63. CFO Stories: Finance Resolutions for 2022 - Getting the right people, processes, and systems in place with Nick Rose CFO of Enable

63. CFO Stories: Finance Resolutions for 2022 - Getting the right people, processes, and systems in place with Nick Rose CFO of Enable

Hannah Munro: 1:11 

So, hello, everybody, and welcome to the first episode of CFO 4.0 in 2022. It's a bit scary to think that we've been doing this for a Well over a year now, but I'm very excited to say I'm with me on today's podcast is one of your peers. So, Nick Rose is CFO of Enable. And today we're going to just talk about what we see in terms of the future of finance and news resolutions potentially. So, welcome, Nick. Awesome to have you on the 

Nick Rose: 1:39 

Thanks, Hannah. Good to be here. 

Hannah Munro: 1:41 

So, in terms of your shift, because obviously moving from, you know, from Travis Perkins to Enable must have been quite a big shift for you in terms of a different industry and a different kind of business. How did you find that transition? 

Nick Rose: 1:55 

Yeah. Well, yeah, going from 24,000 colleagues to 60 or 70 was quite a difference. But like I say, I think I was looking for a different and a new challenge, for one. And while I've been in Travis Perkins, obviously it's a big company, but you do work in small teams. And I've worked in a couple of the smaller businesses, and I knew that's actually where I find things quicker paced. You can make decisions in a much better, more streamlined way. And what I really liked about Enable was the strategy and the goals and the scale of the ambition that the company has. as well as the product itself, which really solves a problem that lots of customers have. So, yeah, it was a big wrench. And I have to say, my family thought I was going crackers. But, you know, two and a half years later, certainly not looking back. And it's been a really great decision from my point of view. Companies now, we've just been through our second fundraise. in the last three or four months. So, we're very well-funded. We've grown three or four times in terms of size of sales in the last two years. When I joined, it was 60 or 70 people. It's now well over 200. So, it's really that kind of journey that we're on is what attracted me to the business. And so, far, it has played out according to plan, which is good news. 

Hannah Munro: 3:33 

No, absolutely. And a sign you're doing a good job as well, I guess, two and a half years in. So, tell us a little bit about what are your ambitions within the role of finance? And what are your ambitions for your finance team over the next 12 months to a few years? Where do you see it going? 

Nick Rose: 3:51 

Yeah, so, I always see finance as it is by nature a support function. So, we're not the ones in front of customers doing the selling deals, although we do get involved. In particular, with my background, I have been a customer, so, I do get in front of those guys sometimes. We support the business in many different ways. In terms of ambitions for how we do support the business, everyone can pull these off the shelf, really. Trusted business partner, making sure we're legal, we're compliant, we're accounting in the right way. We're paying people correctly and on time, in full, with no mistakes. We get their tax rights. And that we have processes in place that support our people doing their jobs. So, really, I see us as a kind of support function, but an important one. And if finance is going well, then everyone is free to do their jobs to the best of their abilities. So, it's opening doors and making sure people have those opportunities to perform. And that kind of sounds like a little bit vague, but when you really drill in, there's a lot of things that people couldn't do if the finance cogs weren't ticking in the background. So, all the way through from paying our own suppliers through to dealing with our customers and making sure the money's coming in and everything that goes in between. So, are we Are we compliant in all our different territories? Do we have the right statutory books, statutory setup? And so, really, yeah, support function. And I think you want to talk a little bit about where we see finance going as well. And for me, there's always been three parts of finance. And one of which is the traditional, I guess you could call it bookkeeping, keeping score. It's a bit dull, but someone's got to do it. And most people in the sort of front end would say, well, there's no value added in that. You've just got to pay some people to count books and make sure the pennies are right. And that's fine. As long as it's done right, then the business can function. It's kind of the bread-and-butter piece. The second part is financial control and making sure that we know where our cash is going. We know what people are doing. We know that approvals are in place for making decisions and that there's a control network and process around that protects everybody involved, not just the company and the company's cash, but protects the individual from making decisions that they shouldn't have done, gives them a framework to work within that they can feel safe doing their role. So, getting that framework right, I feel, sits on finance's shoulders. And it's got to be a wide enough framework such that people can really operate effectively in their roles without constricting too much. But it can't be too wide because otherwise you lose control. And so, getting that balance right is really important. And I don't see the focus on either of those two areas really changing in the next few years because they really are the support function, the must-have pieces of finance. Where I think finance is really headed is bringing in value-add support in decision-making. There's a lot of finance people who are great at analysis, great at finding trends, great at spotting opportunities in a sheet of figures. And bringing that expertise to bear in a business is really important now, especially when data manipulation is so, much more important, so, much easier to do in big rafts of data through whatever technology you're choosing to use. Bringing people in who can do that I think is essential to a business maintaining profitability when at all sides you've got people coming in saying, I want to get more out of you for this, you've got to pay more for that, raw materials are going up, cost to serve, wages and salaries The customers, on the other hand, are saying, I want to pay less. You're getting constantly squeezed. If you're really under control and you can see the opportunities within your figures, I think that decision support piece is becoming much, much more important and will be the focus exponentially for the next few years while not taking away from that kind of traditional and bookkeeping and financial control side as well. So, I think the role of finance for me becomes more broad across the finance space, but across the business space as well. And I think that as businesses generally begin to realise the value that finance people can add, then the importance goes up as well. 

