Not all networking is equal
Non-finance folk often think the FD doesn’t need to be a good networker. You’re back office! Marketing people schmooze, HR people are gregarious – but finance is like IT. Your value is technical skills!
I was involved in a situation recently that shows why that’s wrong. I was working with a growth business that’d built up a high valuation, using it to acquire smaller businesses around Europe. As is often the case with a “momentum” sector, a shift in sentiment had seen its valuation drop, and head office needed to rationalise headcount.
The HR lead in Europe had quickly become one of the few – out of scores – left in the function, thanks to redundancies and a strict ‘back to the office’ policy that saw dozens more resign. I’d been helping out with the finance team – and they suggested we work together to get HR back up to strength.
One of the first things you need is a pool of candidates. But on the continent, people’s relationship with LinkedIn – a natural place to put out feelers – seems so different. In the UK, a post with opportunities in that kind of company will elicit 50 or more responses; we can reply to everyone and create shortlists. Over there, people don’t apply for jobs that way. In a week, we had just four applications.
So I did personal outreach to 40 people who fit the bill – and they all got back to me.
Two lessons: first, not all networks are created equal. LinkedIn culture there is different to that in the UK, or in the US. (And that’s before you list all the ways individuals choose to use it.) Adapt your networking approach to your needs and the context. Clicking 'connect' and hoping it leads to a bigger network is usually not going to work.
Second, ‘IRL’ networks and doing good work for people – they're still the best game in town. LinkedIn makes us lazier; ‘click to apply’ is almost too easy. It was more interesting in the old days when people had to pick up the phone and converse. Being approached – headhunted, although we rarely call it that these days – elicits a richer response.
The best finance execs I work with enjoy being connected (whether it’s through me or not), and by keeping in touch with their networks, they know who they can turn to for advice, support or even filling skills gaps. LinkedIn can support these connections. But if we rely on casual connections online, we lose something important.
So don’t be afraid to get out there, follow-up with tools like LinkedIn – and never resist the temptation to pick up the phone and say “hi”.
- Ray Nicholls
Things to do...
Now...
Working capital update Yep, this again. I spent time with restructuring consultancies this month, and they’re still saying cash issues are a feature as rates remain high and costs eat into margins. Whether its tighter belts or grabbing opportunities, this remains job one.
Next...
Sector research I use Beauhurst’s deal origination platform, for example, which is a great heads-up for companies that are expanding or in transition. FDs can do the same – early warning signs from data can also lead to constructive chats and deeper relationships with operational teams.
Later...
Map new skills
Teething problems for Microsoft’s in-app AI CoPilot (it’s apparently really iffy for Excel) remind us AI is going to be unreliable… until suddenly it isn’t and we need finance folk who understand how to tame it. Time to start weighing up the roles where it’ll hit most.
Lies, damned lies, and...
51%: looking for bodies
I spent a bit of time over at FTI Consulting this month, and one of the things they’re keen to manage is having enough people with the right skills to execute a growing pipeline of work. The big missions this year are shaping up to be turnaround and change management projects, often centred on the financial infrastructure in big companies.
Their own surveys of senior executives give some insight into why. The CFO Strategies report shows that more than half of CFOs globally reckon their number one finance function challenge is “shortage and retention of finance talent”; 83% also say skills shortages are the biggest barrier to finance tech improvement; and 94% that it’s a top concern around efficiency. (Overall, see above, 69% say it's a key risk across the business.)
Interestingly, while the number of big corps and smaller business CFOs reporting “skills shortage” as the challenge is about the same, for training or upskilling, the challenge is a lot more common in smaller businesses. The flip-side is that many more megacorp CFOs are worried about retention than in SmallCos. (Maybe the return of BigCo appetite for finance outsourcing has something to do with that…)
I’ll resist the obvious sales pitch at this point. But it’s a valuable reminder that getting the team you want, the way you want it, is an ongoing struggle for all of us. And as a recent ACCA Global Talent Trends survey stresses, that means keeping issues like DEI in mind.
Final note from FTI’s insights: they’re plugging the term “positive paranoia” for CEOs in 2024: proactive risk management, invest in areas of vulnerability, be curious, all to deliver resilience and the ability to innovate. Huh. Sounds like the best FDs and CFOs I know!
The Bottom Line
Fraud Prefects
I’ve mentioned AI a few times in this newsletter, and I’m afraid it’s not a very flashy message. This stuff is evolving quickly, and in ten or even five years it’s going to be significant in many walks of life. But for now, don’t get sucked into the hype. A watching brief then... except…
The old con of officer impersonation is back with a distinctly AI flavour. In the old days, you might hack an email, pretend to be the chair of the board or the CFO, and issue payment instructions to an underling. Most businesses have checks in place for that sort of thing now. But in a recent case in Hong Kong, even that awareness wasn’t enough for one finance function exec.
According to CNN, “[Police superintendent] Chan said the worker had grown suspicious after he received a message that was purportedly from the company’s UK-based chief financial officer. Initially, the worker suspected it was a phishing email, as it talked of the need for a 'secret transaction' to be carried out.” So far, so good. The social engineering training seemed to have worked.
“However, the worker put aside his early doubts after a video call because other people in attendance had looked and sounded just like colleagues he recognized, Chan said.” Oh. Turns out the scammers had mapped the likenesses of eight finance function colleagues, including the CFO, and got away with $25m (although arrests have been made). Perhaps it’s time for a codeword to use on Zoom calls when you want something done?.
Words from the wise
What the Doctorow ordered
LinkedIn is a great way to stay in touch with what’s happening with old colleagues, rivals and partners (see above...). And it’s a great shop window for your own thinking. But it pays to be careful of anything you broadcast. For example, a few years back I put a message out saying “don’t forget to vote” which resulted in someone commenting on my “privilege of living down south”. Yes, I was confused as well.
Social media tends to go bad quite quickly, leading to this kind of pointless and negative exchange. Web guru Cory Doctorow thinks he knows why. In 2022 he coined the term “enshittification” to describe what happens to platform businesses. (Apologies for the bawdy term, but when the FT features the word in a headline, I figure we’re OK.)
Doctorow explains: “First, [platforms] are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.”
You can see that happening at big venues like Facebook and now Twitter/X. A form of the process has hit Amazon. But I think it’s as much about the level of discourse on these sites as it is their approach to advertising or algorithmic anger. When we resort to simple put-downs and gross generalisation, everyone loses.
Is LinkedIn immune from the process? Well, most people are a lot more civil there, because they know it’s a place their business colleagues hang out. The advertising is low-key, and the business quickly learned that unhassled users were the real gold. LinkedIn has five revenue streams: talent solutions (helping employers find people, $5bn), marketing solutions (ads, about $4bn), sales solutions, learning solutions and premium subscriptions (a whopping 19% of revenue). In 2021, LinkedIn generated $11.5bn…
Two takeaways. First, stay civil, positive and on-topic on LinkedIn. Posting company news and thoughts from conferences is great, and can help expand your network. Just don’t rise to the bait if people knock you. And second, ensure that the whole suite of stakeholders is well served. The long game is looking after your staff, who will look after your customers, who will look after the shareholders. When we chase earnings and fat margins at either staff or customer expense, "enshittification" can’t be far behind.
