Landwood Group is a team of chartered surveyors, asset managers and auctioneers who provide an unrivalled service on all aspects of property, plant and machinery and business assets. Professional, experienced, friendly, focused and down to earth, the Landwood Group team cares about doing the best job they can for their clients. The service every client gets is director-led, personal and tailored to them.

We caught up with Mark to hear his insights on the current economic climate and how it affects businesses in the UK.

Given the toxic operating climate that many UK businesses are currently facing - with some reports stating that 600,000 UK businesses are experiencing severe financial distress -, what advice would you give to company directors who are considering taking their business into liquidation?

It is absolutely crucial to seek professional advice urgently. We know that the earlier you speak to expert insolvency professionals who can assist, the more options there are likely to be for saving the business or finding positive outcomes. This can often be the difference between restructuring the business or going into administration or liquidation. Insolvency professionals will be able to help the business navigate their way through the difficulties and if liquidation is the best option, they can manage the process for the business to achieve the best possible outcome.

What factors do you feel are currently driving the current wave of insolvencies, both voluntary and compulsory, and what headwinds should company directors be aware of in 2023?

There are currently a host of factors affecting businesses in the UK, including rapidly increasing costs of materials, unprecedented energy price inflation, interest rates returning to the long run average and of course changing consumer behaviour. We are also still seeing the impact of the shift to employees working from home and the effect this has on transport use and the city centre retail and restaurant/leisure sector.

With so many companies under pressure, how does your firm typically assist in the restructuring and recovery of a company?

Landwood Group provides business asset and property valuation plus appraisal advice to insolvency professionals and the businesses they advise. Valuations can also be used by businesses to help refinance and obtain a much-needed cash flow boost. The Landwood Group team also assists businesses with the sale of surplus assets and property to generate capital for reinvestment in the business or to help right-size its operations.

In the current climate, is securing more credit to aid recovery a viable option and what ‘tests’ would you typically undertake to determine if more funding is the right way forward?

Businesses often secure additional funding to assist with navigating a difficult period, buying them time to restructure and get onto an even keel. And while this is outside the Landwood Group offering and strict area of expertise in the right circumstances securing funding can provide the temporary lifeline a business needs to survive for the long term.

What are the challenges you face when attempting to appraise and value the assets of businesses that have gone into liquidation? What challenges present themselves when a company has overseas or offshore assets?

Appraising and valuing distressed business assets, whether in liquidation, administration or receivership can be challenging. Gaining access to the site can be problematic and depends on the directors and or the landlord cooperating. Access to MI systems and documentary evidence for the assets, stock and property is very important when gathering data for valuations, but this can also be hard to obtain if the owners and directors of the business don’t cooperate or have already walked away.

Valuing the goodwill, intellectual property and other intangible assets requires detailed information to support them. Again these can also be challenging to obtain in a distressed situation.

In essence, it is not unusual to have little - if any - information and help, meaning that we have to reconstruct and retrofit as much information as possible. This can have an adverse impact on valuations, for all the obvious reasons.

Asset and stock values will need to be on an ex-situ (or break up) basis, which is typically a heavily discounted value that reflects the potential sale realisations of the assets on the second-hand market. This can be most extreme when selling distressed stock which can often be valued as low as 10p in the £1. This reflects the often significant cost of removal, storage and sale of the stock.

Finally, overseas or offshore assets are not as common an issue, but where they exist they will be subject to the local jurisdiction and laws governing insolvency. The remote (from the UK) location of these assets also presents a challenge for physical inspection of the site and assets.

You are a full-service firm, which includes selling assets and property portfolios. What impact is the current economic environment having on the sale and disposal of assets?

The market for distressed assets usually remains resilient with experienced buyers ready and willing to act at short notice. Buyers of machinery and business assets tend to be savvy and well aware of the opportunities to be had in this environment. Both trader and end-user buyers are still prepared to buy if the deals are good enough.

However, traditional buyers of residential properties (owner-occupiers) are more cautious and lenders even more so, restricting their lending criteria even if they maintain their headline rates and messaging about the availability of mortgages. Cash is king in these circumstances.

Commercial property sale volumes have already slowed down and values have dropped across the UK. However, deals continue to happen albeit the practice of “price chipping” has returned with buyers seeking to take advantage of the position in the market.

Phone: 0161 710 2010

Email: mark.bailey@landwoodgroup.com

He is a Certified Turnaround Professional (CTP), Certified International Turnaround Manager (CITM), who brings over 35 years of senior operating leadership, $85M+ asset and investment recovery, 45+ M&A transactions worth $1.2B, and $80M fund management expertise to advise companies. John is the Past Chairman of the Turnaround Management Association (TMA), Past Chairman of the Association of Interim Executives, Senior Fellow at the Turnaround Management Society, serves on public and private boards of directors, and advises companies, and private equity investors. He’s enshrined in Turnaround Management, Restructuring and Distressed Investing at the Industry Hall of Fame and frequently writes articles on turnarounds and outside leadership.

We speak with him on all things turnarounds over the next pages.

What is the most important step to turnaround success?

Obtain leadership guidance early. Turnarounds and the Zone of Insolvency are fraught with risk. Businesses fail because of mismanagement – sometimes it is denial, sometimes negligence, but it always results in loss. There is a different set of skills required.

I recommend hiring outside independent directors and advisers to help shape the process. You need these guys to increase cash flow, provide valuable guidance, contacts, and credibility. Install a board with transition and turnaround experience in value-building situations.

Companies committed to going through significant business change (turnaround, transition, generational ownership transfer, entering new markets), anticipating a major liquidity event, need guidance.

Outside directors often increase cash flow and business growth. According to a Forbes/Lodestone Global survey, 97% of companies reporting increased revenues and EBITDA, since adding a board with outside directors. They bring a new set of skills and ideas to produce benefits, while you maintain control. They provide an external source of accountability and add credibility. When it comes time for a liquidity-seeking event, outside directors send the message that you are an organisation with leadership, guidance, and stability.

Benefits of Outside Directors

Create a culture and structure that will withstand third-party accountability to add value to the business. Start thinking as a rebuilt and growing company and prepare for a potential future life as a public company or increased scrutiny of investors.

