The two players involved - new CIO Stephen Wallace and his predecessor Marcel van den Assum - say the transition was "seamless".
And, as this exclusive interview with MIS shows, the handover provides not only object lessons on leadership succession, but also how IS leaders can prepare for more strategic roles in the enterprise.
When Van den Assum, Fonterra's first CIO, announced his departure early this year, he also reported the company has already chosen his successor - Wallace, the director of finance operations.
But prior to the public announcement, the two had actually been working together to ensure a smooth transition. When Wallace was appointed, he had three months to work with van den Assum on the handover. Wallace led on new projects, while his out-going predecessor finished off old projects.
For this reason, both van den Assum and Wallace say the departure of Fonterra's first CIO is not so much about individuals, but rather about the company and how it handles the changeover of leading staff.
"There are some very important key processes Marcel has taken me through, strategies and theories and more importantly, (getting to know) all of our people. We have had a whole series of conversations about our people, what they are doing; their stage of career development, what they want to do. We have spent much time talking about people," says Wallace.
"There has been communications around the team, [their] aspirations in career development, all the governance processes, steering committees. This is so there is a very seamless process.
Both of us would go to committee meetings for the first month and in the second month, Stephen would go and then debrief me. That way, I am able to hand over without a gap," explains van den Assum.
Fonterra, they say, has had performance management and succession strategies in place for three years, a major plus for such a new company.
"I haven't come in after a three to six month void or lack of leadership. For Marcel, it has been a very satisfactory handover," Wallace points out.
The leadership pool
Wallace says Fonterra makes a "significant" investment in training and development. This job is headed by a "world class talent director" whose role is solely to develop Fonterra's internal talent, so when positions have to be filled up, the company has a healthy mix of internal and external candidates.
Van den Assum's role was not advertised as already the company had people in mind. Says Wallace: "Fonterra is well aware of the external talent in this part of the Asia-Pacific. You benchmark the people you have available in the open market as against what Fonterra already has. Fonterra is constantly approached by people seeking to join Fonterra.
"There were other internal candidates. Fonterra has an amazing talent pool. We constantly look to grow our people into future roles. We actually have full individual development plans and succession plans," says Wallace.
"It's our (individual) responsibility to find successors," van den Assum continues." There were a number of other people (in consideration). We have taken a pro-active role in succession planning, deliberately identifying people that could move into a role. This avoids gaps.
"We have a number of people identified, a number of leaders. When the opportunity arises, you go to that pool identified as a leader. There is then an assessment performed by an appointing manager and the call is made," van den Assum explains.
A commerce backgroundWallace credits his appointment on his all-around business and commercial background with leadership skills.
The Aucklander says he did the 'classic' BCom with finance, with a commercial focus at Auckland university (as did van den Assum).
Wallace pursued a "classic commercial finance" path through various companies including American Express, being an auditor for KPMG, and commercial finance roles with DB Breweries, Fletcher Paper and Fletcher Forests before joining the dairy industry as chief operating officer for ViaLacta BioSciences, a Fonterra subsidiary, in 2000. He became Fonterra's director, finance operations two years later.
While Wallace has not worked overseas, he says his roles meant "much time offshore". "I may have come from finance but I could have come from marketing. I have been in Fonterra for some time. I was intimately involved in the infrastructure outsourcing (to EDS), the JEDI (supply chain) project and the creation of Fonterra Business Services, which is our global back office in Hamilton," Wallace says.
The 42-year-old, with a "young" family, sees his new job as a leadership and business-facing role, rather than technological. "I do not fix printers."
"The sole purpose of IS is to support and enable the business and the role of IS will evolve with the Fonterra business," Wallace continues.
"I relish a challenge. This is what this role is about. It's about growing me as an individual, as a leader."
Van den Assum, meanwhile, has occupied various IT roles in Australia, Europe, Japan, Canada and the USA. He spent more than 20 years with Unisys, ending up as general manager of global outsourcing, New Zealand.
Six months before the dairy merger in 2001, van den Assum became CIO of NZ Milk Products (now called NZMP), part of the Dairy Board, which became part of Fonterra. Finally, some 18 months ago, when IS became a fully "shared service" across Fonterra's separate divisions, van den Assum became Fonterra's first CIO.
