was attracted to the possibilities of this profession.’
After completing the mandatory two-and-a-half years of military service in his native Singapore, Tan studied a Bachelor of Business Administration at the National University of Singapore. To add to an already heavy workload, he took up another challenge by studying for his ACCA Qualification at the same time.
‘I had been searching high and low for a world-class qualification and, when I looked at the syllabus, how it was structured, the standards and status, as well as the global exposure it offered, I knew that ACCA provided a very interesting qualification,’ he said.
Studying for the two in parallel was tough when the exams came around, he admits, although there was a degree of cross-over in his studies.
The toughest area was auditing, Tan says with a slight smile, adding that he was at something of a disadvantage at the time, as many of his counterparts during the 1990s were studying for the ACCA Qualification at the same time as they were working for auditing firms, so they were putting their class-work into practice on a daily basis.
Financial management, on the other hand, came to Tan quite easily, along with strategic management.
‘But it was not all just about studying as I took part in ACCA activities and was the treasurer for the student council of ACCA Singapore, as well as an active cross-country runner,’ he said. ‘I consider the course to have been a wonderful investment and it has helped me in many, many ways, particularly in terms of opening doors.
‘Many people ask me why I took the ACCA Qualification instead of a bachelor of accounting degree,’ he said. ‘My reply is that when I looked at ACCA, it offers a global qualification that is recognised and well-regarded around the world. If I only had a bachelor’s degree, it would only be known in the country where I had studied or, at best, in the greater region.’
After graduating, Tan jumped straight into external auditing work with a Singapore CPA firm. When a new opportunity overseas arose, Tan rose to the challenge and worked for the giant Japanese construction firm Kumagai Gumi Co. as a regional project accountant, travelling across Papua New Guinea, the Solomon Islands, Fiji and Tonga for a year and a half.
Following his passion for the consumer-products sector, Tan went on to join the tobacco giant British American Tobacco, based in Myanmar, where he quickly rose to be head of finance and in overall charge of finance and accounting, as well as commercial and information technology.
After four years in Myanmar – where he was responsible for growing the firm’s market share from zero to 54% – he was promoted and transferred to Singapore as head of e-business development as well as finance development manager for seven nations within the Asia-Pacific South region.
Soon after that, Tan was headhunted to join the leading firm in the tobacco leaf and processing industry, Alliance One International, where he spent three-and-a-half years as finance director for all of the company’s Southeast Asia operations. Later, he was again headhunted to join Dutch electronics giant Philips as its chief financial officer in Indonesia. Within two-and-a-half years, Tan was given a bigger role, based in Singapore, as the head of new business development and head of pricing/margin management for the Asia Pacific region.
In 2009, he was tempted away by Ralph Lauren Corporation to serve as vice-president of finance and operations for Greater China (China, Hong Kong, Taiwan and Macau) and Southeast Asia, based in Hong Kong. In late 2012, he was promoted and moved to Tokyo to take over as chief financial officer in a market that is the company’s second-largest in the world, after the United States. Today, Japan contributes no less than 80% of the company’s business in the Asia-Pacific region.
‘I always wanted to work overseas, to gain first-hand experience of living and working in a different country,’ he said. ‘It’s not like spending three days in one country and then leaving to go home again; if you breathe the air, eat the food, work, travel and meet the local people, that is a completely different thing. It enriches your life and is interesting and exciting.
‘I have worked in the construction industry, fast-moving consumer goods, durable consumer goods, agriculture, fashion apparel and accessories, and all of those sectors have offered me different yet complementary experiences.
‘I actually found the skills I learned in the construction industry very valuable because I was involved in plans for a factory expansion and specific skill sets came into play there; cost controls, budgets, we had multiple activities circulating at the same time.’
And there is still relevance now that Tan is in the fashion business.
‘I use some of the same skills now,’ he agrees. ‘When you look at the opening of a retail outlet or a flagship store, that can be an investment of $5m or $30m. That’s all about investment, its capital expenditures, managing costs, getting value for money, how to do more with less. All the lessons are still applicable.’
He has had some surprises in the work environment since moving to Japan, however.
‘Japanese people tend to have a very fixed paradigm; when they believe in something, they stay with that belief for a long time and, in fact, do a good job of maintaining “the system”,’ he said. ‘A lot of my job is about bringing talented people into the mix with the existing team.
‘It surprised me that there was such resistance to change here. There needs to be a “paradigm shift” – and when I got here I quickly learned that Japanese seldom use that phrase and, to a large extent, ignore it as it does not fit into their culture.’
But Tan has made progress on reshaping his new team.
‘I set standards and expectations that are very high,’ he emphasises. ‘When I come into an organisation, I share with my new team what I expect to happen. We will identify the gaps in that vision and work towards closing those gaps. I do a lot of coaching and mentoring, and I do not force the staff to achieve everything from day one, but we work toward it and I do expect to see it coming through in a year.’
Right now, Tan is transforming Ralph Lauren’s operations in Japan from one of transactional finance, in which decision support accounts for a mere 10% of the total in his sector, to strategic finance, where decision support has grown to be fully 50%.
To do that, he is encouraging his staff to be more timely in their book-closings and issuance of reports, to be accurate in forecasts, streamline their processes, optimise their systems, to become a customer-oriented organisation, able to affect both the top and bottom lines and to have increased visibility on the key financial indicators, moving from finance efficiency to finance effectiveness.
Another hurdle that he has had to overcome in the transition to the fashion industry is in the accounting treatments for lease agreements for stores – whether it is an operating lease or a capital lease – while he has also needed to change his outlook to consider each and every store as a miniature company that has its own profit-and-loss statement, its own sales figures, margins, expenses, staff costs, profits and all the other figures that are generated within those four walls.
‘When you come into retail, it’s easy to underestimate the importance of staffing the right talent in the finance team,’ he said. ‘If you have 1,000 stores and treat them as one company, you will very quickly lose sight of how to grow the company. The result of the whole is the contribution of every single part.’
Hence, he says, a good retail finance talent will have the ability to zoom in on each four-wall profit-and-loss unit and make suggestions on the micro-level that affect the bottom line.
One of the best-known, high-end apparel brands in the world has excellent potential to continue to grow in Japan, Tan believes, pointing out that the purchasing power in Japan is ‘just huge’ and the domestic luxury market is worth in excess of $24bn a year. ‘In terms of opportunities, we have a number of brands that are still untapped in Japan, but have huge potential,’ he said.
Tan is bullish about the Japanese luxury market and the company’s ability to continue to grow its market share for years ahead. And he’s more than happy where he is. ‘Living in the world of Ralph Lauren, I have the best and the coolest job in town,’ he said.
Julian Ryall, journalist