Finance in a High-Growth Consulting Environment with Ross MacGregor, CFO at Axiologik

Speaker A: Welcome to the Finance Seat, a practical podcast for finance leaders who want to know what actually works. I'm your host, James Roach, managing director of the specialist finance recruitment consultancy Head Start, uh, and a former finance director myself. Each episode I'll be sitting down with a different CFO or FD to discuss how they build strong teams, manage uncertainty and deliver change so that you can do the same. Welcome to the Finance Seat. I'm joined Today by Ross McGregor, CFO at Axiologic. Axiologic are a digital consultancy specializing in really complex transformation projects. Uh, Ross, I could explain what you've been doing, but better coming from you. So do you want to tell us a bit about your journey to CFO at Axiologic?

Speaker B: Yeah, I'm a classically trained auditor from KPMG days, worked in transaction services, worked in large corporates and smaller entities. Now at Axiologic, loving, uh, the entrepreneurial spirit that we have, Love the work that we do. Hopefully we can talk a little bit about that in due course and um, really trying to drive growth um, in the organization and scale it sustainably.

Speaker A: Great. So what was it that attracted you to the job? And also do you want to talk a bit about Axiologic and what makes them, what makes them different to other consultancies?

Speaker B: I guess what attracted me to the job um, really was thinking about the IT industry. I hadn't worked in this uh, sector before. I'd worked in construction logistics at uh, retail beforehand. And who doesn't use a computer every day of their lives these days? I thought, look, it'll be an interesting industry to try and get into, uh, without any prior experience. I guess. I fell on Accelerate. They were looking for someone who had experience with scaling uh, businesses, potentially taking them to an exit event at some future point in time. It's a sort of natural fit from that perspective. But I've been blown away with what I've learned really in this sector and space. Axel Logic really prides themselves in delivering really complex digital change programs in the public sector and private sector space. These are highly intelligent, really well regarded IT leadership positions within, um, within the industry and we were doing brilliant work in their NHS Home office, private sector, uh, clients, um, both in the UK and abroad. And the challenge there, uh, uh, has been immense and I've really enjoyed it.

Speaker A: Brilliant. So you're, I mean the business has scaled quite a bit, hasn't it, since you started to. Now you've been there a while now. So how's your role evolved during that period?

Speaker B: I guess When I first joined the business, uh, they hadn't had a qualified accountant in the organization before. So it was an interesting experience. There's no such thing as journals and management accounts and all that sort of stuff. Typical. And then some of your prior guests have talked about this evolution about uh, running a business based on cash balances and uh, like. And they were no real different to that to some extent, but obviously knew they needed to professionalize in, in some way. Hopefully they thought I was going to add some value to the organization. Hopefully they look back with a bit of a, you know, uh, you know, uh, experience I guess in that space and understand that I have done that. But I guess trying um, to scale a business sustainably is tricky. And if I'm being brutally Honest, the first six, uh, 12 months were actually the complete opposite of this. We were actually on the decline. We finished uh, the end of transformation program for one of our major global businesses and actually revenues were falling when I joined and they were forecast uh, to fall. And really that is around the turnaround uh, event. How do we control cost? How can we really think about growing the pipeline? How can we get back to growth? And that's been the challenge since I've been thankfully we've come out the other side of that. The IT consulting uh, sector has improved generally, but we outperform that in recent times. Uh, and we've got a great leadership team there that support me and we're all on the same path together to try and get sustainable growth. Not exponential growth. That's not sustainable uh, in my mind but really trying to pull all the levers we can do to grow our customer base, deliver more brilliant work and create opportunities for everyone in the organization.

Speaker A: So in previous roles you were uh, what construction and products specifically I guess and then moving into consulting where people are the product bit different. You mentioned levers there. What are the financial levers that you're looking at pulling?

