Towards the end of World War II, tribes of indigenous people across a Pacific island started to create fake aeroplane runways on their land and build artificial aircraft communication huts where they would talk into mock radios whilst wearing an imitation of Western military uniforms. They’ve come to be known as Cargo Cults, but in reality, their behaviour was more akin to a religion than a cult. A religion that centred around the worship of aeroplanes.
The reason for this bizarre behaviour can be attributed to the arrival of the American military. After the Pearl Harbour attack by the Japanese, the US forces established operating units on Pacific islands meaning that people's homes were transformed almost overnight into military bases. In exchange for their [forced] hospitality and guideship, the military would share their supplies, food, clothes and medicine.
After the Americans left, the Islanders tried to mimic their behaviour - trying to please the “aeroplane gods” in the hope that they would bestow the same wealth and resources on them, without any understanding of the real cause and effect.(1)
A link can be drawn between the behaviours of these Cargo Cults and people within our industry mimicking the behaviours of competitors and predecessors. Firstly, if you don’t fully understand the processes and behaviours, then you can’t possibly hope to successfully replicate them. Secondly, what works for another organisation may not necessarily work for your own organisation. You should focus on your own development and growth, carving your own path rather than trying to clumsily follow another’s.
This is why having a seasoned non-exec who is able to give informed, industry-relevant advice is invaluable. They can advise you to adopt the best practices whilst also assisting you to create your own industry-disrupting ideas and operations.
I reached out to some of the industries best-known non-execs on what advice they would give to the finance directors of recruitment businesses on how they can both contribute to and drive growth within the company. So without further gilding the lily, here's what they said:
"It is important to position yourself as the ‘partner’ of the MD/CEO; look at the board/leadership of any significant business (public or private) and that is the pivotal relationship. Beyond that, too many CFO/FD’s are seen as providing a barrier to growth; much of the time fairly, but not enough of the time is a ‘No, you can’t do that’ accompanied with a reason why, or, crucially, with a ‘let’s see how we may be able to make that happen for you’. Get to know the sector, your business and its people - your commercial decision making will improve significantly when you do"
John is a strategic hands-on operating partner providing executive level services, coaching and mentoring to recruitment leaders. As an experienced CEO and proven business executive, he's built a career in the professional recruitment and staffing sector spanning more than 15 countries and several continents. He has run a PE-backed group, a UK AIM-listed company, and the UK division of a NASDAQ listed business.
“Recruitment businesses are inherently simple businesses, the complexity lies in the people not the numbers. So a good FD needs to be on top of the numbers, providing the leaders with relevant metrics and KPIs. Keep the reporting simple, clear and focused.”
Gary is an experienced CEO and front-line Leader who is passionate about people and their performance at work. Committed to creating value for shareholders and employees together. He is an energetic leader, experienced with leading through change and periods of uncertainty. He passionately believes that organisational success and workforce engagement are intrinsically linked and only by maintaining a dual lens on the "hard" and the "soft" can organisations achieve their goals.
“The primary role of an FD is twofold, firstly helping make dreams come true and secondly keeping the business on the straight and narrow. Having great processes and credibility to raise cash to facilitate ridiculous growth ambitions matched with unwavering desire to challenge the bosses reasoning when quite frankly, the MI says NO! A great FD is the best asset any serious Recruitment Boss will have and the biggest pain in the arse! I would always hire above the business size so get an FD for whom right now the train set isn’t big enough and grow into him/her. Your FD will be the 2nd most important hire, right behind me!”
Gary has a number of recruitment interests in investment and advisory capacities. He's enjoying his "on" time helping business' both re-engineer and establish new vehicles to maximise opportunities within the improving economic landscape. He's also mentoring a number of MDs and advising boards on a project by project basis. He has also helped connect people and businesses as well as help head up a very dynamic group of recruitment business leaders who are sharing/harnessing the power of the group's knowledge, experience and smarts to do better, faster.