Hannah Munro: 9:17 

Yeah, so, tell us a little bit about how you're approaching that decision support function internally enabled. Are you looking to bring, have you got a team in place that you brought in directly for that function? Did you recruit or train up existing individuals that were already within finance? What's your thoughts on how that function should look and work? 

Nick Rose: 9:40 

Yeah, so, they're quite different skills, you know, going from, from one side, which I would call kind of transactional finance, which is the bookkeeping and the credit control, the accounts payable. That's the really important nuts and bolts of finance. And then there's the taking that data and taking your sales analysis and your margin analysis and turning it into the understandable output and insight. And they're quite different skills. So, people can learn them for sure. But I have brought in a couple of people who've got that background. And we're beginning to focus on our own overheads, especially in terms of the exponential growth we've had along with the business of the amount we spend on our own SaaS subscriptions or software subscriptions. So, we've subscribed to three or four different platforms for our sales team to use. How are we managing the licensing? How do we know we're getting the best deals? How are we negotiating our renewals? And bringing all those tricks into play. So, looking at our usage of a platform such as Salesforce, to name one, where are we really hot on using it? And where are we only using it a little bit? And how are we configuring Salesforce to suit our business the best? That's something that our new guys can actually help with. So, yeah, I have brought a couple of people in. That's not to say the existing guys can't learn and bridge the gap, but there is still a job to do back in the transactional side as well. 

Hannah Munro: 11:29 

And it sounds like you had a specific project, a couple, you know, you've got one specific project in mind that's a real focus. How are you structuring sort of the responsibilities across those individuals? Are you dedicating a team member to each function within the business? Are you looking to use them against a project on more of a project basis, you know, or is it flexible? Does it depend on what's going on within, you know, within the business and your growth plans? 

Nick Rose: 11:55 

I'd say at the moment, we're probably a little bit too small to go kind of person on person marking by department. So, the way I've got it at the moment is everyone's covering everything on a country basis and on a kind of discipline basis as well. So, we're present in the UK, US and Canada. We're about to open in Australia. I've not got specific team members there at the moment, but I will be hiring people in North America probably pretty soon. I think in terms of how to structure it across the piece, if we're bigger and if we had many tens of millions more sales going through, then I would be dedicating people to a sales team or to a procurement team and really getting into the skin, under the skin of what they do. In the same way that we have, we're beginning to specialise with our own sales team in terms of who approaches the smaller customers who approaches the big enterprise type customers and there's a different skill set involved in each and they'd get to learn more about it we're particularly strong in a couple of industry verticals in terms of our own sales and our sales team are beginning to focus a little bit on verticals uh electrical uh distributors being one so, they get to understand the business and they get to have a much more meaningful conversation from the off with our prospects. 

Hannah Munro: 13:33 

So, taking that learning and bring it back into finance, that's longer term where you'd like to go with your team in terms of from a commercial. Yeah, no, I agree with you. Yeah, so, because we have an industry focus as well. And I do find it adds a different, it gives you an ability to have a different kind of conversation because you've already worked with similar customers. You understand a lot of their terminology as well. So, it does make a big difference. 

