Published : 1 year ago, on 22/06/2023

Ashish Gupta talks about the CFO’s role in driving a sustainable Earning model for businesses.

Having an extensive leadership experience of 25 years in seven countries across the world, Ashish Gupta is a proven leader in the field of Business Finance. He has worked in continents from Asia to Africa to Europe and North America. His tenure of 17 years in a Global Company like Reckitt has set him up to be an expert in piloting extremely large and complex businesses through the CFO lens. In his current role of CFO/Finance Director for Reckitt’s North America Hygiene business, Ashish Gupta heads finance for the biggest country globally for Reckitt towards a high growth sustainable model earnings model.

Ashish Gupta has held roles during his 25 years of career that have been diverse in learning and have been a combination of Transformation, strategy and execution. This has helped him gain unique skills in transforming big businesses, implementing large scale productivity and transformation programs, turning around the earning model and putting the businesses on long term growth and sustainable growth strategy.

Ashish Gupta was the Group Transformation Finance Director from 2021 to 2022 overseeing the transformational agenda of Reckitt at Group level and delivered cutting edge transformation of Finance function and other initiatives in the field of groundbreaking productivity program helping the business to make investments in long term capabilities. Ashish Gupta was also the Global Supply Finance Director from 2015 to 2018 for Reckitt where he implemented completely new program of End-to-End Gross Margin Development program looking at 50+ levers transforming the long-term margins of brands by 300-500 basis points.

Ashish Gupta has also been in roles where he has developed the framework and operating models for large scale cost restructuring programs in his Transformation role for Developing markets in 2015-2017 and implementing Enterprise-wide systems like SAP and Shared services in large markets across the world. He has also been in in the role of Finance Director where he led businesses to grow twice the rate vs industry standards and improved operating margins by 500-700 basis points over a period of 3-4 years.

Ashish Gupta is a Bachelor of Commerce from India, has Chartered Accountancy certification from India (Member of Institute of Chartered Accountants of India) and has membership of Association of Chartered Certified Accountants of UK (ACCA)

We recently had the opportunity to connect with Ashish Gupta to lean on his extraordinary experience and skills that he has gained over his career spanning 25 years in multiple geographies.

What has been your greatest learning experience and why?

After a career spanning 25 years in 7 countries around the world, I can say that every experience has taught me something. There have been roles that have looked to be easy from the outside but once in it were extremely difficult to deliver and there have been others that seemed too tough but once you find your rhythm then everything just falls in place. My current role as the CFO/Finance Director for North America Hygiene business has taught me to never compromise on doing the right thing for the sustainable business. The business could be tough and in a difficult position and as a CFO there are decisions to be made that would be good for the sustainable business in the long run even though you may feel the pain in the short term. Whether it is about making sure that you have the right level and quantity of inventories that you are operating with, having healthy level of stocks with your customers and retailers, having the right product mix, converting cash reasonably fast or having the right size of organisation structure having clear roles and responsibilities with the talent that fuels business growth.

What is the secret to having a sustainable earnings model in a business?

The greatest secret to having a sustainable earnings model is to know what works well for your business. If your business is about brands, then you know it can grow by having the right product at the right price and at the right place. But to do that, you need to invest behind research on building a good product, build brand equity so that the consumers know about the products and have the distribution of those products where consumer can buy it – either in brick & mortar stores or online. But how do you have the funding to do all this. The answer is about making sure that cost structures are low – so you don’t lose out on trade when you convert your sales from gross to net, keep your cost of manufacturing and distribution low through a strong productivity and supplier partnership program allowing you to make enough gross margins that could then be invested in building brand equity. The key is also to keep your fixed costs as ‘fixed’ so that allows you to leverage the scale as you grow volumes and keep costs steady.

What are the challenges that you see to the Sustainable earning model in current environment?

There have always been challenges in pursuing a sustainable earnings model but the macro-economic conditions in current environment have been challenging the earnings model of a lot of companies. The environment of high inflation and high interest rates is shrinking consumers wallets and therefore having an impact on consumer’s purchasing power. To make the matters worse inflation is still high and that also gets reflected in higher input costs for companies, higher wages and lower operating margins. This environment also limits the companies’ ability to be able to pass the costs increases to the consumers without having an impact on their volumes.

What can be done to maintain a sustainable Earnings Model in this environment?

The environment that we are witnessing today has not been seen for decades. So, its not easy for the companies to maneuver through this era of high inflation and high interest rates. But the strategy needs to be simple. Companies need to overdrive the productivity program harder than they have done in the past. Every cost should be challenged to see whether it is justified to give a better product experience to the consumer or not. Similarly, product differentiation and product superiority would be the key today when consumer may look for cheaper products due to the crunch in their wallets. Companies should also look at the return that they get on their promotional activities and media spends. There are a variety of AI based data tools that could be used to improve the returns on this spend ultimately getting more out of spending less.

Thank you to Ashish Gupta for sharing his experience and learning with our readers.