Purpose and Profit: From Big 4 to Better Business

Paul King: The misconceptions around the financial trade offs that really hold us back from making progress. So whether that is sustainability, whether it's social impact, there's, I think there's so much more that we can be doing.

Host: You intentionally put yourself in a position where you were going to be exposed to multiple founders and business leaders. Like it's going to lead to opportunities.

Paul King: You're getting a paycheck and you can put food on the table and you know, a roof over your heads and your family. Then, you know, beyond that, the biggest source of motivation for people is a connection to a deeper sense of a purpose. You know, looking at retention and recruitment, there's a cost to employee turnover if an employee leaves. I think Gallup data, uh, shows it being up to 200% of that employee's salary is kind of the indirect cost on the company. This assumption that sustainability, social impact, uh, are costs for a business when actually they are investments.

Host: So I'm really excited today to welcome Paul King, who is a chartered accountant turned startup CFO turned fractional finance leader, turns founder of towards better. Yeah, a bit of a mouthful. Um, but you started your career in the big four, is that right?

Paul King: Yeah.

Host: And then, um, has worked for some really high growth startups, um, and some of the world's biggest brands, including advising Starbucks Europe on their sustainability strategy. Um, but what sets Paul apart is his belief and lived experience really in how purpose and profit don't have to be in conflict. And he's on a mission to help founders and finance leaders build businesses that are, uh, better for people, better for the planet, but also better for the bottom line. Um, so welcome.

Paul King: Thank you. Yeah, I'm excited to be here.

Host: Thanks for joining.

Paul King: Been looking forward to this.

Host: Yeah, me too.

Paul King: Had a lot of great guests and so, yeah, very happy to be here and to have this conversation. Yeah, absolutely.

Host: I mean if I could pick someone who's more aligned to the whole ethos of this podcast, um, I think I would struggle, um, because what you do is very, very well aligned to, um, what we're trying to explore on the Conscious finance podcast. So thanks for, thanks for coming along and I guess straight into it really with your career journey. It's fascinating and it's not something that is typical really of what you see, the traditional finance route. Um, and is that where you wanted to be when you're a six year old?

Paul King: Uh, no. Is, is the, the straight answer? Um, yeah. And I do, I, I question whether there's many six year olds out there that are scream of being an Accountant when, when they're older. Um yeah, I, I wasn't one. Um um. And so maybe that ah, I think that has, that probably has pushed me to, to try different things and take some of the, the risks that I, that I have. Um um. And, and yeah it's been, it's been quite a roller coaster ride from billion dollar boardrooms to the trenches of, of tech startups. Uh but uh, but yeah it's been, it's been a lot of fun and, and learned a lot along the way.

Host: What do you think drew you to finance particularly?

Paul King: Oh, um, being offered a job initially. Uh yeah, I um, I was always, I was always just naturally good with, with numbers and, and just, and enjoyed understanding how like how things, how things worked kind of on a, an analytical level. Science was kind of where you know, I really got drawn towards at school and then I did Bichem Street University, although quickly um, realized I didn't want to spend my life in, in a lab. Uh so I then I then did a master's uh in just a kind of a general business um ah degree and learned a lot more about the real world beyond uh, beyond science. And this is, this is during the um, recession, the global financial crisis. So I kept hearing in the news about the credit crunch and I just thought it was like some new breakfast cereal that when they kept talking about HBoss, this bank that is failing. I just, I honestly thought they were talking about I was getting mixed up with hbo. The I kept thinking why did I keep. Why is this so important? So I knew nothing, nothing about the real world and, and just started applying to um, just management general management grad schemes.

Host: Okay.

Paul King: And uh, and I thought I probably you know, I'll be lucky to get you know, to get a place because all these big companies were cutting back because of the you know, the recession and uh, but I actually got, got offered. Offered a place um, with Lloyds Banking Group.

Host: Okay.

Paul King: So yeah, so I joined the grass scheme there. Uh and yeah I really enjoyed it uh, to begin with and then over time started to realize that I think there was only a certain amount of time that I wanted to stay in the corporate world before then looking to something else. So startups was something that always really interested me. Um, and I always thought that one day probably I'll just start my own. So that was my mission really. Uh, when I was working for those big companies earlier in my career, I set myself the goal of find the jobs and the roles that will give me the most exposure to different leadership teams and Founders. So I could just understand as many different companies as I could and understand what works, what doesn't, why do some companies succeed and others fail.

Host: So you always had that destination in mind?

Paul King: Yeah, yeah, it was always some, yeah, always something that attracted me. I think um, it probably dates back further but there was a unit on entrepreneurship um, in the masters that I did. I think that really kind of sparked my interest in it. Um, but it did seem very distant a lot of the time being in the corporate world. And so it was kind of a meandering path towards it. But I definitely did um, you know the strategy or my mission definitely, definitely work. I was, I was lucky to have some really good roles where I could work really, really closely with different management um, teams. So you know, nature of the, at the time that I found myself in the aftermath of the global financial crisis, these, in these events there's often opportunity as difficult as they are. And so for me it was this, it was a very unique time in terms of just the scale of difficulties that big companies were facing. And so the most exciting part of the bank for me to work in at that point in time was restructuring. And so I managed to get um, a full time role um, after the grad scheme where I worked with private equity backed businesses, um, very big companies between 50 and 250 million pounds of debt that were really kind of on the edge of toppling over and so was given loads of responsibility still just a few years out of university um, and I would have to sit down with serious proper grown ups management teams. These massive companies facing really serious problems. Yeah and hundreds of jobs on the line and my job was to work with them to, to plot a route through that and to you know, and to come out the other side. So um, had, yeah had a lot of, a lot of exposure early on to that and then um, the next couple of roles were, were kind of similar. So I moved to Deloitte. That's where I qualified was at the corporate finance.

