Fearless Finance is Formidable – Or My Japanese Adventure

Over the years I have concluded that for finance to be effective, it needs to be fearless.

In difficult situations people often say, “It is what it is,” which I take to mean there isn’t anything we can do about it.

Well-researched numbers can tell a story that often needs to be told, whether the conclusion is popular or not.

When I worked in finance at Seagram, I was part of a group of six people who were sent to Japan to meet with the leadership of Kirin-Seagram, with whom we had a joint venture (JV).

The business was losing so much money that Seagram was seriously considering withdrawing from the JV.

Armed with a numbers-driven analysis, we made 13 recommendations, 11 of which were implemented.

The primary recommendation was for Kirin-Seagram (KS) to place more emphasis on selling the brands that were more profitable and didn’t compete directly with Suntory.

Kirin had dominated the beer business for years, but they went into the liquor business in response to Suntory entering the beer business. To me, it was useless competition with no winner and wreaked havoc with the bottom line.

Kirin had been pouring promotional money into selling a whisky called Robert Brown to compete with Suntory’s Keiko. But the push made the brand completely unprofitable.

Our team from the U.S. recommended switching the marketing support to the more profitable whisky, Chivas, and raising its price in duty-free shops. Chivas was not positioned as a substitute for any of Suntory’s brands.

Within two years, our joint venture went from losing money to being quite profitable.

Do you have any stories of using a fearless financial recommendation to increase profitability? Share your story. Email me.

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