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It’s been an interesting time of late within the consumer market, much has been anticipated with the new financial year upon us, Easter out of the way and the imminent change in government, but what has actually happened? Well not as much as expected seems to be the general theme in the consumer market. There has been a rapid move towards restocking the shelves with regards to permanent hires and change appears to be on its way with the agenda for Interims coming back into play.
Over the past few years the area within consumer that has really driven the market had been the amount of deals that had been done within this space, whilst almost completely drying up in 2009, they have shown some signs already this year of coming back to the table. There have been talks of clients being more aggressive and some strategic deals have already gone through with what we hope to be a significant amount on the horizon. The change agenda following these deals has been one of the biggest users of Interim Managers and will continue to be the way in my opinion. I anticipate that the back half of the year will see us very active in this area and until then we will see the demand in businesses looking to get their houses in order following the great cut backs. Commercial Interims may well lead the way on these changes as clients look to reposition themselves. The most senior part of the Interim market remains tight but it is starting to ease up as deals come back and the top table merry-go-round begins once again.
I’d be really keen to hear your thoughts on where the market is going and the timescales involved in getting there. As our practice progresses we want to be much more involved with the Interim managers that we’re currently working with as well as those that we want to get closer to. Please give me your thoughts and get involved.
Simon Gough is Head of the FMCG Practice at Interim Partners.
May 11th, 2010 at 2:48 pm
Hi Simon, I would agree with you that the ‘pent-up demand’ we anticipated during Q1 did not transpire into real business opportunities. The Easter break and volcanic ash cloud impact took out almost 3 weeks of business in April too! I am sure this is about timing, and my view is that the market will pick up later this year!
May 11th, 2010 at 3:54 pm
Hello Simon. I have a similar view of the market that I am playing into. The Quality, Risk and Operational Governance world still appears to be largely in a state of limbo with practitioners painfully aware of deficiencies in their operations but also in their in house capabililities to meet the challenge. Ultimately though, budget holders are reluctant to release funding and I sense that as we finally get some clarity over the future British government and the future of the Euro zone this might just start to shift the logjam.
May 12th, 2010 at 10:56 am
Hi Simon, I am finding that in the last few weeks, some more noise and requirements for Interims are about in the FMCG market place. Even though individual chairmen and MD’s are talking to consultants, they, because of the results of the election, ash cloud or whatever reason are still loathe to loosen the purse strings. On a number of occasions they will sweat the current assets and only when necessary, bring someone in, I am sure we all want them to be bolder and manage the risks and growth potential with talented personnel. New government = new hope ?
May 12th, 2010 at 12:46 pm
Hi Simon,
With the government coalition now formed and public sector cuts in line for this year, demonstrating value for money to consumers will continue to be a key focus for major retailers. More direct sourcing from primary producers will mean that suppliers need to demonstrate increased added-value in order to maintain margins. With the possibility of the £/Euro strengthening off the back of continued uncertainty from the weaker Euro-zone economies and increased UK government commitment to reduce the budget deficit, the advantage that UK manufacturing companies have received from the weaker pound may soon reverse.
Where companies can demonstrate unique sales propositions, premiums will be on offer and this will allow companies to extract themselves from the circular pressure to reduce prices, and instead get on the front foot with their customers. This means that companies must think positively and differently, maximizing the perceived end value to customers. Interim managers are able to provide this momentum for change for companies who have recently felt it necessary to trim back on their management resources.
May 13th, 2010 at 10:16 am
Thanks for the comments so far, the “chatter” in the market from the past few days has been more positive indeed and we hope that the positivity translates as some of the latent demand comes through.
The goverment is finally in place, the ash is slowly moving away, no more excuses now, its time to push on. Whats the general opinion on which sectors will break first?
May 14th, 2010 at 12:33 pm
Yet again it seems that the Technical function within FMCG is leading the way wihtin the interim market.
For me 2010 to date has been an amzing one as I have never had to turn away so much work or pass it over to other contacts, most of the time they to have had to turn the assignment down as they to have work. It did go a bit quite over Easter but is picking up again now. The big issue within Technical is the huge lack of talent and for the next 5 to 10 years I suspect this will remain the case. I am sure it is the same with Engineering and Development. This is in my opinion caused by a lack of investment in the Sciences by previous Governments. Will this Government be any different or will its focus purely be on cutting costs and raising funds to cut the debt mountain ?