Host: So within Lloyd's was that more um, general management in general sort of business operations or did it have a finance focus as well?

Paul King: It was, it was definitely finance, finance focused. So this is all about. Lloyds was um, a lender uh to these companies and it was about how can they um, how, how could Lloyds support the company through so that long term it could then recover as much of its, of its debt as possible. And just the nature of these companies being private equity backed, you know going through an insolvency administration process was, was not going to be a good result. And so it was always about, um, backing management with the turnaround plan and often even putting more money in. So you really had to be sure that it was the right plan. So there was an awful lot that did come down to the numbers and the analysis. But, uh, everything obviously, you know, that, that supports that and sits behind it is all the different aspects of a business. And so, I mean, that really appealed to me always as I've seen myself as more of a generalist. And so needing to understand the market, customers and all those other aspects was an important part of it.

Host: It's really interesting how you thought that early on in your career to position yourself for the future, building that sort of business acumen, that commercial awareness, that putting yourself in positions where you're going to have access to multiple different business models, um, different founders, different, um, organizations. And I think that's probably quite useful advice for young people out there today who maybe don't know where they want to go, but they do want to do their own thing eventually or have their own business. Um, and I guess in a similar time where we're in a bit of a economic, ah, storm for one of a better word. And um, yeah, the big firms maybe haven't got as many opportunities for young people as they, as they did. So yeah, seeking out that type of opportunities is probably quite good advice for.

Paul King: Yeah, I think there's always, you know, there's always transferable skills. Um, and I think some of the, you know, the pearls of wisdom, you know, in terms of careers advice that I heard early on was about, you know, thinking, thinking a few steps ahead. And often it's not a case of you just being able to make one jump into, you know, into what you think the perfect role is. It might take a couple of steps to get there. And it's just about trying, trying to break those, those down. But often it doesn't really matter. You know, what if you're in a different sector to where you want to be or, you know, a different, you might be in corporate and you want to be in a startup, or it could be the other way around. And it's more about just understanding what, what skills are important and how can you, how can you seek those out.

Host: Yeah. And then after the Big Four, uh,

Paul King: so I moved from Deloitte to bdo. I joined the Mergers and Acquis and that was, that was great. I really enjoyed it. There was, there was definitely a big difference. Moving from the Big Four to, you know, a slightly smaller firm, um, and definitely from going from restructuring to you know, to mergers and acquisitions. So working with founder led businesses that were really, really successful and they were just at the point of you know, of their first um, private equity transaction or, or an exit. Um, and um and yeah really, really enjoyed that. I had a really interesting mixture of a role between uh, being based here in, in Bristol and so looking after kind of the Southwest generally across all sectors. Um and then I was also um, working with the national uh, retail and consumer team. Um so that kind of took me across to London quite a bit and worked on some really interesting um, transactions there and uh, yeah definitely learned a lot there. That is now you know I work with a lot of early stage businesses which we can, which we can get to but there's, there's um, again talking about transferable skills. There's, there's an awful lot in terms of how you would, how you would run a, you know, emergence acquisitions process, the you know, a sale of a company and how you can apply that to very early stage fundraising. So yeah, I was fortunate enough to have some, you know, have some really, really good mentors and learned a lot along the way. Um and it was there that had the opportunity to make that leap into the world of startups.

Host: And how did that happen?

Paul King: So it was actually a client, we didn't do very much of it but um, uh we were helping ah, a company with an early stage round, um with a fundraise. Um and yeah so I got on really well with, with the founders, was um, working very closely with them for, for a while on this, on this fundraise, um, company called called Pentatonic.

Host: Oh yeah.

Paul King: And uh, and yeah they, they um ended up making, making me an offer that, that I couldn't refuse. It was, it was just the perfect opportunity for me like I said something I wanted to do for a long time but it was also a uh, business um and, and a you know a part of the market that I really wanted to get into. So Panasonic has gone on to become a real pioneer of the circular economy. So sustainability. How do you um, close the loop between the outputs or what might be waste of a business and then recycle that and turn that back into um, inputs, um and also thinking about how do you extend the relationship with customers and so bring them back um, into you know, into stores or to buy more things, trade back products and so they continue to do some, some amazing work in, in that space. And uh, and yeah it was, it was a risk joining them, joining them at that point in time. But um, but it was, I just knew it was, you know, it was the, it's the perfect option.

Host: It scare you?

Paul King: Um, I don't think it scared me as much as it scared probably the, like the people around me. I think, uh, probably you know, friends and, and family and even, you know, even some of my mentors through, you know, previous roles that I had kind of, you know, asked them what they thought about it. Um, a lot of people were, you know, maybe um, urging caution, uh, from

Host: a big corporate quite structured environment into startup chaos like roll up your sleeves. Everything. Must have been a bit of a culture shock.

Paul King: It was um, it was, I think, I think it was something I was, I was really, it was something I was really looking for. I'd always felt that startups would be a very good home for uh, a generalist and I always thought myself as more of a kind of a generalist than just uh, someone that would only want to do finance. That definitely turned out to be the case. I've always had the opportunity to get involved in all across.

