Stand up, be counted
You’re probably reading this a few days before the election. The campaign hasn’t been terribly edifying, has it? The Conservative Party seems to be on a self-destruct mission, while Kier Starmer’s “safe and steady” approach has been pretty “low energy” (to borrow a phrase from that other 2024 electioneer, Donald Trump).
But elections are important. It’s a chance to have our choice counted. Sometimes – perhaps even this time – it can feel like choosing the least-worst option. But casting a vote is more than just choosing an MP. Taking part makes us complicit in the outcome, however we voted. And it shows we’re prepared to engage in a larger community,.
My own community engagement this month was running a session at the FD’s Forum, a gathering of senior finance execs in London. I brought along three FDs with very different journeys to talk about career progression. The aim was to show that what really matters is making your own choice about where you want to go next. That might be consulting into a CFO role at a start-up; or taking the plunge as CEO if you're bored with the FD’s lot.
The key, they agreed, was to make an active choice. My choice was to mix with assembled FDs and meet a bunch of new people, build relationships, and uncover unique stories from their careers. I’m not that into public speaking, so my choice wasn’t entirely pain-free! It took me out of my comfort zone – being visible can be stressful, but it pays to push yourself. That’s a good message to candidates, too.
And I’ve met some outstanding ones over the past few weeks. A common theme for me at the moment is helping them focus on “their decision”. I’m not going to harass or persuade them to take a job. Recruiters at big firms can get battered with KPIs and targets, and that makes people pushy. I like to allow candidates space to satisfy themselves they really want a role – not take a least-worst option. It works, and protects the longevity of the relationship (with me and with their new company).
The market does seem to be picking up at last. For clients, a window of opportunity is open: there are great candidates looking to make a decision, but the bun-fight for quality FCs and FDs hasn’t got too intense. I’m working on seven projects at the moment, for example; when that creeps into double-figures, great candidates will start to get offered more choices that meet their needs.
More choices, anyway, that we’ll have at the election. So if you’re wondering about a finance hire, and you don’t want to settle for self-destructive or boring candidates, you know where to find me. - Ray Nicholls
Things to do...
Now...
Watch the election. A big majority gives a government power to be unpopular (for a bit). So... tax surprises (PE firms are nervous), given the state of public finances? Labour’s ongoing commitment to full expensing is a big plus for investment, though.
Next...
Test Copilot. At the FDs Forum there was a lot of interest in finance function AI. Microsoft thinks Copilot can now go mainstream, and some finance functions are already using it in Excel for productivity gains. But there are risks to be managed…
Lies, damned lies, and...
Gizza job: 37.2 million
Tax, defence, the health service… and growth. Where business and finance has entered the election campaign, it’s largely been to promise “growth” that might just fund the tax cuts/essential public spending (delete as you see fit…) the parties consider their touchstone.
No-one has really mentioned unemployment – even though some areas of the country are still wracked with low- or no-job communities, and there are several where older industries are still closing down. The reason might be this month’s graph: there are a historically high number of jobs (37.2m) in the UK economy – with an estimated 904,000 vacancies.
The ONS figures hide some issues. First, that’s 1.7 unemployed people per vacancy; the economy can’t soak them all up. Second vacancies are dropping but fairly constant in key sectors – suggesting a skills shortage. Third, more than half the annual increase in jobs was health and social work – which is great, but doesn’t “grow the economy” much (or the tax base…), and the sector still shows huge vacancies. And finally, self-employment is rising fast.
The market for financial management skills seems robust – but we need more of those rising jobs to come in decent-sized businesses where finance leaders can shine and real growth be delivered.
On trend
Waiting for the PE pick-me-up
What’s going to motivate the deal-doers? We know that deal activity is a great driver of corporate change and presents brilliant new opportunities for finance execs to deliver refreshed strategies and build better businesses. But both the public and private investor markets remain subdued (both in the UK, but also Europe…).
The chart shows the long- and short-term “score” (that’s deviation from the 10-year and 12-month trend lines) for different type of PE activity. Venture investing remains extremely quiet (both funding and exits), and while PE exits are a little low, the bright spot is buyouts. Note also the number of growth-based deals. Green shoots?
And with UK public equities trading at stubbornly low levels (the FTSE 100 in Q1 was selling for just 12.9x earnings – low profits in 2021 saw that as high as 21x), might we expect carve-outs from quoted companies? That would soak up some private equity dry powder and create a slew of new strategic finance leadership positions in newly independent businesses. We can hope…
The graph is from the excellent Pitchbook, by the way. Their reporting for the UK includes this brilliant at-a-glance heatmap for the national economy. Try not to worry too much, there's some green on the right!
Words from the wise
Influencer in the boardroom
How to Win Friends and Influence People, Dale Carnegie’s 1936 self-help book, has sold over 30 million copies and become a touchstone for many businesspeople (including Warren Buffett) with strong technical skills but a thirst to develop as leaders and shapers. I wondered what influencing techniques I could develop to build on my own public speaking engagement this month, and stumbled across the Substack of Polina Pompliano who offers a guide to leading people using charisma-building advice. (She links a 1996 article on Fortune about business charisma – a great read…) The traits she’s identified:
1. Set the energy when you walk into a room. Say ‘hi’ to a few people and shake hands. People love to be noticed.
2. Say people’s names — a lot. People also love to hear their own name used – and by using it often, you’ll remember it better.
3. Remember the ‘small talk’. Record personal details in your contacts app; Jack Welch at GE sent handwritten notes on personal issues.
4. Commit random acts of kindness. People remember a surprise gift or gesture - even very small things. It shows you're appreciative.
5. Tell compelling stories. It's not easy – focus on the key point, the suspenseful moments long the way, and keep it short. Practice them!
6. Romanticise risk. Don’t be afraid to show how (and why) you went out on a limb. People like to know you're open to ideas.
7. Avoid ‘one-upping’. Don’t give examples of you doing better when people explain their wins. Ask questions; and be interested.
8. Be your “awkward, imperfect self”. Relax, be yourself, disarm with honesty. Buttoned up and formal, trying to be perfect - it feels cold.
Passé meme of the month
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