What should you expect during the turnaround?

The process goes through five stages: changing management focus (leadership), analysing the situation and developing plans (viability), emergency action (crisis control), restructuring business (change), and return to normality (going concern). It is key to coordinate the functions and focus of the company to complement each other.

Can you detail the key steps that are involved when turnaround services are required?

You need clear thinking to quickly determine what is wrong, develop strategies that no one else has tried before, and implement plans to restructure the company. The problems are rarely obvious. Instead, there are often two or three underlying systemic ills that must be fixed. You can’t focus on the symptoms but must find the real causes.

There is a process for guiding an entity through corporate renewal. It involves using a transferable set of skills to revitalise the property and restore it to a sale-worthy state. Then, you sell the entity and realise returns.

Bring Leadership. Change Management Focus

In times of crisis and transition, who can handle the crisis management role? This is a predicament. If there is a qualified leader within the company, then delegate the job of ‘turnaround’ to that person and provide proper support. If there is not a qualified leader in the company – and there often isn’t – don’t hesitate to go outside the company to locate a professional for this job.

The leader must get directly involved in making decisions to achieve the ultimate goal — turnaround and sale at increased valuation. They must be held accountable for performance and timely results. Most importantly, they must get things moving. On the revenue/sales side, look at where and how revenue is generated and keep it coming. On the throughput/production side, get the product or service out the door. How else can you bill for it?

To complete the turn, hire a marquee manager to lead the enduring team. This permanent team adds to value equation.

Set Strategy

An effective strategy is key to implementing change. You must establish a new vision, distil this direction into concrete goals and objectives, and create a guide for all stakeholders to follow. Rebuilding momentum is critical to success.

Focus on a new perspective of what is going on and fix it. Question:

• Is the business viable? Turnable?
• What is the purpose of the business?
• Should it be saved? Why? Are these reasons valid?
• Is there a core business that can be the foundation for the emerging business?
• Are there sufficient cash resources to fuel the recovery?
• Are there existing managers capable of leading parts of the company?

Remember, not all companies are salvageable.

Identify effective turnaround strategies. Operational strategies include increasing revenue, reducing costs, selling and redeploying assets, and establishing competitive repositioning.  Strategic initiatives include adopting sound corporate and business strategies and tactics and setting specific goals and objectives that align with ultimate stakeholder goals. Too often, goals are misaligned with the ultimate direction and lead to confusion, wasted time, false starts, and employees sent in the wrong direction.

Build a Quality Management Team

The value of a company increases sharply with a strong, permanent, credible team who can demonstrate their ability to produce consistent sales, profit and cash-flow results. Establish continuity in the organisation to allow everyone to expect orderly change and opportunity.

Capitalise on available under-utilised human capital — those remaining middle managers. Chances are they are dedicated to the company and its success. Guide them to their next level, and they will take the company to the next big step.

Acquire New Business/Sales

There are only two ways to increase sales: 1) sell new products to existing customers, and 2) sell existing products to new customers. Most under-performers have forgotten, or never had, the basics of marketing and promotion. Clearly promote what your products and services can do for your customer to satisfy their needs; differentiate why your product stands apart from the competition.

Become market driven, adapt to changing conditions and improve your competitive position. Deliver only what customers are willing to pay for.

Establish a Sound Capital Structure

Create reasons for investors to invest and for buyers to buy. A sound strategy with a viable marketplace, efficient delivery and production vehicles, high probability of future cash flows — coupled with a cohesive marketing-oriented management team — will entice the investment community. Securing new capital becomes much easier when investors see high probability of return and a viable exit strategy.

As important to infusing cash for working capital needs, is to make certain cash won’t be diverted into past sins. Establish relationships with creditors so they will work with the new management team — give them upside when the turn is complete. Consider a “creditor’s committee” approach to keep them plugged in and participating. Pre-packaged bankruptcies are also available to ensure cooperation. You can always purchase assets out of bankruptcy to ensure a clean structure, a strategy being utilised more often as buyout funds get more comfortable with the process.

Implement Processes

Use systems and processes to drive the business and control the day-to-day environment, which allows management to run the critical elements of the company. Many managers waste time on tasks where results would be essentially the same, managed or not. Focus on the important things — controlling cash and costs, increasing sales and enhancing value creation. Manage these.

Processes define guidelines and expectations — watch for the benefits derived from communicating what is expected. This will re-establish delegation of authority and expectation to those who can turn the events of the company. When results are recurring, this stimulates value.

Nurture Resources

Leverage all resources —people/facilities/advisers — to complete the turnaround. Set up an incentive structure that pays only when they accomplish the goals set forth in your long-term strategy. A robust incentive structure shares the risk; if successful all will gain. If not, you’re not subsidising poor performance. Incentives should be based on performance that will take a company beyond its sale. After all, they are a key asset your buyer is looking for.

What’s your final word of advice?

Do not expect miracles overnight. A turnaround can take years of hard work to achieve. Outside advisers are a catalyst to speed and direct the process and increase probability of success and returns. Owners must make hard decisions and commitment to enabling the process to take place. Ultimately, the success of a turnaround rests upon the shoulders of a business's most valuable assets; owners, advisers, leaders, creditors, lenders, its management and employees, all dedicated to turning around the company – get buy-in. Good luck.

Strategic Management Partners, Inc.

522 Horn Point Drive, Annapolis, Maryland 21403

Telephone: 410-263-9100   

Facsimile: 410-263-6094

Web Site: www.StrategicMgtPartners.com

Email: Strategist@aol.com or John@StrategicMgtPartners.com

CFOs are starting to be seen as “co-CEOs,” reliable leaders who navigate economic uncertainty and low consumer confidence, securing overall business stability. While CFOs aren’t expected to lead on all fronts of business operations, they are expected to widen their professional remit to be involved in areas traditionally covered by other business functions - such as ESG or managing investments to link disparate tech systems. 

Recent research we conducted in partnership with Deloitte, surveying 700 CFOs and senior departmental leaders globally, found that CFOs’ self-perceptions are not aligned with the rest of the business. For example, CFOs are seen as “inspiring” by others – a characteristic that many CFOs didn’t see in themselves: only 10% of CFOs consider themselves as such vs. 37% of their colleagues. So, how can CFOs look to take charge of business leadership, and exercise the potential they have, whilst carving out a unique scope within the business to tackle what may seem challenging but exciting business priorities?

