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It seems that every time I open the broadsheets someone else is attacking the Support Services Industry. Recent examples have derived from the profit warnings at Connaught and ROK and not satisfied with the fact that public sector spending on services is set to fall in the short term, the focus for criticism seems to have changed to governance related issues and the interpretation of accounting policy.
Questions have been asked about the way that long term contracts are accounted for with many leading analysts calling for a change in accounting standards to help separate the good from the bad. It seems clear to me that it is not in the best interest of the long standing CFO or Audit Partner to highlight such grey areas as that in turn will reflect badly on them and may lead to the FD’s sudden departure as we have seen recently at ROK.
I have two questions for our Interim community;
1. How can the Chairmen and Chief Executives of Support Services companies ensure that the results that they are communicating to the City are not based on accounting policy grey areas?
2. How can the Support Services companies who manage long term contracts build confidence with the City analysts?
Mark Kitchen is Head of Business & Support Services at Interim Partners.
In the first half of the year many companies in the services sector
have been focussing on the front office especially within the following areas; headline growth, new revenue streams, profit contribution, operational and customer service excellence.
In the second half of the year I am expecting a focus on the back
office in particular finance and other high profile projects that require board level sponsorship.
The reason for this is that many companies are waking up after the recession with an over leverage problem that needs to be resolved. As the five year bank facilities that were negotiated in 2006 / 2007 are approaching renewal, paying down existing debt will become the prioity yet again in the service sector.
As most of my regular readers know; I operate as a generalist across all functions and my knowledge of finance is much broader than it is deep. I would be especially interested to hear contributions from any Interim Finance Directors that have experience of refinancing under difficult circumstances and would consider themselves experts at managing cash.
Mark Kitchen is Head of Support Services at Interim Partners.
For those of you that read my blog last month I was talking about the marked increase in activity that I am experiencing across the Support Services industry.
I can now confirm that Interim Partners have just experienced their best ever quarter in terms of revenue, placement of Interim Managers and enquiries. I hope that you are also experiencing similar levels of activity and it marks the end of what has been a difficult recession for Interim Managers.
The one encouraging fact is that my clients are now asking for Professional Interim Managers who have a proven track record of supporting companies that are experiencing planned or forced change. Generally clients are becoming more aware of what to expect from Professional Interim Managers, I am sure that the broadsheets as well as the senior providers are facilitating this positive change in opinion.
I have also seen evidence this quarter of candidates that are new to Interim Management securing work through their own network. I look forward to building a relationship with these Interim Managers who I hope will continue on the Interim Management career path.
If you are new to Interim Management or are a Professional Interim Manager I would like to hear your thoughts on how you are finding the market.
Mark Kitchen is Head of the Support Services Practice at Interim Partners.
I have also seen evidence this quarter of candidates that are new to Interim Management securing work through their own network. I look forward to building a relationship with these Interim Managers who I hope will continue on the Interim Management career path.
If you are new to Interim Management or are a Professional Interim Manager I would like to hear your thoughts on how you are finding the market.
Mark Kitchen is Head of the Support Services Practice at Interim Partners.
I am pleased to announce that for the Business and Support Services sector the demand for Interim Managers has risen dramatically since the end of last year.
There seams to be a real appetite for change in the market place and clients are engaging with us to talk about large scale change programmes and the replacement of under-performing senior management.
I will post a further blog in a few weeks to talk more about quarter one results and quarter two predictions but it is looking good so far.
If you are a professional Interim Manager I would like to hear your thoughts on how you are finding the market and if you have seen an increase in activity in the last few weeks as I have.
I’m not sure about anyone else out there but quite frankly I am happy that 2009 is over. In the last 12 months the support services industry embarked on a large cost reduction exercise which was a complete (and necessary) reaction to many of its customers reducing spend and therefore potentially reducing operating profit unless costs were cut. The media was awash with redundancy notices which had an impact across all functions and any staff remaining are still feeling the change in culture where governance is now king. This affected Interim Management as many programmes were shelved along with anything else that required expenditure.
Will 2010 continue to be a year of trimming the fat or will it bring a renewed urgency for profitable growth?
In December many in our Industry were talking about sizing up lucrative outsourcing deals including a high profile move by VT Group to buy into the market and target Mouchel for acquisition. Diversification was also a hot topic at the end of the year with many companies looking to capitalise on existing customer relationships to deliver expanded services. Thankfully for my sector the model has already proved successful; I realise that they are public sector focussed but you only have to look at the success of Capita and Serco to understand that support services companies can diversify into almost any service offering and deliver it well by initially utilising the right amount of expertise and customer relationship management.
I personally think that 2010 will be an exciting year for support services companies that are at the forefront of change and diversification; Local change programmes will be re-instated as long as they benefit the customer and intelligent cost reduction programmes will have a National, European or Global effect and will be for the long term. A move into complimentary services will feature in many companies’ strategy reports and all of the above can only be good news for proven Interim Managers or Industry experts.
I would like to hear your predictions for the Support Services Industry in 2010; do you think that companies will diversify to offer a broader service to existing clients? Do you think that the focus will be on growth rather than further cost reduction?
