David Ives is a chartered accountant and, since 2005, an interim finance director (or more accurately a turnaround FD) with a number of challenging assignments to his credit. Working closely with restructuring advisers and stakeholders these have included divisions of ITV plc and Associated Newspapers as well as smaller companies in e-commerce, medical devices and confectionery.

David is a member of the PILOTpartners Turnaround Panel. Before going solo David was on the boards of quoted magazine publishing and IT & telecoms distribution businesses and led the MBO of another large IT distributor. When he is not beating up balance sheets David disappears to Cornwall where he takes it out on his sailing boat...

James Wheeler of PILOTpartners caught David in a quiet moment a few evenings ago when he was marooned in Scotland on his current project.

Do you ever hanker after the relatively quiet life of a finance director in a permanent job?
No not really. I decided quite a few years ago what I was good at and what were not my strong points. I think I had always felt that I had a reputation as being a person who got things done and had a pragmatic approach. The more measured, political world of day to day financial management was not really for me. I prefer the intellectual challenge of crisis management and bringing some semblance of order to chaos; then it is time to move on.

Also I like the independence of the interim life, at the same time as deciding to become a full time interim manager my wife and I moved our main location to the West Country, so although I have a base in London, I am by the sea every weekend and for the inevitable breaks between projects, Cornwall is as good a place as any to hang around.

That's interesting – there are very few people I know who have their work/life balance so well sorted out. Whilst I well understand the intellectual challenge of being a successful interim FD, on the face of it one imagines that the role in the current climate could be pretty miserable – with pressures from stakeholders, a shortage of working capital & so on...Is this what you are finding or is having a thick skin maybe one of the more important assets in your kit bag?
Since turning to the interim management sector full time I have spent most of my time working in companies with cash issues, of one type or another. Cash management is my speciality so I think I have just become used to working in situations where working capital is in tight supply.

I think there is probably less room to manoeuvre for everybody. The banking community have less room to make lenient decisions and everything is geared to reducing their exposure to even slightly risky positions. I have been told by one bank recently that they no longer offer term loans beyond two years and overdrafts have to be replaced by invoice discounting. This is not a problem in itself, as in a turnaround a flexible working capital line is helpful as the business begins to recover, however banks are now looking at the ID line as part of their overall exposure limit that they will not exceed.

A thick skin still helps, as a lot of management in distressed companies still do not understand bank lending criteria and that their idea of a supportive bank and the bank's view are probably poles apart.

What have you found to be the main differences in working as an interim FD in a listed company facing difficult issues compared to a private equity backed business?
Working in stressed positions in public companies is far more difficult than in private equity based businesses. The external reporting requirements in public companies make the decision process far more complex with greater involvement from advisers. The natural reduction in market capitalisation attached to the inevitable profit warning means pretty much every transaction becomes subject to shareholder communication which in turn leads to a continual requirement for working capital forecasts and accountants' reports.

The positions of non-executive directors also become more difficult in public companies as they are rightly very much more conscious of their position.

Private equity investors demand high standards and huge commitment from their management teams. However they sometime tell us that they prefer not to hire interim executives as they are not aligned to their interests compared to permanent post holders. Naturally I argue strongly against this line of thinking given my experience of working with the best of the breed. Have you found this to be an issue?
Interim managers by definition are not hired to be involved for the long term; they are there to solve specific problems. However I think it is possible to align the interests of the interim manager with the investor. I am more than happy to work on the basis of results related remuneration and did so very effectively with a leading television company that had a loss making subsidiary.

As part of a team I helped break up the business and realise cash. We were on performance bonuses based on the total cash realisation and it worked very well. If there is a range of defined measurable outcomes for the investors that they need to be delivered in a relatively short timescale then they should be able to employ interim managers and will get a better result.

If on the other hand they want somebody to come in to a risky situation with normal rates of pay but a big potential upside a couple of years down the track, then certainly find the right permanent manager. It is not something that necessarily overly appeals to me. I work on an interim basis to solve particular problems and move on.