Realigning self-perception and expectations

85% CFOs compared to 86% of their colleagues believe they can help solve business problems. But when it comes to human skills, there is a clear divide between how CFOs are perceived and how CFOs see themselves. CFOs tend to over-credit themselves when it comes to actively coaching others across the organisation (27% CFOs vs. 12% colleagues), but at the same time, CFOs don’t give themselves enough credit for being empathetic (18% CFOs vs. 29% colleagues) or strategic (32% CFOs vs. 45% colleagues).

The trend of undervaluing their own leadership efforts holds across a variety of business challenges. It’s especially noticeable regarding tech-related efforts like facilitating hybrid work (81% vs. 93%) and ensuring effective cybersecurity measures (82% vs. 90%), although these duties traditionally fall to CIOs. It seems that ongoing global disruption has helped businesses understand the importance of the CFO in ways they themselves have yet to realise let alone capitalise on. 

Transforming the role of the CFO

Today’s business environment requires leaders to be confident in their ability to quickly adjust plans according to ever-changing realities. CFOs are often the first in the room to dissect the impact of a particular challenge, mitigating risk and determining the best next step. With this visibility, they’re in a unique position to observe and navigate the boundaries between different departments and look forward, rather than back. But where exactly should they be moving? 

Our research found that 86% of CFOs and 81% of business colleagues agree that improved 'processes' - to make workflows more efficient, less burdensome, etc. – are important for businesses to become more agile. At the same time, 82% of CFOs vs. 86% of their business colleagues agree the challenges they’ve been facing in the past 2.5 years could have been improved with stronger communication between departments. Keeping in mind the business needs, it’s essential that CFOs, uniquely positioned to become the link to every corner of the business, implement a revamped approach to planning, making it a process that would connect all business units and enable greater transparency. 

Enabling cross-departmental digitisation through connected planning

Connected planning refers to the technology-enabled process of business planning that joins together people, data, and plans to help accelerate better business performance. Traditional planning approaches lack the collaboration, insights, and predictive, self-learning capabilities necessary to inform strategic decision-making. This process breaks down information silos to eliminate any inefficiencies in financial, corporate, and operational planning.

Connected Planning will be key to agile and influential CFO leadership as this role requires heightened strategic vision. 40% of business colleagues would like to see their CFOs provide a stronger strategic vision and 38% would like to see stronger planning & growth orientation from their CFOs. With such planning tools, all the departments will have a single source of truth to refer to, and the ability to quickly adjust plans based on performance or during unforeseen circumstances. 

This approach allows businesses can stay ahead of any future disruptions and pivot as needed, providing CFOs with the data to support the relaying of their vision, collating data from employees, analysing it, and acting based on data-driven insights 

Ensuring success of ESG initiatives

Our research also found that CFOs see ESG as a fifth item of priority on their list, whilst 85% of senior colleagues consider ESG to primarily be the CFO’s concern. ESG has undoubtedly risen on the corporate agenda, and it is now imperative that organisations look at how they can pivot the operations they already have in place, so they are more sustainable. 

Clearly, there is a real opportunity for CFOs to expand the role of managing their organisation’s ESG initiatives and embrace it as one of their core priorities. CFOs’ active involvement can help bring more visible, significant improvements in this realm. 

Championing the CFOs unique role

The business landscape will continue to evolve and there is an urgent need to be even more proactive and forward-looking. To thrive in this new dynamic, CFOs need to take ownership of new business priorities and drive them forwards. 

Be it in the delivery of agile planning or ESG initiatives, success will largely depend on whether CFOs are able to evolve with time. It can be challenging to positively pivot the role and responsibilities – but it also brings exciting new opportunities to drive organisational success and become a more strategic leader across many business functions. 

About the author: Victor Barnes is the Senior Vice President at Anaplan.

Gig platforms have also been praised for their ability to help businesses improve their operations. For example, by using a gig platform, businesses can more easily scale their workforce up or down to meet changing demands. And because businesses can access a global pool of workers on these platforms, they can tap into new talent pools and get work done faster. So how exactly do gig platforms improve business operations?

Easier To Find And Hire Workers

Human resource is one of the most important—and expensive—aspects of running a business. Staffing agencies can cost businesses thousands of dollars, and finding and hiring workers can be time-consuming.

Gig platforms have made finding and hiring workers for short-term projects easier and more affordable. With a few clicks, businesses can post their project on a gig platform and receive applications from a global pool of freelancers and other independent contractors.

More Jobs For Underemployed Workers

Gig platforms have also been praised for creating more jobs for underemployed workers. For example, a recent study found that 36% of US workers are part of the gig economy through primary or secondary jobs. And of those workers, 53% said they joined the gig economy because it was the only work available to them; many of them did this work through the ten most popular gig platforms shown in this image via Compare the Market business insurance. This is good news for businesses, too. By tapping into the gig economy, businesses can find high-quality workers who may have otherwise been unemployed.

So not only do gig platforms provide a convenient way for businesses to find and hire workers, but they also create more jobs for underemployed workers.

Better Employee Salaries And Wellbeing

Not only do businesses save money on staffing costs with gig platforms, but they can also offer their workers better salaries and working conditions.

One study found that the median hourly rate for workers on gig platforms is $31, compared to $15 for traditional employees. And because workers can choose when and where they work, they have more control over their schedules and can often find gigs that fit better with their lifestyle.

This can lead to improved worker satisfaction and wellbeing, which can, in turn, improve productivity and results for businesses.

Increased Flexibility

Flexibility is another key benefit of using gig platforms. Because businesses can hire workers for short-term projects, they can more easily scale their workforce up or down to meet changing demands.

This can be helpful during busy times, such as the holiday season, when businesses need more workers to handle increased customer volume. And it can also help businesses save money during slower periods when they can reduce their workforce and avoid paying unnecessary wages.

Gig platforms have improved business operations in several ways. They've made finding and hiring workers easier, improved the wellbeing and salaries of employees, increased flexibility, and created more jobs for underemployed workers. Gig platforms are worth considering if you're looking for a way to improve your business operations.