Speaker B: I guess from the humanistic perspective that people centric, uh, position. There's things like customer satisfaction, things like utilization rates, making sure that the pipeline is strong, all those sort, sort of traditional metrics that you get in consultancy. And I had to learn some of this myself, uh, and some of my peers in similar organization, what they're looking at and you learn stuff clearly the founders of our organization, uh, worked in other large corporates before and they can give you help and advice but some ways you need to make your own way and think about what's right. Like we did have all the reporting we have and all the intel and detail we have today on day one. So it's building it up in sustainable blocks and thinking about what's really important, important at each stage of the growth cycle. Uh, and I think that's really the key to maximization um, of value to the shareholders of the organization and to the colleagues that we support every day. Massively helped by the fact that we have a brilliant hr, uh, director in Sarah Bryce. She really keeps us focused on the people, uh, agenda, which is brilliant. I love working with her and people say that finance and HR don't necessarily get on so great, but that's absolutely not the case for uh, uh, Sarah and I. It's brilliant. I always learned something new in this organization. That's why I love working, practicing.

Speaker A: Because you're increasing headcount, I guess a bit more dramatically now versus when you first started out. So uh, I guess with margin, with utilization and growth, they can be a bit conflicting obviously, can't they? So is that how you're managing that balance between those three? Is it just the people focus whilst balancing out the numbers?

Speaker B: Yeah, um, I'm looking at the numbers and thinking about what we can do in this space. In the IT consultant space in particular, we're helped by a massive contractor base. It's absolute standard practice. And getting the right mix between employee and contractor utilization, uh, within our own organization is a real tightrope that uh, we're looking at every day, every week within our organization to really fine tune that um, and you know, we've more sustainable bits work longer term, you can invest and we want to invest in our people. We want to make it uh, brilliant for our employees, but actually we want to make it brilliant for our contractors. We've been able to scale our business. We have a great reputation in the market for really treating our contractors and everyone who supports our business incredibly well. That's uh, something we're really, really proud of.

Speaker A: So without giving away obviously the secret sauce here, but outside of the normal pl, what are you looking at in terms of data and reporting? What sort of bits can you give us? Any snippets of software and things like that that you're using, that you're really finding? Insightful.

Speaker B: I had I guess a blank sheet of paper from which to work on. Okay. We were using Xero accounting software. Business of this size, quite a standard package. But how you actually utilizing that bit of software is key. Um, I think about the time actually we were out for dinner not so long, uh, ago. I think it was my turn to pay for Once uh, James and I submitted the expense receipt as we were at the table, it was within our accounts and uh, so quickly you could believe that that could happen effectively. And there's like loads of bits of technology that can support that. And I'm sure many of the listeners today will have their own um, systems that are working in the background. For me, the systems enable you to have the time to do all the value add stuff. So I'm tenacious in the organization to drive efficiency in everything that we do. And that's everything from day to invoicing on transaction going into our systems through to the spitting out of the data to ensure that we get that as time and as quickly as we can do. Our month end process is half a day within our organization. That's it from beginning to end. Because I'm just tenacious in using systems clear. I'm going to say that we're an IT consultant, we better do what we suggest our clients may want to do. But what does that enable me to do? It enables me to have a small finance uh, team, but it enables me and the rest of the team to focus on the things that really make the big difference, which is the data comes out of the side. Look how we got the right utilization rate, are we making the right margin? Are projects going as we planned? Do we need to pick up with customer or suppliers or contractors, etc. Any discussions in order to uh, meet uh, the targets that we've set? That's where the value gets added to an organization.

Speaker A: Is that how you see finance partnering then? Because obviously it's all about delivery and sales teams I suppose, isn't it in your business? So how does the finance team partner with them? Is it just a relentless focus on efficiency, making your lives easy, all that sort of stuff? Is it visibility? Is it all of those things?

