by Phil Grinhaff* - Wednesday, 14th May 2008 -

Steve Robinson is CEO of M and M Direct, a clothing and sports retailer recently ranked No 2 in a list of private equity-backed companies with the fastest growing profits. A former FD, he speaks about making the transition to CEO and working with private equity firms.

Prior to joining M and M Direct, Robinson was the CEO of Tesco Direct, the non food on-line and catalogue division of Tesco. An Ernst & Young trained chartered accountant, Robinson was appointed as finance director of Argos at age 30 reporting to Kate Swann, the current CEO of WH Smiths.

Phil Grinhaff - When did you realise you wanted to make the move into general management?
Steve Robinson - I think you have to enjoy work to perform at your best. I worked out very quickly that I wasn’t going to be a tax or audit expert and I have always enjoyed the commercial, analytical and strategic elements of finance.

PG - How did you prepare for the transition?
SR - I think you just have to prepare by getting into as many of the general issues of the business as possible – it should be an FD’s prerogative anyway!

PG - What skills did you need to acquire and how did you go about it?
SR - My career is littered with side-ways (and backwards) moves which help give you confidence on the commercial issues. The rest is learning from others what good leadership looks like and adding in a bit of your own personality – for me that is integrity, professionalism and humour!

PG- Your first CEO position was at Tesco heading up the Tesco Direct division. You were a finance director at the time so what do you think attracted them to you?
SR - Coincidence – I had applied for the UK finance director job. When I met Andy Higginson he realised the experience I had at Argos, and given that Tesco Direct was about building a multi-channel retailer from scratch, meant it was a good fit. I guess it was a bit of a gamble on their behalf but I like to think it paid off.

PG - Do you think boards widely consider finance directors capable of making the jump to CEO or is it the exception to the rule?
SR - It’s hard. If you are a commercial FD then you become pretty valuable as an FD and it’s hard to move out – even externally. I think the skill set that makes a good CEO is not profession-dependant. Look at any CEO survey and you will see that.

PG - With so many corporate scandals over the last few years relating to accounting irregularities, do you think there should be more former finance directors in CEO positions?
SR - Not really. The one thing finance training gives you is an absolute grounding in what’s right and wrong. The rest is how you apply that. I think most executives know what’s the wrong side of right when it comes to numbers!

PG - Does your ACA qualification stand in you good stead or do you think it sensible to consider further qualifications such as an MBA?
SR - The ACA qualification gives you a massive leg-up when you are young – the MBA allows you to catch up. However it is the practical experience that makes all the difference. I thought about doing an MBA but found I was beating MBA-qualified people to jobs because of my experience. I think they are both good qualifications – I guess the MBA has more breadth. It’s wrong to compare them really.

PG - M and M Direct is backed by TA Associates, one of the industry's leading private equity players. Given the sums of money involved and potential risk associated with private equity buy outs, do you think having an accountant at the helm provides the investors with greater confidence?
SR - Private equity is about managing risk. I guess it can’t be a bad thing that I have got previous experience – but it’s just a bonus; no more than that. If I was underperforming it wouldn’t save me. That said, it annoys the hell out of my FD!

PG - Many finance directors complain their role has become overly focussed on adherence to rigorous corporate governance, and the regulatory environment. Thus preventing them from gaining the broader commercial skills associated with a general management role. Do you agree and if so what advice would you give a frustrated finance director?
SR - I have looked at a couple of FTSE 250 roles and the first thing I would have done was ensure I had a heavy-weight compliance/technical director to free up my time to concentrate on commercial issues. There are plenty who at any one time would like to move out of practice.

PG - How does working for a private equity backed company compare to a FTSE 100 Plc?
SR -There’s the obvious element of greater reward if you perform. I have always felt a connection with the businesses I work for so for me that isn’t any more relevant now. However, you are expected to put some of your own money in. The thing I don’t miss is the meetings and committees – we are much more “fleet of foot”.

PG - How should a finance director consider positioning themselves to join a private equity backed company?
SR - Cash is king – as is detail. Also it takes time and patience. I got pretty lucky because the majority of deals don’t go through.

PG - As a CEO what do you expect from your finance director?
SR - I expect them to tell me everything. To be honest with me, to be loyal and to take the headache out of understanding the technical side of finance.

PG - You have worked for two of the most high profile and successful CEOs in UK business – Sir Terry Leahy and Kate Swann. Apart from their retail backgrounds, do they have anything in common?
SR - I would add Sir Geoff Mulcahy into the pot! The honest answer is that they are all different but they all have enormous drive. I feel pretty lucky to have seen them operate.

PG - What advice would you give to a finance director who thinks they have the skill set to become a CEO?
SR - Don’t give up. Take some risks. And try to exploit your current role to make it as commercial as possible. At Argos as FD I chaired a supply chain project with an investment of over £100m. I learnt a huge amount.

* Phil Grinhaff is the managing director of Chartered People

If you would like to put some questions to Steve directly, Chartered People will be holding a business breakfast later in the summer in Central London with Steve guest speaker. Contact Phil Grinhaff for more information.

Picture source