A sense of calmness is palpable in the presence of Dennis Tam FCCA, the CFO of Crabtree & Evelyn in Hong Kong. Since he joined the company in 2012, Tam has been the catalyst driving major changes in the Hong Kong operation of this much-loved global brand specialising in skincare products, fragrances and food made from natural ingredients. Judging from the company’s steady sales growth, perhaps Tam is the living proof that it does not necessarily take the aggressive type to drive sweeping corporate changes.
Although Tam’s official title is CFO, his role combines the function with that of COO. The Hong Kong operation looks after sales in the city and various countries and regions in South-East Asia, including Japan, Taiwan, South Korea, Indonesia and Vietnam, and Tam is responsible for finance, IT and supply chain.
‘I’m in constant contact with the company’s global finance and management,’ he explains. ‘Apart from general accounting like internal control and cashflow, I’m involved in the setting of future directions for the Hong Kong operation, the strategic planning and day-to-day operations. I have daily meetings with the heads of retail sales and marketing to stay on top of current sales. Together we review such issues as point-of-sale promotion to see if any fine-tuning is needed. I’m also focused on strategy development and follow up on the progress of strategy execution by individual staff.’
Tam also manages the company’s IT function, which is partly outsourced. ‘For the supply chain, our in-house staff and I work with third-party logistics providers,’ he says.
Tam has acquired his skills and knowledge of diverse specialised fields through life-long learning. While he acknowledges some relevant experience from his previous jobs, he has updated his knowledge through self-motivated learning. ‘Whenever the opportunities arise, I’ll attend retail seminars and trade exhibitions,’ he says.
‘I’m keen on spending time visiting the booths of the exhibiting service providers to get inspiration for different aspects, like visual merchandising. As for supply chain, I participate in meetings with large vendors, such as DHL. As a finance person, I need to enhance my contact with logistical specialists to grasp the know-how of supply chain. By doing this, one can naturally become a specialist.’
Tam also works closely with the IT manager, acknowledging that while he does not require in-depth knowledge of individual programmes it is important that he is aware of developments such as O2O (online to offline), e-commerce and m-commerce (mobile).
Being one of Hong Kong’s pillar industries, the retailing sector is highly competitive and Tam believes that he needs to be fully engaged for a thorough grasp of the store operation. ‘Sometimes top management is not fully in touch with the store-front situation,’ he says. ‘From time to time, I visit our stores and talk to the customers. The information gathered is useful for me when I have discussions with the marketing and sales staff. If you are a finance guy only focused on profit and loss, it does not really help the operation.’
Tam credits his good people skills for enabling close and constructive collaborations with colleagues across all levels. ‘I deal with a cross-section of specialists on a daily basis. I work closely with the CEO, heads of departments, function heads, key staff, managers and other executives. This requires in-depth understanding of their individual work and duties,’ he says. ‘My style is friendly and approachable, to show them that I’m keen on getting as much information from them as I can.’
Tam says that his analytical skills are vital for the company’s operation. ‘The first thing I do on a working day is to look at reports, covering key performance indicators and daily sales,’ he explains. ‘As we have many point-of-sale promotional activities and items, I aim to stay on top of them. Only I and an immediate subordinate are responsible for looking at the analysis reports.
‘After reading the reports, I hold separate meetings with staff of individual departments to fine-tune the strategies and details of POS promotion. This is the nature of retail management, which is based on real-time sales updates.’
Unusual career path
Tam built his experience with the international markets through his previous jobs and gained his ACCA Qualification. He joined Reader’s Digest Asia as finance manager and was later promoted to financial controller when the global group’s Asia regional headquarters was based in Hong Kong. Early in his career there he was the project driver of Oracle ERP implementation. ‘ERP implementation project is a very time-consuming task which requires a lot of focus,’ he says. ‘I led the whole project team to complete it in Hong Kong and then rolled it out to all Asian subsidiaries successfully and smoothly.’ While there, Tam also implemented many rounds of company reorganisation to cut costs, streamline workflow and improve profitability, gaining strong experience of company reorganisation, analyses and execution.
