Strategy & Operations » Leadership & Management » Kin & Carta CFO on creating value from transformation

If you are in the business of guiding clients on change management, it helps if you are in the process of transforming yourself.

Chris Kutsor, CFO of digital transformation consultancy Kin & Carta, says a big motivation for joining the listed firm was its move toward a ‘connective strategy’.

“We provide digital transformation to clients, and Kin & Carta is going through transformation itself, from a portfolio holding company to an integrated consultancy model.

“I wasn’t that interested in coming here just to be a traditional CFO and trying to squeeze out a few more points of margin, or a little more growth. Part of the excitement of me wanting to be here was the approach of taking a portfolio holding model of our divisions and putting them in a connective consultancy,” says Kutsor.

“We’re figuring out how to create more value by having those divisions work together as a digital consultancy, rather than standalone, independent entities,” he adds.

The American says the journey of change at Kin & Carta, which grew out of  printing group St Ives, was something he was familiar with, having developed his career at US tech giant Motorola, which morphed into various models over his 24 years there.

“Motorola split in two, the remaining company then shed a number of legacy businesses, got through that transition and then went on an acquisition spree,” informs Kutsor who, became CFO of Kin & Carta in May.

He says his time at the US tech giant is being replicated on a smaller scale by Kin & Carta, which sold off the St Ives printing and related businesses, and is now acquiring assets including Spire Digital, last month. Its the latest acquisition of a growth strategy, initiated by CEO J Schwan in 2017.

Kutsor says 18 months ago St Ives’ units weren’t sharing resources or approaches to best practice, but a strategy to integrate them should be value creative. “If you provide more than one work stream, it tends to be better for clients, and gives us a chance to trade at a higher multiple over time,” he says.

To help drive the transition to a more joined up business model, finance needs to play a key role, says Kutsor. “You’ve got to understand changing business practices and people’s behaviour to deliver that. You’ve also got to have a strategic understanding and perspective as to how you’re going to implement those changes,” he says.

That approach involves finance working closely with a central sales and marketing function to deliver a multi-faceted offer to clients, with Kutsor liaising with divisional CEOs on strategy. “It’s imperative that finance is a critical part of the organisation, not just adding up the numbers”, he adds.

Drawing on experience

Kutsor says he can draw from a variety of career experiences at Motorola, including finance director for a global division. But perhaps the biggest learning came from heading up investor relations (IR) at the group in his last five years there. “It makes you understand and be that more effective when you hear from outsiders on a continuous basis,” he says.

Possibly the biggest insight from his time in IR was that credibility is earned over time, and how important it is to do what you say you are going to do, he says. “Investors need to buy into a management team because when a company says it is going from point A to point B, investors need to believe it, to have faith in the management team,” he says.

For business leaders to deliver on a stated set of aims starts with “understanding the business itself, the drivers of the business, so that when the CFO and CEO are setting expectations, talking to investors, they’re making their strategic road maps to look ahead,” Kutsor suggests. “You need to understand where the risks and opportunities are, so you can put out an understandable vision that people can track results against.

“The connected model we are developing requires a different operating model, from the CFO’s perspective. As well as core finance functions I also have some operational responsibility, to deliver an efficient model that new acquisitions can plug into.

“From an IT platforms perspective, the sales and marketing function can interact with finance through our Google suite, our Slack module and our financial model. We can take care of some of the efficiencies, platforms and processes, that they don’t have to create on their own-that’s a big part of my job.

“It is especially critical in Kin & Carta, for me to be able to provide an effective operating model, the tools, processes and people, that need to be updated and upgraded,” adds Kutsor.

Becoming a B Corp

Kin & Carta is also on a journey of transforming itself into a B Corporation (B Corp), a company that balances profit with people and planet through meeting the highest standards of social and environmental performance.

Kutsor says the starting point for becoming a B Corp has been the desire to enhance the culture of the firm, and in doing so improve it’s chances of attracting and retaining talent. “We need our people to be as engaged and as happy as we possibly can, to generate innovative capability,” he says.

“We measure employee engagement as critically as we measure bottom line or expenses or revenue growth. It’s in every one of our charts that we provide to investors,” says Kutsor. “One of the ways you do that is with culture.”

“We wanted to give our employees a meaningful work goal, or something larger than just their job itself when working for Kin & Carta, which manifested itself in us striving to be a B Corp. By the end of this year we expect to have four of our divisions certified as a B Corp, and to be the first publicly traded B Corp.

“We understand employees find deeper meaning in work when it’s for a higher cause, for doing all the right things, not just for our people, but for the planet and our own children. It’s a nice rallying cry for us.”

Ultimately, Kutsor sees his role as combining the traditional CFO role with harnessing the value of the firm’s key asset- its people. “I spend as much of my time managing people and change as I do looking at numbers. It’s not a single threaded job, its multi-faceted. It’s about people, process and profits, all are combined,” he says.

The firm’s last full year adjusted pre-tax profits were down 2.5% from the previous year on like-for-like net revenue up 2% to £148m, with net debt increasing from £26m to £38.4m.

In continually finessing this approach, Kin & Carta has started on a journey that may take many new directions on the path to maximising value creation, says Kutsor. “We hope two years from now this company looks nothing like it does today. That is the appeal and the opportunity that gets me completely fired up,” he adds.

 

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