Being a high-flyer in the fast-paced, ultra-competitive world of online travel is almost like being in a combat situation. And at stressful times, the finance chief of such a company needs to exercise leadership and motivate his staff as an army officer would.
This is what Nigel Addison Smith, the new chief financial officer of online agency ebookers, has found.
And with a background which includes years in the Territorial Army, the board of ebookers found Addison Smith well prepared for the world of online travel.
‘Because the world is so competitive, organisations in this day and age inevitably go through difficult patches,’ he says. ‘And it’s very much up to the board as a group of people, and individually, to lead the organisation through that and make sure everyone’s very much focused on their jobs and that the morale is high.’
Getting off the ground
Addison Smith hit the ground running when he took over as CFO at ebookers.
With the current accounting scandals and fallout from 11 September, the chartered accountant had his work cut out.
Like everyone else in the transatlantic travel business, many of ebookers’ customers vanished overnight after the terrorist attacks. Addison Smith recalls: ‘The bookings completely and utterly died up for three weeks afterwards.’
But although the tragedy had an impact on growth, ebookers broke even at the end of the year. The CFO attributes this to the collective experience of the managing directors who, together, had 250 years travel industry.
‘They had been through difficult times before, such as the Gulf War. After 11 September, massive cost-control methods were put in place, and once the market started picking up, we identified opportunities. We used the relationships that had been built up by the various managing directors with the airlines in their respective countries to work together through what were very difficult market conditions.’
Tough trading conditions
But this is not the first time the KPMG-trained accountant has encountered tough trading conditions since he stumbled into the travel industry while on secondment to First Choice from the Big Four firm. In his previous job he found himself drawing upon his army experience to keep his finance team motivated in the midst of an attempted hostile takeover.
‘In the army, one of the things officers have to do regardless of what’s going on is appear confident. It’s a combat situation … that’s where it comes back to the leadership,’ he explains.
The hostile takeover bid took place in 1999 when Airtours tried to acquire First Choice and Addison Smith was finance director of Air2000, which belonged to the takeover target. ‘On the day Airtours announced its bid, I took everyone to the pub at lunchtime as they obviously weren’t able to get any work done.
‘It’s difficult because the staff are very proud of the company. And when you’re in a situation where the cultures of the two companies are so different, which is the case with Airtours and First Choice, there are some very, very strong feelings.’
This is when the motivational skills he learned in the army kicked in.
‘Every time there was a newspaper article all the rumours went around the office and everyone got a bit tense. So I just used to call people together at ten o’clock in the morning and talk through the latest article, reminding people that the best way to deal with the crisis was just to get on with our jobs,’ he says.
Addison Smith found that although the situation dragged on for six months and he could do little to stop the takeover bid, just getting on with the work made the situation appear less demoralising. And setting the example as the finance chief was imperative.
He says: ‘If you walk around the office looking nervous and harassed, people think “Oh God, the finance director’s looking worried”. You’ve got to look confident, you’ve got to say “look guys, it’s a tough situation but we’ll work our way through this”,’ he explains. ‘You have to be honest with people. Everyone knows there’s a problem but fundamentally, if you act confident even in a difficult environment, it motivates people.
‘At the end of the day, the key way of proving one was up to the task was by staying focused on making money. We made record profits that year.’
Clear financial strategy
Addison Smith says a good finance director also has to be clear about the financial strategy of the organisation, have clear focus on profit and cashflow, and the ability to forecast. ‘One has to be able to see where the market opportunities are for acquisitions,’ he adds, ‘be able to move quickly to do deals, and build the nuts and bolts of a good flexible team to make sure you can move as the organisation needs to move.’
And to make a good team, it is important to have people skills, he says.
The job market is highly competitive and people can look elsewhere if they are not happy. He says people must ‘feel there’s a purpose to what they’re doing, whether it’s producing a set of results, a forecast or sales figures. It’s vital’.
Addison Smith says he picked up his people skills from the army. ‘You learn a lot about people skills up on the Brecon Beacons during the middle of winter in a blizzard. It’s a very hostile environment. But a lot of what you learn is transportable into the office,’ he explains.
The current accounting scandals, he says, have put the CFO under the spotlight even more. ‘All the directors tuned out when it got to the point where there was discussion over the numbers.
They saw the whole thing as a bit of a black art, thinking it was very much between the chief executive and the CFO.
‘Finance directors will need to be a lot more open in terms of what they’re doing while trying to do it. The relationship with auditors is key, the relationship with the non-executive directors is key. Again, non-executive directors are all going to take an increasing interest in what the CFO is up to and the accounting policies being adopted.’
Although working at ebookers is not exactly a nine to five job, Addison Smith stresses it is important to keep the proper work-life balance. ‘I think it’s important to switch off. In my last job there was a very strong element of one carries one’s job home with one and I don’t think that’s healthy.’
And true to his word, Addison Smith is due to escape Plymouth on a sailing trip leaving behind the stressful world of cashflows, margins, and profits.
He will be hoping not to leave one stormy sea for another.
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