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This weekend I was out and about with the family and we visited a farm up in rural North Yorkshire where they encourage the children to feed the animals and give you an overview of the farming industry. During the course of the visit I listened to the farmer who owned the business as he talked about the plight of British Farmers and what needs to be done. His explanation of why farming was on the decline was simple “you lot don’t want to pay what the food is worth!” He then listed his neighbours whose businesses had ceased to exist, not down to the recession but down to the fact that the country had traded out of British Foods and preferred the cheaper import with the artistically licensed labelling.
On the way home we debated this point quite extensively and then it spilt into the office in Interim Partners. Is Food too cheap? Has everything become purely price driven now and is there a way for the farming market to return to a profitable existence so our grand children can enjoy a range of foods that is grown and produced in the UK. The clients that I’ve visited in the past month have reported a constant theme, price rises are needed as a matter of urgency to assist the market getting back on track. We’ve had multiple first hand examples of cost cutting Interims we’ve put into businesses that have cut costs back to the bone and argue the way forward is more volume but at prices that mean something to the producer.
Does this mean that the commercial agenda is now jostling for pole position as we come out of recession?. Interims who can drive price rises as well as value add back into the retail trade. The other side to this argument is that the retailers can’t be seen to raise prices in the period of austerity and that inflation needs to be contained. So what’s going to happen first?
I’m going to visit the farm again in a fortnight as the kids loved it and I’d like to take some thoughts back to the chap who runs the place so please get involved, give me your opinions, is there more cost cutting to come, is there more fat in the land? Do the retailers need to give more back?? I look forward to hearing from you and contributing further to this debate.
Simon Gough is Director, FMCG of Interim Partners.
It’s been an interesting time of late within the consumer market, much has been anticipated with the new financial year upon us, Easter out of the way and the imminent change in government, but what has actually happened? Well not as much as expected seems to be the general theme in the consumer market. There has been a rapid move towards restocking the shelves with regards to permanent hires and change appears to be on its way with the agenda for Interims coming back into play.
Over the past few years the area within consumer that has really driven the market had been the amount of deals that had been done within this space, whilst almost completely drying up in 2009, they have shown some signs already this year of coming back to the table. There have been talks of clients being more aggressive and some strategic deals have already gone through with what we hope to be a significant amount on the horizon. The change agenda following these deals has been one of the biggest users of Interim Managers and will continue to be the way in my opinion. I anticipate that the back half of the year will see us very active in this area and until then we will see the demand in businesses looking to get their houses in order following the great cut backs. Commercial Interims may well lead the way on these changes as clients look to reposition themselves. The most senior part of the Interim market remains tight but it is starting to ease up as deals come back and the top table merry-go-round begins once again.
I’d be really keen to hear your thoughts on where the market is going and the timescales involved in getting there. As our practice progresses we want to be much more involved with the Interim managers that we’re currently working with as well as those that we want to get closer to. Please give me your thoughts and get involved.
Simon Gough is Head of the FMCG Practice at Interim Partners.
It’s been an interesting year to say the least and one I’m sure a fair few of us will enjoy saying goodbye to. Its not all been bad news as some areas have held up well, but what I really want to know is will we have projects in time for Christmas. The noise and general discussions within the FMCG market would suggest that we will. The last six months have created frustration for the talented Project and Programme managers out there who has seen work streams identified but haven’t made it past the Finance Directors cutting table.
The projects that we have been scoping have largely revolved around efficiency, some integration work and even a return of commercial work coming back on the agenda. So what do the timescales look like? Well from my perspectives we will see projects starting this side of Christmas but with the lion share coming in the new year. There has been a significant of clients getting burned this year by recruiting a low cost option to run a project to keep costs down, its these same clients that are now asking me the question “are these individuals committed interims with a track record”, yes they are.
I’d be interested to hear when you think different areas of the interim market will see a lift and your rational as to why. We have an interesting time ahead of us, let’s enjoy it.
Simon Gough is Head of the FMCG Practice at Interim Partners.
So as we move to the end of the second quarter of 2009 a number of points have become clear in the market of FMCG. In previous Blogs we discussed the fact that it’s not all doom and gloom and people will always need to eat, well this hasn’t changed but the speed of change is becoming more apparent.
First of all the good news. We’re now seeing signs of programme and project budgets being signed off creating a focus on genuine Interim Managers for delivery. The purse strings that we predicted for the start of the new financial year are beginning to loosen. The requirement to differentiate between the “professional interim” and the “candidate between” has never been more pronounced and clients are actively seeking people who can demonstrate this difference quickly and effectively. The current focus on projects has been around operational efficiency, value engineering and supply chain.
A question I’m asked almost every day is should clients be using the current climate to take business off their competitors or to just to hold their own. Well I’m not seeing much with regards to commercial investment from an Interim perspective, though companies are forming commercial briefs to ensure they hold their position with increased challenges coming from the retailers. I can see this trend continuing until we line up for the golden quarter where clients may look to make a point of difference but surely they must be already thinking this?