Host: I've seen your canvas skills, pretty snazzy pitch decks you've built there. You've got a really good creative side as well as the numbers I've noticed.

Paul King: Yeah, I think that's um, yeah that's something that I've learned throughout probably at BDO and then definitely at Pentatonic as well. Um, because we worked with retail and consumer brands when we put together the im, so like a bigger version of a pitch deck, uh, we would always put a lot of effort into just making it beautiful and representing the brand because the brand would often be a big driver of the valuation of these businesses, ah, that we were know helping the founders to, to sell. So we actually had an agency, um, like an in house agency that would help with the design of those things. So I think I learned, I learned a lot there and then particularly at Panasonic. Um, Jamie, one of the founders had a background in you know, brand marketing communications at uh, Nike and other other big businesses and he was brilliant at those things in terms of how even a really, really early stage company could look and feel like an established brand. And that made a big impact at uh, Panasonic. And so yeah, I think I learned it from there and it's something I encourage. Even early stage founders I work with. I think how pitch deck looks is almost as important as what's the actual content inside it because investors will skim through it like a 90 second skim through a pitch deck and so how it feels and how it looks, even if they won't say this, it does have a really important effect.

Host: Yeah. Yeah, love that. So it sounds like Pentatonic was almost stars aligning, um, that they were a client. And, um, it led to an opportunity, but not only did it lead you into the startup space, but it also led you into that purpose space where you're working for a business that is a real force for good. Is that, was it that move that sort of spurred that passion in you, or is that something that existed before that maybe you weren't scratching that itch and the stars just in the right way?

Paul King: Yeah, yeah, it's a really good question. Um, I think it's. There's different, uh. Yeah, there's a. There's a few different things there. So for, For a long time I really had this, this drive that I wanted to be, you know, to be doing something that made a difference. Um, I think just the nature of being in banking, you know, in, uh, during the recession and in the times of banker bashing in the press and uh, when we had induction for the, for the grad scheme, um, which is basically like a corporate version of a, of a freshers week, we would. We were hidden away in a Premier inn in the Docklands. And, and all the, you know, the, the kind of the usual swag and stuff that you're given was just. Was not branded. And there was even kind of jokes about, um, uh, because I was at Lloyds and they said if, you know, if, uh, if, if the press ask you who you are, uh, what or what we're doing here, just, you know, tell them that you're from rbs. So it was, you know, just operating that environment, um, was, I think, must have kind of. Must have shaped it. And there was one particular moment that in hindsight, I think has really stayed with me. And so you might remember the, um, the Occupy movement. So it starts on Wall street where people just were camping out. Intense. Yeah, on Wall street and they were protesting against the kind of, you know, the injustices and the inequality and how, you know, the, the system had collapsed and those that had caused it didn't really suffer any consequences. And, you know, the whole 99% thing and we are the 99%. And that had, that had really captured kind of the imagination across the globe and it had very much spread to London. And so there was. There's Occupy St. Paul's so they were camped out outside the London Stock Exchange. And I was really, really fascinated by this. I mean, at the time, it felt like, you know, the. The system was on the verge of collapse. You know, like, around me, I was inside it, and I found it exhilarating. Other people must have been, you know, must have just been worrying about, you know, the. The security of their job and. And things. But for me, it was like living through a, uh, film. It was great. And so one lunchtime I decided to walk down to. To. To the camp. And it was. It was a cold, wintry day. But I, um. I left my jacket on my. On my chair, and I took off my tie and shoved it into my pocket so I wouldn't be kind of seen when I got down there. And I was just. I was just blown away by. Was like a city.

Host: They.

Paul King: They had a university with. With a whole library of books. They had a program of lectures that would go throughout the day. Yeah, there's a canteen serving meals. There's even like a hairdresser.

Host: It's a very civilized protest.

Paul King: It was. Yeah, yeah, yeah. And so it kind of. It really stuck with me. Um, just the momentum that they could. That they were able to. To gain, but ultimately it kind of, you know, fizzled out and didn't really, you know, it felt like it didn't really come to, you know, a conclusion that they were. They were driving for. And I think they were great at, uh, articulating the problem, but didn't really have a clear solution as to what. What needed to be done. But it was very much that sense of purpose that really, really bound everyone together and kind of, you know, and drove that momentum. And so going back to the office and sitting down and at my desk and putting my tie back on and kind of looking around me and, you know, I just. It was. It was stark how lacking this. The sense of purpose was there. But of course, there was all of the, you know, the planning and the structure and everything. And so I think that's probably where, you know, the seed was first sown in terms of you need to have both of those things. You need to have the. You know, you need to have a sense of purpose that really drives you, but you need to make sure that it translates into, you know, into. Into commercial and financial success for, you know, to really. To really sustain it.

Host: So that must have sparked something in you then, that whole. Just going through that experience.

Paul King: Yeah.

Host: Do you think there's something deeper, uh, from your childhood upbringing that made that, made that happen?

Paul King: It's a really good question. It's something I've asked myself a lot. And, and at the moment. I don't really have. I don't really have an answer for it. Yeah. Um. I feel like there must be. There must be something because it has. It has been something that, um, I've always felt a dream, a deep drive to want to do, to, you know, to. To contribute something positive.

Host: Yeah.

Paul King: Um, and to make, you know, to make a difference somehow. But, yeah, I'm not really sure exactly. Exactly where it comes from.

Host: Sadly, I'm not a hypnotherapist, but we could dig into that.

Paul King: Okay.