When the company moved its Asia regional headquarters to Singapore, Tam relocated. There, he was charged with achieving headquarter status from the Singapore Economic Development Board. After fulfilling all the local compliance requirements, the company obtained significant income tax relief for five years from 2006. ‘Together with the CEO, I helped set up many local subsidiaries throughout Asia,’ Tam recalls. ‘I had to work with local lawyers and accounting firms in various countries such as India, Japan Thailand, Philippines, Singapore and Malaysia to overcome various business and local compliance issues.’
After spending three years in Singapore, Tam returned to Hong Kong and joined Otto International, a leading apparel company based in Germany. Its Hong Kong operation was the headquarters of the group’s global sourcing arm and oversaw 30 subsidiaries globally. ‘This job helped deepen my experience in working with individuals from diverse ethnic and cultural backgrounds, and further sharpened my communications skills,’ he says.
Tam firmly believes that his previous working experiences have helped to enhance his interpersonal and communication skills. ‘That’s why I can work well with my present colleagues on different levels smoothly,’ he says.
He describes the ACCA Qualification as the key that opens many doors. ‘It has helped get my foot in the door of companies and get hired by them. Through my study for the exams, I acquired diverse knowledge that has helped me fulfil the specific requirements in my various positions,’ Tam says. ‘I attend various events organised by ACCA, such as the CFO Club Luncheon. I get to know many friends and the keynote speeches are inspirational.’
Back at Crabtree & Evelyn, Tam has been the leading driver in introducing pivotal changes to the Hong Kong operation. These include key performance indicators (KPIs), optimum stock cover and weekly business review meetings. His first priority when he came on board was to develop the KPIs. ‘When I joined the company, it did not have any KPIs,’ he recalls. ‘I did not encounter any resistance from my colleagues at all. They were very supportive because they all had looked forward to having sets of KPIs.’
His initial two months were spent in detailed discussions with the relevant colleagues to figure out the KPIs and analysis reports needed for business enhancement, and to work out the aspects for which help and input from finance was required. When the overall direction was clearly defined, Tam began engaging the IT team and external consultants to build the KPI reports and analysis from scratch and completing the process in just three months.
‘In retailing, the KPIs cover such aspects as average transaction value, unit per purchase and average unit sales,’ Tam explains. ‘All these have been quantified for comparisons and analysis over time. As for the KPIs for delivery, these include the length of time taken for goods delivery after ordering. All aspects in the operation have their own KPIs.’
Cordial discussions and exchanges of ideas rely on mutual trust, Tam has learned. ‘I was able to build positive relationships with my colleagues shortly after I joined the company,’ he says. ‘As I helped deliver the system they had longed for, it built mutual trust among us.’
An inventory management overhaul was another challenge. ‘Three years ago, we had been under pressure to shorten the stock cover, which was relatively long,’ he explains. ‘I therefore spent a lot of time working closely with the sales team and the demand planning team to better control purchases.’
The process involved not only section heads but also frontline sales assistants and other lower-level staff. ‘We focused on the in-out projections by SKUs [stock-keeping units]. We had more than 500 SKUs and each one required similar projections for the stock cover reduction. It took over a year to lower the cover to a reasonable level. We have maintained this level ever since. Inventory management is ongoing and it requires close monitoring. We’re confident that it is sustainable.’
Meanwhile, the weekly business review meetings involve function heads and CEO, and focus on what happens in the week and what fine-tuning is needed. ‘The meetings cover sales in all markets managed by the Hong Kong operation,’ he says. ‘These are useful meetings as we discuss the latest sales performance based on the KPIs and analysis reports.’
Tam finds it most satisfying when he is able to give constructive ideas that win the consensus of the others for implementation. ‘A distinct trait of the retailing business is that a business decision will show its impact at point-of-sale very quickly, particularly in this social media era,’ he explains. ‘If one idea does not work, we’ll come up with another one. This is where I get the job satisfaction.’
Wilson Lau, journalist
This article originally appeared in Accounting and Business magazine. Read the original article