It’s been a really good month, with a couple of interesting (and challenging) processes coming to an end. One of them has got me asking: should I be more assertive about my own choice of candidate when I'm convinced there is an ideal match?

The normal process is to get a broad view of the ‘possibles' – an interesting selection of who’s in the market – then support the client in picking the person they like most. But I got a sense they wanted me to make a firm case for the one candidate I thought was best fit.

It's not ‘outsourcing the decision’. And I don’t think giving a client a choice of candidates is wrong – far from it. But it’s not always as valuable as recruiters think. Sometimes the client knows that out of five good candidates, their choice might come down to personality alone, and they’re reluctant to pick solely on that basis. So having an outside view on the 'first among equals’ is valuable.

It was often the case, back in the day, that recruiters would take time to understand the role and the team, then uncover exactly the right candidate. Later, back-up options and a range of choices became the thing – but now that idea of trusting the pro(cess) is back.

That relies on recruiters covering three sides of a triangle: knowing the role and the firm it’s in; understanding the candidate pool – and getting under the skin of good individuals; and appreciating the environment within which they will be operating.

There are lots of ways of doing the third bit. (I’ve been using Pitchbook this year for intel on deals and hot sectors for example.) Last month, to deepen my sense of the interim market right now, I went to a PwC/Institute for Turnaround event. Real insight doesn’t just come from presentations and data – so their idea to run a “net-walking event”, where 30 corporate finance (CF) folks strolled around Bath and chatted in groups, was genius.

Apart from the fun approach, that evening confirmed what my own project book was telling me: interim is becoming more important to many sectors looking at change.

The issue is getting the right candidates engaging with interim as a concept. Lots of finance execs want a permanent home, and interim has traditionally attracted a particular type. But chatting to the CF advisers, lawyers and investors in Bath, I realised: maybe we’re selling it wrong.

What defines ‘interim’? Well, it’s usually a practical rather than emotional commitment. You go in, oversee a new ERP roll-out, or steer a turnaround, and there’s a finishing line – when you’ve delivered. But you know what that sounds like? A CFO job in a private equity portfolio business. That’s just as time-bound, and equally project-focused.

On many processes, then, there's a clear, measurable and essential set of criteria that a candidate needs in a role (and that a client can offer). We should have the confidence in our choices when we find the right person.

- Ray Nicholls

Things to do...

***Now...***
**Cyber. Again.**
The hits to M&S, Co-op and Harrods show cybercrime is a top-level risk. Get *all* dept. heads to revisit the danger signs and wargame hack responses *now*. Co-op just pulled the plug. What would you do?

***Next...***
**Assess BYOAI.**
While many boards dither, employees are bringing their own AI tools to work and that might be an invisible problem. (MS putting AI into everyday tools, too…) Get a grip on it – and get some ideas off them, too...

***Later...***
**Back-pocket cuts.**
The theme for 2025 is “unpredictability”, and that’s not just Trump. Having plans for ways to conserve cash – and to adapt to supply chain chaos – before it happens is the surest way to stay agile. Have a hit-list.

Lies, damned lies, and...

336 deals in Q1... is bad?

Pitchbook’s Q1 UK PE and VC activity report is out, and it makes for very mixed reading. If you’re considering a role in a PE-backed business, there are datapoints to bear in mind.

First, it looks pretty quiet in PE land, with deals down to 'just' 336 for the quarter, for a modest(ish) £18.6bn. That’s as low, on both counts, as at the start of the pandemic. Perhaps relatedly, US involvement in UK PE deals has also dropped markedly (yes, it could be Trump).

Exits are worse: just 59 deals for £5.5bn – and the data on corporate acquisitions helps explain why: they're also as low as they have been in a quarter since 2020. And even fundraising looks to be well below the (rising) trend of the past four years. Look on the bright side: at least the amount of dry powder is off its highs

Bright spots? Let’s turn to VC activity, where the picture is better, flattered by rising deal values. VCs, it seems, need to deploy capital and are seeking out chunkier firms to soak up that dry powder (with a big uptick in 'venture growth' classed investments, see below). So although VC deal count is modest – 548 in Q1 – values are consistent with the past couple of years. And VC exits look solid, too.

