What's the Winning Ticket for Shared Services Leadership?

When you think of Las Vegas, what comes to mind? Gambling? Entertainment? Hotels? CÃªline Dion? All of that, yes. But having just watched SSON recognize MGM’s finance leader as the 2013 "Thought Leader" for North America, I now also associate Vegas with Rick Arpin! I was on a call with him earlier this week, and could not help wondering at the challenges some of you face in hugely competitive industries – like hotels and gaming. Rick obviously lives and breathes shared services. He’s achieved a lot at MGM, and is part of the team planning for an exciting, expanding future for this $8 billion company. But that is not what this interview is about. I wanted to find out: What makes a leader like Rick tick? What’s his management style? What’s his story? [To get a brief soundbite on the new skillset a shared services leader needs to be developing – listen to what Rick has to say] Rick, as an acknowledged leader in the shared services industry, how do you empower your teams? There are a couple of things that I think are important. First of all, my approach from the start was to provide my employees with the tools they needed to be more effective. This could mean encouraging a sense of empowerment, meaning giving them the authority to make decisions, even to take risks. It was important to let them know: it's okay to fail as long as you learn from your mistakes. It also meant: providing them with support when they encountered roadblocks or difficulties. In my early years, when we were amalgamating departments to build our shared services, it was also about technology. Some of the folks were working with really old PCs and they just couldn't keep up with what we expected from them. So providing the right tools is a starting point. A second element is the cultural environment that we have built up over time. This is something you can't just implement, you have to build up through consistency in your actions and your words. Part of that is about hiring the right people when we need them. And part of it is about walking the walk. If we're going to deliver innovative solutions to our clients, for example, we all have to be trained and skilled in those solutions, starting with me. There are no exceptions to that rule. It's part of who we are. What are some challenges you’ve encountered in your career at MGM? The first challenge to me, personally, was that I came in as a relative outsider. I came from a public accounting background. What that meant was that I was an outsider in an industry that is fairly close knit, and that likes to keep it that way. It did turn out to be an advantage though, as it gave me perspective and the ability to infuse some new thinking. It certainly has not hurt my career. However, while I was eager to introduce some new ideas that I had seen work elsewhere, I was perhaps less sensitive to the fact that change doesn't happen overnight. I've become better at that, and I think the business has become better at collaborating. As you know, we've grown through acquisitions – we’ve had 2 acquisitions since 2000. I joined the organization with the first acquisition, and I've lived through the other. While incorporating acquisitions has many challenges, it's also a tremendous opportunity for synergies. The recession, starting in 2008, also infused a collective energy into our operations: it brought us all together more, within one company culture, by virtue of the fact that we had a common "enemy," if you like. It meant that the business units had to work better together, and the corporate area/services worked in partnership with the properties. I'm proud of what we've achieved across finance for MGM. Our focus on "continuous improvement" has brought a lot of savings, as has our partnership with Genpact, who’ve helped us identify some obvious waste in our processes while at the same time supporting the move to standardization. There’s always a new challenge, of course, but that interplay aspect, with the businesses, is crucial to our success. What’s your priority at the moment? My core priority at the moment is to support the company's growth plans, and expand our services beyond the existing operations, which are mainly around Las Vegas. We're actively looking to expand in the US as well as internationally, perhaps along the lines of a Four Seasons or Ritz, so pursuing a more global hotel management model will be part of our strategy. The other thing I want to do is expand our scope. We want to leverage the shared services concept and the skills that we’re building to get more and more of the other corporate groups – HR, IT, etc – to get them to think like a shared services. This is important, because shared services can help MGM win competitive bids in strategically important markets like Asia. It’s competitive to go up against the Starwoods and Marriotts of the world, so we need to be as good as we can be. It's a tough business, running hotels. You just mentioned it’s a competitive industry, but part of getting ahead is surely also sharing best practices. How do you network within your industry? Sure, it's competitive but I've also always found the shared services industry to be a fairly open and generous group of individuals. At conferences like yours we share knowledge and exchange some best practices, obviously within limits. In fact, I recently collaborated with your colleague, Naomi Secor, when she was putting together a conference for the hospitality and gaming industry. I have friends at Hyatt, at Marriott, at the Four Seasons… in fact, across the hotel and gaming industry… and we like to get together and share some ideas. Not too long ago we implemented a fairly large-scale reengineering of our billing process, which was partly spurred by a conversation I had with someone from Marriott. So yes, networking within the industry is important and I think we all gain from it. What's your impact on internal decisions? How do you add strategic value to MGM’s business? We've worked hard on integrating the financial shared services group into the business. Firstly, this is about strategy. We were one of the first corporate areas to embrace a strategic plan, three years ago. We’d heard that the company was going to be moving towards strategic planning, so we jumped in at the ground floor and it’s helped enormously in getting us aligned to senior management’s vision. It’s also helped a lot with the business units, because we leveraged their input. Instead of telling them what we think is right, we listen to what they need. Three years later, the business units are in the strategic plan, too, and they recognize that we are right there, alongside them. It puts us both on the same path and supports our partnership. Another advantage, I suppose you could say, for me personally, is that while senior management often consists of marketing folks, at MGM we have quite a few finance folks, so they get the shared services concept. They understand this is the way to go, and they are enormously supportive. It's an integrated, global, cross-functional world out there … how are you developing your team’s financial skills in alignment with your customers’ evolved expectations? A year ago we established a performance management succession planning process for the shared services center, which includes finance leaders in the business units. It has helped us be aligned to the business needs, and it supports collaboration as we all find that we have something in common: we are all looking for the same solution, whether that’s more good staff, more training, better leadership, etc… We are also about to launch a financial leadership program. We already have one for high-level positions, but we need to back this up at the lower level. We need to do this because Las Vegas, where we are based, is not a great resource for finance talent, but of course it has the benefit of being close to the business. Of course, our business units face the same issues, when looking for quality finance staff. So we are going full steam ahead with talent development in finance. What's the best tool in your arsenal? What defines a strong shared services leader? Having been in this role for a few years now, what I find today is that my work is more operational than functional. So it's less about finance per se and more about the business operations in general. I'm fairly certain that anyone leading a functional area, whether HR, IT… whatever, would say the same thing. What we need today are operators, not technicians. What this means in terms of career is that folks should be developing a broad functional background from the start. So, instead of spending the first 5 years in one function, you might traverse 3-4 functions in that time. That means: you learn how to learn a new function more easily. Beyond that, it's about developing the normal key foundational skills, a service mentality, customer relations, good negotiation skills, etc. Thank you Rick. And again, congratulations on being recognized by SSON members this year. [inlinead]

What's the Winning Ticket for Shared Services Leadership?

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