Managing Post-Funding Decisions – Avoiding the OPEX Trap
Securing an injection of funding is a pivotal moment for any business. It validates your vision and provides the resources to pursue growth opportunities. However, this influx of cash can tempt management teams to expand operational expenditure (OPEX)—particularly through increased headcount—without fully considering the financial impact.
While optimism and ambition are crucial, it’s essential to remember that increasing OPEX too quickly can erode profitability, leaving businesses scrambling to maintain performance rather than improve results. This guide explores how to make smarter, more sustainable decisions when managing post-funding spending, linking costs to revenue, and maintaining profitability.
The Challenge: The Temptation to Over-Invest in OPEX
One common post-funding misstep is rapidly expanding management headcount or other fixed costs to demonstrate progress. With the average UK management salary at £40,000, adding headcount can quickly escalate OPEX.
It’s vital to calculate the financial impact of these decisions. For example:
- At a 5.7% gross profit margin (the UK average in 2023 and 2024), every £40k in costs requires £702k in additional revenue just to maintain profitability.
- The margin for error is slim, and poor planning can lead to negative outcomes, even in high-growth scenarios.
This makes it imperative for businesses to align spending with achievable revenue targets while ensuring that profitability is preserved.
The Context: Trends in UK Gross Profit Margins
Over the past three years, the average gross profit margin for UK companies has shown modest improvement:
- 2022: 3.98%
- 2023: 5.70%
- 2024: 5.70%
While these figures represent a positive trend, they also highlight how narrow profit margins remain for many businesses. It’s important to note that these averages vary significantly by industry, meaning your specific gross margin may be higher or lower.
This variability underscores the importance of understanding your business’s unique financial metrics before making significant OPEX decisions.
Recognise Internal Pressures to Expand Teams
It’s not uncommon for existing management to push for the recruitment of additional subordinates after a funding round. In my experience, your management team will often be convinced they need more heads to handle the additional workload and expectations.
While these requests can have merit, it’s essential not to take them at face value. Don’t assume the need for additional headcount is entirely factual. Instead, work through the specifics:
- What additional effort is required, and is it truly beyond the current team’s capacity?
- Can the workload be redistributed, streamlined, or supported through tools or processes before committing to new hires?
- Will this new role genuinely alleviate constraints or simply create new layers of management?
Taking the time to evaluate these pressures critically helps avoid the “easy option” of expanding headcount unnecessarily and ensures every hire contributes directly to value creation and sustainable growth.
Challenge the Justification of Additional Costs
I often hear management teams justify a £40k investment by breaking it down into monthly salary terms—seeing it as a manageable £3,333 per month. While this might make the cost feel more palatable, it’s only part of the picture.
Instead, consider the £702k in additional revenue required to cover that £40k annual cost (based on an average 5.7% gross margin). Spread that revenue target over 12 months—suddenly, it’s a staggering £58,500 in extra revenue per month just to stand still.
When viewed from this perspective, does the investment still feel like a “no-brainer”? Reframing the conversation this way encourages leaders to assess whether the additional cost is truly necessary and whether the associated revenue targets are realistic.
Reframing the Post-Funding Conversation
Instead of asking, “What can we do with this funding?”, ask:
- “How much additional revenue is required to offset new costs?”
- “Are these expenditures sustainable given our profit margins?”
- “How can we optimise existing processes before increasing fixed costs?”
By shifting the focus from spending to sustainability, businesses can avoid common pitfalls and ensure that growth efforts lead to tangible, profitable results.
Practical Framework for Post-Funding Decisions
1. Understand the Financial Impact of Additional Costs
With average UK gross profit margins at 5.7%, it’s essential to calculate the revenue required to break even on new expenditures. For example:
- Every additional £40k management salary demands £702k in new revenue to maintain profitability.
- To improve profitability, the required revenue is even higher.
This highlights how even modest increases in OPEX can have outsized implications for revenue targets.
2. Optimise Existing Processes Before Expanding
Use funding to address inefficiencies and strengthen existing systems before committing to increased OPEX. Scaling flawed processes amplifies inefficiencies, leading to wasted resources and reduced profitability. Focus on:
- Automating repetitive tasks.
