EY helps clients create long-term value for all stakeholders. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.
At EY, our purpose is building a better working world. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets.
In this episode of The Better Finance podcast, Kelly McGinnis joins host Myles Corson to discuss invaluable lessons on driving growth, managing change and leveraging technological advancements within finance.
Kelly McGinnis, Vice President of Finance, Pharma Services and Clinical Research at Thermo Fisher, discusses the complexities and successes around Thermo Fisher's corporate acquisitions.
Kelly brings to the table her experience in driving and managing such large-scale corporate transactions. She discusses the importance of a clear understanding of the long-term objectives, while dealing with the culture dynamics of the acquired company. The episode provides an understanding of the need for agile leadership that can orchestrate change initiatives seamlessly in line with these factors.
Throughout the conversation, Kelly emphasizes the transformative role of innovation and technology, recognizing the critical role of artificial intelligence (AI) and automation in shaping the future of finance. The episode makes a strong case for transitioning teams from traditional manual procedures to more forward-looking analytical approaches, using technology as a lever.
Kelly also discusses the human aspect of M&A, highlighting the importance of change management and team morale, and in aligning new colleagues with the company's vision. She stresses the need for clear communication and transparency to help foster a culture of trust and collaboration.
Throughout the discussion, Kelly stresses on the evolving nature of finance roles, advocating for curiosity and continuous learning. She encourages a leadership style that promotes innovation and empowers finance professionals to drive broader business outcomes.
Key takeaways:
Develop an understanding of the intricacies involved in large-scale corporate transactions, including the need for clear strategic goals and cultural adaptation
Learn how the adoption of AI and automation can pivot finance teams from leveraging time-tested methods to embracing a more analytical and future-focused approach
Recognize the instrumental role of effective leadership in fostering team dynamism, nurturing a cooperative work environment, and managing transformational shifts
For your convenience, full text transcript of this podcast is also available.
Kelly McGinnis
“What does excellence look like at the end of the journey, because you can't just figure it out as you go. You got to really focus on what am I trying to achieve and work backwards with a level of clarity.”
Myles Corson
That was Kelly McGinnis, the Vice President of Finance for Pharma Services and Clinical Research at Thermo Fisher. I’m Myles Corson from Ernst & Young, host of The EY Better Finance podcast, a series that explores the changing dynamics of the business world and what it means for finance leaders of today and tomorrow by sharing insights from global leaders on key topics affecting the world of corporate finance.
The conversation with Kelly explores how leadership and technology contribute to the successful integration of acquisitions, and how finance teams can transform to be more analytical and forward-thinking.
So let’s jump in.
Corson
Thank you for joining us and welcome to the Better Finance podcast. It's great to have you on.
McGinnis
Happy to be here.
Corson
Kelly, just to get us started, perhaps you could tell us a little bit about yourself and how you ended up where you are today through your career journey?
McGinnis
Sounds good. So currently I'm the Head of Finance for two of Thermo Fisher Scientifics businesses. Been in Thermo Fisher almost five years at this point. Before that, I was the CFO [Chief Financial Officer] of a tech company focused on industrial AI [Artificial intelligence]. So, I did that before and then before that, 15 years in GE [General Electric] of increasing responsibility, lived all over the world doing different things, but mostly focused on the energy and oil and gas businesses. I'm from Massachusetts, have an 8-month-old son and married with two enormous dogs and we live in Boston.
Corson
Lot to draw on there in terms of your experience, so appreciate that. One of the things we're going to talk about today is the opportunity to use corporate transactions as a catalyst for transformation. Perhaps you could talk about some of the transactions you've been undertaking in your role at Thermo Fisher, just to set some context as we get into the conversation.
McGinnis
Sure, as the CFO of the business, when Thermo Fisher acquired its largest acquisition to date for just about US$20b called PPD [Pharmaceutical Product Development],we closed the transaction in December of 2021. When I was named CFO of that business, there was the founding point of let's make sure that we integrate it really, really well and then also drive home the synergies both from a revenue and a cost standpoint. So, it's actually very fresh and that I've been doing it over the last two plus years or so. So, we can definitely get into that.
