CFO Spotlight: Stefan Allanson, MJ Gleeson Plc

We speak to Stefan Allanson, CFO of MJ Gleeson Plc, about the highs and lows of his journey to CFO. Walking a familiar path with a unique route, we talk about getting lucky, working with Private Equity, learning about entrepreneurship, saving distressed businesses, and the North South divide.

HedgerWay: Talk us through your career from your first role as Financial Analyst at ICI to your current position as CFO at MJ Gleeson.

Stefan: I qualified as a CIMA Accountant with ICI plc, headquartered in London. From there I moved to Honda to set up their European Invoicing and Treasury Operations. I actually obtained the role of their European Treasurer by default having originally been hired as Assistant Treasurer working for a newly appointed and highly experienced treasurer. We were both due to start work the same day but he didn’t turn up, so they offered me the role. From there I took my first Group Treasurer role for a very acquisitive listed PLC, BTP (my first move up north). I had a lot of fun raising money, doing due diligence and acquiring businesses. We eventually sold BTP following which I took the plunge into the VC world with some friends in London. That was successful but did not make us rich. I returned to the listed PLC world, again in Manchester, joining Vita plc in Group Treasurer and Group Financial Controller roles. This is where I got my first serious exposure to private equity during and following a hostile take-over. After a short stint working on the London IPO of a Chinese group, which was subsequently abandoned, I joined Keepmoat where I became Deputy CFO before moving to Gleeson where I am now, as CFO.

HedgerWay: So it really was right, time right place for your first serious role (in Treasury) then?

Stefan: Indeed! I received a superb grounding in Treasury when I was at ICI. They encouraged me to complete my CIMA qualifications, (even though I trained as a Treasurer, I originally qualified as an Accountant). At ICI, those blue chip professional principles and a strong work ethic were ingrained early on, which has stood me in very good stead ever since. Honda was also a remarkable opportunity. I had a lot of fun there which then led to my first Group Treasurer role in a mid-cap PLC before jumping into the VC world at a technology start-up back in London. Then, at a sleepy mid-cap PLC back in Manchester I was thrust into the PE world following a hostile take-over. It was all right time, right place.

HedgerWay: Leading nicely into our next question then, what would you say have been your biggest challenges but likewise your greatest achievements in your career to date?

Stefan: In terms of challenges, committing to work without doing it at the expense of your family is a challenge that a lot of ambitious people struggle with. Having a successful career and a successful family is still a challenge for me.

The responsibility of decision making is also a great challenge. As you progress in your career, you acquire more responsibility and are required to make decisions, often with imperfect information. By nature, a lot of finance people are uncomfortable with that. They like to analyse and understand and dive as deep as they can to get as good an understanding as possible, often postponing decisions until they have perfect knowledge. As your career progress it becomes more and more difficult to do that. Being prepared to make decisions with sometimes imperfect information is critically important.

Aside from my three children who are smart and beautiful, an achievement I should credit my wife with, I would narrow down my biggest professional achievements to two things. I have been part of teams who have saved two large businesses that were in deep trouble – lots of debt and bad leadership being two main consistent factors. In both cases the companies were financially broken and shareholders were underwater. Being part of small leadership teams that successfully navigated these crises has been an incredible experience and very satisfying. Reflecting on this experience, building a strong team is critical for CFO’s. You need a strong, bright, motivated team of people around you. You can stand taller on the shoulders of strong people. And, building a strong, committed and effective finance team is very rewarding

Hedgerway: Having worked in several Private Equity and VC backed businesses what specific advice would you give other candidates looking to become finance leaders in Private Equity?

Stefan: Two things. Firstly, be prepared to work hard – PE companies work hard and expect the same from the senior managers and directors of the businesses they own, so be prepared! Secondly, don’t be afraid of the PE owners. They’re on your side but often appear intimidating. Private equity guys are usually some of the smartest, hardworking, focused, educated people you will ever work with and that can be quite imposing and a shock for a lot of people. That didn’t intimidate me, I saw quite quickly that they are not perfect and they do make mistakes. They also value and respect people who push back and hold their own views, particularly if those views are considered and well articulated. In PE be prepared to work hard because you’re going to have to and if you don’t, then you need to move on and do something else. Be your own person, don’t be afraid of them.

If you think that this is where your strength lies, be confident and go for it.

HedgerWay: As a CFO what how about the differing challenges a VC backed business offers compared to a Plc?

Stefan: Moving to a VC backed business was a shock. I moved from a Group Treasurer role reporting to the CFO, travelling around Europe and North America raising finance, performing due diligence, negotiating agreements on M&A transactions, to a VC backed business where you need to be prepared to get your hands dirty and do the basic stuff, such as raising invoices, posting journals and chasing customers for payment. In a PLC there is usually a resource to support you, but in a VC business, particularly a start-up, you have to do a lot yourself. You are the resource. Also, a VC backed business operates much faster with less bureaucracy than in a PLC. You aren’t constrained by the range of governance rules and internal policies and procedures that a listed PLC has. Decisions need to be made quickly, often immediately, which is a challenge but it’s great fun as well. A piece of advice, a PLC in most cases has policies and procedures which must be followed, but don’t be afraid to challenge these procedures. I have seen far too many people in companies I have worked in say ‘these are the rules, so I’ll work to those’. Sometimes the rules are no longer appropriate, and you should challenge them.

HedgerWay: In our last CFO Spotlight, Smart DCC CFO David Brown identified cross sector experience as being invaluable to his career. He felt that many employers miss out on great potential employees and the experience they bring, through only recruiting from within the same industries. As someone with cross sector experience what has your experience been with transitioning between sectors?

Stefan: I agree with David on this one. I think that having to learn to operate in a new sector stretches and trains the mind to embrace change and think more laterally. I would go as far to say that it can be unhealthy for a finance professional to remain in the same company in a single sector for most of their career. I have worked in nine companies and six sectors and always felt that I brought something new to the table. There is also something liberating about moving to a new sector where you don’t have sector experience. You can ask a lot of dumb questions and those questions can result in a refreshing insight for the business. I have never been afraid to ask those questions especially within the honeymoon period where I am trying to understand the sector in which that company operates.

HedgerWay: Working both in London and outside the north throughout your career, how would you compare the local market to the London market?

Stefan: The quality of people in the north is extremely high. They’re just as bright but London does attract international senior finance professionals in a way that the north rarely does. While the quality of people is excellent here, you most definitely have to hunt for them, win them over and sell them into joining your team. I’m lucky, I’ve always worked with really high quality people in the north and would pit them against London candidates any day. However, the market is much shallower here, finding people with good experience can take a bit longer, and sometime you have to wait for the right person. Conversely, for professionals, there are fewer opportunities. The number of large multi-national HQs in the north is limited, but there are a lot of great businesses that are growing strongly that need good people. George Osbourne’s Northern powerhouse does exist.

HedgerWay: And finally, how do you see your future in Finance?

Stefan: I never really had a long-term strategy when it came to my career and have tended to look only a few years ahead while ensuring that I am making a contribution and enjoying the work I am doing at that moment. Where I am now, and what’s most important to me, is to make a difference, to add value and to be recognised as someone who can be trusted to deliver. Whatever role I can see that in is where I will go, whether that is with Gleeson or another company. I have been very lucky in my career, have had fantastically interesting roles with a lot of opportunity to add value and make a difference and my ambition is to continue to do just that.