Reconomy, a leading supplier of sustainable waste management solutions, explores how the younger generations are influencing businesses to be more environmentally conscious and how businesses can lead the way for a brighter tomorrow.  

What does Gen Z think?

The increasing interest in sustainability has created a space for young people to campaign for continued action against climate change. And thanks to the powerhouse voices of Greta Thunberg, Vanessa Nakate, and Mya-Rose Craig, Gen Z has become the generation of sustainable activists.

According to a survey by Bupa, 63% of Gen Z and millennial respondents reported feeling the burden of climate change, compared to only 37% of Gen X and 28% of baby boomers. This could be a result of powerful media coverage that has raised awareness of the damage being caused by our behaviour. Firstly, Blue Planet in 2017, then the WWF advert ‘Fight for Your World’, which resonated deeply with many, stating that this is the first generation to know that we are destroying the world and the last to do anything about it.

These values have gone on to influence the individual behaviours of older generations. And, according to a survey conducted by Deloitte, 39% of adults reduced the number of new goods they bought between 2020-2021 as a result of the values of Gen Z and millennials.

How has this affected businesses?

Individual behaviours cannot be solely responsible for reversing the negative effects of global warming. As a result, people are looking beyond individual factors by holding businesses and governments responsible for national and global carbon footprints.

34% actively chose to buy from sustainable brands between 2020-2021. But how do consumers know which brands are sustainable?

Marketing campaigns can be utilised to showcase sustainable products or services. This presents brands as desirable to Gen Z and millennials. However, actions speak louder than words, and delivering results is proving to be just as important as marketing. Sustainability within businesses is itself changing. The commercial landscape for companies is evolving and moving away from a consumptive capitalism approach towards a more regenerative form. Businesses that fail to adapt are likely to face extinction.

The shift in consumer behaviours has also encouraged the growth of the green economy, which was reportedly worth £205.76 billion in 2021. This includes over 75,000 low-carbon businesses, such as recycling plants and wind turbine manufacturers, that prioritise the environment and employ over 1.2 million people across the nation.

How can businesses tackle climate change?

More often than not, businesses are taking steps to become more sustainable. On the other hand, sometimes companies are stuck on a transitional path, stalled by individual cost centres that are preventing holistic decision-making.

This can often lead to departments making polarising decisions based on the way that their business runs. In these circumstances, companies fail to recognise the full scope of their resource cycle and all of the benefits that come with having a varied approach.

To achieve meaningful progress, businesses should successfully implement sustainable waste management solutions into their culture, structure, and strategy. This might not be implemented straight away for some, although from a procurement perspective, they should be able to make decisions that have a lasting impact on the entire organisation.

This has been a challenge for some businesses until recently, as each unit would procure for their own requirement, and there were not as many comprehensive solutions that could consider the whole resource cycle.

Overall, there’s no doubt that sustainability is taking centre stage. Baby boomers and millennials have paved the way for Gen Z to campaign for current concerns surrounding the speed of climate change. In turn, businesses are being held accountable for their actions, fuelling hope for a future free from the negative effects of global warming.

Sources                   
https://internetretailing.net/sustainability/sustainability/a-third-of-uk-shoppers-demand-greener-products--and-will-pay-more-for-them-22190

https://www.glamourmagazine.co.uk/gallery/gen-z-climate-activists

https://www.bupa.com/news/press-releases/2022/gen-z-seek-ethical-workplaces-as-environ-mental-health-burden-bites

https://www2.deloitte.com/uk/en/pages/press-releases/articles/four-out-of-five-uk-consumers-adopt-more-sustainable-lifestyle-choices-during-covid-19-pandemic.html

https://www.prca.org.uk/Reaching-Millennials-and-Generation-Z-with-Purpose

https://www.bbc.com/future/article/20211105-how-carbon-might-go-out-of-fashion

https://www.theguardian.com/business/2022/jan/14/dirty-greenwashing-watchdog-targets-fashion-brands-over-misleading-claims

https://www.theguardian.com/environment/2021/aug/10/uks-green-economy-four-times-larger-than-manufacturing-sector-says-report

https://www.countryandtownhouse.com/travel/does-carbon-offsetting-actually-work/

Flexibility and adaptability are core beliefs in his work. His successes have come in large part due to his ability to identify concepts that will transform markets. The companies he’s built – from ride-sharing businesses to sunglasses and eyewear brands – have benefitted from this mindset. As he continues to build his business portfolio, the beliefs will persist in guiding his work. 

“I believe that you have to understand that the world is changing so fast,” he said. “The markets, the appetites, the cultures -- everything changes.”

Alejandro Betancourt has used that ability to identify change and anticipate what it means for markets and consumers to develop an impressive array of business achievements.

Auro Travel Advances Ride Sharing In Spain

Betancourt is the founder and largest shareholder of Auro Travel, a Spain-based ride-sharing company. Betancourt founded the company after seeing an opportunity to compete with similar companies like Cabify and Uber. Spain requires such companies to have vehicle licenses to operate. The company aggressively began acquiring the licenses, which are in limited supply.

The company, founded in 2017, today has about 2,000 licenses, mostly in Madrid. It is the largest provider of private car services with drivers in Spain. 

While the move was perceived to be risky at first, the strategy has paid off. Auro Travel developed a division, Arrow, which licenses the licenses to other ride-sharing companies seeking to operate in major Spanish cities.

Betancourt takes a hands-on approach to the companies in which he invests or creates. At Auro Travel, for example, he is fully involved in strategic planning, selection of key management leaders, and the creation, testing, marketing and launch of the company’s mobile app.

Betancourt believes the ride-sharing industry will continue to evolve and grow, noting that several of the companies are now branching out into areas such as food delivery. With the fierce competition for market share in the industry, he believes there will be contraction eventually.  

A Career In Varied Industries

Alejandro Betancourt attended Suffolk University in Boston, graduating with a double major in international economics and business administration. He started his career working for Guruceaga Group as a new business manager for the international trade company. He later served as a director of trading and an executive trader for ICC-OEOC, an oil and gas company.

