Business Leaders views on the current economic, business and talent landscape in the East Midlands.
Last week we hosted another of our CFO Forum’s here at Macildowie HQ in Nottingham. There are a carefully selected group of around 40 CFO’s from across the region who come together once a quarter to discuss the key issues in the market and to find out what other businesses are doing to maximise opportunity or mitigate risks.
With it being holiday season, we were slightly thinner on the ground, regardless there was a healthy discussion on a number of key themes and topics and I thought it would be useful to share these with the wider market.
Customer Experience is Key.
We had a number of retail focused CFO’s in the room and there was a general feeling that the changing shape of retail is at an interesting tipping point. People’s shopping habits have changed; the customer experience is now equally as important to people’s buying decisions.
People treat a shopping trip as a visit to a destination and we are seeing small retail stores that are diversifying into café’s, add on services and focusing on customers who identify with their brand AS WELL as price.
This doesn’t sit purely in retail. Customers expectations of how they will be treated has generally risen, as has that of employees, with the advent of things like social media, trip advisor, google reviews and glass door, businesses are doing more to curate positive brand images and associations.
“Everyone says they are doing it, no one is really doing it and no one is doing it well”…
It’s not a new topic, nearly 10 years ago I was recruiting for Business Intelligence professionals and Big data was seen as something, which, if harnessed correctly, would add significant competitive advantage. The sentiment around this hasn’t changed, but that phrase stuck in my mind: -
“If harnessed correctly…….”
A number of the CFO’s felt that bigger businesses are almost at a competitive DISADVANTAGE. The sheer volume of data that they produce creates a significant amount of noise, which can make it difficult to spot the actual trends.
That being said, a number of the businesses in the room have actually harnessed the power of data to inform them around their product mix. Shaping their supply chain decisions and linking back into the customer experience piece above, they have identified product ranges or offerings that were not previously considered.
Although the premise of the CFO forum is to stay “business focused”, inevitably, the impact of talent drain was a consistent theme. Average salaries in the regions Top 200 companies have risen significantly in the last 12 months and talent shortages in key skills is one of the biggest risks to growth. Tech staff are difficult to find, even in a city like Nottingham which has a blossoming Tech market. Interestingly, there were a couple of organisations who are considering relocating head office functions to be closer to core talent pools.
We looked at the reasons for some staff moving on and whilst salary was absolutely a key driver, it was felt that the expectations of more junior staff to rise rapidly through the ranks or to “drive their career” was also a factor.
With the rising cost of housing and people wanting to secure a foot on the property ladder, people were sacrificing the ability to round out their experience or to become true experts in their discipline for an increase in remuneration.
Outcome Vs Time Based Working Practices
As a result of the talent drain, it was conceded that working practices are going to have to change. Flexible working is becoming more common place as is remote working (with the associated “working from home” jokes.)
It led to an interesting discussion around how to manage remote workers and how people entering the workforce have very different working practices. Many people are now happy to be working late into the evenings, but may have 2-3 hours out during the traditional working day to go to the gym, pick up children from Childcare until their partner comes home or may even just want to start later.
Businesses who have adopted and embraced managing their staff based on outputs and outcomes as opposed to a strict 09:00 till 17:00 model, have seen staff retention increase, talent attraction become easier and productivity rise.
Historically, the people who were in the office earliest and staying latest were seen as the grafters. Nowadays, questions are asked about their ability to get the job done within the confines and time constraints of the role.
Growing Order Books Coupled with Supply Chain Shortages
Order books are generally healthy, there is an argument that a rising tide floats all boats, but businesses are seeing demand for their services and products with the only barrier being bottlenecks and shortages in the supply chain.
Due to this, costs are rising as the clamber to find alternative suppliers happens, but there is now an ability to pass these costs on to the end user/client where in previous years, this had a significant impact on sales / margin
Challenges and Freedoms of SME VS Corporate Hierarchy
Every CFO in the room had had previous experience of both the blue-chip and SME environment. It was felt that there was some great advantages of working in an SME or OMB, decisions were typically made quicker and an ability to be agile in their industry allowed them to capitalise. That being said, Cash Flow Management has become critically important, especially as volumes increase and the need to hold more stock becomes a necessity.
The great news from the event, is that the East Midlands market seems to be generally healthy. Well run businesses are seeing opportunities to grow and the M&A activity within the region is moving at pace.
The sentiment in the room is that the 2nd half of the year comes littered with opportunity if the risks are managed in the right way. It will be great to see how this manifests in the coming months.
One more thing before I go……
As part of our on-going initiative to support people at the top of businesses to drive their own development, improve business performance and build a local network of peers, we are also now launching a “First Time MD” Mastermind group.
Whether you have become MD for the first time, or have recently moved into a new MD role with a new employer, there are challenges to face – it can be a lonely place at times – but you needn’t do it alone.
The first of these events will take place on 20th September in our Nottingham HQ and run from 8.30am to 10am. We are looking to have a maximum of 12 delegates, if we have an overwhelmingly positive response, we will host more than one group.
If you would like to know more about that event (or the next CFO forum), then please feel free to get in touch with me below.