John Gregory Interview: the Kellogg’s Centre of Excellence

The centre of excellence at Kellogg’s does more than streamline the finance function, it is nurturing the finance leaders of tomorrow. Sandra Higgison talks to John Gregory about the impetus for the centre and the results the company is already enjoying.

In November 2009, John Gregory, European Shared Services Director at Kellogg’s, dialled into a conference call to get an update on Project Vista. Half way through the discussion he was surprised to see his name appear on a slide as the person leading the finance-transformation initiative in Europe. Eleven short months later, Kellogg’s went live with its first centre of excellence.

Described as a poster-child project within the cereal-making company it is a powerful example of how effective the centre of excellence (CoE) model can be. It also illustrates why a growing number of organisations with mature shared services are choosing this approach.

Why create a centre of excellence?

Summarising the project’s objectives, John says, “The basic premise was to free up our local finance resources to really drive top-line growth and move up the value chain. “

The vision for the Dublin-based centre of excellence is to:

• Deliver a leaner, more commercially focused organisation to drive finance activities with streamlined processes
• Drive efficiencies and create a talent pool of finance personnel to support succession planning
• Create a central process and consistent service by automating certain activities
• Build upon the services already offered from our centre in Manchester and see how far up the value chain centralised services can go

Identifying activities

To decide what went into the centre, John’s team identified the activities that were bogging down local finance managers, such as tax compliance and statutory activities, spreadsheet analytics, planning and forecasting. None of these really required finance people to be close to the business to perform them.

They brought four teams into the centre of excellence. The centralised area finance planning team offers business support and consolidation, and provides direction to the local planning groups. It has standardised all the Kellogg’s European reporting within Hyperion to the point where there are no longer any spreadsheets in this part of the business, which has reduced management reports across Europe from over 700 to currently around 50.

A new marketing organisation had centralised much of its activity but needed a finance team to support it. Similarly, a new European sales organisation also needed a finance structure to help support the right decisions. The centre of excellence was the obvious choice for these functions.

The biggest group in the CoE was the commercialisation team. “The centre now takes a lot of the commercial support from the local business partners as we found that they are spending 70-80% of their time on non-value add and non-core work,” says John. “It has a lot of planning activities now, a lot of ad-hoc analysis and spreadsheet decision support. The intention is that the commercialisation people who are still in the market can now spend more than 60% of their time talking to customers and driving value.”

Project Vista has also outsourced elements of Kellogg’s local GAAP and compliance reporting to free up resource, and the centre has its eyes on the tax and treasury teams, and the outsourced relationship too.

Creating a talent powerhouse

Another major driver for the centre was talent management. “We have six core behavioural competences in our talent programme,” he says. “While we focus on technical skills in the early stages of an employee’s career, we are very much about recruiting and developing potential leaders for our organisation.”

The competences for Kellogg’s finance leaders can be summed up as:

• Creates direction
• Delivers quarterly results
• Organises to win
• Drives alignment
• Invests in people
• Inspires and energises

“While individuals can get great experience of up-stream finance activities, such as planning and business analytics, the roles also offer development in most, if not all, of our leadership competencies,” he says.

Delivering rigor, commerciality and visibility

The swift roll out of the centre enabled it to deliver early results to the business. “We’ve brought a lot more rigor to what we do,” says John. “With standard reporting and greater visibility we’re driving commonality across Europe.  The local management teams are much more engaged with the centralisation agenda. They see it as a real positive as we’re taking work from them without taking many heads out. We’re driving a commercial focus into local teams.”

Increased visibility has given Kellogg’s greater visibility of the larger items of spend.  It is now getting a better return by spending money on the right campaign in the right market at the right time. With one set of business rules instead of 12, it’s not surprising that the country managers, European leadership team and finance directors point at Project Vista as a shining example that other Kellogg projects should learn from.

Communication and resources

Despite the success John’s team has already delivered, the creation of the centre of excellence has not been without challenges. When he came onto the project there were two people on the team working with external consultants who were struggling to drive the project forward or communicate with the business.

In a typical week the team would have a call with the steering committee, one with the area team to keep everyone up to date with developments. Then there was a call with all the European FDs and another with key stakeholders. There were also monthly meetings with country managers and finally quarterly meetings with the leadership team.

“Our first step was to release the consultants and build a programme office. A key early win was to bring in someone to support communications. People had told me I needed it but it was only when we got going that I realised it was probably the most crucial role we created.”

Indeed, the willingness of local teams to engage with Project Vista can be attributed to the team’s focus on communications. “The business could have perceived centralisation in the wrong way but people have been extremely positive, almost falling over themselves to support us. They got it straight away, which comes back to the communications.”

Resourcing was also important and something John admits he should have done earlier. The team secured IT support, a full-time HR person, a programme manager, a controller to oversee the migration of processes and controls, and project managers for building the CoE, managing further transactional work coming into the existing Manchester centre, and running the tax and statutory outsourcing project. “We went from two to eight full-time people, which gave us the bandwidth and scale to get this done so quickly.”

Bottling the energy

Looking forward, John says that it could take until the end of the year to get everything embedded and people focused on the top line again after a year looking internally. “We’ve got some real positive energy out of this project, we need to harness it and start looking at formalising a Lean Six Sigma programme around our newly centralised activities.”

If the success John has already delivered is anything to go by, there are a lot of exciting developments to come from the Kellogg’s centre of excellence. As he says, there’s never a dull day at Kellogg’s.

John Gregory is European Shared Services Director at Kellogg’s.