Subscribe to this page
EquityFC Blog
Showing entries posted in 2006
Showing items 1 to 10 of 19
Previous | Next
The value of the FC | 7 December 2006
See, contrary to popular belief, some entrepreneurs do get it: "[John] McGuire, who set up [Phoenix Car Company] in 1993, added: 'A good financial controller can make a big difference' for a company that is just starting out."
I've met numerous entrepreneurs' FCs/FDs, and two things strike me. First, it's amazing how often they make a huge difference to growing companies. Everyone assumes a start-up has to be some cult of personality, with the visionary CEO totally unfettered by accountants. The truth is that unfettered entrepreneurialism is just ideas and energy - not a business. Second, the FC involved tends to get much faster exposure to operations. Fewer people - and certainly fewer people who have the first clue about process and systems - in a company means you have to get your hands dirty from day one. And that's great news if you want options later in your career.
Final point: note how McGuire says just starting out. Lots of smaller, growing or entrepreneurial companies make do with a book-keeper or a part-timer when they kick off because they think they can't afford a full-time expert. OK, in some little lifestyle start-ups, that's probably true. But a serious business plan requires a serious finance function - even if that's just one FC.
Why growth companies are a great option for ambitious finance people | 23 November 2006
I've just got off the phone from a CEO of a property management company that did an MBO earlier this year. It's a big expansion capital deal - the business was turning over £4m a year and was focused on one particular area of property management. The team saw an opportunity to buy a much larger rival, which has not only given them much bigger volumes of business (critical in a low-margin operation like property management), but has also helped them diversify their income streams with differnt types of clients and a couple of high-growth niche operations in related areas. Total raised: £8.5m, £5.5m from the bank and £3m from a regional PE player.
Great stuff, and a fantastic challenge for the finance functions of both the buying company and the acquired businesses - it's about financial discipline, growth and diversification. The guys in those teams will also get exposure to PE, which looks great on the CV.
But the big win? Well, said the CEO, one exit route being considered is an AIM flotation at the back end of 2008. But since the company has never produced consolidated accounts before - but will have to to March 2007, along with comparatives for 2006 - they're looking seriously at switching to International Financial Reporting Standards.
It's brilliant for the company. Since they've got a mountain to climb anyway (the consolidateds and the comparatives), they may as well do IFRS as UK GAAP. It'll be more or less the same workload. But it will also get them ready for the flotation should that be the exit; and if it ends up being a trade sale, how convenient for a quoted buyer if the numbers are all IFRS-ready.
It's also brilliant for the senior guys in the finance function. They get to step onto that learning curve way ahead of most other accountants. The FC will be able to say they're well versed in both UK GAAP and IFRS - which gives them a huge advantage and loads more options when it comes to their next assignment.
We've said it before: growth companies with dynamic and valu-focused management teams are the best place to learn your trade, move outside your comfort zone and super-charge your career. IFRS is just one example of how that happens.
Speaking of FC jobs you'd like... | 9 November 2006
I think we have a winner. Charles Hammond is financial controller at Cable & Wireless Seychelles. Actually, it's better than that. He was FC until CEO Usman Saadat was forced to leave over work permit difficulties. So he's now interim CEO. Man, just when you think it can't get any better...
(And there's one FC I ought to interview about climate change, I guess...)
Just in case you were still wondering | 7 November 2006
Saw this FC job ad just now. Sums up everything I've been saying about how the role has changed and pushed the finance number two into the old FD's job (my emboldenings):
Salary: £60k + Bonus + Bens
Location: Mid Kent
My client, a rapidly growing Healthcare business, is looking to recruit a truly commercial FC. The prime objective is to add value whilst ensuring the financial systems are maintained, controlled and developed creating an accounts function capable of delivering sustained business benefit in a changing environment.
Key elements of role:
* Driving major change through business reporting
* Managing (parts of) re-engineering programme integrating back and front office systems
* Standard responsibility for procedures, controls and liaison with external parties
You are likely to have had experience of managing larger teams and will be looking for a role where you can have a clear understanding of the future strategy of the business. You are likely to be driven and ambitious whilst still having a keen eye for detail. Excellent prospects."
Says it all, really. That could easily have been a "modern" FD role ten years ago (and still could be in some companies). If your business (or your current FD) doesn't take this approach to the FC role, it's time to move.
More new roles for FCs | 7 November 2006
Just a quickie: Finance Week reports that Chrysalis financial controller Simon Winder is now a trustee of the company’s pension fund. These days, the group FD role is seen as incompatible with trusteeship, so I guess that makes sense. But as FC, Winder will still have some some conflicts - most notably if he's a member of the scheme and certainly if (or when) he gets a few share options. Pensions: it's a minefield.
Want a top FD job? Be a top FC | 6 November 2006
Just back from the FDs' Forum, Richmond Events' annual finance function fest aboard the cruise ship Oriana. The unoffocial theme this year seemed to be personal and career development, testament to my long-held assertion that from the management accountant to chairman of the audit committee, finance executives now need to have great communication, delegation and interpersonal skills if they're to succeed.
Unsuprisingly, the sessions focused on careers got a great turnout from the assembled FD and FC delegates. (And the fact that there were a fair number of FCs, but the suppliers on board were also delighted, is testament to the purchasing power now held by numner twos, I think...) One speaker was asked about how an established FD might go about engineering a step up to the big leagues (FTSE 350). It's tough if you haven't built a career in that sort of organisation, but the best advice was to take a number two slot in them and work up from there - even if the t*tle is theoretically a step down.
