The good news is that senior finance professionals are increasingly earning their livings as independents and with a portfolio of activities. The bad news is that many would like to but never get started.
In a world where the fashionable pressure is on accountants to shift their focus from keeping the score to playing the game, we are seeing a whole range of options being tried out.
These range from interim management, management consultancy, through corporate finance/M&A activities to business angel work to non-executive director appointments. The changing business landscape, including current economic volatility, lifestyle issues and market forces are all key drivers. Immediacy and flexibility dominate.
Increasingly, finance directors are going out on their own. Many see it as a new opportunity but often do not realise that there are new skills to be learnt, new sectors to be understood, new skills to be assimilated and, probably most importantly, new interpersonal skills to be mastered.
Presentation and appearance are crucial. FDs working through interim management providers can find themselves with challenging and interesting assignments.
The interim management providers are an early port of call for many FDs aiming for a portfolio career. The sector has been expanding rapidly as more businesses recognise the value of bringing in top business professionals, carefully selected and vetted, for a short period of time to handle a particular task. The quarterly interim management surveys conducted by Russam GMS point to an increasing volume of part-time interim work, now accounting for about 30% of this #500m-plus and expanding market.
Chartered accountant Granville Easter lives in Buckinghamshire and has been on his own since 1995. He operates in an FD capacity for a small corporate video and events company, which takes up, on average, two or three days a week. This leaves him time for other work, which, he says, can be lumpy. Sometimes, a well paid and fairly intense assignment comes along; sometimes it is a short assignment – always it is different. His working lifestyle suits him – variety, interest and working at differing intensities. His work comes mostly from referrals and sometimes through interim management providers.
John Seear, who heads the ICAEW’s career service, would probably describe Easter as one of the clever ones. Often, he says, he finds himself answering questions about portfolio careers. Typical is the FD who might have lost out in a takeover, aged around 50, salary range #50k to #80k, wife with a high-earning job, children nearly stopped asking for money, happy lifestyle in a congenial neighbourhood and so on – ‘Ah, what I’m going to do now is operate as a part-time finance director/business adviser to a number of SMEs. I’ve got a wealth of experience. How do I start?’
Not easy. The market reality for FDs looking to go plural is that so many fail to take the good advice they would hand out to their clients.
Successful independents would probably recommend some or all of the following:
– Starting up on your own is not more of the same – it is something different
– Business start-ups in new sectors need business plans
– Paradoxically, the narrower the professional product, the more chance there is of selling it
– Independents who are successful tend to report a similar story – they support a broad and vigorous marketing and selling programme but work always seems to come from unexpected sources and mostly by referral
– Quality work gets referrals
– Looking good is key.
By contrast, Kent-based ACMA Eddie Hollock can’t remember the last time he did any marketing. He acts as a part-time FD for about six SMEs. ‘If you do a good job and your clients appreciate and like you and you are not in a hurry, waiting for referrals is the best and the oldest way of building a practice,’ he says. Hollock is also in the interesting position, at 63, of trying to work out ways of reducing his commitments in a way that suits his clients – not the usual story about ageism we hear today.
Some former FDs get into corporate finance and M&A work, seeing the requirements as similar to those from their previous existence. The main snag is that the rewards are contingent and highly unpredictable. However when they do arise they can be fairly substantial.
Those who opt for SME non-executive director work soon find out that those who are supposed to need NEDs don’t want them and those who do want them don’t know where to go to find them and finish up with a mate from the golf club. The singular exception to this is 3i who run their own much sought after register. There are other NED providers. The ones at the top end do okay for themselves but deal only with a handful of candidates, whilst the intermediaries at the SME end cannot generally get enough volume to make a living.
What is very clear, however, is that FDs will keep on going plural and as more become successful and tell their stories more will learn enough to be successful and never want to turn back.
– Charles Russam is chairman of interim management provider Russam GMS
The Interim Management Association’s website is at www.interimmanagement.uk.com.