Two years ago, the global dairy giant began shifting IT jobs northwards, from Wellington, to Hamilton and Auckland following its 2001 creation under the multi-billion dollar 'mega-merger' of the bulk of New Zealand's dairy industry.
For van den Assum, this meant living in the capital but commuting regularly to Auckland, and spending the working week away from his four children. The choice had to be made; family versus career and it was family that won.
"When I decided at the end of last year, I indicated to Graham Stuart, our director of strategy and growth, that the option to relocate to Auckland wasn't viable for family and other reasons.
"The company wanted to create a Fonterra leadership in Auckland. You need to be part of an integrated team. From a personal point of view, that was challenging. There were other factors to consider. The intention (for Fonterra) to relocate are just normal events. But I cannot continue to commute on that basis.
I cannot do the job on the basis it needs to be done while at the same time, maintain a family," the born-and-bred Wellingtonian explains.
The 48 year-old still has to firm up plans for his next venture, and will enjoy a holiday with his family first before deciding. "I have had 28 years, year-in, year-out, roles in the corporate world. It's a good opportunity to spend some time with the kids," he says.
Wallace says there are "significant streams" of work currently being implemented, with van den Assum still "transforming the infrastructure".
This includes a utility vision with EDS, a $590 million seven-year out sourcing project with EDS signed in December 2003; the global rollout of JEDI, a 40-project supply chain optimisation program. Enterprise reporting, business intelligence, plus HR-related projects are also underway.
Looking back, van den Assum highlights his achievements as being a founding leader of Fonterra, which include "bringing the IS team together from disparate companies, rationalising different systems and processes, aggressively driven. Fundamentally, those initiatives enabled us to achieve those merger benefits.
"We have brought Fonterra together, different elements that made Fonterra into an integrated company, rationalised business processes and applications, developed a strategic plan to get a roadmap. Whether it is Stephen or myself, you move on."
A highlight of his stint is creating the "central nervous system" of Fonterra from three major firms - Kiwi Co-operative Dairies, the NZ Co-operative Dairy and the NZ Dairy Board.
"Inefficiencies had grown up and Fonterra was about breaking down these efficiencies to optimise supply and demand," says van den Assum.
JEDI and its 40 supply-chain projects was the "ultimate achievement", he continues. "In the end, this business is about an integrated optimised value chain from cow to customer."
No typical day
There was no typical day at Fonterra, van den Assum says, with much happening from dealing with strategic issues, creating and following a roadmap, handling immediate concerns, and answering questions on provisioning and security.
"My greatest enjoyment was participating in a business creating fundamental wealth for New Zealand. You get a fundamental passion. Before, I worked for service businesses. Therefore, Fonterra was unique," he says.
Van den Assum says he has no regrets and recalls no failures. The only 'negative' he offers is company systems are not fully standardised, and there remains much dependence on email.
"A lot of these things we would like to see superseded by streamlined infrastructure and communications." And he adds, "the disappointment of having to make the hard call of family balance - which has nothing to with Fonterra".
With just a week before his due departure from Fonterra at the time of the MIS interview, van den Assum offers a few pointers to his successor.
"My role is about being clear as to what is important to the business; focus on priorities, engage on a wide basis. The other thing that is key is networking. Build relationships within or without the team and stakeholders; capitalise on the intellectual property that a wide community of interest has. There's the IS community, suppliers in the marketplace; being in a leading organisation. IT seeks the best possible input. Part of the role is to tap into that."
An open mind
So what's next for van den Assum? He is looking forward to a family holiday in Bali before determining his future. And there are hobbies such as mountain biking, basketball, photography and music.
But his successor, who himself likes triathlons and contemporary art, offers some opinions on what his own future might hold.
"My focus is on the role I have now. Because of how Fonterra plans and looks after its people, once this is complete as a natural role, I am convinced there will be the next natural thing for me presented within Fonterra," says Wallace.
"There are senior leadership roles, spawning incubators, growth businesses, challenges that individuals want to step into. You need to have an open mind."
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