International Paper’s CFO on Leveraging Disruptive Finance

After serving as CFO of Intercontinental Paper (IP) from 2007 to 2011 and then as senior vice president of the company’s industrial packaging organization, Tim Nicholls was asked to direct finance for a second time in 2018. Nicholls, who has moved among finance and operations more than significantly of his 23-calendar year career at IP, claims it was an easy choice to make and that he returned to finance with a new knowing of the corporation. “I experienced been functioning some of IP’s much larger businesses and viewing firsthand the possibilities they experienced, the dangers they ended up trying to regulate, and the economics of what they were being doing,” he claims. “That standpoint gave me so substantially additional to attract on when I returned to the CFO part.”

Today, Nicholls is leading a a lot more streamlined finance function pursuing very last year’s spinoff of IP’s world wide printing papers business, Sylvamo. Right here, he discusses finance’s function in that intricate transaction and how collaborative teams embedded in the business are bringing new degrees of info-rich examination to a array of selections throughout the company.  

How has the finance function altered for suppliers like IP above the final decade?

Nicholls: Finance requires to give far more benefit currently, concentrating extra on the strategic viewpoint expected to push better business selections. Technological know-how, especially knowledge analytics, has authorized us to extend our skill set to come across worth in the details. In this way, finance has grow to be a lot far more provider-oriented. We have to help the vision of benefit-insert tasks to the organization, offer challenge administration and adjust administration abilities, and elevate the benefit of finance in terms of communication, affect, and impact.

What are some rewards you see in the existing condition of finance technological innovation, and how is it serving to your groups assistance the organization?

Tim Nicholls

Technologies is aiding us boost our organization model, our procedures, our consumer interactions, and a great deal a lot more. Access to substantial amounts of information has amplified our abilities for decision-earning at each amount of the corporation. At IP, we have constructed cross-useful teams concentrated on working with highly developed analytics to establish patterns and streamline our operations. Our groups choose the alternatives introduced to us by way of innovative analytics and locate strategies to generate special price, with the top purpose of bringing scalable answers to the enterprise.

For the past two years, our finance groups have used a disruptive technological innovation method with the corporations to uncover modern remedies with details, assessment, and other systems. That approach has been employed on several tasks now in many phases of proof of thought, piloting, and implementation. For a very low-greenback investment, the returns in performance are substantial. An illustration of that process in action involves challenge-resolving for our daily containerboard shipments we move about 40,000 tons of containerboard covering 15,000 SKUs out of our mills just about every working day to our vegetation to be converted into containers and then shipped to clients. We have a pretty advanced source chain management program but today’s natural environment needs us to shift options each day, and we’re making use of facts to obtain the very best resolutions in authentic time. We can see the options in an quick and can figure out how to acquire gain of them. Given the complexities in our recent enterprise surroundings, with changing provide chain constraints and constraints, getting that skill to make more rapidly and greater decisions is an vital gain.

What financial or sector conditions led to past year’s spinoff of IP’s world wide printing papers business, now working as Sylvamo?

The spinoff was not a consequence of a certain current market party but instead an endeavor for us to set up diverse organizations to allow every the finest opportunity to go after its individual procedures. As a a lot more simplified business, we are functioning to construct a improved IP as a generally corrugated packaging-concentrated business with a potent cellulose fibers organization, and are superior positioned to develop earnings and cost-free-funds circulation.

What was finance’s function in the Sylvamo spinoff?

It was one particular of the extra sophisticated transactions the firm has undertaken, so it expected a cross-functional staff work, in particular given the reality that we had been developing a new, stand-by itself, publicly traded entity fairly than just offering aspect of the business enterprise to an acquirer. Functions were global and really linked, involving legal entity structure and all that goes with remaining ready to assistance a business enterprise in many unique locations close to the entire world. In addition, the operational units of IP and what turned Sylvamo were intertwined, with connections across IT, lawful, and HR, so they desired to be separated and remade to in the end provide two distinct organizations.

Finance’s position was multifaceted. We oversaw the software administration business office to make certain that timelines were being coordinated and comprehended, and practically each individual aspect of finance was touched. Our team was concerned with all issues that go into building a new public company from a financial standpoint. Corporate accounting, tax, treasury, and inner audit had to be replicated in some way on the Sylvamo facet, which include staffing and leadership positions, and experienced to be in put immediately upon closure.

In addition, as we aided the new Sylvamo leadership team put together to get the reins of a publicly traded enterprise, it was a time to reimagine what sort of firm IP must be put up-transaction. Finance has been a major aspect of the benefit creation system, determining how we aid our firms and the organization by evaluating prospects, building sure we are measuring performance the proper way, and eventually participating in a essential function in some of the decision-building procedures in terms of prioritizing and utilizing essential initiatives.

What are your priorities with IP’s existing finance purpose article-spinoff?

We’re continue to a international business serving shoppers around the earth, but with a streamlined portfolio and a simpler organizational structure. We’re striving to come to be much more nimble, extra agile, and much better at building value a lot quicker. Finance has to mirror that not only in conditions of supporting the broader company targets but also in phrases of remaking ourselves. We need to have to mirror what the corporation has develop into and in which it’s likely, and make sure we’re arranging finance expertise and abilities in a a lot more streamlined, targeted way.

We are restructuring our method to how and where by we deploy talent. The place individuals sit isn’t what drives who functions on assignments. We concentration on what requirements to be achieved and then establish who has the finest skill established to make it occur. That suggests teams may perhaps be virtual, deal with-to-face, at headquarters, or in our services. We are employing all equipment at our disposal and restructuring from a classic finance organization to develop groups all around crucial duties and projects.  

—by John Labate, Deloitte Companies LP editor, Deloitte Insights in The Wall Street Journal 

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