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This article was first published in the February 2016 Singapore edition of Accounting and Business magazine.

Simon Hove started his career working for a brewery, but he now leads the fight against what the World Health Organisation (WHO) calls the ‘the most important mosquito-borne viral disease in the world’.   

As CFO, vaccines, Asia Pacific & Japan, at Sanofi Pasteur, Hove is preparing for the launch of a vaccine for dengue, which has been in development for the last two decades. It has a 60% efficacy against all four serotypes of dengue and large-scale phase III studies have shown an 80% reduction in the risk of hospitalisations.

The dengue vaccine could have a tremendous effect on a large segment of the world’s population – the WHO estimates that 2.5 billion people live in areas where the virus can be transmitted. It can be found in South Asia, South-East Asia, much of Central America and the northern half of South America, and has also been reported in parts of China and Russia. The disease kills about 22,000 people a year, mainly children.

As such, this vaccine is expected to be in great demand in over 100 countries and areas around the world and, given that dengue is prevalent in much of Asia, Hove’s division is likely to be very busy. It is an exciting opportunity, he says, but one that has to be handled carefully.

‘Vaccine launches are hugely expensive,’ he notes. ‘You have the cost of getting information to the public and you have to balance the costs versus the benefits we get out of it both long-term and short-term. As you can imagine, our dengue vaccine launch is probably the most significant product launch Sanofi Pasteur has made in the Asia-Pacific region in a long time. With such a significant launch in prospect, we have to evaluate how we put the right resources in front of the launch effort.

‘As in any company,’ he continues, ‘resources are limited and although there will be some element of new resources going into the launch, there is also a need to evaluate how resources can be channelled from other activities.’ According to Hove, Sanofi is looking to find areas and activities where it can reduce investment levels without impacting the top line, so that funds could be channelled to support the upcoming dengue launch.

That, of course, is the classic job of the CFO, deciding on resource allocation to increase the top and bottom line. Hove sees himself as a value hunter. ‘You have to be constantly looking for growth opportunities, and directing resources to the right place. You have to have that mindset that shifting resource allocation is absolutely key.’ 

Even though he is based in Singapore, a country where dengue is certainly an ongoing problem, Hove can consider himself fortunate compared to other senior executives in the pharmaceutical industry. In much of the developed West, big pharma is grappling with a sea change. The era of blockbuster drugs is coming to an end, patents on older drugs are expiring, and the cutting edge of research is often being done by smaller, more focused start-ups. 

In Asia, though, the challenges are different. Many developing countries are behind the curve, which gives companies such as Sanofi opportunities for growth. In the area of vaccines, for example, many countries in Asia still do not have a vaccine schedule, unlike in the West. As these countries embark on more systematic vaccination programmes, demand will increase. In fact, Hove is already seeing this. ‘The biggest problem is that we can’t supply enough vaccines,’ he says.

He explains that vaccine manufacturing is an inherently difficult biological process and, from time to time, the global manufacturers find themselves in situations where supply cannot meet demand. ‘In such situations, we have to look at contractual obligations, national health issues in case of no alternative supply and, naturally, the economics of the different alternatives.’

Hove’s enthusiasm conveys how much he relishes the challenge of being CFO of a company that has the potential to improve the lives of millions. He has come a long way since he began his career at Danish brewery Carlsberg. He saw very early on the potential Asia offered when he joined the accounting department of a Carlsberg subsidiary in Shah Alam, Malaysia as a trainee. 

That year-long stint convinced him that Asia was the future. ‘My year in Malaysia was an eye-opener. I saw how dynamic Asia was. In Europe, sales were stagnating, prices were declining and demand was topping. In Europe, we were working to trim the cost base. In Asia, there were increasing sales, increasing production. We were building organisations. It was a growing business. It was much more interesting.’

His time in Malaysia also inspired him to aim to be a CFO. His experience there had shown him how central the role of the CFO was. ‘As CFO, all information passes through you. You have all aspects of the business; it’s the best place to be.’

After his traineeship, he was posted back to Denmark. But the excitement of Asia stayed with him, so that when the opportunity came to be posted to Asia, he leapt at it. He moved briefly to Singapore, then to Hong Kong.

There, he was a project manager at Carlsberg Brewery Hong Kong, posted to the finance department and reporting to the CFO for China operations. Carlsberg had acquired 20 breweries in China and the main challenge was integrating their financial operations, to help them to do fast month closings, and standardising reporting to ensure that it followed international accounting standards. In addition, the finance department was looking at its more established markets in Asia, like Hong Kong and Malaysia, streamlining operations to make them more efficient. Hove was involved in all of these projects.