Corson
Yeah. I think, obviously, you come into the life sciences sector. This is one where actually you and your peers, as you look at how to build capability gaps for your organization, how to expand into adjacent markets, acquisition is a natural source of growth. As you think about the opportunity to create smart integration opportunities to make sure that the deals deliver the maximum value, can you talk us through the thinking that goes into that and then how you evaluate some of the options?
McGinnis
The founding principle that I really focused on in the beginning, and I think this is what Thermo Fisher does more broadly, is: do no harm, right. Lots of companies when you acquire a very large company, you either completely leave it alone or you try to integrate every single line item through the process. And I think the best answer is somewhere in the middle, starting with the foundational do no harm, but figure out fundamentally what we can do better together. The PPD acquisition specifically we really focused on an add-on to service capability versus the general thesis was cost savings. How can we go to market better, faster combined than individually and that really was the underpinning of the integration thesis. And I think clarity around what you're trying to achieve really helped us decide where we focus and it was very customer-focused, very revenue synergies, combined offerings and strategy. And while we did focus also on cost synergies, it was the secondary outcome versus the primary outcome.
Corson
That transition you're describing from being very cost- and synergy-focused into this broader catalyst for transformation of the organization. What were some of the things that you did to enable that change and that shift in mindset?
McGinnis
Not to say we didn't have to achieve cost savings because we did, but what we really used it as is, we've got this opportunity and this integration to really redefine what we want the function and frankly, the combined business to be. And we spent a lot of time in the beginning defining the North Star of what does exceptional finance function look like. The teams are really excited about a vision. And I think because we were able to clearly define the vision of where we want to go, the cost savings just came and we didn't really have any meaningful attrition in the business, because we got a lot of teams very excited about the vision that we were going. And so, thinking back, pulling the team along toward the vision was the number one most critical thing we did through the process.
Corson
That's fantastic to hear, and I think it really highlights the importance of being able to articulate that vision and get your people brought into it, particularly when some of these transformation activities can be challenging. They can be disruptive and you're getting your people brought in is such an important success factor. Hearing you talk about the North Star, it sounds like that was very much a North Star for the combined entity. So, this wasn't there was one dominant partner coming in. It sounds like you were thinking about this as a new integrated opportunity. So, everyone had the opportunity to weigh in and collaborate. Perhaps you just talk a little bit more about is that how you thought about it and how did you, again, bring people on that journey with you to drive that success and that teaming?
McGinnis
Because the combination of the two businesses could yield a better outcome for customers and just make us more effective in the life science space, we are able to get a lot of energy around when we do our jobs right from a finance perspective. We're actually increasing the analytics and driving better patient outcomes and being a lot better commercially and because we were able to make the linkage externally, not just internally focused, our teams really gravitated toward that. I would say the second thing that was very impactful is we really focused on when we do this right, all of our employees’ jobs will be better than they were yesterday. And I think that really, really hit home for people, because in any company, not just the two companies that we're talking about, processes are more manual and backward-looking than they should be. And I think if we really were to ask our teams, particularly the most junior folks, they would say, “Of course I don't want to be manually consolidating Excels every day. I want to be driving analytics. I want to be helping the commercial team. I want to see how my work impacts the actual customer in the company.” And because we set that as the foundational North Star, it was very easy to get people moving along in the vision, even when we were making some very tough cost decisions just to hit cost synergies, and that was relatively flawless, always difficult, but relatively flawless because of the underpinnings of the vision.
Corson
That's really interesting and your point about really selling your people on what the benefits were to them of the outcomes that you're working toward. It may be something we can come back and talk about why that's so important, successful transformation. But drilling down on this North Star question for life sciences companies, you've talked a lot about the focus on the customer, the patient and the outcomes, so that's very easy to make the connection to the outcomes of what you as an organization are doing, given your background with GE, oil and gas, coming into the life sciences sector, are there other differences that you point to that make the sector more unique and special?
