Our CFO Network is where we learn and communicate our market insights from our executive finance specialism, build stronger connections in our network, and make valuable introductions. We have been building our relationships and reputation within our professional networks for over 20 years.

David Webster is a Finance Director who has been part of this network for many years. We helped David secure his FD position at Horizon Platforms in 2020, and as we have stayed in touch, this represents a great opportunity to look at the impact that David has had on the business:

You are now three years into your first Finance Director role. What were the key lessons at the start and how long did it take before you were able to make an impact?

The key lessons at the start for me were more about getting to know the business and the people: understanding how everyone works, key strengths, development areas etc.  which of course is true for any management/leadership role, but in a Director role, it is perhaps even more important given the breadth of the role.  I was fortunate to join a business that was very well managed from a finance perspective, having replaced a full time financial controller and part time FD, who had kept the business in a strong financial position.  The key thing for me was to take finance to the next level, the starting point was getting people talking about finance rather than accounts, and while there are still some people calling it accounts, on the main it is now the finance team.  Some may think this is me just being pedantic, but the logic was taking finance from being a hidden support function to something driving the business forward. Straight away, I used my commercial finance background to help do that with lots of changes and small improvements in the first few months, and have continued that approach, looking at continuous improvements month after month to take the business and finance team forward.  So, effectively, from day one onwards, I've been making continuous improvements which I believe have had a positive impact.  The biggest change, however, was certainly embarking on the big project of an ERP implementation just 6 months in, which definitely provided challenges, and was a steep learning curve, but an important project nevertheless.

You made the move from some large corporates (Marks & Spencer, ISG, Asahi and Virgin Media) to Horizon Platforms, a £23m business with 85 staff. How was that transition for you? What were the benefits of starting big and narrowing the focus as your career advances?

I’ve really enjoyed the move to an SME.  One of my biggest challenges is that I have a fairly short attention span, so the breadth of the role is something that is difficult to get in a large business.  For example, my current role not only looks after all of finance internally and externally, but I manage the relationship with our outsourced IT provider, and have responsibility for two of our other business units (effectively as a Divisional MD) so each day is incredibly varied.  One of the constant battles I have is the balance between leading and doing - in some of my previous roles I had dozens of team members, so my role was entirely on leading, whereas in an SME there is a balance, so I do still get stuck into excel on a semi-regular basis; this keeps hands-on skills strong as well as leading a team and developing others, but it is a fine balance, and a constant area of focus to try and get right!

The benefit of starting with larger businesses was the variety of roles on offer, and through having exposure to larger finance teams, I had access to a wide array of subject matter experts to learn from.  It allowed me to work in lots of different parts of finance, building a wider portfolio of skills and knowledge; moving around between roles fairly quickly wasn’t something frowned upon in larger businesses, rather it was encouraged.  Through this it provided the perfect platform for me to gain great grounding across most, if not all, areas of finance, which certainly put me in good stead for moving into an SME.

Horizon Platforms is owned by an Employee Ownership Trust. Tell us about this structure and any other advice for an FD moving into something similar.

The number of EOTs is growing rapidly in this country (with Pratap Partnership now having joined this group!), and while it provides a tax benefit for those exiting (capital gains exempt), it has huge opportunity for those within the business.  Once established most are held via a Trust, which has beneficiaries that are the employees of the company. As soon as you leave the company you are no longer a beneficiary, and you can’t be a beneficiary if you have ever owned more than 5% of the business.  It’s fairly straightforward in reality, and a nice exit route as while there is due diligence, the third party agreeing the price is effectively HMRC, as you have to demonstrate a fair sale to them.  Once established, there are tax benefits for employees (or co-owners) such as up to a £3,600 income-tax free bonus per year, and of course should the company issue dividends, all co-owners receive an equal share.  Often people look at PE as the holy grail from a long term equity reward point of view, however, EOTs can also offer this - not only in the equal share split, but there are opportunities for equity for individuals (such as Directors) providing the Trust retains at least 51%.  For any FD looking to go into the EOT space, I’d ensure that the culture is right for this in the business, as it is a shift in mindset, and not all cultures could grow effectively with this structure.  And the other part would be ensuring the funding structure is such that it provides the right pressure on the business to repay the debt, but not so much that it hampers business performance. Ensuring there are appropriate opportunities for rewarding people across the business at milestones throughout the journey is also key.

There are so many outstanding SMEs in our region. Where do you see the major challenges and opportunities for these businesses over the next three years?

I believe the next few years are going to be incredibly challenging.  With higher interest rates set to stay, some businesses that relied on cheap debt will unfortunately cease to exist.  Costs of capital will normalise however, and prices, salaries etc. will no doubt change in line with this. Some of this will provide opportunity for businesses, others will provide further challenges.  However, through any difficult time, it also provides an opportunity for some businesses to thrive, so I do believe those businesses that come out the back of this and have reacted quickly, and continue to react quickly, will be in a much stronger place.

Outside of the economy, the increased focus on digital and AI is certainly going to be one to watch.  Again, a huge opportunity for businesses to use this to increase operational efficiency, and improve the customer journey through all sorts of digital innovations.  At Horizon we are consistently investing in digital, as we don’t want to be left behind, we want to be at the forefront in our sector.  Unfortunately, right now, digital comes at a high cost, so this is going to be a barrier to entry for some businesses, but like most ‘new’ areas, this will inevitably normalise and become something more easily accessible over time. Even if a business can’t afford to invest extensively, they should keep close to innovations and invest in what they can so they don’t get left behind!

You have added two Non-Executive Director roles in the past three years (South West Yorkshire Partnership NHS Foundation Trust and The Mast Academy Trust) –how did these roles come to happen, and what has been your experience of having voluntary roles on top of the day job?

The Mast Academy Trust is a local multi-academy trust in my area. I was keen to do something voluntary locally, and just happened upon the role on LinkedIn.  This role is primarily outside of hours, so is relatively easy to maintain and usually it is personal commitments that clash.  

Regarding South West Yorkshire Partnership NHS Foundation Trust (or SWYPFT as it is generally referred to), this is a more formal, remunerated NED role.  With this role, I was keen to explore and expand my skillset, and through conversations with my CEO, decided a NED role would help that. I considered all sorts of opportunities including start ups, but given many of my family have worked in the NHS, this was a great place to approach, and Ifound SWYPFT who were looking for a NED that came from a chartered accountancy background.  The Trust’s ethos and values fit well with me, and I’ve enjoyed my time there so far, and feel I add value as a member of the Board and various committees.  This role is much more challenging to balance as meetings happen during the working day, so diary management and organisational skills are key to balance this.  I also feel this has helped me in my day job, in that the NHS is heavily regulated with a lot of governance in place and a high focus on Equality, Diversity and Inclusion.  So, I feel, learning from experts in these areas has also helped me grow in my role and as a person too.

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