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Shifting boundaries

Karim Bohn (44) was appointed as the new CFO at PATRIZIA in November 2015. It’s true that in most companies the "Minister of Finance" tends to have trouble making fast friends, but even as the new man in the hot seat, Bohn seems quite relaxed about it: "When you’re the CFO, you’re a cross-border worker. You spend all your time trying to look in two directions – into the company from outside and out of the company from the inside." Bohn talked to estatements magazine about why this is not the first time he’s had to think about crossing boundaries.

Which saying resonates more with you? ‘Wise is he, who knows his limits’ or ‘Only by going beyond the limit can you forge new connections’? 

In terms of my own personality, I’d actually relate more to shifting borders, never wanting to be satisfied, translating visions into reality.

How does this disposition manifest itself?

Through a focus on ‘the beyond’, looking at the other side of the borderline. In other words, taking ideas one step further. And making them happen. Whether that’s at home or at work – they’re the same principles.

Can you be more specific about that?

Sure, take the idea we’re pursuing at PATRIZIA – to become Europe’s leading property investment company. We’re already on the right path, but as we walk along this path we might reach a boundary, a borderline that limits us and slows us down. So the challenge is to shift that borderline by concentrating on the essentials – primarily by doing something.

And where do you see these borders?

They’re lines that are there for historical reasons, so they’re totally understandable. They’re structures that have evolved over more than 30 years and with each change the company has gone through they’ve become more and more complex. But they’re also boundaries that a company runs into if it’s shaped by its German-ness and it’s trying to act European. In terms of the language, the culture and of course being able to ‘let go’.

What do you mean by ‘let go’? 

What I mean by ‘let go’ is that we delegate responsibility and allow subsidiaries in the individual countries to assume more responsibility. This takes us right up to the borderline. But the goal is now to start thinking pan-European and start acting locally. To do that, we have to let go and that has a lot to do with trust. And of course we have to make sure that our subsidiaries take this trust seriously and act responsibly. So it has to be 100% clear that abusing this trust will have consequences. That’s a principle that applies everywhere, at work just as much as it applies at home. My eldest daughter has just turned four and we’re setting limits for her, so she knows that we trust her to move around within certain boundaries. Of course as she gets older, she learns to shift the borderlines and we do let her. But she knows that if she  breaches our trust, there’ll be consequences. However, if we place too many restrictions, it hinders her development. And it’s the same with the European ‘offspring’ of PATRIZIA. We’ve brought them up and taught them lots of things – and now we’ve got to allow them to gradually cut the cord.

But that also means sacrificing quite a lot of control…

We’re not sacrificing control – this is something that’s vital for any company that wants to function properly. Control doesn’t mean restricting freedom or clamping down on running a business independently. Control isn’t the opposite of plenty of freedom. What’s more important is effective control. Too much control can cripple an organisation and it’s usually neither efficient nor expedient. We only use a few control mechanisms and performance indicators – but they’re effective.

What’s your approach when it comes to expanding business beyond the borders of Germany? 

Local business only works if it’s managed locally, so in the other countries where we operate we’ve either acquired a ‘platform’, complete with its own existing team (one that was already successful in that country), or we’ve sent up our own team of experienced and established experts. Overall it’s a somewhat protracted process because first clients have to learn to trust you. But once that’s happened, you soon start to pick up momentum. A good 10% of our institutional investors now come from outside Germany and more than 30% of property investments are somewhere be-yond the borders of Germany.

Why is crossing borders so important for PATRIZIA?

Expanding into Europe helps us because each country has its own economic cycles. So this adds stability to our business model and prepares us better for the future. Also, each class of property has a different cycle in each country. So the more diversified we are, the more robust we are as a company. And that doesn’t just work to our advantage, of course it’s also beneficial to our customers because we can offer them more products, offer them more individual packages and ultimately offer them ourselves as a robust partner.

To what extent does that limit risk?

My assumption for the next three to five years is that we’ll reach a similarly strong position in all of the countries in which we operate as we’ve currently reached in Germany – so we’ll be leading from the front. That will be particularly important if the market slows down – which is certain to happen; we’re no less cyclical than any other industry. But when the economy does go through such a phase, we’ll need to have reached critical mass in our markets, not just to make sure we don’t shrink, but also in order to get the biggest possible slice of all the smaller cakes.

When you’re the CFO of a company, part of the job is making sure you save money and don’t spend it. You’re highly unlikely to become ‘Employee of the Month’ by doing that. How do you feel about that?

If you’re trying to ask me if it bothers me that I’m not everybody’s darling in this job, then no, I don’t see it as a limitation. For a start, it’s part and parcel of the job. But on the other hand, I think there’s no job where you could do right by everyone. At least you can’t if you take your job seriously and do your job responsibly. The more important thing to remember is that the CFO’s job is to use the assets that are available to the company to generate profit and to invest assets efficiently. People are inclined to mix up saving with forbidding or avoiding expenditures that aren’t conducive to the purpose of the enterprise. And I feel extremely comfortable about using the company’s money efficiently or using it to generate profits.

What does that mean specifically with respect to your job?

For me, a CFO is a service provider – in both directions, externally and internally. Looking outwards, I feel it’s important to issue reports that are always transparent, especially if they’re going to our shareholders. Look-ing inwards, the department I work in is the objective conscience of the company. The finance department’s job is to help the company make decisions based on facts. With accounting and management accounts, it’s not just about the raw numbers but also about interpreting the business is-sues beyond the numbers. To manage the operations of a business efficiently, you need key indicators that are meaningful.

What qualifies someone to be a good CFO?

Apart from the right analytical strengths, a CFO needs the ability to reduce the large universe of numbers down to the key facts and to translate this into strategic decisions. But being a manager is about working in a profession that isn’t just about specialist tasks: it also requires the ability to manage people properly. 

You’ve taken part in an Iron Man competition and even cycled round the route taken by the Tour de France. Could it be said that there’s something in you that pushes you to go beyond your limits?

As I said, for me it’s not about the experience of finding out where the borderlines are, it’s more about shifting the borderlines – through discipline, hard work and endurance. Whether you’re practising sport or you’re at work – limits and limitations are also goals and you only achieve goals with a clear focus, careful preparation and the rigorous application of a strategy. If you succeed in doing that, of course it’s a great feeling – in what-ever area of life it is.

When does Karim Bohn feel he’s hit the borderline?

In job terms, when things stand still. I say that because I strongly believe that every day is a good day to develop and ask yourself critical questions.

And in personal terms?

When people are intolerant and narrow-minded.

 

estatements magazine would like to thank Mr Bohn for the interview.

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