Speaker B: Well, it is a mixture. Every engagement we have uh, with any client is always different and unique and um, we need to really make it a unique experience for the customer. That's what they demand to make life easy for them. My raison d' etre is always make life easy for the customer, make life easy for the delivery teams and leave me in the back office teams to do all the, the time consuming, annoying bits that everyone has in their roles. Um, because that means we deliver brilliantly for the clients and that's my relentless focus and what I think about every day. How can I make that experience? The reality of that is, uh, that we partner with them at the beginning. All pricing decisions, all proposals, uh, to Any new engagement come through me, uh, to sign off and agree these are margins we want to make. Is this, uh, sustainable? Is this the right thing to do with regards to where we are on the journey for each of our clients and what the work we're trying to do? You know, that's what I enjoy doing every day.

Speaker A: So I was going to ask you more around, like, how do you get that, um, commercial discipline, if you like, in a really entrepreneurial culture. But it sounds like you sort of wrestled your way into all the processes. Really? Is that how you've done it?

Speaker B: Yeah, I guess. This is the point of scaling businesses and this is the challenge of any scaling. But you need to have different, almost like guardrails or different ways of interacting in this space as the business evolves. Um, and in the early days, look, let's just see how we're going, let's give some guidance. And then when things aren't, um, quite going as you would envisage, maybe coming up the rails, whatever, then okay, you need to employ a little bit more, uh, control in that space. But my philosophy is, look, let's give them the guardrails, then make sure they're aware of the decisions that are making. Because that's the scalable sustainable model. If I upset everything in the organization, I only have 24 hours in the day like everyone else does. That's not scalable. So we need to make sure that we're empowering them to make the right decision, give them the data, understanding the point of decisions that they're making. And if we can do that successfully and we can get everyone thinking in a similar mindset to, uh, me, which isn't the only mindset in the organization, but similar mindset, then it just makes my job a hell of a lot easier.

Speaker A: And in terms of building out your team, making finance more impactful across the business, I mean, you've been really lean. You alluded to that a while ago, horrendous for finance recruitment businesses like ours. But actually you paid for lunch as you said. But, um, uh, what have you looked for then? Because you came, as you said now, accountant first. Accountant in the business as you built it out then what were you looking for in the people? Or were you looking just pure software first? How do I make this slick? Rather than building out through people, I

Speaker B: haven't actually had to recruit that much. In fact, the last bit of recruitment I had to do was, uh, for my financial controller, she went on maternity leave and with a short term interim, uh, person for a year with Great success. The rolling up the sleeves, the attitude that, uh, I'm going to get involved in absolutely anything in this organization. And I don't pigeonhole that around literally anything because it's all about this position of trying to delight the customer, trying to make life easier for the fund online staff, uh, the consultants. If we need to do anything to help them, then I expect me and my team to do that within relative boundaries. We're stepping all over marketing and HR and all the rest of it. But if they do need our help, then we should be there. Someone who's got that general, rounded, uh, attitude and wants to get involved in these different areas is really what I look for, uh, in someone joining the business.

Speaker A: Is that a rarity?

Speaker B: It's a tricky one.

Speaker A: No.

Speaker B: I think a lot of people want to do it, uh, whether people actually can demonstrate that and can, uh, show the experience. And to me, uh, one of the key points in when I'm recruiting is, uh, around the characteristics of people. And I've been very lucky to come along to one of the Head Start sessions, um, with Simon Hartley. Unbelievable session. Unbelievable guru in this space. And it's those characteristic traits I really thought about when I'm thinking about recruiting. And he does a brilliant job. If you've got a chance to go along to one of his sessions, I highly recommend it. And if you're recruiting on character, then actually the rest of it can train. I'm talking about some characteristics about people who want to roll on the sleeves that get involved in stuff, comfortable going into areas that they have literally no experience of doing because they want to learn. Uh, they've got the energy to get involved. And, you know, that's the stuff that is hard to demonstrate on, uh, a CV and all the rest of it. But that's the stuff that I love to recruit and, uh, work with day in, day out.

Speaker A: Thanks for the plug. You're not paid for it at all, are you? Just.