Nick Rose: 13:57 

Well, you build a greater understanding and gain that credibility straight away. And you can't buy that. You can't just go in and say, I know about finance. Believe what I say. You've got to get what they're doing as well and kind of emphasize with them about the issues that they face. And if you really understand what's going on, then you can do that much better. 

Hannah Munro: 14:20 

Yeah, and I guess the same principle applies again. with the departmental piece if you understand the ins and outs of sales or marketing you can offer more insight and more value-add longer term but there is something to be said isn't there for working holistically across the organization you can spot things if you're working across different departments that that can definitely add value 

Nick Rose: 14:43 

well, someone's got to have that kind of expanded out view as well and I guess that'll ultimately as we get a little bit more specialised, that'll still fall to me and the senior team to say what's going on across the business. And our job really is to make those departments work effectively together and allow people to be great at what they do. Without that, then what are we here for? 

Hannah Munro: 15:08 

Yeah, and it's a great view that you have. And from what you were saying earlier in terms of working with the teams to understand the use of licenses, the team are getting quite involved in the actual software itself and how it's configured. And it's not just about what are we paying, it's about what value are we getting, which is a really interesting approach. 

Nick Rose: 15:31 

Yeah, I know. To be honest, I haven't really thought about it too much. I just know that we need to have people doing that. And we can really streamline the business much better if we have that collaboration piece and the clear line of sight between what the front end of the business is doing and what implication that has on our finances means that you can build a business case very quickly, even intuitively. against you know we're paying for these licenses over here we're getting x value these licenses over here might cost the same but we could do more with them and so, you get very quickly to a decision point if you join up all those dots and you know if those decisions attempt to be made without financials in mind then you'll never get the best result for the business 

Hannah Munro: 16:25 

Yeah. And I like your focus on value as well, because that's sometimes the missed piece, isn't it? It's not just about what you're spending. It's what value does it bring into the business and what impact, I guess, is it having? And I often find when I'm speaking to people, the underutilization of the tools that they already have is really interesting. They're not even aware of what systems and platforms can do. So, I think it's great that you're spending that time. 

Nick Rose: 16:50 

Yeah. No, good. And the other focus is, for me right now is we just implemented a new ERP system, 1st of October, it went live. So, we're now three months in and I think lots of teething problems have been overcome. It took four months, four and a half months to really plan, design out, configure and go. So, it was pretty intense over the summer and early autumn. But yeah, we've gone live now and our job now in the finance team is really making the real value, get the real kind of change in the way of working, get out of the manual process that we had before into relying on automated decision points, relying on the system telling us what to do when, and then we can think about spending more of our time on that business analysis side rather than chasing our tails, wondering which invoices to pay. We know what invoices to pay because it's in the system and the system's the one book of truth that we have. And so, if it's not in the system, it's not happening. That's a big change for Enable as a company. It's kind of gone from small company ethos where everyone kind of knows everything that's going on to as we grow no one can possibly keep up with that and we needed a system that would see us through our kind of period of scaling which we've got in the next three or four years to one where our ultimate aim is to get to an IPO and ultimately list on a public exchange somewhere so, if we can achieve that we're going to do it through a properly focused and intuitive to use system that allows people that that kind of getting away from the menial jobs and it allows them to think about adding value to the business in whatever way they can 

Hannah Munro: 18:58 

and it sounds like that was a big shift there but in terms of your that like you said that small company mentality into that that more if it's not in the system it hasn't happened ethos how did you approach that with the wider organization 

