Thoughts from an Interim Manager - Wayne Evans
Wayne, people get into Interim Management for a variety of reasons. How did you start and what were you doing beforehand?
I spent 10 years in the automotive industry as FD Calsonic Europe, a member of the Nissan keiretsu. Before that, having returned from working in the USA, I was FD of an MBO company; that was in turnaround. After Calsonic, I joined Royal Doulton plc, a fully-listed company in 1998, as FD. The company was in trouble and I was part of the turnaround team. In 2001 I became a career interim, specialising in turnarounds. Since 2001 I have spent 17 months in Bucharest (Romania), 14 months in Budapest (Hungary) and 7 months in Bruges (Belgium).
You have a broad experience of working in challenging private equity backed businesses. What skills do you think are particularly relevant in a turnaround situation?
Turnarounds require the ability to make huge decisions in a short space of time. It is a high-pressure environment. Typically, the FD has been kicked out, the accounts have lots of dangling debits, creditors are understated and the cash has gone. Suppliers are banging on the door, the finance department is on its knees, the banking syndicate is crawling over everything and the investors are in denial, wanting to know what's gone wrong. Cash management, cost reduction and business planning skills come to the fore.
What would you say are the critical elements of getting to grips with a distressed business and a successful turnaround?
The management are key to the turnaround. It is one thing to manage a short-term cash problem and prepare a business plan that trades the business through the difficulties, but it is a totally different proposition to actually deliver the turnaround plan.
What do you think are the main drivers and differences in a private equity backed business compared to a plc?
Plc's are all about quarterly earnings and income trends. As long as the City understands the dynamics of the business (the emphasis is on the P&L), management is more or less left alone. Private Equity, on the other hand, is all about cash and the exit. You have to squeeze every drop of cash out of the working-capital sponge, return their investment as quickly as possible and hit the 'exit' earnings target.
Clearly we are facing a difficult period given the state of the economy and the continuing after effects of the credit crunch. How do you see this affecting the buyout market and existing portfolio companies?
A lot of companies are going to breach banking covenants during the September and December reviews. Turnaround specialists are going to be in high demand, in my opinion, along with HR down-sizing/tribunal specialists.
What do you enjoy outside of Interim Management, and how do you manage the work/life balance?
As a Welshman, I am passionate about rugby; the fifteen-man game that allows fat boys and fast boys to play in the same team. I'm too old to play anymore and, anyway, my knees are knackered plus I've gone from fast to fat, but I just love watching a good game. The majority of my spare time is spent with my family, however, as I mostly work away from home. In terms of work-life balance, when I'm working on a turnaround away from home, "life" becomes the balancing figure, so to speak. I guess I don't manage it well.
What advice would you give to someone thinking of a career in Interim Management?
I believe that it should be a specialist career, whereas it seems to be flooded with 'permanents' using it as a 'temp' job until a 'proper' job comes along. Any budding self-employed businessman/woman has to decide whether he/she wants independence and variety (but uncertainty) of interim work rather than the security (but routine) of employment. We're all different and there is no obvious answer.