When considering candidates for our next Business Bloop Award our attention has been drawn to the recent article in the Daily Telegraph by Philip Aldrick and Hella Ebrahimi on Vantis, the accountancy firm that actually managed to go bust. We are grateful for the insights this provides.
Whilst it is not unknown for accountants, lawyers and the like to fail it is rare and actually difficult to do. “In this business you should be able to make money and cover your costs. If you are not managing that you are making some pretty fundamental mistakes” (quote from Chief Exec of a rival accountancy firm).
Vantis was the creation of accountant Paul Jackson notable for his heavy moustache and long curly hair. You would have thought this was enough warning in itself for anyone not to get involved. In 2002 he merged 4 small accountancy firms, floated them on Aim for £26.6m and installed himself as Chief Exec. Over 5 years he expanded rapidly by buying up small regional firms and rebranding them as Vantis. At the same time however working capital and costs rose driving up debt to peak at 54m in 2008.
To actually end up with working capital, costs and debts rising when your strategy is to buy up and consolidate other businesses shows that this business was never under any sort of control nor was there any plan for it to be so. The expansion and
The only real “consolidation” was the rebranding. It is expected that many of the small firms bought by Vantis will now be bought by their managements, with up to 90% of staff retained. In other words they will revert to the small regional firms they had been and in reality still are. The processes needed to grow and manage an accounting and advisory business, as opposed to a loose collection of accounting practices, were inadequate or non-existent.
So it is POOR PROCESS once again producing the inevitable poor and in this case disastrous result. Vantis’ “aggressive” tax advice to the rich and famous resulting in two major HMRC investigations and their appointment and subsequent removal as liquidator of Stanford International Bank are simply symptoms of underlying inadequate processes. And all of this stems directly from the deep seated managerial and behavioural values of the leadership of the business.
So you may think we are going to give our Business Bloop Award to Mr.
For more on process thinking go to :http://www.changeworld.co.uk/gettingresults.html
Business Bloop of the Month Award is brought to you by Steve Goodman & Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs at“Exceeding Expectations", "You're having a laugh ... Seriously?, "Capitalism or ... Common Sense .