He served as a director of two energy companies. At BGB Energy, the Venezuelan affiliate of Kawasaki Heavy Industries, he oversaw sales origination throughout the country and was responsible for 13 turbines. He later served as a director of Pacific Exploration & Production Corp., a Canadian public company with operations throughout Latin America.

In 2012, Alejandro Betancourt joined O’Hara Administration. Today, he is the director and a controlling party of the asset management and investment firm. He oversees the firm’s fund-raising and investment strategies, working with European banks and institutional investors. He is the firm’s largest shareholder in private equity investments in technology, banking and oil and gas companies.

Bright Future For Hawkers

Hawkers began as a $300 investment by four friends, who bought 27 pairs of American sunglasses made by Knockaround. Reselling the sunglasses proved to be an instant success. The founders decided there was a market for affordable, high-quality sunglasses with a modest price point -- $20 to $40 at the time. A Kickstarter campaign netted them nearly €190,000 and Hawkers began offering a range of colours, frames and lenses.

The founders, however, faced operational and logistics hurdles that had led to shipping delays and frustrated customers. 

Alejandro Betancourt saw the potential in the young company. He and a group of investors put up €50 million for the eyewear company. In November 2016, Betancourt was appointed as company president for Hawkers. 

In 2018, Betancourt made an additional investment of €20 million. Today, he is Hawkers’ largest individual shareholder.

Betancourt used several innovative marketing strategies to grow Hawkers to the third-largest sunglasses brand worldwide. He relied heavily on social media and influencer marketing to begin using well-known web stars to tout the product. Hawkers gave the influencers free sunglasses along with promo codes they could share with their followers.

Betancourt also began using celebrities and signed promotional deals. Ford, Kia, Mercedes-Benz, PayPal, PlayStation and Smart are among the companies Hawkers partnered with. In addition, the company signed a marketing agreement with the NBA’s Los Angeles Lakers. Celebrity partners included Steve Aoki, Lionel Messi, Ricky Rubio and Usher. 

Betancourt also launched a campus brand ambassadors program that has recruited 5,000 college students to date. The ambassadors, chosen due to their wide social media followings, host events on behalf of Hawkers in exchange for trips and festival and concert tickets.

Today, the brand has expanded across Europe to Asia, Australia and North America. For Betancourt, success is a never-ending pursuit. 

“Everybody wants success. Everybody's looking for success,” he said. “It’s a continuous pursuit of trying to achieve your different goals, which keep evolving. As long as you are in that race to continue to pursue them, you are on the road to being successful.”

The last time inflation was this high – in the early 1980s – Margaret Thatcher had been prime minister for two years. Channel 4 had just launched, and if you were aware of inflation at all, it was probably because the Wham! cassette you wanted to buy at HMV was a pound more than you expected.

Since then, inflation has rarely exceeded 4%. Generations of British and European finance professionals have spent whole careers making forecasts – where inputs and outputs were relatively stable most of the time. But that’s over now. Today, with Sterling and Euro zones’ inflation already running above 7.5% and no cooling in sight, monetary stability seems to be something else we lost during the pandemic – and adapting to this new reality is now a concern for chief financial officers (CFOs) and finance transformation leaders. 

What should you keep in mind?

This is a crisis with your name on it

The 2020s aren’t the 1970s reloaded. For CFOs and other finance leaders, managing this round of inflationary times is likely to be even more challenging.

The reason is that today’s CFOs have a broader mandate to help shape corporate strategy, supply chain resilience, pricing and procurement, as well as maintain a keen interest in the level of staff attrition in the business. As a finance leader, you may well be positioned to understand what is happening, but have you considered how finance should partner differently with the rest of the business?

Inflation is a five-alarm fire

Inflation will affect your firm, your employees, and your shareholders – but not everybody will be attuned to the dangers, and many may be underestimating the toxic effect of stagflation (i.e., inflation without growth). Your first job will be to convince everyone that mitigating its impact is a high priority. Unless your financial modelling capabilities are ready to simulate the limit of passing on any price increase to customers and contain input price hikes, inflation may not just hurt margins for a quarter or two, it may hurt your company’s profits and prospects longer term. Whether the challenge is procurement, outsourcing, pricing or hiring, you need a finance transformation and continuous improvement strategy, and that strategy should be executed based on proven best practices.

Prices and costs are moving targets

The costs of labour, materials, transportation, energy and other expenses are all increasing, but not necessarily at the same rate. To handle inflation, you will need a deep sense of the moving parts of your cost structure – particularly if a period of stagflation ensues and the growth slowdown limits your ability to raise prices. Enterprise-wide, too, it’s important to remember that inflation affects different businesses differently. Organisations in the hospitality business may be very concerned with foreign exchange risk, while industrial manufacturing organisations will likely be worrying more about the cost of raw materials and logistics. It goes without saying, of course, that working capital management will need even more emphasis. If you need to cut costs, do it intelligently. Benchmark your costs to look for opportunities and take another look at the benefits of digital transformation, which many companies today are finding to be a highly effective way to scale capabilities while reducing expenses.

The most valuable people in your team may be revising their CVs

In a very real way, inflation is a pay cut for your staff. If you don’t make it worth their while to stay, your best employees will leave. Keep this in mind as you draw up your own hiring and retention plan. Replacing finance professionals will be expensive, particularly because for many firms, proactive inflation management will require hiring more analysts. The shortage may turn out to be quite serious: we know of one company that is expanding its planning and analysis team by 40% and doubling its indirect sourcing and procurement staff so it can handle the added workload generated by additional price and cost modelling and more frequent contract reviews.

Refocusing the services of the finance business partners becomes paramount

Unfortunately, for many finance organisations, the activities of the finance business partners supporting management decisions may still be consumed by the wrong types of activities and priorities. High-performing organisations are instead revisiting the role that finance should play to help adapt the enterprise to this new reality, focusing on important questions: What is the breaking point where price increases begin to adversely impact demand across your products, services and channels? How much inventory are you willing to carry as warehousing costs increase? What is your exposure to rising interest rate differentials? How do you balance working capital management with the need to satisfy customer demands? What is your optimum cash position to take advantage of discount opportunities? What is your supplier credit risk? Do you understand the working capital drag created by the increasing cost of capital on our overall profitability?

