Siemens Financial Services

by Monitor Staff June 2007

A Conversation With Roland Chalons-Browne, President

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Roland Chalons-BrowneWhen last we spoke with Roland Chalons-Browne, the 49-year-old British native had recently left his position as managing director of WestLB— a position he held since 1989 — to take on the role of president for Siemens Financial Services (SFS). He had been pegged to replace William Zadrozny, who announced his retirement from the company in October 2005.

Known to the world as a global solutions provider, the very name Siemens evokes a picture of a powerhouse developing and manufacturing products, designing and installing complex systems, projects and services. So when the company came knocking, Chalons-Browne was pleased to accept, realizing an opportunity existed for personal — as well as professional — growth.

Beyond that, Chalons-Browne relished the idea of leveraging his financing savvy in the manufacturing and service marketplace. “I really was intrigued by the notion of making the move to a company that actually makes something and by the opportunity to help provide integrated solutions by combining product technology and services with financing,” he explains.

For the past year and a half, he has worked to expand that notion to the Siemens enterprise, devoting much of his effort to honing a mutually beneficial relationship between the company’s products and financing sales teams.

Despite some early reticence regarding his lack of leasing experience, Chalons-Browne started with a clear vision of SFS’ potential — a vision he was eager to put it into practice. The question was exactly how to go about it.

“After taking over leadership of the company, I took a really in-depth look at it to see how we could differentiate ourselves and create value,” he says. “Although we had a reasonably successful franchise it was difficult to see how we could leverage that to the next level and capitalize on the changes taking place in the marketplace.”

For Chalons-Browne, that involved taking a small unit within the global industrial giant and generating new value for the entire Siemens family. He approached the task with an eye for simplicity and the methodology of an engineer.

“While continuing to serve our non-Siemens customers, we looked up all of those Siemens businesses that we have and we came up initially with a preliminary listing of 15, then segmented that down and are initially focusing on four key Siemens operating companies here in the U.S. to test our approach,” he says. “The goal was to partner with them and raise their appreciation for having a viable financing component as part of their overall sales and marketing mix.”

Chalons-Browne adds the three areas SFS is currently focusing on are the healthcare, industrial and energy markets. In addition to traditional equipment financing, SFS is able to offer asset-based lending and receivables financing to customers in these markets.

As he explains it, the cornerstone has been the repositioning of SFS’ relationship with the Siemens operating companies, though the non-Siemens customers continue to be a critical part of the company’s focus.

“Historically a lot of the sales people within those operating companies tended to be engineers, doctors or technical people who are very good at going out and completing a technical sale based on the virtue of the equipment,” he says, “but today, customers are more diligent at managing their costs, and therefore increasingly those buying decisions are being made by what I call ‘economic buyers,’ who not only want to see how good the equipment or service is, but where does the acquisition of that equipment and service fit into their working capital structure.”

And that, he says, is where SFS comes in. Today, Chalons-Browne’s vision is closer to reality. But getting there took time, and the new president shook things up at SFS. In many ways, he redefined the entire philosophy of the company.

First, he recast the business with three major sector focuses: healthcare, energy and industrial. Then he went to work molding the company’s sales strategy from the ground up.

Siemens Info“I basically re-staffed the executive management teams almost completely by bringing people in with different skill sets largely from competitors — we brought in people from Royal Bank of Scotland on the risk side, GE on the industrial side and from GMAC’s energy business,” he says.

On top of that, Chalons-Browne began transitioning the SFS sales force from one that sold leasing and ABL products to become purveyors of what he calls “relationship management solutions.”

“We are driving our salespeople to put themselves into the position of the CEO or senior management of our customer, do some preemptive homework to really see what challenges confront that individual and then work to formulate some solutions to those challenges,” he explains. “Only then do we go to that individual with a solution. We’ve really taken the relationship from a product-sales dynamic to much more of a problem-solving partnership dynamic.”

Under Chalons-Browne’s leadership, SFS now selectively places three to five financing specialists with industry expertise into the regional sales offices of the operating companies. The end result, he says, is a “multi-tiered relationship, not only between myself and the respective executive management of the operating company, but also at the sales level.”

Chalons-Browne says that a year into his initiative, the unit is beginning to gain momentum. In October 2006, at the close of the fiscal year, SFS’ U.S. division managed an equipment financing portfolio valued at $3.2 billion with nearly 200 employees.

Still, he admits, change requires sacrifice as evidenced by a 38% drop in new equipment financing business volume last fiscal year. The company fell two places in the 2007 Monitor 100: from #28 to #30. Chalons-Browne attributes that to the conscious effort to reposition the company and selective portfolio sales conducted to align to the strategy.

“What we had been doing in the past was a lot more of an opportunistic business, spread over a very wide range of industries,” he explains. “It takes time to get traction and to have people be more disciplined; and rather than reacting to more opportunistic business, to focus more on the strategic areas.”

Over the next year, Chalons-Browne says he plans to build on his successes and further put his initiative into practice. “The market is increasingly competitive and it’s become more important than ever for us to focus on the needs of our customers,” he says. True to his doctrine, this focus hinges on refining relationships both within the company and with customers and vendors.

“I think if the business development officers build a good relationship at the sales level and my senior management team and I maintain a good relationship at the executive level, our approach will start to pay dividends and really help our operating companies appreciate the benefit of having a viable financing alternative as part of their overall business mix. The key is to be very much in tune with all our customers, and to leverage our strength as a manufacturing company with our expertise as a financing company.”

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