“Automation may threaten entry-level roles in finance departments”
The finance profession is evolving pretty quickly in parallel to the emergence of new automated solutions. These changes require the finance director to be aware not only of competitors, macroeconomics, legal or regulatory changes and social trends, but also to be up to date with all the new advanced technology solutions coming to the market in order to improve efficiency in his department.
Today we talk about these and other issues with Secret Escapes‘ Finance Director Alex Wakeford. Secret Escapes is a free-to-join website that runs ‘best-in-market’ flash sales for four and five-star hotels and holiday packages worldwide. The hotels and vacation packages are hand-picked by a team of travel experts and include everything from UK country house bed and breakfasts, short city breaks, to luxury European getaways and long-haul all-inclusive holidays.
How does one end up being Secret Escapes’ Finance Director?
By being in the right place at the right time. I was the Financial Controller for 18 months before being promoted. Before that, I spent 10 years at Deloitte, PwC and Barclays Capital, mostly working on restructurings; so a very hands-on branch of corporate finance.
One thing I appreciate now is just how important luck can be in your career. I moved into the restructuring industry one year before Lehman Brothers went into insolvency and the credit crisis happened. The timing was coincidental but the aftermath of the credit crisis was the best time in the last 20 years (maybe longer) to be in restructuring, and for someone wanting a career in finance, it was probably one of the most varied and challenging areas to work in.
At the time when I wanted to leave, I had some very different options and the one I chose, Secret Escapes, happened to be a really good company. I don’t think you can truly tell from the outside what a company will be like when you work there. I remember being here for about a month before going home and realising that it wasn’t just a ‘fun startup’, but that it had a really solid business model. Then as the business grew bigger my boss – at the time the FD – decided to retire. Again, it was all about timing.
Although I’d put myself in the right place each time and taken the opportunities to build useful skills and experience, chance could have easily have taken me down a different path.
So I guess you had already the idea of being a Finance Director in mind.
When I started working after university, I trained as a Chartered Accountant because I didn’t know what I wanted to do. I thought it would be a useful experience and it was broadly aligned to what I thought I would be good at. But while qualifying during the start of my professional career, I realised that becoming an FD was a reasonable aspiration. From all the jobs that I had any insight into, it seemed like one I could really enjoy. Actually, by then I knew I’d love to be an architect, but I’d be terrible at it.
Regarding your work at Secret Escapes, what has been your primary focus?
My main focus has been coping with expansion and getting the job function fit for the scale and aspiration of the business. We have grown pretty rapidly, yet sustainably, over the last few years – in 2016 our turnover was close to 2.5 times what it was in 2014. When I started, we had just expanded outside the UK and had about 150 people in 4 countries, now we have roughly 500 people spread over 15 countries and sell to consumers in 21, so life is a lot more complex.
And what has been your biggest challenge during this time?
The cultural change from a “big four” accounting firm was enormous. The change in atmosphere and the freedom was fantastic, but in my second week I forgot to authorise our American payroll, and the Americans didn’t get paid their salaries. In my previous jobs, the work had been hugely demanding, but that was combined with smooth training programmes, progression through roles and I was surrounded by other people doing broadly similar things who I could turn to for guidance. Here, I really had to be across everything straight away, and there was no safety net equivalent to the multiple partner review process I had before.
One of the big challenges since then has been making enough time to build the team. When it feels like you’re permanently fighting fires taking time out to scope a proper job spec seems like time ill-spent even though it absolutely isn’t. I have a great team now but getting the right people in place was harder than I expected.
Philosophically, in the startup world, there are concepts like “minimum viable product”, which are perfectly sensible but don’t always fit well with the finance needs of accuracy or resilience in systems. It still takes an effort to get to a balance between making something that works without over-engineering something you won’t use.
How is the department you are leading composed?
When I joined, there were six of us including me, and now we are 19. Everyone gets quite a lot of autonomy, even the teams that are focussed on more transactional work. The people I delegate most to are the managerial group of roughly seven people, nearly all are Chartered Accountants or lawyers. I’m quite proud of the internal and external training we’re giving to the people who are developing internally.