Speaker B: I'm not just for the camera. I'm not paid for anything. But it is so much so that even my said, look, we need to get everyone going through this, uh, full process because it's unbelievably powerful. Brilliant.

Speaker A: Thanks. So a bit of navel gazing then. What's next? What's next for you? What's next for Axiologic, I suppose, also within the framework of AI and automation, it's huge in the time that you've been there, really as well. And I suppose it's that balance of how do we use it to enable um, but also stay ahead of where it's at so that we can keep adding value to our clients within that landscape.

Speaker B: Yeah, it's a big one and we talk about it every day with our clients and like, wow, AI is going to change our world. I think, you know, purely from a financial perspective, we could always utilize more. As you know, all of my colleagues are using these sort of tools and everyone has their favorite, uh, AI tool of choice these days. You know, just doing that in a, in a controlled way I guess is the thing. And we've all probably experienced instances where it's about something that we're not so happy with, but really the power is going to be about how these things start linking up through workflows and how something can be spat into a system and come out the other end, something beautiful, uh, and exactly as we want it. That's probably the future, but I think day in, day out, data, uh, and the quality of data, even though in our business from day one when we had X amount of data, the amount of data we collect and control and manage and think about is massively, uh, increasing in our relatively straightforward, simple business. In comparison the corporates I've worked in in the past where it's a mindful and getting that data source and some of your uh, other um, interviewees suggested. But data, data, data, getting that sorted out is a challenge. And actually I think a lot of people are thinking about their data systems. It's interesting to hear about Fiona and her finance transformation in a prior podcast that you've had about people thinking about their legacy systems. And actually, you know what, we're here, we want to be there in six months, 12 months, uh, time. How are we going to get that? It may well be that your current system, your current ways of operating, your current processes need to be ripped up and actual logic, very, very keen, uh, to emphasize the point that those organizations that fail to adapt and transform will be gone in the years to come because they just can't keep up with the changing world. And every industry will be impacted through, uh, some sort of IT intervention, whether it's really AI and the AI bubble, all that sort of stuff, let's see where we get to in five years time. But there's a history of organizations that when they fail to transform, fail to move with the times, and they're the ones that left behind that constant evolution, that constant thought process of changing day in, day out is what I believe every organization should be thinking about.

Speaker A: Because you're a little bit, uh, contradictory to some of the points that have been made in the past, aren't you around transformation having a clear end? You were kind of saying to me previously, you're not sure about that?

Speaker B: I should say for the guy James and I were just talking about beforehand, I said, I'll throw him under the bus. Well, yeah. Am I allowed to disagree with some of your prior, uh, uh, podcasts, viewpoints Fiona have. I love listening to the transformation journey you've been on and the points you're raising and I agree with many of them wholeheartedly. But this idea that there's an end to transformation I don't agree with. If I'm um, honest in the current landscape of thinking about digitalization, it, transformation, all this stuff. Yes. Whilst there may be a mission and a goal and uh, an outcome, you're trying to live breaking that up into the chunks and never ever ending that journey, trying to maximize what you're getting out of that product or service, uh, is the way that we try to evolve organizations because to some extent it's just too big a complex thing to try and get your head around. You've got to break it up and it gives you more options to um, um, meander, I guess, around the subject to ultimately achieve the goal. This is an absolute nightmare for finance people, by the way, because everyone in finance wants to say, right, I'm here, I'm going to get there in 12 months time and it's going to cost me 2 million quid or whatever the check size is. And uh, for someone from IT go, well, we don't actually know how much the check size is going to be. We're just going to do the right thing and every one of these steps is going to be a return, um, on investment. And we can absolutely prove that out to you. No, but how much is it going to cost me? When's it going to be delivered? Well, we don't really know that because we're working in an agile way like this is like heart palpitation moments for any senior finance professional. But this is the modern way and I think we need to just change the mindset in this space to ensure that from a finance profession perspective that we're really supporting our uh, IT colleagues and people who try to transform uh, business because it's not going to be a linear process from A to B like it may have been tried to achieve in the past fully enough. It's probably why many of these big, large transformational journeys failed to some extent because it's just too big a bite to take I guess what you're saying

Speaker A: then they've been really cost focused and they need to just move towards ROI focus almost. Don't worry what it costs because as long as you can justify the return of which your IT colleagues are going to define or show you, like go uh, with the leap of faith, change your way of thinking.