The increasingly strategic role that the finance function plays in high-performing companies over the last decade gives legitimacy to the evolving role of finance. For instance, we foresee an enduring role for finance professionals in educating and coaching other leaders in navigating this challenging environment. This role will be supported by the unmatched analytic insight – an understanding of how the company’s value chain fits together, including research and development, commercial operations, and other enabling functions. As challenging as the rest of the 2020s may be for the prepared finance executive, they are also likely to be years of extraordinary opportunity. 

About the author: Gilles Bonelli is an Associate Principal at The Hackett Group’s Finance, Enterprise Performance and Business Intelligence Advisory Practice in Europe. 

Climate crisis: a year in review 

When we reflect on the year just gone by, it remains clear that the world is still not taking the steps it needs to prevent and mitigate climate change. The worrying symptoms of the crisis are being felt across the world, from torrential rainfall in Malaysia to wildfires ravaging the mountains of Greece. The evidence is incontrovertible. Despite the devastation caused by climate change, political and business leaders have been working to turn the tide on the crisis. The three reports released by the IPCC throughout 2021 and into 2022 have all been clear - we all must play a part in tackling the crisis. Just recently, the IPCC released their starkest warning yet, which suggested that we were reaching a point of no return and that if we are to stave off the worst effects of climate change, we would need to significantly strengthen existing targets.

2021 was a big year for climate action, which is the result of an established trend in which climate change has become part of the public consciousness. Each year more people are recognising the devastating effects of climate change – according to a study in the Lancet, for example, more than 60% of young people are 'extremely concerned about climate change'. Alongside an increase in a public outcry for climate change, 2021’s long-anticipated COP26 summit also struck a chord with the public  – with commitments made by world leaders being criticised for not going far enough.

However, it would be remiss to ignore the important steps international leaders made to help achieve our shared objective of keeping the planet's warming below 1.5C. For example, 153 countries strengthened existing or made new emissions targets; 137 countries pledged to end deforestation by 2030, and more than 100 countries have committed to reducing methane emissions by 30% by 2030. While further action is needed, the work achieved in Glasgow has kept the 1.5C goal alive.

Encouraging corporate decarbonisation: time to change tactics?

Now that political leaders have come together to double down on decarbonisation targets, the time has come for public authorities to design bold policies to tackle climate change. At the same time, businesses have a crucial role to play in decarbonising as fast as possible to prevent global warming and stay relevant. Many companies are already rising to the challenge. For example, in March of 2021, 30 of the UK's biggest companies signed up to the United Nations Race to Zero campaign and many have been making good on their commitments. For example, both BT and Vodafone reached their goal of powering 100% of their UK network by renewable sources, while AstraZeneca more than halved their greenhouse gas emissions (scope 1 and 2).

However, while more than 1,000 companies, including 82 Global Fortune 500 companies, have announced Net Zero targets, committing to ambitious goals is far from enough to accomplish a meaningful sustainability transformation and a significant reduction in global emissions. There is great momentum in setting targets but achieving Net Zero implies a transformation journey far beyond the incremental change most companies are accustomed to.

Engie Impact’s own research shows that while several companies have set goals, few have proposed a detailed strategy to reach them. I don’t believe that the lack of planning and foresight is a reflection of their attitude to climate change. It instead highlights the complexity of overhauling the existing setup. It is, undoubtedly, a huge challenge, but businesses must not bury their heads in the sand. Technology, skills and knowledge on sustainability are available and advancing rapidly – it's in a business’s best interests to adopt them and tackle climate change head-on.

To encourage businesses to design and implement effective decarbonisation strategies, we must look beyond the method of attempting to force companies to change through government legislation. The recent introduction of mandatory climate risk reporting in April should inspire more companies to get their sustainability house in order. The regulatory pressure will only increase.

However, while new regulations are essential, they are not a silver bullet, so companies must recognise the tremendous value in introducing sustainable business practices. Ultimately, it is in their best interests to invest in sustainability transformation. Those companies that engage in sustainability transformation will improve their bottom line as they reduce costs, by consuming less, unlock new revenue streams, retain and attract the best talent, create a competitive advantage compared to their peers, increase client loyalty, be financed through cheaper capital etc. And on top, they will help mitigate the effects of climate change.

Looking back … and forward 

Since the last Earth Day, the spotlight on climate change has gained further momentum, with more of the world's largest companies announcing ambitious Net Zero targets and investing in their sustainability transformation. Meeting these targets will not be easy, but the good news is that investing in sustainability has become cheaper, with companies now able to take advantage of funds allocated for sustainable projects and a significant reduction in the cost of technologies. These changes have also coincided with advancements in sustainability digital platforms to enable a seamless transformation at enterprise scale. Businesses can now leverage data to simulate precisely how much carbon they can reduce by implementing new internal processes, saving time and enabling companies to expedite their journey to Net Zero.

Sustainability transformation is not a choice, it is a business imperative. Companies that refuse to invest in sustainability transformation will quickly become irrelevant as consumers opt for their greener competitors. While Earth Day continues to shine a positive spotlight on sustainability each year, the fight against climate change is happening every second of every hour. We still have a chance to win the battle, but the time is NOW.

Mathias Lelievre is the CEO of ENGIE Impact.

However, while 59% of business leaders reported having a “zero-tolerance” policy towards racism, only 18% of employees claim their leaders have openly acknowledged existing inequities – according to new research by Henley Business School.

With more than 3 out of 4 job seekers and employees (76%) reporting that a diverse workforce is an important factor when evaluating companies and job offers, it is clear that companies need to champion diversity and inclusion because it is morally right and also because it is important for business success.

Deborah Gray outlines some key tips to help a business design a recruitment strategy that attracts a broader range of talented individuals while expressing the firm’s commitment to its values.

Make your adverts inclusive

The latest research from LinkedIn suggests that while both genders browse jobs online in a similar way, they apply for them differently. More importantly, the study found that male-orientated job descriptions, can actively dissuade women from applying to jobs, and this is particularly prevalent within the tech sector.

As a result, employers should avoid the temptation of recycling an old advert from previous years and deploy gender-neutral language in their communication. Therefore, it’s essential that the language used in job adverts is inclusive, avoiding nuanced biases and avoiding blanket terms such as ‘team player’ or ‘charismatic’ in favour of accurate descriptions of competency.