McGinnis
Trends move very, very fast in this industry, even growing up in energy and oil and gas, coming to life sciences, I think one of the biggest learnings I had is science moves really fast, trends move really, really fast. And what you're supporting is something that if you get right through the process actually has profound impact to the entire planet. And I think rallying the vision cry for the whole teams around that was super, super important and I think thinking about those forward-looking analytics and having the financing teams really focused on that. When we do it right, we actually know through the process where a molecule is and which ones are going to be successful or not, and how we monetize that and actually how we focus and drive the outcomes. It's a lot easier to make those connections in the life sciences space, given the speed. So, I think that's actually been helpful as well.
Corson
To pick up on your point around more of the forward-looking analytics, a lot of finance organizations are making that shift from understanding the past, but being able to interpret the past and actually project it forward. Can you talk about that journey and how you've thought about it and where are you able to bring more of that value and insight by being more forward-looking as a finance function?
McGinnis
Definitely. So, I'll start with an example and then how we're getting our teams there. So, we're definitely, it's been a journey, but we're definitely seeing our teams start to think about if you know how the clinical trials are as an example are progressing through the process. So, we run clinical trials on behalf of pharma and biotech companies, then we actually know what the set of opportunities are in the future. We actually know how to pull through other Thermo Fisher-related business that we probably wouldn't have closed before. And our finance teams being front and center in that discussion and making our commercial and operations teams more successful is actually yielding more financial benefit for Thermo Fisher. That's a huge example. But the hardest part is actually not, in my experience, not creating the more robust forward-looking analytics, but getting the whole team upskilled enough to know how to do it and to use it and to actually create value, because they're very used to that backward-looking reporting mechanism and the skill set around — not just the analytical skill set but the leadership skill set associated with being more forward-looking — is totally different than what they were used to doing before. And so, I actually focus a lot of mental time on that latter part because if you have a good team and you have the right tech capability, you can figure out the analytics. The hard part is getting your team upskilled and ready to go to actually do something with it.
Corson
That really resonates and as you think about those skills that you're looking for in that new finance world, what are the skills do you look for? And particularly, where there's much more direct connection with the business, with other functions within the organization, the need to be able to communicate and connect in different ways that perhaps aren't ones that finance is traditionally associated with is one that we talk about a lot. But we really appreciate the way you think about that, the way you're also helping your people to understand the skills they need to be developing and how they achieve that.
McGinnis
I think the most important skill set on a team is curiosity, because if you actually don't have curiosity, it doesn't matter if you've got an analytical skill set, you're not going to ask the right questions. So, I really look at curiosity. I look at facilitation skills, meaning are you able to look outside of your boundaries and just get things done outside of what one would consider just their job? That's super important. And then this mindset of we're all serving a greater team outcome, because team members and colleagues that are just very focused on what they're delivering day to day and don't really understand the why or the context or any of that tend to not do really well, when you're thinking about forward-focused business outcomes. And I think those are the skills that I actually look for. None of those things, as you noticed, were they know how to do AI or they know how to do automation — like because you can learn or you can build that, but if you don't have those foundational leadership skills, it actually doesn't matter technically what we can or can't do.
Corson
Maybe we pick up on some of the technology aspects now, because I think what you're highlighting is something that I very much believe in, which is technology is a tool, an enabler of the outcome and the vision, the North Star as you described it as being. And if you understand the North Star, then you're more likely to identify the right tools to help you get to that journey, but you sort of brought AI into the conversation. Are there things that you're doing to help your team understand the potential of AI as a tool in that journey and how do you see it fitting into that broader toolkit from which the team can pull?