Nick Rose: 19:12 

um Well, I would turn around and say, actually, that's not just a finance thing that we've gone through in the last two years. So, we've gone from being owner managed, no funding apart from a bank overdraft, very good, profitable, but very slow growth to a business that's completely turned on its head, has suddenly grown. We're now in the top 5,000 in terms of rate of growth companies in the US. We're number 1,100 or something. And that's a year and a half ago, so, we're going to be even faster now. The pace of change has just gone through the roof, the whole company. So, we've all had to deal with that as a change approach. And it's really the big reason I joined a couple of years ago is because I knew that was the journey the company was setting out on. And I thought I could help it in some small way. So, I think we've all been through that. So, selling the process change to the business was actually pretty easy. Everyone knows that we're going to have to go through many of these as we grow from sort of single digit millions of dollars to getting towards three-digit millions of dollars in the space of five years is not a small challenge. And we keep telling everyone, on our regular all-hands meetings. We have them every month and we keep talking again and again about the pace of change and the need to be amazing at what we do and to perform at our very best, because only by doing that will we achieve the goals. And that filters down into each department, setting its own quarterly objectives, which are all designed to support the company strategy for that and the next quarter or two. And part of when you look across the business at all the departments, quarterly strategies and objectives, they're all designed to enable this business change that's happening because we're driving it from the exec level. But we're just encouraging as many people as we can to get on board. And the pace of change is not for everyone, but we want everyone with us on the journey. 

Hannah Munro: 21:37 

Absolutely. And I think there is something about working with, particularly in software, I think in technology, there's a really interesting piece around fast growth. And certainly, like you say, it's not for everybody. So, how do you find the right team members that have the right viewpoint? Do you look for people in similar industries? Do you look for something else? When you were choosing your new members, what did you look for? 

Nick Rose: 22:01 

So, I've recruited a few since I've been here. And the number one thing I look for is just what's their energy level. If someone's got natural energy, then I can see from a CV they've got the skill set, they've done the roles before, I can ask all the technical questions I want. But if they haven't got the energy and the attitude and the will to win and that excitement of being in a, we call ourselves a bit of a kind of space rocket shooting for the stars, if they haven't got that aptitude and that energy level, then they're not for us. And we really need people to come along and be prepared to ride a couple of bumps out because there will be some on the road somewhere. But yeah, I look for energy and the ability to just get on with people and influence them and work collaboratively as a proper high-performing team. 

Hannah Munro: 23:03 

No, that's great. I don't look for 

Nick Rose: 23:04 

anything else. 

Hannah Munro: 23:05 

I think there is something, it's the intangible that makes the impact, I think, in change projects. Like you say that sort of determination, a bit of grit, and also, I love that concept of energy. Hard to measure, hard to see on a CV, but it's something that makes a big difference. 

Nick Rose: 23:22 

But you can pick it up in a few minutes in an interview. And if you meet them enough times before you get a pretty good idea of will this person fit with the team, in terms of where we're headed. And that's always the kind of key thing. I always used to think, will this person fit with the team I've got today? And it's not necessarily that that we want. We do want that, of course. It's really important. But I think even more important is, are they going to be one for the future and really, really help us change the approach? 

Hannah Munro: 23:57 

I love that. 

Unknown: 23:59 

So,... 

Hannah Munro: 23:59 

You obviously have been through a massive amount of change. You know, implementing a new system is a real test, I guess, of all sorts of aspects of change management. You know, in terms of that shift, what are the sort of the takeaways that you had or things that went well, perhaps a few things that you wish you'd thought about before you started that you could pass on to perhaps our audience? What did you wish for you? 

Nick Rose: 24:26 

So, I think the... The key parts are, number one of any change project that involves systems, get your data in shape, get it really clean. It goes without saying, it's where everyone falls over and everyone says, we get our data right, but then that always causes some issues. And we had our own share of those. I think have a very clear idea of where you're going. What does great look like at the end? How do you measure success? The most important thing that we did was communicate to people at the right time in the right amounts. What do I mean by that? You can communicate loads of stuff right at the start of the project and get everyone really excited, but then it goes quiet for three months while you're working out what you're doing and you're working on the configuration or whatever it is, and you lose it. I think it's about building a crescendo of excitement and buy-in and motivation to help you succeed by bringing in people at the right time and make sure you hit your time scales. Because if you don't, then that's another way to lose that gist and the momentum and the enthusiasm that you're trying to build. 

Hannah Munro: 25:46 

I think that's a really great point. And I think sometimes as well, being realistic about your timescales is where a lot of projects fall over. Like you say, I think people underestimate the amount of effort, the thinking time that needs to go into a project where there's a big transformation piece, the data time, the adoption piece, the testing and everything. So, that balance between making sure that you hit your timeframe starts with a good plan, in my personal opinion, from the beginning and not try to do too much too quickly. 