Host: If you like. But no, it must come from somewhere. I always wonder the same for myself because, you know, similar story but in a different context, I would think big global corporate businesses. And the longer I was in there, sort of looking around four walls and, uh, thinking, it's got to be more to the working world than this. You know, in a world as a listed organization, it's all about shareholder value and it's not their fault, it's just the structure and they have to please their shareholders. Um, but, yeah, I mean, I had a bit of an awakening really, just when combination really probably of having Esme and thinking, what world is she going to grow up in?

Paul King: Yeah.

Host: And then equally then, pandemic. A lot of time sat on your own, looking at four walls around you, thinking, yeah, what am I doing? Um, and. And I took a lot of deep reflection thinking back, you know, what do I want to do? What do I want to build? And then looking intrinsically in terms of my values and what I cared about. And, um. Yeah, the only conclusion I could really come to is I've got my mum to thank for it. She was. She's raised me as a single parent and, yeah. Um, a lot of her values and my values that she's basically passed on and instilled in me. But, yeah, I haven't managed to pinpoint a single. A single.

Paul King: Yeah, Well, I think that's. I think that in itself is a great. Is a great answer, a great source of inspiration.

Host: M. Yeah, definitely. Um, so getting on to your journey from there, then you, um, you joined this startup. Did you go straight as a CFO or do you climb. Climb up to that?

Paul King: Yeah, so, yeah, I was. I was finance director to begin with. And then.

Host: So you went straight from M, M and A to fd? Yeah, because that's quite a different role, isn't it?

Paul King: Yeah, and I was, um. I think the bit that worried. That worried me was about going into the. It was like the operational side of finance and, you know, accounting software that I Had never touched before. So.

Host: That you ever pulled together a set of accounts?

Paul King: Uh, no, not myself. My, my roles was always the, you know, the analysis of them. Um, and so, and also, you know, I hadn't been an auditor either. I'd always done corporate finance roles. So that was um, yeah, that was something that did, that did worry me quite a bit. Uh, and you know, and I spoke with the founders about it and I was, I was lucky that I had a really good relationship with them. Um, and they reassured me, they said, you know, we're not, we're not hiring you to be a bookkeeper. M. And you know, we know that your, you know, your strengths are going to be in other, in other places, so don't worry about that. We've got, you know, that'll be covered by, you know, other people in the team.

Host: Okay, so you had bit of support.

Paul King: Yeah, yeah, that's good. Yeah. And so I think actually that it's probably, you know, for anyone who's thinking about. About making that jump into an early stage company or a smaller company, um, it, that, that does. It does tend to be the way that those, those more operational aspects of, of finance are uh, kind of, you know, um, are covered. You know, it's, it's kind of. Those are skills that will usually exist

Host: within, within a company or an outsourced accounting firm.

Paul King: Yeah.

Host: Do the bookkeeping.

Paul King: Yeah, that's right.

Host: Accounts.

Paul King: Yeah, that quite easy things to, you know, to find. Um, and so really it's that strategic or it's the commercial insight that, that you can bring that really adds value and will probably be where, you know, where, where you would be comfortable adding value if, you know, if you've come from a, you know, a larger business.

Host: Yeah, but I think your story demonstrates just the importance of relationships because if you had somebody in M A doing the role you were doing, applying to an FD advert, uh, or job externally with no existing relationship, you probably wouldn't even get an interview.

Paul King: Yeah, potentially. Yeah. Yeah. I think, you know, as I was thinking back about you know, the, my journey so far and the, and the steps that, that I've made and particularly the bigger jumps and I think to the people on the outside or even people that know me, they seem like very big risks, but I think to me they're not. And it's often something said about entrepreneurs is that they're risk takers, but in reality it's there they're able to assess the risk more accurately and, and find ways to mitigate it. And so through Their, you know, their insights or a piece of technology they've built or, you know, their distribution and routes into customers or whatever it might be, they're, they're actually able to, you know, to reduce that, that risk. Um, and so from the outside it just, it seems like a massive risk, but to them, you know, it isn't. And so I think that that's kind of been the case. I think, um, a lot of it feels like through luck for me, but I think with, you know, with joining Pentatonic, it didn't feel like such a risk to me because I was very close with, you know, with the founders and the business. Um, and I had that opportunity to have that, you know, the honest conversations with them.

Host: It sounds like luck, but, uh, you often make your own luck, don't you? And I think you'd go back to the beginning of your story where you intentionally put yourself in a position where you were going to be exposed to multiple founders and business leaders. Like, that's going to lead to opportunities.

Paul King: Yeah, yeah.

Host: You're building your tribe. Yeah. Uh, early. Which I think a lot of people don't necessarily see the value of their tribe or their network, um, soon enough and the connections that you make and how, how they often lead to the next thing. Like. Yeah, I can say the same about my career.

Paul King: Yeah.

Host: I don't think I've ever applied for a job. Like, everything's come from knowing somebody, a referral or friendship.

Paul King: I mean, it's that. Exactly. Show the best, the best jobs aren't often advertised.

Host: Yeah.

Paul King: And yeah, I think that's, you know, I think that would be the case with me as well, particularly in probably the second half of, of my career. And, and yeah, I think even when, when I was, you know, there were times where I've, I felt quite disillusioned with, with the corporate world and I thought, okay, you know, I just had enough of this. I need to now go off into, you know, do and do other things. And even if I, you know, at the time I probably felt like I was, I was going to do something very different and would leave this behind. Actually, a lot of the contacts that, that I, I made back then have, you know, have stayed with me and, or, you know, have kind of come. Come back round full circle and people that have continued to be really helpful, really supportive and so even. Yeah, I guess that, you know, one of, one of the messages or piece of advice maybe to people early, uh, in their career is that even if you feel like you are going to move on into something very different. You know, don't underestimate the power of the relationships that, that you build, you know, at any, any point in time.

