Stoy Hayward’s business restructuring practice, Simon Michaels,
became the firm’s managing partner in July. The new leader
discusses his ambitions for the firm during these challenging
economic times with Nicholas Moody.
Simon Michaels has big boots to fill. His predecessor Jeremy Newman
was a high-profile figure in the UK accounting profession who led
BDO Stoy Hayward for seven years, increasing the firm’s revenue
from £201 million ($392 million) in 2001 to £350 million in
2008.
Michaels says he will stamp his own management style and
approach to the role. “My challenges and those of the business are
different now,” he says. “They are different because we have an
improved market position and the economy is going to be more
challenging over the next couple of years than it has been over the
last few years. It is not about doing things differently for the
sake of it, it is about the fact that the business will need other
things over the years to come.”
Increasing market share
Michaels admits to being hugely ambitious despite a deepening
sense of economic unease among the UK public. He wants to improve
the firm’s position and grow ahead of the market. At present, the
firm has about 3 percent market share.
“As a business we are very keen to use the challenges in the
marketplace as an opportunity for us to invest and grow,” Michaels
says. “There is a huge gap between Grant Thornton and ourselves,
and the Big Four, and what I want us to do is to dominate that gap
in the market.”
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| Simon Michaels, BDO Stoy Hayward |
Michaels also wants to break down some of the barriers and
prejudices he believes exist in the marketplace in order for BDO
Stoy Hayward to gain a greater market share of large listed
clients. “We don’t want to be Big Five,” he adds. “What we want to
be is the most distinctive player in the marketplace and to have a
very clear identity in an otherwise grey market where all firms are
seen to be broadly the same.”
The firm is on the lookout for further mergers or acquisitions
where they exist, following its acquisition of actuary and pension
firm Wolanski Checkley Fisher in April and tax specialists Chiltern
last year.
Michaels anticipates fierce competition from the Big Four over
the next few years in assurance and audit but tax and advisory
remain two key areas that offer big opportunities for the firm.
These openings exist in the traditional advisory services lines of
corporate finance, restructuring and forensic but also
outsourcing.
“Increasing complexity in the tax market is marginalising some
of the smaller players, which is creating more opportunity,” he
says. “There are conflicts of interest which are providing us with
more opportunity to win more market share.”
The firm’s leadership structure has been one of the first areas
to change under Michaels’ stewardship. BDO’s leadership team has
shifted from a geographical-led emphasis to a matrix where services
lines, geographical areas, clients and markets are all
represented.
“That system makes sure that right at the top of the
organisation all the relevant constituent parts are represented,
including our people,” Michaels says. “We have our head of people
there to make sure we are engaging with the business and we are
giving our people everything they need.”
Clients’ needs are firmly at the heart of Michaels’ approach to
the business as is his desire to ensure BDO is the most cohesive
firm in the market.
“The philosophy I have is that we put clients absolutely at the
heart of everything we do and, secondly, we operate as one firm, so
we are the most joined-up organisation in the profession,” he
notes. “Clients get absolutely everything BDO has to offer, we
bring the right skills to the table, but we don’t have these
[service] silos that exist elsewhere.”
While Michaels’ predecessor became well-known as a vocal
commentator in the competition and choice debate, he singles out
governance as a hugely important area he will pay attention to.
“Governance is at the forefront of investors’ minds,” he says.
“For the market to have confidence in the accounting profession, to
the extent there is that public interest element, it is very
important the profession is seen to adopt the highest levels of
corporate governance, but also to put itself at the forefront of
industry discussions with regards to governance.”
The new BDO leader revels in the competitive environment offered
by his firm’s rivalry with Grant Thornton but he won’t be drawn
into a slanging match.
“I find it stimulating having some competition,” he says.
“Growth and where you are in rankings are important but it is not
the be-all and end-all.
“The more important bit is around the market proposition and
position, and the long-term sustainability you can get from getting
that bit right. Securing leadership positions in your target market
is more meaningful than the league tables.”
