When Harmit Singh was CFO of Yum! Restaurants franchise operations in Asia in 1997, much of the continent had plunged into recession, a development he had yet to experience as a finance professional.
"Demand shrunk dramatically," said Singh, today CFO of Levi Strauss & Co. "I was in Singapore and a key question for us was, what do we do? Discount? Lower prices? Or do we do something different?"
Singh’s response was to look deep into Yum’s global reach and find someone who had been through a recession before.
"Mexico had had its own share of recessions," Singh said last week in a CFO Thought Leader podcast. "So, I called up the Mexican CFO and asked him how he handled it. And rather than discounting, they had built an affordable layer of value products which, when you’re trying to ensure demand, [helps you] keep pace with what people can afford."
Singh invited his Mexican counterpart to Singapore to share his experience first-hand.
"He spent time with our executive team, and then I took him to meet our franchises in different markets," he said. "When they heard [about the value products idea] from the source itself, it resonated a lot better, because the experience was real."
The recession experience underscored Singh’s view that finance leaders perform best when they don’t try to solve problems on their own.
"I was able to build from their experiences and that’s allowed me over the last two decades to build a playbook," he said. "So, when we got into this [current slowdown], I know there are a few things we have to start thinking about."
Since his finance leadership journey started almost 40 years ago, which has included roles in American Express, PepsiCo and Hyatt in addition to Yum! and Levi Strauss, he has tried to build a deep bench of talent.
"If you take my 11-12 direct reports today, no one is doing the same job they were doing when I joined the company," he said. "Over the years, I’ve been lucky to have people who work for me go on to do bigger and better things, either with other companies or doing other jobs."
At Levi Strauss, which he joined in 2013 as CFO, Singh is helping to lead the digital transformation of the company, which started out as a wholesaler but is now pursuing a direct-to-consumer model.
"As we enter the next decade or two, we’re pivoting to … engaging with the consumer in our stores and through e-commerce," he said. "That gives us lines of sight into consumers and allows us to grow customer lifetime value (LTV)."
Prior to the pandemic, e-commerce comprised about 2% of the company’s business; since then, it’s grown to 10%. That growth is driving the company to control more of its technology in-house rather than rely on third-party partners.
"We pulled back capital in the last year in other areas but we actually accelerated our spending on initiatives like omnichannel," he said.
Omnichannel is the idea that consumers should be able to engage with the company in any way they want, whether that’s buying in-store, ordering online and picking up in-store or having an online order delivered to them.
The pandemic had the effect of accelerating the omnichannel strategy.
"Things that would have taken us a year or 8-10 months to roll out we were able to do in six weeks," he said. "Buying online and picking up at the store — that’s something we had in the cards to roll out in 2021, but we rolled it out in six weeks in 2020."
The omnichannel strategy has also led to a flood of rich consumer data, which Singh’s FP&A team is using to better understand their customers.
"As the pivot happens, the critical metrics are how many new consumers we’re signing on, what’s their repeat rate, and the LTV of someone when they buy Dockers or Levi’s," he said.
He’s also playing a lead in the company’s environmental, social and governance (ESG) efforts as part of a strategy to set goals for a broader set of stakeholders than just shareholders.
"We’ve always believed in sustainability," he said. ‘It’s inherited from the Strauss family and Levi Strauss himself."
Among other things, the company is looking to tie executive compensation to diversity goals.
"It’s important to measure it and compensate people and our leaders against that and measure progress over time," he said.