Equally, firms need to avoid using jargon that might be deemed unnecessary – phrases such as KPIs, SLAs and P&L. While potential recruits with experience may well understand these acronyms, talented young people, particularly those coming straight from university, may be less aware of these terms and corporate jargon.

Firms should only include skills that are immediately vital, while clearly expressing their commitment to improving diversity. It is also important to constantly review applicant demographics to continually monitor when adverts might be discouraging applicants.

Don’t let biases go unchecked in the interview process

Unconscious bias goes some way to explain why many cross sections of society are underrepresented in senior management teams and boardrooms. For example, a study from researchers at Nuffield College’s Centre for Social Investigation in 2019, which altered nothing but applicant names that were based on their ethnic background, found that while 24% of white British applicants received a call back from UK employers, just 15% of ethnic minority applicants did.[1]

Moreover, compared to White British applicants, people of minority heritage had to make a considerably higher number of job applications before getting a positive response, including those from Pakistan (70%); Nigeria and South Asia (80%); Middle East and North Africa (90%).[2]

It is important to also be wary of unconscious gender bias when screening candidates. Unfortunately, gender bias in hiring persists today, with a recent UN report finding that almost 90% of men and women hold some sort of bias against women and a look at the FTSE 100 showing that there are more CEOs/chairmen called John than there are women.[3] Just 10% of executive-level roles in the tech industry were held by women in 2020 – highlighting that there is still a clear need for change.[4]

Interestingly, a 2016 Harvard Study found that employers who interviewed candidates in a group setting were far more likely to eliminate any gender biases inherent in an individualised hiring process.[5] More diverse representation will help workers feel better accepted and therefore more confident in entering different sectors. Hiring more women into senior leadership roles will positively influence younger female workers, helping them to aspire to similar roles in the future.

Asking candidates about their interests and working styles during interviews may offer useful insight, but this can also foster biases. Therefore, rather than job suitability, interviews often end up testing similarity between candidates and current employees – this can be problematic in workplaces that lack diversity.

In addition, companies should have multiple decision-makers involved in the hiring process. This way, varying notes and scores can be compared and reviewed, which will often reveal a candidate’s suitability more effectively.

Target a variety of sources for diverse candidates

Instead of relying on the same tried and tested talent pools, employers should seek out new sources focussing on a variety of different institutions, universities, cities or regions. As an example, there are many groups online, such as the women in business network or the black business network, which could provide opportunities for businesses to hire a more diverse group of new recruits.

Find an external recruiter that shares your values and commitment

It is often the case that businesses look to specialist recruitment firms to find suitable candidates.  Specialist firms often have a deep understanding of how to encourage and foster diversity and inclusion through the hiring process. These firms can often point out problem areas within the hiring approach for businesses where diverse candidates might be disadvantaged or where there is potential for bias.

Totum Partners adheres to recruitment practices that find, foster and forward candidates from a diverse pool of talented individuals from a variety of backgrounds and demographics. Not only are companies with a diverse range of recruits seeing 2.3 times higher cashflows than those with less diverse teams, but they are also 70% more likely to capture new markets than their counterparts. However, much more importantly, increasing diversity and inclusion is just the right thing for businesses to do. Providing all candidates with a fair chance, free from bias or discrimination is at the top of Totum’s agenda – those who do not adapt to encourage D&I will find themselves short of the top talent that drives business success.

[1] http://csi.nuff.ox.ac.uk/?p=1299

[2] https://www.bbc.co.uk/news/uk-46927417

[3] https://www.beapplied.com/post/gender-bias-in-hiring-report

[4] https://isemag.com/2020/10/telecom-the-latest-stats-on-women-in-tech/#:~:text=According%20to%20a%20report%20by%20Entelo%2C%20there%20are%20about%2019,10%25%20of%20executive%20level%20positions.

[5] https://dash.harvard.edu/bitstream/handle/1/8506867/RWP12-009-Bohnet.pdf?sequence=1

Considering the current environment, is now a good time to sell a business? 

In the industries that we typically work in (waste, recycling, trucking, logistics, food service, contracting), the M&A activity is off the charts right now. Given rising inflation, labour shortages and the escalating situation in Ukraine, if you are even on the fence about whether or not you want to sell your business, I would advise you to take a serious look at your exit options. On top of all that, the Federal Reserve is planning multiple rate increases this year. Given that, as well as the economic and geopolitical issues facing the United States and the world, there is no telling what the capital markets could look like a year from now. A deal that requires any sort of financing may be difficult to achieve 12 months from now. In short, I do believe it is a good time to sell your business, especially if you are a closely held business. There are quite a few industries right now that are being aggressively consolidated and valuations are very high. This is absolutely a great time to sell, but if you are serious about doing so, I would start the process right now. The last two years have shown us how rapidly things can change, and I would not be surprised if 2023 looks a lot different than 2022.

What are your top tips on planning an exit?

The number one tip I could give anyone who is trying to sell their business would be to stay organised and have all your information accurate and up to date. I am helping a closely-held family business sell right now. On top of being great people, they have also run their business exceptionally well. In a matter of a week, they were able to provide me with audited financials, tax returns, asset lists, customers by revenue, large contracts, etc. I could tell right away that their information was accurate and that I could trust it. When I am negotiating with buyers, it is a huge advantage to know that what I am selling is accurate and that I will not get a surprise right before closing that results in the owner taking a haircut.

The next tip I would give to anyone considering selling their business is to explore getting a quality of earnings (QoE) done. Every deal I have been involved with, whether it is getting a commercial loan for a client or helping someone sell their business, has involved one of the parties getting a QoE done. A QoE is a “mini audit” that is not as long or costly as a full audit, but it gives instant credibility to the financials that a company provides.

Unless the situation in Eastern Europe escalates even more than it already has, I expect the M&A activity to continue to be busy, at least in the short term.

