Managing Your Cash Flow

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A tale of two FDs

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First, let me tell you about Mike Gahan. Gahan is the FD of The Consortium, a Trowbridge-based procurement and fulfilment business focused on the social care, education and training sectors.

Gahan is also a Real FD reader who invited me to make the journey west from London to see and hear about all the great things they’re doing in Trowbridge.

He joined The Consortium in November 2005 to help the management through a buyout and then grow the business. By ramping up profitability, focusing the company on margins and improving efficiencies, the company is now turning over £40m and growing strongly.

A couple of days later, in a posh London hotel, I met Michael Kourey, who is the CFO of California-based global communications group Polycom.

Kourey has been with Polycom from the very beginning when the company had zero sales. In the fourth quarter of FY 2007, Polycom hit $1bn in revenue. It’s a highly profitable business that generates a lot of cash; so much cash that Polycom is now acquiring its own stock.

They’re two very different companies. The Consortium is forecast to record sales of £43m this year while Kourey has his eye on a revenue target of £2bn . However, some similarities emerged between the two men and their companies.

Kourey says one of the reasons behind Polycom’s success is that an entrepreneurial spirit still wafts through its corridors. The Consortium is also an entrepreneurial company with inspiring management leading from the front.

Kourey is focused on bringing the right people into the organisation, saying that’s the way to build a great company. Gahan says recruiting very good staff has helped turn around The Consortium’s fortunes.

The Consortium is also big on communication. Staff are briefed on key indicators, how the company is performing, future prospects and business developments. Likewise, Kourey says it’s vital Polycom communicates freely with its employees.

For some reason it was oddly comforting to see that some ideas and practices are just as relevant in a giant multinational as they are in a mid-size West Country company.

(Oh, and one more thing, completely unrelated to this article but important none-the-less if you enjoy scones. If you ever get the chance to go to Trowbridge, I recommend a little garden café just off the main square that does a mean cream tea. Scones + jam + clotted cream + coffee = £2.40.)

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