Nick Rose: 26:15 

But hearts and minds. Every time we sat down and had a kind of all people involved meeting, is everyone happy with where we're at? Shout now or come and talk to me privately. No problem. But tell me. I want to know. Because if I don't know, we can't make any adjustments. And that kind of talking to people and making sure everyone's with you. is the most important piece. Because if you think you've, before you start any project like that, you've got to say to yourself, do you have a team in place that can actually do it? And I was lucky enough that I figured I did, you know, some good people. And we've managed it. It's gone without hiccups so, far, although we do have a year end to get through at the end of this month. So, that'll be the final, the final little test. 

Hannah Munro: 27:10 

Yeah. And when you say you had the right team, was that made up of just your finance team or did you get sort of super users from different departments involved? Was it a cross-functional 

Nick Rose: 27:21 

team? No, so, we've done it in quite a low-key way. And I guess unlike a lot of kind of traditional, I guess, retail distribution type businesses, we don't have a point-of-sale system. All of our customers are by written contracts and then we just invoice them, and our implementation team picks up the whole implementation of our system. So, in terms of use of the system, really, it's around the backend financials for the other teams, raising POs, authorizing POs, authorizing people's expenses and stuff. So, that's just the training thing. And it does also help when the system you've got existing is quite clunky and no one really likes it so, it kind of removes one of those barriers to entry that that you could have otherwise um and no the whole the whole change um yeah we went out and talked to people we kept them uh up to date we trained them at the right time uh gave them access to all training materials but also everyone in my team was on point to um to help them hold their hands. 

Hannah Munro: 28:42 

And I think that's great that finance were, like you say, that support service for those different departments to bring them on board. And also, your open-door policy, I think, sounds like it was a real factor in your success in terms of making sure that people were coming to you with issues and challenges as you went along, rather than it getting to a point where it was irrecoverable almost. 

Nick Rose: 29:04 

Well, I always think that's really important, especially recently with COVID. You know, over a lot of the summer, most people were working remotely. You know, we are kind of pseudo back in the office, how I'm in the office today. And we'll sit together out on the floor. I don't try and sit in an office closed away or anything like that. I wouldn't have it. So, yeah, the whole... And I guess that's another thing that finance and all businesses and all departments have got to plan for and get used to is the changes that have been brought about in the last year and a half, two years. Focus on what's right for people, a lot more mental health stuff, and a lot more making sure that people are comfortable working in multiple different locations and can actually do a job effectively. But I still think there's a big value of an office environment how do you bring in new people without meeting them and being a human being and being a team? You know, I'm not quite sure how effective you can truly be if you never see anyone that you work with. 

Hannah Munro: 30:17 

No, I completely agree with you. And we were talking just before the podcast started actually about how, you know, that sense of meeting people and getting to know them. I think that there is something around, you can see so, much body language, but you also get, like you say, a vibe and an energy from somebody when you meet them person to person. And, you know, the ad hoc conversations that you overhear as well. that can also add a huge amount of value. And we just don't get that in this remote world, which is, I think, something I really miss about being in the office. 

Nick Rose: 30:49 

Yeah, absolutely. You swap stories about what you did at the weekend, and it's not forced because you're making a cup of coffee while you're doing it. So, you know, it doesn't eat into the day, but it's such an important part of being human because we're social things, aren't we? 

Hannah Munro: 31:06 

We are, and I think people underestimate it. And I don't know whether you've got any strategies for that, but certainly I was speaking to, I think, Shauna, she does a lot of work with remote teams. She was a podcast earlier last year, and she was saying how important the first part of a meeting is to not talk about work. If you're going to be managing a remote team, that piece around having conversations around what we did, what we had for lunch yesterday, you know, whatever it happens to be. Exactly. And you have to make time for it. Whereas sometimes you can be so, wrapped up with these back-to-back meetings that everyone seems to be in that you don't make the space. So, it's a lot harder. And I think it takes a lot more structure with a remote team as well. 