“Best advice to FD’s would be to work hard to be a good support to the MD, but also be someone who can say no when appropriate. Keep a keen eye on cash flow, as growth often consumes cash and working capital. Don’t pursue growth at any cost - ensure the business focuses on profitable growth, and does sensible business at good margins. The old maxim applies “revenue is vanity, profit is sanity - and cash is reality”
As an ex-FD and MD of an £80m recruitment business, Alan has been recruiting FD’s for recruitment businesses since 1999. Having performed both the MD and FD role he knows what both parties expect out of that relationship. Alan is in the process of moving into a Non-Executive capacity with Camino Partners. As Chairman, Alan still lends support to his colleagues who are delivering retained searches and assignments at FD / CFO, CEO and COO level. Alan is also available to take on further Non-Executive roles from this year as part of a portfolio career.
“You’ve got to decide with your MD what your objectives are; create a three year plan that isn’t a 20 page document. You need to construct an org chart of where your business should be by year one, year two and year three with a hiring strategy of who you are going to hire, when, and in what priority order. You also need three years’ worth of financials to wrap your objectives up in. Once this is established, you need to understand the science behind how you’re going to deliver this. You need to understand the ratios and activities of what your business needs to do to get to £X – what key metrics does each individual need to be producing in order to achieve their deliverables. Planning is essential so you know you are making the right decisions today in line with the future objectives of the business but it’s also important to remember that you can’t control today what happens in three years’ time - but so, once your plan is in place break it down into bite-sized chunks using the data metrics that you can control. If you tick these off every day, week, month and quarter, then 3 years’ time will take care of itself.”
Alex is Non-Executive Director of over 30 fast-growth SMEs, specialising in helping businesses grow more quickly, more profitably. He personally works with a select group of dynamic business owners and boards who are looking to improve, accelerate and potentially exit their businesses with maximum shareholder value. His specialties include creating faster, more profitable growth, maximising equity value for shareholders, exit planning and advice, non-executive director and chairman, chairing board meetings, strategic advice, creating and improving a company's vision, building top-tier director and management teams, and board level mentor and coach.
“A good finance head will know that the alternatives to growth are stagnation, contraction & demise...none of which are particularly attractive, or look good on your CV! My advice is simple, keep your shareholders & directors safe from the criminal implications of some (all too) common practices in the recruitment world. For years too many recruiters have played fast and loose with compliance, at best, ignoring tax evasion (on the part of their contractors & sometimes their consultants) and at worst, actively encouraging it. This really has to stop, as with the advent of the Criminal Finances Act it is now a criminal offence to facilitate, in any way, tax evasion almost anywhere in the world. So, as a FD, remember that to grow a business you need to still have a business; allowing the company to operate outside the law could put you out of business, and leave you personally facing criminal charges!”
Graham is an accomplished and highly experienced strategic senior manager currently operating as an adviser to some great companies in Europe, the Americas and AsiaPac. He is a very experienced independent board adviser and mentor, has run a wide range of specialist recruitment businesses, is a highly effective communicator and team creator, is a superb motivator with exceptional leadership skills, has a high energy, enthusiastic and passionate approach to the sector and unrivalled Mergers & Acquisitions (M&A) experience. Graham is skilled in dealing with owner-managers and different nationalities and has extensive knowledge of cross-selling; ensuring brands can cross-fertilise with common clients with superior market intelligence network.
In order to be able to help facilitate growth within a business, finance directors need to understand their sector, their business and their stakeholders. Give clear and concise information whilst maintaining strong processes and being a credible figure within the organisation. You must have clear, quantifiable goals for the business that you've split into achievable and tangible chunks. Keep updated on any legal changes and ensure that your business is remaining compliant (as only legitimate growth is scalable!). You also need to be emotionally intelligent enough to know when and how to push back and be able to say no whilst still keeping the MD onside. Lastly, make sure you keep your eye on maintaining good margins, focusing on profitable growth.
Ensure that you are always thinking about the why as well as the what. We need to be constantly questioning our own processes and activities to ensure that we're not building mock airports hoping that wealth and success will follow.
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