Host: Yeah, yeah, definitely love that. And, and getting on to. Towards better. So you founded that when?

Paul King: Oh, um, uh, about a year and a half ago. Um, and it has, it's a lot of uh, um, early stage businesses will, it's gone through, it's gone through some, some pivots and it's kind of had a couple of changes and in focus and so on. But yeah, about, about a year and a half ago.

Host: What's, um, the why behind that?

Paul King: So that is, is really how can I use the skills and experience that I have, you know, amassed over my career and then put that towards my, you know, this, this drive of wanting to have a positive impact. Um, and so the other part to uh, the question that you asked me just now about where does that come from? The kind of the Occupy story is one, maybe like a deeper one, but on a more practical level, I think when I was with Pentatonic, um, and I really enjoyed getting involved in the client work that they were doing so supporting these massive Fortune 500 companies to um, you know, to get closer to their net zero targets by being more sustainable, devising solutions to the specific challenges that they faced. Um, and we were revising Starbucks and it was in the middle of the backlash against single use coffee cups. And so this is the days of the Attenborough effect, um, the Latte Levy. You know, it was in the press all the time and from all corners. The general public, the press, the government, everyone was just demanding uh, a solution that uh, uh, these major coffee chains could become more sustainable. And so we were working with the uh, leadership team of Starbucks Europe and we had a load of initiatives and detailed blueprints about how they could become more sustainable and solve this challenge. And despite the pressure they were under initially, there was a hesitation to actually move forwards and proceed. And it became clear that it was the financial side of things, uh, that was causing this hesitation. And so a big part of my role was to then demonstrate how these programs that we were going to implement would not only help them become more sustainable, but also would, would increase shareholder value, um, as well. And this is a pattern that I had seen repeated over and over again since then, that it's the misconceptions around the financial trade offs, um, that really hold us back from making progress. So whether that is sustainability or whether it's social impact, I think there's so much more that we can be doing. And this is the biggest barrier to making progress. And particularly having been in kind of the climate tech space, the technology we have, we should be doing so much more already. And so for me it's not so much a technological problem as it is a decision making problem. And often it just boils down to the numbers and people thinking that the numbers don't work and this is a cost when in fact it's an investment. And so having spotted that pattern, um, it was something that I wanted to help more companies to, you know, to overcome and show that purpose and profit can, can go together.

Host: Yeah, and I think that's really important, especially right now. I think with, you know, when I founded Core3 three and a half years ago, the world was making quite good progress in terms of opening their eyes to the importance of conscious capitalism and the concept of the triple bottom line and um, the B corp movement and business for good, whatever you want to package it up as. You know, ESG initiatives were all progressing and actually having a bit of meaning. But feels like this year, m, thanks to one orange faced man, a lot of that has been unraveled. Um, DEI initiatives being shelved, ESG initiatives being shelved because one uh, global leader doesn't value it.

Paul King: Yeah, yeah. There's no denying the kind of the macro environment that we're in, um, has definitely shifted those things down the corporate priority lists. So whether you call it ESG or CSR or DEI or whatever it might be, it definitely, it definitely has kind of fallen down the to do list a little bit. I think what interests me and I think can um, very much be part of the solution to this problem is that a lot of it is actually driven by these same misconceptions around the financial side of it. So this all comes from ESG and particularly dei, diversity, equity, inclusion, being heavily politicized in the US And a lot of that comes down to this conflict between doing business the right way and being profitable. And this concept of shareholder primacy or the profit motive that companies exist. And the purpose of a company is to make profit uh, for its shareholders. And that in itself is, that's a whole rabbit hole we can go down into. And whether or not that, that interpretation of that actually is, is correct or not, but the opportunity is of course to show that actually these things doing business in the right way, um, can actually make a business more profitable as well. And I think deep down the market, CEOs, um, are uh, you know, are realizing this and they do believe it. It's just A case of understanding how to go about, um, putting it.

Host: So in your view, what is the business case for being more of a responsible business?

Paul King: So I think there's a few aspects to it. And you know, if you look at um, sustainability as an example, I think long term, there is no question that there are such risks, that there is very much a long term financial reason for investing, investing in these things now. Ah, but for me, what really drives me I think is more the human side of it because that's also some way where you can see the results much more quickly and more tangibly. So you know, I think people, people want to work for, you know, for companies that are doing something positive. They want to feel good about the work that they're doing. And you know, assuming that you're, you know, you're, you're getting a paycheck and you can put food on the table and you know, a roof over your, your heads and your family, then you know, beyond that the, the biggest source of motivation for people is a connection to a deeper sense of purpose. So there's lots of big studies that show that um, connection to a sense of purpose is the most effective long term driver of motivation, employee well being, employee engagement, whatever kind of term that you want to choose. And then that obviously has links into performance and financial. So if you ask any um, probably any CEO, uh, he said if you have two employees who are equally skilled and experienced, one is happy, one is not happy for whatever reason, which one do you think is likely to perform better? And then that obviously then links into. You would see that on your P and L. So it's really just about understanding the linkages between these things. Uh, and actually last year, um, there was a special report in the Financial Times on this very topic. And uh, one of the articles within there had a headline that said firms with happier staff have higher profits. And so for me it was a really encouraging sign that a publication like the FT is not just running an article on it, but a whole special report dedicated to the link between employee happiness or well being and profitability. And so, yeah, I think it's becoming increasingly more mainstream that we should look after our staff, we should have happy employees and that will drive performance. And I think where perhaps the link isn't so well understood is about how actually a connection to um, a greater purpose and you know, sustainability, social impact really is the strongest driver of that.