Nick Rose: 31:48 

Yeah, totally. I fully agree. And we used to have kind of team coffee meetings on a Friday early afternoon. That's a great idea. It was great, but it doesn't beat being in a room together. you know, you can't recreate that atmosphere. And so, we've created a new policy. It's a little bit different right now because of the guidance to work at home. But, you know, we like people to be in a minimum of three days a week in the office space. So, it's flexible. You can do whichever mix of days you want as long as by team we'd like you all to be in at least one day a week so, you can get that that kind of team atmosphere going. And, you know, we are invested in our buildings and our people, in which case we want to use them and get the best out of having those facilities. 

Hannah Munro: 32:45 

No, absolutely. And how, you know, just following that chain of thought, how are you managing that with obviously you being spread across the world, not just in the UK, so, with your US, Australia teams as well? How are you managing those relationships with the UK teams? 

Nick Rose: 33:03 

Well, travel has been difficult. So, I guess just by being one of the exec, I'm one of the people who are going to be traveling more. And I was lucky enough to be able to get to Canada and the US in the autumn in two separate trips. And I think building those relationships across thousands of miles is difficult. I mean, where would we be without video conferencing now? It would just... We couldn't run our company like we do for sure. But the atmosphere and our Canadian office, we hired our first Canadian in February last year. And we're up to, I think we're now about 55, 56 people there. We opened an office in September. And up until the end of September, early October, none of the senior leadership of the whole business had ever been to Canada. in terms of to see anyone in Enable. So, the whole exec went early October, and we met everyone and had a couple of dinners out and it was such a fantastic kind of watershed moment of, you know, now we know people, we can pick the phone up much, much easier and there's a better atmosphere. So, I think there's a bit of, of travel needed where you are remote, where there's a business need as well. We're not just sending people just because they want to go. They've got to have a purpose. But the training piece and the understanding of how we work together, yeah, there's a need for working in the same office. 

Hannah Munro: 34:45 

Now, I think that's a great shout. And I think that's something we all need to bear in mind over the coming years as we learn to live with COVID. There is something about sort of face-to-face. So, I want to maybe finish up this conversation by asking you sort of what are your personal resolutions for the new year, for 2022? How do you know it's going to be a good year for you? What are you looking to achieve? It could be personal. It could be as a CFO. It could be what you want to achieve for finance. you know, but any of those. 

Nick Rose: 35:17 

Wow. Okay. Well, I'll keep it business focused. So, I think for us, it's continuing to allow the business freedom from a financial perspective to grow and to make the quick decisions that are needed. We've got a really tight team at the top and we are very good at making fast decisions and vast majority of times we seem to be lucky enough to get them right. So, for me, it's all about creating flexibility within a framework, which in the framework is the financial plan. And if I can create enough flexibility in that, then I can work with the other leaders in the business to just change, turn on a sixpence whenever they need to decide not to hire in that space, but to hire over here instead. and be just really light and nimble on our feet in those decision points. So, working out how to adjust the business and what the implications of that are in real time is just the number one priority, I think, for me, and working out especially what it means for the business. And if I was in a larger business, I'd be getting really close to the business operations particularly where there might be long supply chains and you need early sight of changes, early sight of any issues coming because COVID lockdowns or any other issue, you don't get much warning. So, how to plan the business on a long-term basis is really, really important. I think you've got to build in much more flexibility than we used to before. Making sure that you're close to your bank, close to your sources of funds, making sure you have headroom in your plan. You can ride out issues. So, I think there's an element of being more conservative on your cash coming in as well. 

Hannah Munro: 37:25 

Yeah, I think that's a... A really strong one. So, the concept of agile finance, which is the term I'm hearing more and more, the ability to flex your financial plan. I quite like that. Yeah. It's a good term, isn't it? You know, we use agile in other areas of the business but actually getting into the agile finance piece while still, like you say, giving yourself space because it's all about cash flow. You know, cash is king. Totally. Absolutely. Find 

Nick Rose: 37:51 

a balance. Absolutely. 

Hannah Munro: 37:53 

Brilliant. Well, that's some great thoughts for our audience and certainly some brilliant takeaways. So, thank you for sharing your journey and your experiences with us. It's been great to have you on the show, Nick. And yeah, good luck. It's, you know, good luck for 2022.