‘Don’t give CFOs that make the move to CEO the benefit of the doubt.’ Fair
comment, perhaps, but not the sort of thing that you would expect to hear from
someone who’s barely got his feet under the desk from making precisely that
By his own admission, Albert Ellis is still in the honeymoon phase of his
appointment. Having stepped up to the CEO role at recruitment company Harvey
Nash in April this year, as the company embarks upon a new three-year strategic
plan, he’s surprisingly frank about the challenges of making the transition from
his previous job.
Given the industry he works in – notorious for its wide boys and sharp suits
– his candour is disarming. ‘In the City, when they make a CEO appointment, it’s
to make a big impact from someone they need – for example Stuart Rose at Marks
& Spencer. The question with MDs from a sales background is, do they
understand the numbers? Bernie Ebbers at WorldCom was a good example.
‘CFOs are analytical and understand the numbers but ultimately they have come
through the back office. There are always doubts about whether or not they can
deliver the strategy,’ he says.
But, as Ellis points out, the odds are certainly stacked in his favour. ‘CFOs
have tended to make up the majority of CEOs, and the majority of CEOs in the
FTSE100 are accountants.’ Indeed figures suggest that around 70% of the FTSE100
have a qualified accountant as FD, chairman or chief executive.
Statistics aside, the fact that Ellis has been preparing for the role for the
past five years, under the watchful eye of predecessor David Higgins, has
certainly helped smooth the way.
Higgins has taken more of a backseat role within the business as executive
vice-chairman, and Ellis concedes that his mentor is ‘managing to let go quite
well’. ‘David is looking after group marketing and group business development
and maintaining relationships with the City, but he no longer has the daily
grind of the P&L.’
Ellis has taken the reins at Harvey Nash at an opportune time. With the
economy following an upward trend and recruitment activity at a high, the
company’s recruitment and search divisions are flourishing.
Just last month, Harvey Nash announced a 220% increase in pre-tax profits to
£3.6m for the year to 31 January 2005, on revenues up 25% on the previous year
to £163.4m. Today, the 17-year-old company has a market capitalisation of £31m,
employs 2,500 staff and has 26 offices worldwide.
In the UK the company is perhaps best known for placing IT candidates. Ellis
says the decision to shy away from the ‘commodity’ finance and accounting market
in the UK is a conscious one. ‘In the US we’ve benefited from Sarbanes-Oxley and
we’ve been successful in building up our accounting and finance service. But in
the UK we do CFO searches.’
This year’s Accountancy Age Top 50 survey highlights all too well the
difficulties of recruiting (and retaining) professional staff. Ellis himself
speaks with some authority on the challenges facing clients looking to hire at
the most senior levels, as the task of finding his own replacement gathers
‘We’re hiring a CFO as we speak. I’m managing both the CFO and CEO roles at
the moment and it’s difficult,’ he concedes. ‘People are having to be very
It’s often said that people hire in their own image, so the prerequisites for
Ellis’s financial number one make for an interesting read. ‘I’m looking for
someone who’s commercially orientated, with a big personality and a range of
experiences who is prepared to be hands on.’
Ellis, 41, qualified as an accountant in 1992 in his native South Africa, and
having met and married his English wife, the pair decided to move over to the
UK. ‘She’d spent eight years in South Africa and so I said I’d spend eight years
in the UK to make it equal. It’s been 12.’
Apart from a few digs about the weather, Ellis is truly at home in London,
and clearly enjoys the job – whether it’s schmoozing clients or presenting
figures to the City. And yet he’s a relative newcomer to the world of business.
‘I played the trumpet for a living but the money wasn’t regular enough, although
maybe it was a factor of how good I was,’ he says in his self-deprecating way.
‘I played jazz clubs on a weekend, but mainly worked as a session musician
recording jingles, TV soundtracks, things like that.’
It was the precarious nature of his musical career and some parental pressure
that finally pushed him towards accountancy, ‘My father didn’t want me to be a
musician. Being an accountant made him much happier,’ Ellis says.
‘I used to practice all day. But gradually you realise that money is
important. Leisure, music and entertainment was a shrinking sector. That made me
think I needed a secure job.’
Glamour may not be a word often used to describe the profession, but Ellis
admits that was also part of the appeal of accountancy. ‘If you look at
successful business people, at least 50% are accountants. In the 90s everyone
wanted to work in IT. The 80s were all about lawyers and accountants.
Beancounters may have a bad image, but how many geologists do you hear have made
a big impact?’ he asks.
The link between a career as a professional musician and one in accountancy
may seem tenuous, but it taught him a lot and was, Ellis says, far harder than
anything he’s subsequently experienced in business.
‘You have that small, glamourous area at the top and below it everyone
struggles, unlike accountancy, where you can study hard and work hard and be
successful, even if you don’t have the talent. It’s made me more resilient and
humble. There’s nothing like rejection early on in your career.’
Ellis hasn’t had much time to pick up his trumpet since he made the move to
the world of business, even less so since he embarked upon what he describes as
his third career. ‘Making the transition to CEO is different,’ he muses. ‘It’s
surprising how the pressure is different. As CFO, you’re aware of it but you don
’t realise how many expectations there are on the CEO from directors,
shareholders and customers – and you can’t buckle under the pressure.’
Ellis knows pressure, having been at the financial helm at Harvey Nash over
11 September 2001 (‘we lost a whole month’s sales in the US’), not to mention
living and working through the dotcom boom and bust.
For someone who’s getting to grips with a new level of stress, Ellis looks
remarkably well. It could have something to do with the fact he gave up drinking
coffee the week before his new job started. But it’s also because, so far at
least, he’s enjoying the challenge. ‘They’re being very nice to me and giving me
the benefit of the doubt, but at some stage you’ve got to deliver.’
Ellis’s biggest test will probably come in 11 months’ time, when Harvey Nash
posts its next set of full-year results. In the meantime, He’s is doing the
rounds, cranking up the air miles as he visits the company’s offices around the
world, to impart his wisdom and give recruitment consultants on the frontline
his insight into the mindset of purchasing CFOs.
His travels have led him to believe that there’s always a grain of truth to
national stereotypes. ‘But it’s not antagonistic. The Americans think big and
are very ambitious. In Europe it’s different – you can have a really successful
career and never leave the country.’
But the stereotype surrounding recruitment consultants is something Ellis is
keen to play down. ‘We’re aware of the image – we try to make sure our
recruiters have a consultative approach to the job.’ The acquisition in 2000 of
the interim management division of PA Consulting has, he says, helped to
reinforce that view, and give Harvey Nash the moral high-ground over its
Ellis’s typical working day hasn’t changed dramatically since April – he
still aims to be at his desk by 7.30am, but rarely stays later than 7pm, he
says. ‘I don’t believe the stories you read about people working 18-hour days. I
just don’t see how you can do it.’
But career number three does at least allow for a bit more time on the green,
‘playing golf badly’, not so much for the health benefits, but more as a way to
get to know people. ‘If they’re having a bad time of it, all the professional
defences disappear when you’re struggling around for four hours after a small