Today's CFO global strategist.

• Author: Heffes, Ellen M.
• Position: COVER STORY - Ellen Heffes,Gregory Millman,Ravi Nedungadi

Globalization and technology are redrawing old borders and rewriting the rules of business in both developed and emerging markets. In the process, they're redefining the role of chief financial officer. Transformation is now the name of the game in almost every industry in every nation.

The careers of the three CFOs profiled here illustrate these transformations. First, Gregory Millman profiles a CFO who has co-piloted a major Indian group through the shifting currents of that country's economic transformation while, in the process, bringing a shareholder-value focus to the business and helping to establish it as a major competitor in the global beverage industry.

The second, by Ellen Heffes, describes a CFO in the Mexican telecom industry--that has moved from government-owned to being privatized more than 15 years ago--who is relentlessly trying to grow the business by offering more services to consumers while being thwarted by competitors and stymied by his own government's lack of urgency and slowness in establishing consistent regulations.

And the third, also by Millman, profiles a CFO with a nontraditional resume who is putting business priorities at the heart of the finance function for the Asian operations of one of the world's leading financial services and insurance firms. And, he's doing so in the midst of what former Federal Reserve Chairman Alan Greenspan recently called a "once in a century" financial crisis.

Building Competition and Investor Value

Talk about the challenges facing today's CFO, and Ravi Nedungadi, president and chief financial officer of Bangalore, India-based United Beverage Group, recalls a labor uprising early in his career. At the time, he was an accountant with the thankless job of imposing financial discipline on a troubled Indian company with a militant and angry workforce.

"When you have had to stare down 150 people trying to stab you with broken bottles, not much scares you away," he says.

When Nedungadi began his career, the very concept of a CFO was alien to most Indian companies. "There was a chief accountant," he explains. "But the job was completely historical. Today, by contrast, in India's more-progressive listed companies, the CFO is a "co-pilot, very much involved in resource allocation in every aspect of the company."

Nedungadi joined UB in 1990, and the evolution of his career from accounting to strategic finance reflects fundamental changes in India's economy. Consider capital raising: "Twelve or 14 years ago in India we had a government bureaucrat called the 'chief controller of capital issues,' "he says.

"This gentleman, in his wisdom, would price every public offering by an Indian company. I remember having a big argument with my chairman, who was cursing away, saying, This guy knows nothing and how can he decide the price of shares?' I told him it's easier to manage one bureaucrat than to manage a faceless market."

In those days, regulations severely restricted business investment and expansion. "Nobody was interested in the stock market. You made money by cornering licenses issued by the government," Nedungadi says. "Once you had a license you did whatever you felt like, because the government in a sense was guaranteeing there would be no competition in your area."

UB group was a multidivisional conglomerate then, engaged in numerous unrelated businesses. Colleagues called him the "mad man" because he was responsible for mergers, acquisitions and divestment.

Nedungadi has been at the forefront of transforming UB Group and establishing it as a major player in the global beverages market. "Transformation has meant defining who we are and simplifying a group that used to be 125 companies in various lines of businesses into three or four listed verticals where we can define who our customers are, what market share we want to be and so forth," he explains.

To this end, Nedungadi has pioneered a market discipline enforced by market metrics, such as economic value added, to focus the attention of sales and operations people on value creation. "We used to be highly focused on volume."

At that time, he explains, by volume, UB was fifth or sixth largest distiller in the world and wanted to get into the top three.

So selling more volume was the goal, as it meant something culturally to get into the top-three bracket. "But the moment we introduced the idea of having to pay for capital, the silly idea of raising volume that doesn't make money disappeared."

In addition to metrics, Nedungadi also emphasizes corporate governance. "It has been a long haul, especially because for a time the stock market was asking for these things but not rewarding companies for having made the changes. Today it's easier. The market has gotten more institutional...