My next tip would be to check your expectations going into any deal. Your business is not worth what you think it is, it is worth what the highest bidder is willing to pay. We have met numerous owners who have unrealistic expectations about what their business is worth and it can ultimately cost you value. At my old job, I was leading the acquisition of one of our local competitors. We offered him $3.5MM for his business, he wanted $5MM. We ultimately walked away from the deal. Over the course of two years, he lost a few big contracts, had a couple of trucks breakdown, and a key employee left. Just two years after our initial offer, we bought him for $1.2m. You should absolutely get what your business is worth and fight for it, but also remember that it is not you the business owner who ultimately decides how much your business will sell for -it is whoever is willing to pay the most.

Finally, continue to run the business as if the deal will not go through and you are going to run your company for the rest of your life. Until all the documents have been signed and the money is in your bank account, a million different things could happen that could derail the deal.  I have seen many business owners think they are going to close on selling their company then begin to neglect the day-to-day operations of the business. In the instances where the deal falls through, I have seen those business owners in some unpleasant situations. No matter your exit strategy, it is pertinent to continue to maintain the standards of your company.

What M&A trends do you expect to see in the coming months? 

Unless the situation in Eastern Europe escalates even more than it already has, I expect the M&A activity to continue to be busy, at least in the short term. It is possible that it will be a down year for the stock market with rate hikes coming and fixed income securities currently have historically low returns. For financial buyers, especially PE firms, buying companies is the most logical step to earn points on your money. I would expect financial buyers, especially PE firms, to continue to be aggressive in the coming months.

About Michael Cifor

Tangram Partners offers four “core” services. It provides business valuation (BV) services, M&A advisory, debt and equity raising and corporate restructuring. In his role at Tangram Partners, Michael is the primary lead on all of their BV projects as well as support management with other services. During his time at Tangram, he has performed  numerous valuations for cases that included divorce proceedings, succession planning, wills and estates and shareholder disputes. On top of his BV work, he has put together three separate syndicated commercial credit facilities totalling over $100m, executed two mergers and one acquisition and is currently in the process of helping a close-held, family business sell. 

Tangram is currently engaged with several commercial banks to work out projects where they help businesses that have defaulted on their loans to get back in compliance. While located in upstate New York, the company works nationally with current clients in California, Georgia, Florida, Massachusetts and Michigan.  

The Public Accounts Committee (PAC) report warns that there could be “potential disruption” at the UK border if cross-border passenger volumes, which have been at a fraction of normal levels due to the pandemic, recover as expected in 2022. 

This could be “exacerbated by further checks at ports as part of the EU’s new Entry and Exit system and especially at ports like Dover where EU officials carry out border checks on the UK side,” the PAC’s report says. 

“The PAC has repeatedly raised concerns about the impact of changes to trading arrangements on businesses of all sizes and we remain concerned.”

Since the end of the agreed transition period on 31 December 2020, there have been a series of changes in how the UK trades with the EU, and in relation to the movement of goods between the UK and Northern Ireland. 

This has led to the EU introducing full import controls. While the UK had initially intended to follow suit, the implementation of such controls has been delayed by the government three times over the past year. 

“Government plans to create the most effective border in the world by 2025 is a noteworthy ambition but it is optimistic, given where things stand today,” The PAC says, moving on to comment that it is “not convinced that it’s underpinned by the plan to deliver it.”

At the same time, nothing stops you from retraining and pursuing a career in an industry that is beginning to take off. Emerging industries have always been a thing, and the new industries are often popular with existing and budding entrepreneurs alike.

Knowing what these industries are is the critical first step, and that is where we come into the picture. Below, you will find a list of some emerging industries that have dominated the business scene for the past few years and which look set to remain. 

Regardless of what industry you are looking to move from or into, read on to discover more about these industries, as well as a bit about what you can do to be successful in your upcoming career switch. 

What Is An Emerging Industry?

Before getting into the swing of things, let’s take it back to basics. For those who are unsure, Investopedia defines an emerging industry as when a product or idea is in the early stages of development, and numerous companies focus themselves on this idea. Generally speaking, this happens when a new form of technology is discovered or created, replacing an older counterpart. 

As you might have grasped following from this definition, there have been numerous emerging industries throughout the last few decades, running alongside the numerous technological advancements that we have seen. These include the following industries: 

1. Artificial Intelligence (AI)

AI is something that is becoming all the more commonplace but is a phenomenon that is still confusing a lot of people. The technology that is used for this emerging industry is continuing to develop and grow and is being used more in our day-to-day lives than ever before. While some might find this form of technology problematic, it has proven to be incredibly helpful to numerous industries. 

Various industries and businesses use this emerging technology; it is even used by some government departments here in the United States. There are numerous jobs available in this emerging industry, and they can be attained by learning the associated skills that often link closely with computer science as a field. 

2. Fintech

The running theme throughout this piece will be that most emerging industries relate to the likes of technology in some way or another. Fintech, also known as Financial Technology, is the process of competing with or replacing more traditional methods of delivering financial services with a form of technology. Much like other forms of technology, this is something that is continuing to grow and develop while also revolutionising the ways that we complete tasks. As a result, there is always something new to learn about this emerging industry. 

Fintech courses online allow interested parties to learn more about this form of technology while retaining their existing skills in the hope of moving into this as a career. Completing this fintech course from Harvard University Online in your own time ensures that you can make the switch into the industry at your own pace and when the timing is suitable for you. Financial services will always be required; there is no doubt this is an industry and form of technology that is here to stay. 

3. Renewable Energy

This is a term that we feel many people reading this and beyond are familiar with, for it is something we have grown accustomed to throughout recent decades. There has been a significant focus on renewable energy throughout the years, with this idea gaining more traction since the United States rejoined the Paris Climate Agreement. 

Clean energy is important to many people, not just those who are eco-conscious. The renewable energy industry is set to grow exponentially in the coming year, with analysis experts estimating that the growth could pose a threat to the traditional use of coal. 

Expanding into an industry like this is a lot easier than most people realise. Beginning your career change by volunteering in the sector to develop your passion is the best place to start. From here, you can learn more about the processes and establish whether there are more specific skills that you need to learn and develop before applying for a role. 

It goes without saying, but emerging industries provide a multitude of career and growth opportunities. Understanding what the first steps are and moving forward from there is sure to ensure you land a career you are happy with. No matter which emerging industry has caught your eye, go forth knowing you are making the right moves and will be working with the latest technologies in no time.