Eventually, he was promoted to manager – group controlling (China) with Carlsberg China. Previously, the finance department in China had not had a controlling function; it was largely focused on balancing books. Hove describes that department as ‘old-fashioned – there was little connection between accounting function and business. I took up the role as controller for China to help them do better planning and expand.’

Within a year, he became business controller for Asia at Carlsberg Breweries. It was at this point that he realised he needed to beef up his accounting knowledge. 

In his university days, he had planned to go into the financial sector, so majored in applied economics and finance and graduated with an MSc from the Copenhagen Business School. However, he ended up at Carlsberg and by the time he had risen to the post of business controller, Asia, he realised he needed more than what his training in finance provided.

‘I had started out thinking that I was going into the banking sector. However, my career had taken me in another direction, so my educational foundation was not where I wanted it to be. Many times, I was falling short on more complicated accounting topics like taxation and pension liabilities. I could see where I wanted to go and decided I needed to upscale myself,’ he says.

He started working on his ACCA certification and, soon after gaining it in 2009, he began casting around for new challenges. ‘I didn’t want to become a 20-year veteran in Carlsberg; I wanted to try something different,’ he explains.

With his wife (who is Malaysian), he decided that a job in Singapore would work out better for them, as his wife could be closer to her family. He found a job as financial controller, South-East Asia at pharmaceutical company Genzyme, which was a big change for him. As well as relocating to a new city, he had to move from fast moving consumer goods to the biotech industry. He also had to assimilate the shift from working for a European company to an American one. 

While he is careful to avoid broad generalisations, based on his own experience Hove feels European companies tend to discuss issues more before a decision is reached. ‘The decision-making process is longer, but I also feel more informed,’ he says. ‘In a US company, the process is faster.’ 

Need for differentiation

He also believes European companies are more prepared at the outset to try different strategies for different markets. In American companies the home market is usually the biggest for the company and, as a result, there tends to be a belief that what works in the US will work everywhere. Meanwhile, he says, ‘European companies, because their home markets are smaller, are more used to working in environments with different cultures, regulations and languages, so there tends to be a greater awareness of the need to do things differently dependent on the country they are doing business in.’    

As well as the need to adapt to a different culture, there was also a difference in the work challenges he faced. ‘At Carlsberg the revenue base was large, but my scope was limited,’ he says. ‘In Genzyme, my job scope was broader but the revenues smaller.’

What was exciting was that he was reporting to a general manager instead of to a finance function. ’I was a business partner to the GM; it was a mini-CFO position. I was working with the GM to build the business,’ he explains. Soon after he joined, Genzyme was acquired by Sanofi and he was asked to lead the integration, in addition to managing accounting and finance.

Today, as CFO of vaccines, he also finds himself using his ACCA-acquired knowledge every day. ‘The ACCA Qualification gave me a very strong foundation in accounting and financial management. I leverage on this when I have conversations with my team and other people in the business. I’m not the best at any one thing but I can have conversations with everybody,’ he says.

Having spent so much time in Asia, Hove has seen a variety of office cultures. For him, the most striking difference has been in the decision-making process. ‘In Europe, all the stakeholders come together at a meeting, discuss and come to a consensus. In Hong Kong, people don’t speak up in meetings. But after the meeting, they discuss among themselves and then they reach consensus.’

While that might sound less efficient, Asia makes up for it with speedy implementation. In Asia, things can move much faster after a decision is made, Hove says: ‘There is more of a get-it-done attitude and people will put in the effort and the hours. It’s much quicker than in Europe.’

In Europe, on the other hand, things can easily get bogged down by long-established processes that dictate how things should be done. In part, it is the classic difference between emerging and mature markets, Hove says. ‘In mature markets you are locked into systems and processes, while in emerging markets you are defining processes as you go along.’

He notes that Asia is, of course, not homogenous, and that even major international business centres such as Singapore and Hong Kong have their own vibe. He describes Singapore, his current base, as an easy place to be. ‘It’s easy to be comfortable and you have good access to the rest of Asia.’ It is also easier to be better informed in Singapore, he says: while in Hong Kong the news tends to focus, naturally, on China, in Singapore, there is news from around the region.

Hong Kong/China, however, is a dynamic environment, Hove points out: ‘You have an extremely hardworking population, a population that wants to catch up, particularly in China. They see the need to run faster than everybody else and they are really eager to learn. They will take everything you come with and make it their own.’

Jimmy Yap, journalist