The team structure is relatively flat. Few projects are self-contained; for most things, there will always be a need to talk to other people or teams about the solution. The expectation I have is that someone can take ownership of a problem and solve it in a sensible way without having their hand held.
What key attributes does a Finance Director need to be successful?
I’ve heard it described as being a T-shaped individual, which seems like a reasonable description.
On the one hand, you need to know in depth what’s going on in your part of the company, and in the rest of the organisation. You are responsible for everything your team does, and what a lot of people outside your team do too. And rightly or wrongly, monetary measures make up a lot of how companies are assessed. But you cannot do everything yourself, and you might not be the right person to do it anyway, so you need be able to understand the business well enough to know if something you’re told isn’t right instinctively.
Apart from this granular knowledge, you also need a really broad understanding of all the different things that could be relevant outside the company, whether that’s competitors, macroeconomics, legal or regulatory changes, social trends or anything because otherwise, you don’t have perspective. And without that, you won’t be able to make good decisions about what’s important and what isn’t. So I think a combination of these two attributes makes up the keys to success.
It probably also helps to have the experience to know what “good” looks like too. It’s far easier to replicate and adapt the “good” that you saw somewhere else than it is to think it up from scratch.
How important are new technology solutions in your department?
When you can define a process, and you can control the inputs and the edge cases, then you can probably automate that process. And that’s key to both making the cost base scalable and getting access to accurate information.
The systems you can buy off-the-shelf and implement relatively easily, we’ve done that. Expenses are automated by Concur and staff can just take a picture of a receipt on their phone, and it all goes for approval automatically. And most of our external operating expenses now go through a similar Concur system where they’re automatically scanned, and are sent to the right person for approval through an automatic hierarchy. The system fires out automatic reporting to budget holders.
The FP&A team have done a great job of getting the whole company access to the massive amounts of data that our marketing and our websites generate, and that’s key to our trading decisions.
So you have automated some processes recently.
Most of the automation in my team has happened in the last 18 months or so because prior to that, we didn’t know enough about what we needed. In a startup, things can change fast, and you don’t necessarily know what the inputs and edge cases will be, nor what outputs you will want. Two years ago, the company was just about small enough for every team to know pretty much what was happening everywhere else, now that’s definitely not the case.
The expenses and operating expense systems were started about 15-18 months ago. We’re working on a second round of automation of remittances to our hotels and tour operators at the moment. It is something where automating 95% of cases is really easy but getting the last 5% is incredibly hard. That’s been quite a big project, and it will make a massive difference to the efficiency of my team.
We also have automated managing our foreign exchange exposure through Kantox, which is great, because I don’t need to think about it, which I used to on a daily basis.
We’ve reached a stage where other teams across the business have been making similar progress in automating activities that started off as manual work.
What are the implications for the composition of your department?
At a simple level, as the business grows, we will be able to do more without growing the team at the same rate as we have done previously. We should have more information, more accuracy and more control with fewer manual interventions; it should give more time for analysis and hopefully more insight.
But at a broader level, when I read an article about self-driving cars, or about other jobs that can be replaced by computers, I often find accountants fairly high on the list. And I’m intrigued by that. Entry-level roles, in which someone is reconciling two different data sources and matching them against each other, or typing a number from paper or pdf into a system can and are being automated for sure. But equally, that’s been happening for a long time, and even today most companies still have people doing data entry somewhere, even if it is outsourced.
But when you get to more complex systems and needs, you still need someone to design the system; to run it, to understand it and its limitations, and to feed information to it and act on the information it provides. You probably need someone to monitor the agreement with the supplier. And you still need someone to set priorities, make decisions about trade-offs between priorities and manage internal and external relationships. So maybe you need fewer people for the same output, or maybe you get more value from the same number of people – I don’t know.
I wonder about the people who write those lists, and I cannot figure out if they don’t know much about what accountants do, or if AI will really get so good that I’m one of Nassim Taleb’s turkeys and I don’t realise we’re in November already.
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