Mark Kitchen is Head of the Construction and Support Services Practice of Interim Partners.ber many in our Industry were talking about sizing up lucrative outsourcing deals including a high profile move by VT Group to buy into the market and target Mouchel for acquisition. Diversification was also a hot topic at the end of the year with many companies looking to capitalise on existing customer relationships to deliver expanded services. Thankfully for my sector the model has already proved successful; I realise that they are public sector focussed but you only have to look at the success of Capita and Serco to understand that support services companies can diversify into almost any service offering and deliver it well by initially utilising the right amount of expertise and customer relationship management.
I personally think that 2010 will be an exciting year for support services companies that are at the forefront of change and diversification; Local change programmes will be re-instated as long as they benefit the customer and intelligent cost reduction programmes will have a National, European or Global effect and will be for the long term. A move into complimentary services will feature in many companies’ strategy reports and all of the above can only be good news for proven Interim Managers or Industry experts.
I would like to hear your predictions for the Support Services Industry in 2010; do you think that companies will diversify to offer a broader service to existing clients? Do you think that the focus will be on growth rather than further cost reduction?
Mark Kitchen is Head of the Construction and Support Services Practice of Interim Partners.
It is a common sentence that I hear …. “our business is different from any other” but the more I place professional Interim Managers into assignments the more I realise that “most businesses in a given sector are the same”. Of course, some companies are better than others at sales, delivery, cash flow management etc but, in essence, if let’s say the sales channel is B2B, service based and the sales cycle is long how different can the sales process be?
There are, however, differences at a functional head level, one senior manager will be very different from another and differences in skillsets contribute to poor key stakeholder or subordinate management, bad customer service, lack of drive and ambition etc throughout the whole function.
Surely what every organisation wants is the best functional heads who are capable of driving profit whilst the organisation as a whole deals with the changes in the economy. My question is where do we find these “best in class” functional heads? Will they be an executive that has been in the same industry man and boy? Or do we start and embrace executives from outside our industry that can bring a specific skillset such as “lean”?
I am interested to hear your thoughts and I would especially like to hear from Interim Managers who work in and out of support services and have delivered a “best in class” assignment within a support services organisation.
Mark Kitchen is Head of the Construction & Support Services Practice of Interim Partners.
As I sit at my desk waiting with baited breath for the start of the traditional September Interim Management busy season I can’t help but think what a strange year it has been so far….
Banks have started lending in relatively small amounts and only to organisations who can already afford it, the broad sheets would have us believe that the green shoots are growing one day but then (ensuring to stay on the fence) predict a “W” recovery the next, the FTSE is rallying far more quickly than many of the analysts would have predicted and apparently the recession is over because we have won the Ashes !!
My question is, what do Interim Managers think September will bring for the Interim community and what are your experiences in what has proved to be a difficult year so far?
Mark Kitchen is Head of the Construction and Support Services Practice of Interim Partners.
After the months of March and April proved to be flat I have been encouraged by the increase in activity since the final week of May. It seams that after the fragmented Easter holiday period companies are now focusing on increasing profitability through rationalisation and change management and as one leading executive said in a conversation last week “It was quietly agreed that at the start of 2009 we would almost be forgiven for not achieving profit targets but now that some of the broadsheets and analysts are talking about green shoots any lost revenue will have to be recovered in quarters 3 and 4, 2009 may not be regarded as a write off after all and we all may be measured on recovery performance”.
I’m not sure if the broadsheets and analysts are just talking up the economy to boost confidence but the recent announcement that the PMI level has risen would seem to back up the recovery theory in our sector. The real test for me will be the amount of assignments that close successfully in a market that has shown so far this year that there is a large difference between needing an Interim Manager and securing sign off from the board.
Should Facilities Management companies use existing “at risk” management that are targeted for redundancy for special projects or should they utilise professional Interim Managers who already possess a strong project management skill set?
As the economic cycle continues its downturn, board level executives are presented with a similar problem to last time. Do they use current senior management to execute essential business change projects or do they draught in professional Interim Managers?
The easy and most convenient answer would be to utilise an existing senior manager who will be given an opportunity to stay with the business a little longer. Wouldn’t it be better to retain the business knowledge in the company, especially if the manager has a strong Facilities Management background?
In this particular case, which takes precedent? The Facilities Management knowledge that will depart with the existing manager, or the added value of a seasoned Interim Manager who has previously executed this type of project within business services?
Isn’t the existing BAU manager just delaying the inevitable? If the business can allow them to manage a major project, are they not already surplus to requirements and will the manager leave at some point to pursue a career which will allow them to use their newly developed project management skills anyway? Surely the project shouldn’t suffer in the hands of a project trainee, especially when it will be profit critical?
I personally feel that the Facilities Management Industry would benefit from using experienced professional Interim Managers. The Industry has “grown up” so much from when I was first introduced to it over 15 years ago and the present downturn, in my opinion, should present an ideal opportunity for the now professional FM companies to embrace the changes and once and for all cut the apron strings from its Construction mothers that hold it back.