McGinnis
Couple of things. So one, we've kicked off an AI and automation finance leadership council, where every business has a couple of representatives. The whole goal is learn, share, develop, play around with it a little bit, learn what it can do, because new technology fails, when it's so structured that you try to put design thinking in a box and don't let people just play around with the set of opportunities. This is allowing us to create a safe space both with automation and AI to let all of our teams just play with it a little bit. And it's been outstanding some of the ideas that have come out of it, and actually the excitement because everybody likes to crowdsource. They don't like to be told, here are the five exact things we're going to be focused on because me at my level across like 2,200 people, I'm not going to know exactly what is going to make someone's job better or what's exactly the most impactful. But if I let people play around with it and give them the tools and give them the experts, the ideas that come out of it are fantastic and that's what we've been focused on.
Corson
In that innovation realm, it really resonates, again, the opportunity to kind of unleash the innovation and curiosity of the organization. Obviously, one of the amazing things about AI is just how easy it is. The usability is huge and which is why you see such acceleration in the adoption rates. But if you look at any successful innovation organization, it's actually how do you constrain some of that and drive the focus, as you think about setting some of the guardrails so you can create the framework within which people can really bring that focused innovation and creativity. Can you talk a little bit about how you think about that?
McGinnis
So, we actually do have someone on my team that is responsible for getting the excitement, letting people play around, but then prioritizing all the stuff because you can't possibly do absolutely everything all the time. So, he's actually responsible for helping us prioritize. And then if someone's idea isn't chosen, there's actually a feedback mechanism to say, “Hey, this is a great idea, but we can't focus on that right now because of this.” And I've noticed over the years, if you never give someone who has a great idea feedback of why you're prioritizing something else, there's some disenchantment around you're not listening to my idea and so we actually do have built in that framework and that feedback loop.
Corson
That's a great example. Thank you for sharing that. So, if we bring it back to the transaction scenario, using transactions as the transformation. As you reflect back on the journey you've been on, what were some of the secrets for success and some of the lessons learned that you've had going through this journey?
McGinnis
Integrating, the biggest acquisition that Thermo Fisher has ever done, and we're an acquisitive company, the amount of time and energy spent on what one might consider HR, human resources-related thoughts in change management is more than I probably would have expected going into it. It is the most important thing in big integrations, because at the end of the day, particularly for a service business, these are people we're going to succeed or not succeed, based on how we bring people through the thought process and where we're going and why we're going there and when you're dealing with unpopular decisions, being very forward in the why and just dealing with it head on. And so, if I were to think about where I spent most of my time and what I even probably could have done even better because you know that nothing is perfect as you're really dealing with change management, everything else will follow and I think that if and when, when most likely I do this again, that is again going to be the number one thing that I think about. It's foremost to the cost synergies, to the revenue, to everything else and so I can't stress that enough.
Corson
It's great to you particularly that because our research really evidences the reason any kind of transformation fails is if you don't get the human aspects right. So again getting that piece right at the forefront rather than as an afterthought it's so great to hear you articulate. The other thing, obviously with the human elements of transformation and you talked about Thermo Fisher being a serial acquirer, I'm sure many of the businesses that you've acquired have been through multiple changes in ownership. Again, just given the nature of the PE [private equity] funding, all those kind of things, what is it you do to try and avoid some of that change fatigue? Because we all experience so much change in transition, but it's kind of on steroids and if that's not pun in the life sciences space, so what is it you do to overcome some of that exhaustion with transformation?
McGinnis
I think you have to be really, really good at prioritizing — very, very good at prioritizing — and that means sometimes you're choosing to do things either the company did before, we're just not going to do it anymore, or it's also making very cognizant decisions. I know this is in the integration plan, but I'm just not going to do it. And there are several situations where I just consciously decided I'm just not going to integrate certain things. I know that we normally do in Thermo Fisher, but I'm just not going to do it and here's why. And the reason that those choices actually were made is because I didn't want to completely overwhelm the organization all at one time, particularly in an organization, to your point, that had been through different layers of public private ownership, different changes in ownership and having the conviction around what's important and what's not is really the way to get through it and also being able to articulate here's the vision. And a company particularly that is being acquired by their forever owner, which is the example in this instance, there should be a sense of calm in that. This is not just another owner, quick shop of we're going to turn things around and go somewhere else. This is forever and this is something that we're actually going to do to grow together. And if you can actually say that with clarity and conviction, it changes the toner of the conversation with a lot of our folks, and this is a business that has 35,000 employees. So, when you think about that, again going back to the people aspect, hitting that message home the right way is just foundational.