Host: And is there any data to back that up that uh, having that sense of purpose or fulfillment in your job day to day leads to More happy, engaged staff.

Paul King: Yeah, there's uh, loads of data points out there. There's also, you know, I can give some, we have some personal examples from the companies that I've worked with as well. I mean just to start with, I think it's worth recognizing that as of this year Gen Z and Millennials now make up the majority of the workforce. So just over 50%. And for them this is having a connection to a purpose at work. Working for a company that is making a positive impact is a non negotiable for them. Um, and so there's a Deloitte study that showed 89% of Gen Z and Millennials will say that that's the leading factor when they make decisions in their career. Um, then in terms of how purpose then links to wellbeing and then how well being influences performance, um, in. So there's this big study that underpinned this Financial Times, um, special report. And then kind of buried deep within there, I went through all 45 pages of it. There are these six different pathways that they um, uh, summarize as being the operational links between wellbeing and performance. And so the first one, I guess the most, the most obvious is productivity. So if staff are happier, they're going to be performing more efficiently and more effectively. And this is something I've seen myself. So one of the companies I've been working with, it's a high tech manufacturing, um, business. And often one of the big question marks is, okay, we accept that maybe for people that are, you know, at the top of organizations are going to be bought into, you know, vision and all of this kind of stuff. But does it, does it really filter down? And so in this, this particular um, project that I was working on with this company, we looked at um, there was a lot of underperformance in the kind of the shop floor stuff, the production, the production team. And so a big test of whether you could use kind of reinvigorate a sense of purpose, a sense of connection to the rest of the organization and to a greater purpose and would that, you know, would that result in higher productivity and greater performance? And we were able to show that it did. You know, even with people that are on the front line of a business, they're paid on hourly rates that uh, a lot of people will say that's kind of beyond the scope of how influential this could be. And so we went through this big program of really investing in the onboarding experience. Much more regular team briefings connecting their day to day roles with the vision and kind of the long term direction of the business and understanding how important their roles were in, in the business as a whole. And so doing these things, uh, just transforms the performance. And being in a manufacturing environment, you're blessed with having lots of data to study. And so productivity went right up, outputs were up, uh, the QC pass weight rates were up, wastage was down. And ultimately this ended up increasing margins by 32%.

Host: Wow.

Paul King: Yeah. And so this is something that huge. Yeah, it's huge. And think about the roi because you know, these aren't things that, you know, it's not like a capital intensive, um, you know, program doing this. It's, it's, you know, it, it's one of, it's, it's like a culture initiative that finance people will often, you know, think of as being one of these, it's one of these intangible kind of, you know, warm and fuzzy things that appear nowhere on their Excel model apart from the cost.

Host: Yeah.

Paul King: Um, and so this really, for me, I always encourage companies to think about how can you don't see these things as a cost but as an investment. And how can you identify the links between this initiative, if it's well being or if it's culture, whatever you want to call it, what impacts might there be on performance? And that will look different across different teams in a business. And then from there it's easy to then think about how does that. Yeah. Influence your, your financials.

Host: Yeah, definitely. I think I, I can resonate a lot with that as a purpose driven business. You know, there's benefits there that I didn't even think of. You know, we did it because it's aligned to my values as a founder. But actually the, the knock on commercial benefit is just surprised me with regards to, first of all, the talent acquisition. It's really, really hard to find experienced recruitment consultants that are any good that will move from one place to another because they're usually tied into big bonuses or whatever. Um, and you know, in the first three years I've been able to attract more experienced consultants than I did in 10 years in a big global corporate, which is, which is crazy. Um, then from a, you know, from a, from a customer acquisition standpoint as well, um, I probably say 20% of the customers that choose us, choose us because we're purpose driven and we're a B corp, you know, and that's, but the, the majority still care about the quality and the delivery and what we do and pricing comes into it. Like there's still those standard decision making processes that you'd expect. But for, but even for that 80% is probably builds trust because we care about what we do. Yeah. Uh, we're a responsible business. You know, the purpose runs deep so then translates into our values and our behaviors and how we treat our customers as well and with honesty and transparency and all that knock on effect.

Paul King: So it's probably more than drives the results is all.

Host: Yeah. And then it from a cultural perspective internally, like bringing those values to life and turning them into meaning just creates more fulfillment day to day for the, for the people working, uh, here it's had such a great impact on the culture. There's just, there's so many things which I haven't yet had time to measure or put some figures on. But you know, I think, um, it's quite incredible.

Paul King: I think it's. Yeah, I think you, you do it so, so well in terms of making that, making that sense of purpose really, really clear. And, and it's not, you know, and it's, it's not just talk either. You know, you stand, you stand behind it through, through good times and bad in terms of your support of, of non profits locally and, and I think for me what the, the biggest indicator that of a strong sense of purpose in a company is that it, it just, it resonates throughout. It doesn't matter who you're, you're talking to and, and I, and I see it through, you know, speaking with different members of your team or, or even just seeing their posts on LinkedIn. Even if it, the, you know, the guys that hadn't met yet and it's, you know, it's like the same, it's like the same voice and the same level of enthusiasm that you have just comes through all of it. And obviously that is going to then translate into, um, doing a better job serving your customers better and you know, finding, finding just the right match in terms of the right person for the, for the right role. And you know, and you guys, your, your performance and your stats are, you know, way ahead of the, you know, the rest of the market.

