How to Become an Impactful Finance Leader — with Peter White
We had the pleasure of interviewing Hyperoptic CFO, Peter White, who shared his tips and advice with us, on how to become an impactful finance leader or CFO within a high-growth business. Learn about the challenges and lessons Peter has faced on his own journey to becoming a high-growth CFO.
Dav: Provide us with a brief overview of your background.
Peter: Going back to the start, I trained with Price Waterhouse Coopers where I became a chartered accountant, which is quite helpful when you want to be a CFO working across all corporate tax and corporate finance. I took my first role in industry at a company called Kvaerner, which at the time was a $9 billion turnover company operating in 100 countries with about 62,000 people, so quite large. Then with my next venture, I went to the other end of the scale, which at the time was a company called Hutchinson 3G UK that went on to become Three, the multimedia mobile operator in the UK. They had 12 employees and I was number 12, I was the finance department when I joined. Having paid £4.4 billion on the 3G licence we then raised a £3.6 billion non-recourse debt facility and built out the business over the first three years. Within the next three years, we went from zero revenue to £1.5 billion with 4 million customers.
Following on from that experience, I went into the world of private equity going to Prague to work for a company called České Radiokomunikace, which was the incumbent broadcaster. We spent three years really turning that around, streamlining it and selling bits off before selling to Macquarie for €574 million in 2011. I returned to the UK to get involved with a couple of private equity backed software ventures, Lumata and Workshare, backed by Francisco partners and Scottish Equity Partners, respectively. Then after Workshare, came here to Hyperoptic, where I’ve been for coming up two years and managed the equity round that led to a secondary buyout by KKR infrastructure in November of last year. The business has been growing pretty-quickly and has been in the Tech Track 100 for the last four years in a row. We are aiming to get our fibre into about 2 million homes in the UK by the end of 2021. So been quite busy here as well.
Dav: It seems you’ve played the role of CFO under various guises, for different size businesses and industries. So, give us a quick overview of when you join a firm in the first 90 days, what should be your aim?
Peter: The experience I’ve had is kind of universal across all types of businesses. First thing to do is make sure that there’s clear alignment on what does good look like? What I mean by that is, where do we want to be as a business in three years, five years, whatever years really, but let’s make sure that everyone is completely aligned on that vision. That’s across the shareholders, the board, CEO, your peer group in the organization, because without that, everything else becomes a bit of a waste of time. So, make sure that there’s really clear alignment on what does good look like. In the world of private equity, it’s straightforward, it’s shareholder value, it’s a question of what multiple of money the investor wants to make. Then it’s about how you do that? It’s ensuring that the strategic direction, that vision, aligns with the long-term financial plan that’s built around that.
Assuming you get through all of that, okay, then it’s quite important to make sure you’ve got liquidity, you’ve got the funding in place to make sure that you can deliver on those plans. And if not at this point in time, there is a plan to get funding, whether that’s from shareholders, debt markets, whatever that may be.
Then you move into, have you got the right teams that are on the journey? Have you got the right processes to scale? Have you got the supporting technology to deliver on those processes, and give you the insight to measure performance and monitor you’re headed in the right direction on that journey, in the period-of-time that you’ve set out? In most instances it doesn’t have to be gold plated at the start, but it does have to be fit for purpose. It must fit with the size of the business that you want to be, not that you are today.
Dav: What are some of the biggest challenges you’ve experienced in the first 90 days as a CFO and how did you overcome them?
Peter: There have been many varied challenges in my time, but I think at Three, as I mentioned, when I joined, I was the finance department and had to get the funding in place in addition to growing the team very quickly. We had an ambition to be a FTSE 100 flotation in four years. So, I recognised what needed to be done and from a standing start, that’s a huge amount of work to do, that you can’t do all by yourself, you need to get a team around you. So, I talked to recruiters I knew and got people in quickly, mostly temp to perm, at that point, for the speed. I was hiring people in my second week at Three and established the modus operandi with the CEO, as there was so much to do. He said to me, I really don’t want to know what you’re doing on a regular basis as I’ve got enough to worry about, and you’re going to make mistakes. Because if you don’t, you’re not going fast enough, but don’t make the same mistake twice, or I’ll have to fire you. So, that was real growth trajectory experience, and I was tested with all the challenges that came around that.