Corson
Yeah, it sort of really resonates with one of the things that we talk a lot about the paradox of the CFO role is how do you balance communicating that long-term vision with delivering the short-term results. And again, being able to really clearly articulate to people what the long term looks like, you're more likely to get their buy-in, their commitment and they want to go on the journey with you, because they understand how they're going to contribute to that. So, that's a fantastic example. We touched a little bit on technology. You've obviously highlighted the importance of getting the people aspects right, but I think you kind of also were very clear you can't shy away from the cost synergies and at the end of the day, this has to translate into financial performance. So, again, that balancing act that CFOs have to achieve. One of the things we hear consistently obviously is concerns about what technology is doing for jobs. So, just interested in how you perceive that, how you get that balancing act right?
McGinnis
Though it wasn't the primary outcome, we did execute somewhere between 15% and 20% cost savings that just came as you actually work through the improving processes and technology and all of that. So, that did happen and it was an outcome, but I would say it wasn't because of the technology. And the technology is really changing the remaining teams jobs day to day. And so, when I think about this, what will really outcome at the end is everybody's jobs will just get better. That goes back to where we started, and it doesn't mean that there won't be cost savings and job eliminations through the process, but my experience more than half the time folks are redeployed to other roles that have more relevant forward-looking type of responsibilities. And so, I kind of view it as what we have a responsibility to do is upskill people so that they're ready to take on the next generation of jobs, because this industry is growing. So, that means that there are opportunities for everybody, especially in the finance function, to do bigger and better things.
Corson
The other angle to it, Kelly, is obviously having gone through the [COVID-19] pandemic, I think a lot of organizations reevaluated where they do things right. And with globalization, with the way technology is a great lever of in terms of the connectivity, the collaboration, how do you think about having the right people doing the right roles in the right places and the sort of the footprint of your organization? Has that evolved and changed?
McGinnis
Oh, absolutely. Yeah, every role I've been at, even throughout my career, I've rethought what that means and I have really thought about are my teams doing the right thing in the right country and does the cost structure make sense, and so I've done it in every role. I think it's actually — if you do it right, one, it creates cost savings and scalability, but it actually makes the folks’ jobs better, when you're actually done with it. And so, I 100% think that that should be a priority.
Corson
And in terms of that question about the collaboration and connectivity as a global organization, what were the kind of things that you're doing as a team, as an organization to benefit from the way technology allows us to interact?
McGinnis
The positive, if there is one, through the [COVID-19] pandemic era, as I'll call over the last few years, is everybody has an opportunity to be on video with each other. I can be there when I'm not there via Teams. I can create videos; I can do remote town halls and we do lots of those. We do lots of virtual interactions and I think though you can't forget that in-person interaction is necessary no matter what. And so, as leaders, I do think, and I do it myself, make sure I'm present at the different sites that we have. Doesn't need to be all the time, but it needs to be once in a while, so that people can see me and see each other. And really people don't leave jobs, they leave leaders, they leave teams and they leave people. So, it goes back to people and the more that we remember that, I think the better off we'll be.
Corson
We’ve covered a lot of ground, Kelly, and a really interesting conversation and thank you for sharing those perspectives. As you distil it down, if you were to give a couple of pieces of key wisdom and advice to our listeners about how to drive successful transformation through a major transaction like this, how would you summarize it?