Speaker B: Yeah, which is a big leap of faith. Uh, I can't imagine too many CFOs out there. Just oh yeah, absolutely. What this goes back to is understanding and the closer uh, in any organization finance can become to any of their colleagues, uh, within the organisation, the better it is, the more you understand, the more you can appreciate their viewpoint, what they're trying to achieve. And as long as everyone's got that clear, obvious focus in where they're trying to get to and we're supporting each other in achieving that goal, then it's hopefully a uh, a future way of doing business. Uh, it's uh, certainly been led massively from the uh, IT digital space. Let's see how that transcends across organizations uh, up and down the country and into other areas of each business.

Speaker A: We can play this back in five years time when it's all like that. Uh, everyone's going on ROI and go, you heard it here first.

Speaker B: I don't think he's that revenue straight if I'm honest. Uh, and my IT colleagues will say oh we've been banging on about this for years upon years and rightly so. And it's only really since I've joined Axiologic, I've really taken us on board and understood the benefits of doing this. I was highly skeptical, don't get me wrong in the early days. But when you start seeing the power and the benefit this can bring and how business can scale and transform very, very quickly in way shorter periods of time than what you thought was ever possible. When you change this mindset then um. Wow, brilliant.

Speaker A: So um, from a pure sort of finance perspective then, axiologic, what's next?

Speaker B: Well I want to grow the business more. We're doing that sort of classic PE model, trying to double, double, double type stuff. Um, and with that will naturally be a need to scale the back uh operations in the organization. We probably need more data, insight into some of our engagement. Some of our modeling has been around, uh, traditional uh, time and material type stuff trying to move more towards outcome based stuff. Great for the client, guaranteed to what we're going to deliver for them. Really good value propositions in that space. With that comes a little bit more Financial scrutiny to know where you're going. Uh, one, two month projects. Yeah, fine. Two, three year projects, maybe not quite so comfortable, uh, by, uh, just leaving the guys on the ground to crack on and we'll see how the numbers tip out. So that level of detail and understanding, uh, is crucial as the business scales, and that's what we all need.

Speaker A: Brilliant closing question, Swan. We like to ask everyone, when you look back over your career, what have you learned that that actually really matters in great finance people?

Speaker B: Uh, I've alluded to it in this conversation. I think people who can roll up the sleeves and get involved. But actually, if I think about the great leaders, and I've been unbelievably m lucky with many brilliant people that I've had the privilege of working for. Okay, maybe not in the moment. You know, you always have that boss. You think, oh, God, they were really hard on me back in those days. Uh, but I look back on those, oh, my God, they were the best because they pushed me beyond limits. And I think if I didn't nail it down to one thing, I think it's got to be stakeholder management both up and down. The brilliant people are the ones who can sell a, uh, vision, sell a story, get that stakeholder engagement across the business and really break out of that sort of direct finance mindset. I think it's very easy to fall back on numbers and rely on numbers and make decisions just based purely on m numbers without bringing the human side of it. Those people who can manage stakeholders and get the business moving in the same direction at all levels is the ones that really stick in my mind. And there's a few of them.

Speaker A: Thanks, Ross. That's been amazing. Thanks for listening to the Finance Seed podcast. Stay tuned for the next one up. Thanks for listening to the finance seat. Before you go, please do take a minute to rate and review. It makes a huge difference. And make sure you give us a follow so you know when the next episode is out. See you there.