At the other end of the spectrum, when I joined Lumata, the software business, that was a carve out from Buongiorno, operating in 11 countries around the world and it was obvious that it wasn’t a business the shareholders, thought they had bought. The big challenge up front was to, again, get that alignment with the shareholders, as to what was this business, what does good look like. As part of that, recognizing that to stand a chance to get to where we wanted to get to, we had to immediately do a very big restructure. This involved taking out about half the workforce, selling a number of companies around the world, putting Australia into solvent liquidation, shutting down other geographies and really cutting back to the root so we could grow it again.
Dav: If a firm does have a very aggressive strategy for growth, as a CFO, is your role to make sure that they have the best-in-class finance function, so that they can grow in the right way? Or, do you from the off have to wear multiple hats and look at the entire business operation?
Peter: You have to wear many hats as a CFO, gone are the days where you could just focus solely on your finance team, your finance department, reporting, compliance and those sorts of things. You’ve really got to get engaged on a much wider basis. It will depend a lot on the maturity of the business that you join, and also the bench of people that are on the team when you join, so that is very variable.
If I give you an example, when I joined Workshare, one of the other C suite was in their first C suite role and trying to juggle many things and was struggling with some of the concepts and dealing the team. So, I invested time with that individual to help them get to be successful, kind of mentoring to a degree. Because unless the whole team is successful, you can be the most amazing CFO with the best finance team in the world and still have an unsuccessful business.
Dav: With that in mind, would you therefore say, that it’s important then for the CFO to make it their business to learn about different parts of the organization so that they can have an impact?
Peter: Absolutely. And again, in my experience, your CEO will absolutely love that and value it. It will be part of your journey to build that intimate trust with your CEO. You’ve got each other’s backs, discuss how you will divide and conquer and agree up front where you’re both going to spend your time and your effort, so that you don’t duplicate but instead have coverage across the whole organization.
Dav: When you go from a start-up to scale up, what are some of the biggest changes that you have to be in control of as a CFO, for that transition to be successful?
Peter: So, I’ve come back to the point about making sure in that first 90 days your foundation layer is in place, because without that, you can try and scale all you like but everything will kind of fall over itself and end up in a bit of a crumpled heap. Make sure you spend time building that foundation layer to support the business because when it goes into that scale phase and business starts accelerating incredibly fast, it is very difficult, if not impossible to go back and retrofit elements.
Billing is the example I use of a system that’s fundamentally important to get in place. It’s really the lifeblood of the business, without which, there’s not a lot of point in turning up to work in the morning. And it’s always the billing engine that will reveal weaknesses and issues in processes and other systems across the business, as it has to interface with so many other areas to produce the all-important invoices.
Dav: Are there particular traits that you need in order to become that impactful finance leader or impactful CFO within a high growth business, specifically?
Peter: The obvious ones, you’ve got to be highly professional, you’ve got to be incredibly capable as a professional accountant, you’ve got to be trustworthy, you’ve got to build that relationship with your CEO. But above all of those, you’ve really got to have a high degree of resilience, a very high level of energy and strong leadership skills with a degree of emotional intelligence.
Dav: Do you think that kind of adaptability needed for the chaotic start-up environment, is difficult sometimes for finance professionals to pick up if they’ve worked within a very corporate environment?
Peter: Everyone’s different, obviously, and everyone operates better or worse in certain situations. But I think if you’re from a large corporate and you have that fixed mindset, you will struggle to shift into more of a start-up dynamic, even scale up environment, where you have to wear multiple hats and step outside of your traditional comfort zone. It’s either going to excite and motivate you, or it’s going to fill you with fear and dread, and if it’s the latter, then it’s the wrong place for you. I used to interview people back in the day at Three, and I’d say, if you’re looking for a job with a specific job description, with roles and responsibilities and a defined career path, I suggest we don’t waste each other’s time anymore. If, however, you’re comfortable with all those things, let’s talk.
Dav: How have you moulded finance teams in the past, and currently, to ensure they were ready for growth?