McGinnis
I'd say, one, know what your guiding vision is. Did you acquire the company because you think they're better together and you can drive real outcomes for customers, and hence revenue synergies, or is it a pure overlap and you're going to get scale out of cost. I think having what's one and what's is two super, super important. Two, as we've talked about multiple times, this is a people business. Every business is a people business, and spending all the time and energy upfront to figure out what change am I going to drive and how do I bring everybody along with me. If that's not done right, it will fail every time. And then third, kind of linked to the other two, is you got to really know what you're trying to solve and what does excellence look like at the end of the journey, because you can't just figure it out as you go. You got to really focus on what am I trying to achieve and work backwards with a level of clarity.
Corson
That's fantastic advice and I really appreciate you sharing that. So, just in wrapping up, let's get a little bit more insight on you personally. So, is there a particular quote or a saying that you found very helpful in your career that you refer back to?
McGinnis
Yeah, it's by Mike Tyson actually. Everybody has a plan until they get punched in the face. I think about that all the time, because I am a very well-planned individual and leader, but I have to be agile enough to change my mind, if facts change, and you got to do it really, really quickly.
Corson
I love the military analogy, I think, which is similar to the Tyson one. But if you empower your people to understand the overall mission objective, that vision piece, it's more likely they make the right decisions on the fly because they understand where they're heading. That very much resonates with me. And as you look back on your career, I'm sure you've had lots of great mentors, sponsors, was there a particular piece of advice that has been the most impactful in your career so far?
McGinnis
Yeah, I had a leader in my GE days tell me the differentiator as you move up the chain is not only your level of curiosity, but when you decide to take action and when you decide not to take action. And they're both intentional decisions and that really, really helped me, one, the curiosity point as we hit on before, but then being okay, deciding not to jump in or not prioritize it, or know that it's broken, but you're going to just leave it — that's a time allocation-related type. Once I got really comfortable with doing that, I really started focusing on the things that matter the most.
Corson
When to say no.
McGinnis
Yes.
Corson
Great leadership example. On that point, obviously we're all living in a very high-pressure, high-pace world, the importance of wellbeing and personal balance is important, is there anything you do to maintain that balance in your personal and professional life?
McGinnis
Yeah, like I said, I have an 8-month-old, so that –
Corson
and two big dogs.
McGinnis
[LAUGHS] Yeah, so I'm sort of forced to spend quite a bit of time focused on my family and just life outside of work, and I think it actually makes me that much more efficient in my day at work. Yeah, I'm mommy to an 8-month-old, and then I walk my dogs and go to the beach most days when I'm here in North Carolina or in Boston, when I'm home as well.
Corson
Fantastic. Well, I'm sure that really helps to get things prioritized. I'm going to throw one last curveball at you, one of the things that we have been talking about a lot is actually how CFOs build personal brand and the importance of that and is that something you think about are the things that you're doing? It's such an important part of the communication, being seen as a visible leader to your team, but just interested if there's anything that you think about or do in that space?
McGinnis
Oh absolutely, yeah. As I think about how I've wanted to build my brand over the years, it's I want to be a people-focused first, change driver — that is not afraid to challenge the status quo and push the limits and things where they need to be pushed, but also just making sure I continue to understand as a CFO. I've got foundational responsibilities to ensure we're compliant and have controls and all of that. But yeah, I like to shake things up and bring my people with me and make sure they got bigger jobs, if they still want it.
Corson
That's a great summation and a really positive note to finish on. So, Kelly, really appreciate you joining us today and sharing all of those wonderful insights. So, thank you.
McGinnis
Absolutely. Thank you.
Corson
If you’ve enjoyed this or any episode of The EY Better Finance podcast, please leave a rating or review and don’t forget to subscribe so you get future episodes. You’ll find related links in the show notes or ey.com/betterfinance. As always, thank you for listening and if you have ideas or topics you would like to see covered or guests you’d like to see featured, please don’t hesitate to reach out. I look forward to speaking to you next time on The EY Better Finance podcast.