Once the government starts to realise the size of the hole we are in and starts to raise all taxes there will be a tightening of the purse strings by all concerned. In all probability this is likley to become reality in early 2011 and our clients will have 2 choices.
The first being the time honoured way of stop spending and delaying filling vacancies. I am sure we have all been down this route and felt the pain this option brings. At some stage companies will realise this is the wrong approach and will need some one in place and quick to implement change or implement further cost savings. Which is when the Interim comes into play.
The second and the way the sucessful companies will take is to use the expertise available on a short term basis to implement and follow through change management.
2010 will continue to be a good year possibly into Q1 of 2011 but after that I think it will become harder. As jobs are lost there may even be an increase in new interims, who think it is easy money. If this happens watch fees fall.
May 17th, 2010 at 12:03 pm
Mark, Thanks for your comments. I agree with your points about the Technical market, the enormous skill gap seems to be widening right now and could even go far as a problem for the next generation. Where do you think the solution for food technical will come from in terms of investment? I think that the investment that has been made is being sucked up by industries with more resources such as the Pharma market.
Regarding the piece about the increase in interims and subsequent fall in fees, I’d say that most areas experienced this fall last year and are now starting to slowly build their fees back up in the private sector. Technical really didnt experience this though. Now is the time to build the point of difference between the professional interim and the people between jobs who think, incorrectly, that Interim is a route to easy money.
May 18th, 2010 at 2:55 pm
Hi Simon,
The businesses I am working with have so far this year, not been affected by new governments or ash clouds. The main impact has been the amount of money in people’s pockets and what they can afford to buy. This said, the businesses I work with have on the whole seen sales increase, with improved margins. New products have been developed, and succesffully launched, with a clearer focus on the longer term strategies of the businesses.
There was a high number of temporary staff within the businesses, together with high staff turnover when I started. The temps have all gone, and staff have become more stable, as the management concentrate on trimming costs, but also in retaining key personnel.
There is a lot of movement within the sectors they operate, and as such, they need to be focussed on what they are doing - being efficient, and achieving thier longer term goals. This assignment was originally six months - now nearly 18 months on I can see it coming to a natural conclusion.
May 31st, 2010 at 10:28 am
Hi Simon, well operationally there have been far more murmurs in the past 3 weeks than I had heard over the previous 3 months. Whilst there is still the undoubted reluctance of many businesses to follow things through to appointment of interims, as they continue to attempt to make do to preserve their short term finances, I expect it is only a matter of time before some take the lead and manufacturing kicks off again. I believe this will be starting very soon. Finger’s crossed anyway!
June 6th, 2010 at 5:37 pm
Hi Simon,
This is the first time I have looked at your blog: it is a great way to hear from you, and other interim managers, about what is happening in the market.
My observations are pretty much the same as the other bloggers. I haven’t seen much activity yet in FMCG for the kind of work I do - strategic transformation. Clearly, over the last year or so, companies have done all the usual things to cut costs and protect the bottom line - reduce headcount, trim marketing and R&D budgets, not hire interims(!) etc - but growing the top line profitably is critical for the long term. Strategic deals will be an important way of doing this, and like you say, these should present a lot of opportunities for interims. Let’s hope we don’t have to wait too much longer!
July 6th, 2010 at 3:27 pm
The economy and the england football team have a lot in common. Beaten easily by competition lying eastwards, fighting amongst ourselves about irrelevant things, good talent left behind, poor talent promoted on reputation, current generation not delivered, next generation abandoned in favour of cheap imports.
Its going to take a long hard slog to get back to a decent level. Companies are facing rising costs, be they government induced or market driven, prices will have to remain subdued as consumers have had their fingers burnt. Employment will remain a real issue - unemployment lags the economic cycle so we are looking at much worse to come. the only people recruiting on any serious scale are the investment banks and they are just taking back the people they shed in 2008.
There is some work out there for interims but its very specific. A few peole working in the sector have told me general recruitment is in a real dive to the bottom of the market - smaller firms undercutting the established ones, quick and dirty tactics are pervasive as the number of available candidates outnumbers jobs by 200 to 1 for management level roles. Companies are not taking risks on talent or transferabble skills only on exact fits. One chap I know - a good solid manager / exec has made 400 applicaitons with not a single response regarding his applications, he has packed up and gone to a decent footballing nation - Spain.