With regards to the slow news, the business of turnaround hasn’t yet caught fire. I’ve had lots of conversations over the last few months about how the government’s actions have affected the appetite for businesses to seek funds focused on turnaround. Predictions from senior turnaround professionals have ranged vastly as to when this market will start accelerating and I’d be keen to hear your thoughts and predictions on the market as we head into the summer period.
Let me know where you think the biggest challenges are going to be and lets discuss it. I look forward to reading your comments.
Simon Gough is Head of the FMCG Practice at Interim Partners.
Well it’s been an interesting few months in the world of FMCG with a really busy start to the year followed by a quieter time through March. I get the feeling that we’re sitting in the eye of the storm right now. The new financial year could bring optimism to the interim market in the short to medium term as the projects that have failed to take off could receive their budgets. The interesting dilemma will be how the clients spend their money and the suggestions so far will be that the briefs will be very specific as they look to focus on key skills delivering quick pay backs as well as long term returns. We’ve all been witnessing the decision paralysis in the market place of late and I think this will start to lift as clients brace themselves going back out into the storm. Whilst it would seem that although cutting costs are at the top of everyone’s agenda it would appear that it’s a mutual belief that this won’t be done if it deteriorates the supply chain, instead, solid continuity planning together with acid tests could be a route for interims through the summer leading up to the golden quarter.
So what I’m interested in are your thoughts on where the market goes from here. Will Alastair Darling come in on his white horse during the budget or will it follow my prediction that the market will be ugly yet ripe for the right type of interim looking to demonstrate a point of difference.
Over to you.
Simon Gough is Head of the FMCG Practice at Interim Partners.
As we are all aware from extensive media coverage the Automotive industry is the latest casualty of the recession following in the footsteps of Construction and Financial Services. No company or country has been immune from the collapse and the woe’s of America’s ‘Big 3’ were only the start. We are now seeing the likes of our biggest marque’s including Aston Martin, Bentley, Rolls Royce and Jaguar Land Rover making mass redundancies and halting production over Christmas for an extra few weeks only to come back to more doom and gloom and the halting of production in some cases, until mid 2009.
Prestigious brands have been clobbered as much as volume manufacturers and the cause is no mystery. It all began more than a year ago in America with the subprime-lending crisis and then the doubling of oil prices. Buyers found it hard to borrow to buy new or used cars and dearer pump prices set off a trend to swap gas guzzlers for smaller more economical cars. However the real trouble came in November following the financial meltdown of the Lehmann Brothers earlier in the year. Credit systems seized and stock markets panicked. I think all in the industry will agree when I say that the force with which this has hit the industry has been gigantic, a bit like hitting an ice burg! Almost every car maker has a plan, to cease production for the short term, drop shifts and postpone new launches. Offers in showrooms are being used to lure buyer’s but as yet this has not no significant impact, although some manufacturers have reported December 08 figures were up on predictions. IS this the positive we have been hoping for or just a Christmas rush?
How much of the downturn can be attributed to the credit freeze it is hard to say, and the feedback I have been having from my clients is also around customers not wanting to drive into work after having made redundancies in their new car, and rightly so on some counts especially in smaller business where they are very exposed.
But is this now an opportunity for the industry to take stock of its production and re-assess where it is going for the future? Surely it needs to be addressing more complex issues than just customer expectations but those of the larger environmental picture and the fact that in the not so distant future the internal combustion engine will be a limited commodity, if not extinct. Alternative fuels, smaller car will all be topics being discussed amongst Board members and Engineers alike and the cars we see launched over the next 18 months will unfortunately be cars that have been in production and development for 3 or more years so may contain some of the future aspects of the industry but not all.
Some manufacturers are reporting customers looking to modify and make additions to their current cars rather than buy a newer updated model, is this the future for the short term as we have seen in the housing market? Customers extending their properties and improving their kitchen and bathroom rather than move to new home, will customers add sat-nav systems, DVD players and new interiors rather than upgrade to a new car?
I would be very interested to know your thoughts on how the industry can use this as an opportunity to move forwards and improve, and where you think Interims will fit into this? Will we see more Interims in place of permanent staff to move around the industry, maybe with fresh eyes and new ideas?
What does the future hold for the industry longer term and what effect will that have on their interim usage? The next few months will be crucial and with redundancies and some feeling a little uneasy about the state of Automotive there are bound to be resignations and the loss of some key members of staff, so this will prove a challenge in itself if there is a recruitment freeze, so fingers crossed that the industry heads are all aware of the value an interim can bring at such times and the level of expertise that may not currently be available in-house.
To sum up, the Automotive Industry has a tough year ahead. It has had an outstanding period of growth over the last few years but now needs to look to the future and interims will most certainly play a part in that transformation, when and how only time will tell.