Pitchbook adds a more bullish note on fundraising: “megafund closes have supported totals in the quarter, which should enable PE firms to capitalise on low market valuations amidst ongoing volatility.” The recipe, then? Keep an eye on the chunkier start-ups and scale-ups; and have your CV ready if the the public markets hit valuations and make larger take-privates an option. And keep an eye on the FT, where PE coverage has been a tad more bearish than at Pitchbook...

On trend

Flex your decency quotient

OK, confession: it’s not a brand-new idea; but I think it is trending. The term “decency quotient” was popularised by Bill Boulding, head of Duke University’s Fuqua School of Business, in 2019. In a Harvard Business Review article, he argued, “Successful leaders… must possess triple-threat capability: IQ+EQ+DQ… a combination of two familiar attributes — intellect and emotional intelligence — and one that I believe must be recognized and elevated: decency.”

I came across it recently chatting with a board recruiter at one of the big-box headhunters. (Yes, we chat all the time – and often refer each other work; it’s not dog-eat-dog when the best outcome for clients and candidates is on the line…) She was applying it to the recruitment game. And like her, we’re not just interested in how we act decently to ensure the best outcomes for clients and candidates. True decency is about how we also handle the candidates we don’t place.

For a boutique firm like Pitch Hill, it’s relatively straightforward – the business only exists because we build long term relationships that are beyond transactional. But I was really impressed to see it pop up among the big players too. I fear it’s still rare (on the London scene, anyway), and I can imagine when your inbox is getting hit 250 times a day, it can be challenging to stay ‘decent’. So kudos to her.

DQ is something every leader can develop. And it needn’t be touchy-feely, either. Doing the right thing is just good business. You can hear that message from big beasts such as former Mastercard chairman Ajay Banga (“You can’t win [as a company] by standing on someone else’s shoulders and beating their head in,” he said in 2010; Banga, above, is now president of the World Bank); or Microsoft CEO Satya Nadella: “empathy is not just nice – it sparks innovation.”

Being decent includes things like listening, being polite, following through and making long-term decisions. It makes for a more positive work culture – which is good for productivity. So it’s hard to disentangle from DEI, too. That might be no bad thing: turning the idea of ‘inclusion’ into an essential part of enlightened leadership on the road to long-term value creation is the mood music for our times.

Words from the wise

“Price is what you pay. Value is what you get”

Our last newsletter just missed the news of Warren Buffett’s retirement. CEO of Berkshire Hathaway, the ‘Sage of Omaha’ is one of the world’s shrewdest, wealthiest, and most boring investors, trading seldom and holding for the long term. His annual letter to shareholders is a hardy perennial of the business press – and we figured a pick of his musings would be a suitable way to mark his step-back.

Ah. A quick web search shows we’re not alone. Web sites seem to compete on the weight of the Buffett-isms they have on offer. We go from 90 Warren Buffett Quotes on Investing, to Warren Buffett's 105 Best Quotes Of All Time, to Top 150 Warren Buffett Quotes (With Meanings), all the way up to 341 quotes from Warren Buffett. (I’m not sure I’ve said that much in my whole life.)

We’ll save you some time. Here are five decent ones with some up-to-date context:

“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.” Job one of the CFO is to remind the board – especially spending departments – about this truism. (Also: Buffett’s rep is as much about fearlessness in voicing truisms as it is smart investing… a good tip.)

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” Businesses should always be sustainable. Forget ‘ESG’: call it ‘long-term value creation’.

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.” AI. Yes, we think it’s about AI.

“Risk comes from not knowing what you are doing.” Finance execs are privileged: they have more information than most about what's happening and how it works. Use it.

“I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” Finance execs often pick CEOs to work with. Picking great companies might be a better option…

Passé meme of the month

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