Host: Uh-huh. It's very kind of you to say, Paul.

Paul King: Yeah, well, it's, you know, I think it's a, I think it's a great thing and you're doing it, you know, you're doing it the right way. And I think it's just, you know, it's another proof point that shows that, you know, you can, you can do business the right way and you can also be commercially and financially successful as a direct result of that. Not in spite of it.

Host: Yeah. And that, that happiness bit really resonates with me. What you said is that uh, anybody can relate to that because if you're sat at your desk and you're a bit grumpy, you're not going to do your best work, are you? Whereas if you're happy and fulfilled, you're not, you're not, you're going to go beyond the job description. There's like that extra, that discretionary effort, those things where you might just push the dial a little bit further or go the extra mile for your customer or work a little bit later sometimes if you need to. It's just like there's, there's just more motivation and drive there generally. But if you're not, if you're not happy, you're just watching the clock.

Paul King: Yeah, yeah, yeah, absolutely. Um, it's such a big factor and it just, it makes sense. Like I said, if you asked that question to a CEO, uh, the two staff equally matched, one happy, one unhappy, everyone would say of course the happy one's going to perform better. And this is something that the markets know this. There's really interesting research that was, it was in this, this FT special report about how um, they did this experiment of creating a um, like a well being index. And so they looked at the start of every year they would pick a hundred, um, 100 stocks of companies that were named on the, the best places to work list, um, and they'd invest $1,000 in each of them, hold it for a year and then rebalance again at the start of the next year because of the, you know, 100 companies that are on the best places to work list. And, and over the course of uh, three or four years it was showing that this um, this index or this portfolio outperformed the s and P500. So just a, you know, like a general stock market index by 14%.

Host: Wow.

Paul King: And there's, there's other studies that show that after, after a company is named on a great place to work, uh, or best employer list, there are a few of them, few of these kind of badges, um, there will be ah, ah, an almost immediate bump in the share price of these companies. So this shows that the market is pricing this in. So people who are just driven by purely financial metrics, traders are factoring this in and they know that happiness is an indicator and a driver of long term financial performance. So you know, it's just, it's a question of what, why aren't more firms really committing to this? There's A couple of stats there. 87% of CEOs, uh, believe that um, employee wellbeing is a source of competitive advantage, but only 33% actually make it a strategic priority. Um, and so, you know, I think,

Host: I think it's because it's not that immediate benefit. It's not, it's not short term enough. Sometimes I think it's a, it's seen as a big effort and it's a long, a longer horizon than typical, uh, business decision making. Yeah, but you're right, it's just so worth the investment. I think there's, there's loads of data around the B Corp movement as well as how that B corporations, ah, grow faster and are more profitable than other business like uh, businesses of a similar size that aren't. Um, so yeah, I'm hoping today we can get that business case through to people's minds and to have more organizations that are a force for good in the world. Um, because I think that's the way that the businesses need to go, really.

Paul King: Yeah. And I think a lot of the responsibility actually falls on the shoulders of finance professionals as well. I think that's a really important point to make. These, you know, often around, you know, the, the board table, finance might sit on the opposite side from marketing or HR that really wants to, to implement these initiatives because it's going to help attract and retain the best staff or you know, customers love this. And, and so it's about how do you, how do you build the bridges that, that link these things that might be intangibles. So if it's, you know, employee engagement or retention or brand equity, how do you, how do you translate those into things that you can then see on a P and L or you know, firstly measure with KPIs and then obviously translate into, into financials. Um, and so, you know, looking at retention and recruitment, I think there's, it's quite well known now that there's, you know, there's a, there's a cost to employee turnover if an employee leaves. There's, you know, there's, I think Gallup data shows it being kind m of up to 200% of that employee's salary is kind of the indirect cost on the company.

Host: Well, yeah, recent rec data, which is backed by um, I think it was Deloitte or PwC data as well, shows three times their salary. Yeah, it's huge cost. There's all the hidden costs as well.

Paul King: Exactly.

Host: Yeah. Onboarding, training, leadership time, lots of productivity of the team around them. Um, then when they Leave as the team is stretched and you might have more um, retention issues further down the lines. Just so many snowball effects.

Paul King: Exactly. And so these, all of these costs are there. They're just hiding on the PNL and they're not, they're not being linked to, you know, to what is, what's driving it. And so, okay, we didn't hit our targets this month. Why was that? Because, you know, we're, we're short of one or two members of the team because they left.

Host: Okay.

Paul King: And usually you stop there. It's like, okay, why was that? Why was that? And so I think it's always possible to connect the dots and to figure out what is driving it. And usually it is an intangible factor like well, being and connection to purpose. But that will then be influencing things performance that you're tracking already with KPIs. And so it's just a case of connecting the dots between them. And so, you know, I often think as you know, a finance professional, you're often building these forecasts and you know, you might be putting in a cost for something that is, you know, uh, some, the new HR culture initiative. Okay, you know, what's the budget for that this year? But think about what's on the other side of that. What if it's not a cost and it's an investment? How should this be influencing performance? And how can we, how can we measure that and how can we understand and quantify this link? And then you can start putting a financial ROI on these different initiatives and then it transforms this happiness thing from something that CEOs think is important but never get round to, to being something that they, you know, they need to, they need to crack on with. They'll know what the ROI will be.