Well, it looks like good advice: over at FTSE 100 oil and gas play, Jann Brown, the group financial controller, has been announced as Kevin Hart's replacement as FD. (Hart is off to be a CEO at a smaller company.) That shows what we've always said here: that the FC role is no longer a pure-play number cruncher. Like the FD role a few years ago, it's been shifted into a more strategic, advisory role. And that's true in all sizes of company, not just the FTSE power-players. Bored FD of a static company? Find yourself a broad FC role in a bigger, but growing, business - and if you get your first taste of private equity experience that way, you're adding a crucial component to your CV for when that PE-backed FD role comes around.
But note also: "Elsewhere, Simon Thomson, the commercial manager, has been appointed legal and commercial director." Which, I think, suggests that companies are more willing now to share out some of the roles that got dumped on the FD in the past (such as legal). And that means an FC with strong communications skills and a strategic mindset will find the transition to the top finance role even easier.
Ambition | 30 October 2006
Check this out - the link takes you to a blog called Successwithu. It's written by Alex Chan, a Chinese guy working in Singapore. He's a financial controller (hence his appearance here), but he's dissatisfied with his lot:
Many accountant are working under my team. When they join my company, they are young and poor. After a few years, they are rich and Wealthy. Some are much richer than me........ Yes, there are so many opportunity there ! you can make money from share market, from property market, from trade, from joining a group of friend doing small business and make it big ..... But, I didn't do any ! What is the reason ? Why I didn't ride on it ? Why am I not set up a company there nor forming a team of people that we can work together ?
Good question, Alex. And that's one many more FCs could probably ask. And there are entrepreneurial opportunities out there, even for accountants, as he points out.
Is it too cheesy to suggest that getting into a growing business with a bit of excitement about it, an opportunity to make some decent money and a chance to experience life beyond the boundaries of the corporate finance function satisfy at least some of those frustrations? That is, after all, what the guys at EquityFC try to help FCs do. I'm not sure being FC at a high-growth PE-backed company would fulfil Alex's definition of success ("a person that can do the thing he love to do all the time"). But it's probably a lot closer than doing the faceless finance function thing in a faceless corporate...
By the board | 26 October 2006
We've written before on the need to think unconventionally about finance careers - get out into the operations side of the business, think laterally about job t*tles, look for positions in businesses where you'll get the right experiences to take your career forward and so on. But this story adds a new dimension into the mix: the FC as board member. I suspect it's far from being the only case.
It's a good news piece about a new management structure at "one of South Wales' longest-established companies," Andrew Scott, a subsidiary of the Rowecord Group which employs almost 250 staff has reported a turnover of more than £25m. Company secretary and financial controller David Hadley is part of this turnaround board. So why not an FD? Well, perhaps it's a seniority thing, and maybe the t*tle will come in due course. But look at the rest of the board: a commercial director and an ops director? (There's also a BD director, so the commercial guy isn't solely responsible for sales and marketing.)
Which sort of implies the FC role is being treated on its own merits. If the FD role really does encompass a bunch more commerciality now (and it does), and if that side of the function is being handled elsewhere, why not have an FC on the board of directors?
OK, I realise that we may be about to turn full circle here: if he's a director, why no just call him "FD"? But that's my point. Maybe we will, indeed, see the emergence in UK company culture of a COO or an ops director or a business services director or even a support director to do the broader job that many FDs currently do - and the "FD" will become the FC who's senior enough to sit on the board. Which begs the question: would you hanker after the pure FD role? Or the wider "support" director's job?
Could you be a lifer? | 25 October 2006
It's unusual, these days, to come across someone who's worked their whole career in one organisation. (Even the notorious loyalist Lord Browne spent time as CFO of at Standard Oil... shortly before it merged with BP, admittedly.) So my eye was drawn by this story about the retirement of Greater Manchester Passenger Transport Executive director general Chris Mulligan. Why's he on this blog? Well, he joined GMPTE in 1977 as a management accountant, became financial controller in 1985, FD in 1987, and DG in 1991.
So he's another finance professional who's proved more than capable of operating at the highest levels of general management (and in Mulligan's case, politics, too). But I was also struck by the acceleration in his career. Eight years to get to FC, then just two to FD and only another four until he took the top job. The lesson? A smart FC will find a posting that's got plenty of meat to it, get stuck in, but then have a clear idea of how they plan to sling-shot out of that position into wherever it is they want to go. Mulligan managed that in one organisation; but for most of us today, that means picking the right jobs, stretching ourselves and having a clear exit strategy.
Ready to throw away the assumptions? | 18 October 2006
I was having lunch the other day with some people from a company that specialises in human resources (I'll leave it vague...). Great bunch, really smart guys, and had plenty of experience with FDs and FCs - but mainly in quite big companies.
I was talking about the financial controller post - and arguing that in the same way that the FD is now really the general manager of "the services that allow a business to function", so the FC is increasingly a person who, in order to put his skills to best use, or ought to have experiences outside the finance function. One of the guys demurred - in his experience, the controller is the numbers guy. End of. But I think he's just not looked at enough growing businesses where you can't afford anyone to have that narrow a view.
Evidence? Well, it's all around, but this news item caught my eye today: "Israel-based food importer G. Willi-Food International Ltd. on Tuesday named Albert Israeli as its chief financial officer, effective immediately. Israeli replaces Gil Hochboin, who served as CFO since August 2000. Israeli previously served as financial controller and sales and operations manager of Golf & Co. Group Ltd."
Our first exclusive EquityFC.com feature is about making the move from FC to FD. In it, we argue that experience outside the finance function is getting increasingly important. A financial controller can do those jobs - and I'm not just talking in IT or HR, areas that are functionally close to finance. Sales and ops manager? That's what I call gaining non-financial experience...