Peter: It’s understanding, where the business is aiming to be, and therefore what level of skill set you require from your finance team to support that journey. The key for me on this one is hire ahead of the curve. So, hire bigger and heavier than you think you need today, if that’s the growth trajectory that the business is headed on. Always remember that you’re only ever as good as the people who work for you. I always look to try and hire people who want to take my job. Because that way, I’ve got the best support and the best quality of people underneath me. And the last thing I’d probably mention is, get people with ambition and ability because you can always train the skills.
Dav: As a CFO, you have to at times make some tough decisions in the first 90 days, inevitably you’re going to upset people for one reason or another. So how do you strike the balance?
Peter: As a chairman of mine once said, bad news doesn’t get better with time. So, get in and make those initial evaluations. I always try to spend, depending on the size of the team, at least 30 minutes with each member of the finance team to get a broad understanding of them, what they do, how they operate, etc. You’ll be surprised how quickly your instincts will kick in and tell you who is going to be onboard for the journey and who really should be going now? Or who you maybe need to give a little test to and figure that question out. But make the decision early, get it over with, it’s never pleasant at the time, but in my experience, both parties are always better for it afterwards, because if it’s not a fit, it’s not going to get any better.
Dav: What advice would you give to aspirational CFOs, Heads of Finance, VPS of Finance, in terms of the skills and experiences they should try and get exposure to, in order for them to be a successful CFO one day?
Peter: I think you don’t need to be a master of all the finance functions, but you certainly need to have had exposure and an understanding of all the finance functions, whether that’s reporting compliance or FP&A. You need to able to not have to worry about what I called your foundation layer too much, your day to day, your bread and butter role. Because frankly, that should be a given that you can do that. Therefore, you can spend more of your time on the other things like strategy, being partner to the CEO, managing the other stakeholders, without having to learn the core functions on the job.
Dav: I suppose your point there alludes to the fact that you should be gaining as much experience as you can, across different departments, in order to become ready for that first CFO position.
Is there anything else that they could be doing outside of their particular job remit, in terms of qualifications within finance? Or do you think it’s more a hands-on experience that they should be gunning for, in order to become a successful CFO within a high growth?
Peter: I would say, get a mentor or a coach or a trusted confidant, someone who you can share openly with, without fear, who’s got experience and has gone through the same journey a few times. I’m mentoring a few people at the moment and I think it’s very helpful for them as they go on the journey to be able to talk to someone who’s kind of been there, done it and can take some of the mystique away.
Dav: With the current economic situation there’s a number of finance leaders out there that are firefighting, that are battling because their business isn’t doing well. What advice would you give to them in terms of how they can possibly better their situation and the situation of the organization that they’re working for?
Peter: Yes, it’s really tough for a lot of people out there. And to an extent, we went through that same evaluation here, at Hyperoptic when the COVID virus hit earlier in the year. It’s all about liquidity in that situation, if you’re not doing the 13 week rolling forecasts already, then it’s really time to get implementing that. That will become a very important tool in the near term to make sure that you manage liquidity and that you’re hitting payroll, it’s never a nice feeling to be struggling to hit payroll. But once that is kind of locked down and you understand that, you want to run those scenarios for the longer term, to figure out where the business could be trading in the coming years. Then take whatever remedial actions you can take today, to ensure that it’s able to survive. That could be divesting of any non-core assets or indeed any assets that will be needed to maintain liquidity and raise additional funding from banks, or equity cure from your shareholders. Don’t rule anything out at that point, any kind of funding should be looked at, depending on obviously how bad the situation is. And overall, always be overly cautious and pessimistic, that way, you can only be pleasantly surprised.
Dav: Final question from me, you’ve worked in the corporate world and you’ve worked within small start-ups/scaleups. Where does your preference lie?
Peter: I like scale up, I like growth. I like the challenge that comes with operating in international markets and, particularly, I like being pushed beyond my comfort zone. Otherwise, it’s all a bit routine for me and frankly I know I’m someone who gets bored quickly. And that’s not good for me or the company that I’m working for!.
For more information on How to Become an Impactful Finance Leader, have a listen to our Zanda Talks podcast episode with Sabrina Castiglione, Tessian CFO
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