Host: Love that. And we're, we haven't quite had time to get through your uh, sort of capital for impact side of things either. And I know that that's another area that, towards better our, uh, helping clients with, in terms of fundraising in, in quite a difficult world. Um, but I guess with, with that. Ah, um, what, what advice would you give to founders or CFOs FDs trying to raise in this climate?

Paul King: Yeah, um, it's, it is a challenging time to raise for early stage companies at the moment. So for. I think my advice would depend upon whether you're early stage or later stage. And so I think later stage companies, and I work with companies across the spectrum, later stage companies, I think look at, think of a fundraiser as your plan B. Okay. So you need to Figure out other ways, uh, to extend your Runway, to hit the milestones that you need to hit, to, uh, implement the strategy that you believe is the right, the right course for your company, but find other ways to unlock the capital to do that. And so that could be within your working capital, particularly in the terms, payment terms of customers, is often a great one. Particularly innovative companies that are doing something different, you should be able to negotiate better payment terms. There's also a lot of alternative debt funding out there at the moment. So if you approach it that way, you're in a very strong position. If you don't absolutely need the money, that is, that's the best place to, to be in. And then if you go through a fundraise, then, um, you know, you then have a decision to make us. Okay, do I switch to this being now being my, my plan, My plan A. For early stage companies, you need to recognize that fundraising really is a numbers game. There's kind of, there's no getting around it. You need to be, you know, you need to be going out to 100, 150 different investors that are, that you've already filtered and made sure that are a good match for your business and looking to invest in companies like yours. And you also need to get warm introductions to at least half of them. And so someone that can make a connection, that can introduce you. And this goes back to what we talked about near the beginning, about the importance of contacts that you make throughout

Host: 150 is a lot.

Paul King: It is, it really is. And a lot of people don't recognize that. But you need to think of a fundraiser as a sales funnel. And so if you're going out to 100, 150, then how many of those are actually, you're actually going to get a response from? And that's why warm introductions are so important, because you get responses and you get quick responses as well. And so that means that you can cluster together the first round investor meetings that you'll have and then you start moving all of them through the funnel, through the process, in lockstep. And what that does is it makes sure that you build momentum. And for an early stage company, that's so important in a fundraise because investors have to feel like this is something that they can't miss out on.

Host: It breeds sort of healthy competition as well.

Paul King: Exactly. Yeah. And this is one of the things I mentioned about from my days in M and A, where it's, these are, uh, very well established, very successful, profitable companies, but the same approach holds you, you Run a competitive process and you move everyone through it at the same time so that you get multiple offers landing all at the same time, and then you've got that competitive tension and you can start pushing up the price. And the same, the same holds for an early stage fundraise if you, you know, if you have to start with such a big number, because early stage is really difficult. And that's the number you want to start with or you have to start with if you want to have, you know, a handful of term sheets at the end of it. And really that's, that's the position that you need to be in if you want to, you know, if you want to get a good result, if you want to be able to choose, okay, which investor do I want to partner with?

Host: And is that where somebody like you comes in that can facilitate those warm introductions? Or is that, would you recommend people go and find them themselves?

Paul King: So it's, it's really, really important that founders don't try and outsource a fundraise.

Host: Okay.

Paul King: It's kind of as, you know, time consuming and distracting as it can be. You want to be running the business. There's so many things that you need to be doing and the fundraise just does. It takes a lot of time, but it doesn't take as much time if you know exactly the things that you should be doing. But it doesn't send the right signal to investors if you're outsourcing it to someone. And so it's important that founder leads it. And it's also important that they're able to unlock those warm introductions through their network because it's also another really big signal of, uh, the credibility of a founder. And it's also important for the investor, they like to feel like they have sourced this opportunity through their network because that's how it's come to them. So there's lots of reasons, um, why they should go about leading it themselves. And if you know some of the secrets, then it doesn't take as much time.

Host: I guess we could probably have a whole other episode on that topic. But if anybody is interested, sort of early stage, that is thinking about fundraising, are you happy for them to reach out to you directly?

Paul King: Yeah, yeah, absolutely. Yeah, probably via LinkedIn is probably the best way.

Host: Great.

Paul King: But yeah, more than happy to, yeah, to, to have a, have a chat with people.

Host: Amazing. So final question. What is the one thing that you hope people take away from today?

Paul King: Oh, um, so I think just to, just to reposition this assumption that sustainability, social impact, uh, are costs for a business when actually they are investments. And, um, as a finance professional, I think you have a real opportunity to be the person in your company who, who takes the lead in showing that actually being better for people and being better for the planet can also be better for the bottom line. And there's huge impacts, uh, that you can then have by doing that. So I think whenever you hear about your company exploring a new sustainability initiative or wanting to become a B corp, think about how those costs could be flipped into investments.

Host: Love that. Paul, thank you so much for, uh, joining me. It's been an absolute pleasure. Thanks.

Paul King: Yeah, thanks, Leo.

Host: So thanks for listening to the Conscious Finance podcast. Um, it's really appreciated and if you can help us increase our impact and inspire others, um, it'll be much appreciated. All we ask is just subscribe to the podcast. Um, give us a like or drop us a comment. Um, it really does help get the word out there and expand our reach and hopefully inspire others to drive their impact further. Thank you.