Having said that my current project looks like taking a year, the previous one took six months and the one before that, eighteen months. How long is an interim assignment?

Good point. My experience over the years has been that a successful interim FD is usually kept on for much longer than the originally intended duration of the contract. This seems to me to vindicate the value delivered by the senior interim manager as well as showing that being 'super-aligned' may not be the be all and end all. Have you found this too? So how do you decide when to withdraw once the core tasks have been achieved?
Projects do always seem to go on longer than anticipated. There are a couple of reasons for this: everybody underestimates the time it takes to negotiate a sensible restructure and at the start of projects management are unsure of the value they will attain from interim managers.

Usually it becomes obvious when the right time to withdraw has arrived. The company will be refinanced, a stable financial team will be in place and I will be getting itchy feet and will want to move on.

Much of your interim career has been in turnarounds. How do you manage to get a management team which is in denial or distress 'on side' on Day One of an assignment, especially if you have been introduced by the bank?
Hello... I am here to help! It is very important not to position yourself as a consultant and it is usually quite easy to work out who are the good guys, just from talking to them. Form good relationships with the people in the engine room, if you want to know what the real position is, spend time with the Financial Controller and accounts staff. Get close to the numbers. Look for easy wins to show you are worth the fees you are being paid, for a job that the management often feel does not need doing.

A thick skin is a prerequisite. On one cash management job I was engaged in, the Finance Director informed me the bank needed the input of an interim but he was happy doing the cash forecast on a Saturday morning. Six months later after a successful refinancing with me working mostly five days a week we parted as good friends!

How do you tread the fine line between being the servant of the company on the one hand and having to report to the bank which was instrumental in putting you there of the first place?
I always try to make it clear at the outset that I will do whatever I can to help but that I need to remain independent, as ultimately I am reliant on banks for my livelihood. Mostly, as ever, it comes down to just being open and honest with both parties. This is actually true for both parties. I have learned the hard way that it is pointless giving an opinion to a bank, however heartfelt that opinion may be, if you have not shared it with management and they have understood the point you are trying to make.

Often, management actually want your help in dealing with the bank. They do not understand why the bank is acting the way it is.

What do you do/would you do if you started an interim assignment and found that the financial position of the business was much worse than you had been led to believe either by me or by the other parties who hired you? My guess is that this happens as often as not.
The first thing to do is form your own opinion by getting deeply into the numbers. Often it is worse than you thought and is probably continuing to deteriorate. However you owe it to the company management to give it your best shot. Make sure you put no positive spin on the forecasts shared with the bank and advisers, emphasise all the down side risks and if they continue to support then stick with it. I always bear in mind, however, that you do what you can, but not every project is going to end in success.

How do you keep your business network going when you are really busy on interim assignments far from home?
This is very difficult. When I first started on this course I assumed the majority of my projects would be based around London. I have not now worked in London since November 2009.

The majority of my contacts are in London and it is very difficult to make networking meetings mid-week in London when you are working in Scotland as I am currently. I try to keep in contact via e-mail and then when a project ends move back to London and pick up on the contacts left in limbo during the last project.

Most of these contacts are, fortunately, in professional environments – the turnaround panels operated by the restructuring departments of the large and specialist accountancy firms like the ones managed by PILOTpartners, the managers in the workout teams of the banks and of course private equity investors - where there is a common understanding as to these issues.

It is actually easier to contact people if you are immediately available having just finished a project. There appear to be a lot of "interim managers" around at the moment who are really permanent directors who have lost their positions and want temporary work until they find the next permanent position. However I think most providers can tell a true interim and are interested in hearing about your last assignment.

Yes I agree, especially nowadays with permanent jobs being more difficult to come by. But you can be sure that we can tell the difference.

Finally David, and tongue firmly placed in cheek.. Have you ever had sleepless nights worrying about your PI insurance cover?

No, I am very conscious of my responsibilities! If I thought I was being asked to do anything that put me at risk I would quit immediately. It is not really to do with PI cover, it is my reputation and in this field, ultimately, that is all you have.