- Streamlining workflows.
- Enhancing operational systems to handle growth without proportional cost increases.
3. Invest Strategically, Not Reactively
Expanding headcount is often necessary for growth, but it should always align with clear ROI. Before making new hires, assess whether the role:
- Addresses a critical constraint to growth.
- Will lead to measurable revenue or efficiency gains.
- Could achieve the same outcomes through outsourcing or technology.
4. Link Expenditure to Revenue-Generating Activities
Ensure that every expenditure contributes directly or indirectly to revenue. For example:
- Instead of hiring additional management, could a combination of junior roles and improved systems achieve similar outcomes at a lower cost?
- Are you investing in sales or marketing capabilities that will drive the necessary revenue growth?
5. Foster Financial Awareness Across the Team
Educate your leadership team on the relationship between OPEX, profit margins, and revenue. Encourage them to think critically about how each decision impacts the bottom line. This not only leads to better decisions but also creates a culture of accountability and strategic focus.
Key Questions for Post-Funding Spending Decisions
- Does this expenditure align with our growth strategy, or is it reactive?
- How much additional revenue is needed to cover these costs?
- Are our current systems optimised to handle growth, or are we scaling inefficiencies?
- Could alternative solutions achieve the same outcomes more cost-effectively?
The Leadership Advantage: Sustainable Growth Over Quick Wins
Post-funding decisions set the tone for your business’s next phase. While it’s tempting to ramp up OPEX to deliver immediate results, it’s crucial to prioritise profitability and long-term sustainability.
By understanding the financial implications of decisions—such as the revenue required to support an average £40k management salary—you can ensure that your growth efforts are strategic, measurable, and sustainable.
At NorthCo, we specialise in helping leadership teams navigate these critical moments. Our tailored leadership and operational support services ensure that businesses maximise the value of their funding while avoiding common pitfalls.
Conclusion: Grow Smarter, Not Harder
Post-funding growth should be exciting, not stressful. By linking spending to achievable revenue targets and maintaining focus on profitability, you can avoid the OPEX trap and position your business for sustained success.
Subscribe to our newsletter for more actionable insights on leadership, operations, and sustainable growth strategies.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
What Is an HR Business Partner, and Why Do They Matter?
What Is an HR Business Partner, and Why Do They Matter?
An HR Business Partner (HRBP) is a strategic role within the human resources function, designed to embed HR expertise directly into the business. Unlike traditional HR roles that focus primarily on administrative tasks, compliance, and policy implementation, HRBPs are intended to work closely with specific business units or departments. Their purpose is to align HR initiatives with the organisation’s strategic objectives, ensuring that people strategies directly support business performance.
HRBPs are there to provide tailored HR support to business leaders, acting as advisors on workforce planning, talent management, organisational design, and employee engagement. The goal is for HRBPs to build strong relationships with the teams they serve, enabling them to deliver insights and solutions that improve performance, enhance employee experience, and drive value across the organisation.
In theory, the role of the HRBP represents a significant evolution in how HR contributes to business success. By working alongside operational teams, HRBPs should bridge the gap between traditional HR priorities and the real-world needs of the business. However, the effectiveness of an HRBP depends entirely on their ability to understand the business they are partnering with, which is where challenges often arise.
The Advent of HR Business Partners: Bridging the Gap or Widening the Void?
While the introduction of HRBPs was a step towards aligning HR with the strategic goals of businesses, the role often falls short of its potential. All too frequently, HRBPs lack the operational knowledge necessary to genuinely partner with the business units they are assigned to support.
I often encounter HRBPs who have little understanding of what the business department they are supposed to partner with actually does or how it operates. They lack insight into the department’s day-to-day challenges, key performance drivers, and operational realities. Instead of closing the gap between HR and the business, this disconnect can inadvertently widen it, creating frustration on both sides and undermining the very purpose of the role.
Upskilling HR Business Partners to Understand the Business
While it may seem obvious that HR Business Partners (HRBPs) need a deep understanding of the departments they support, in practice, this level of integration and knowledge-building often doesn’t happen. Many organisations assume that HRBPs can gain the necessary insight simply through conversations or high-level briefings, but this approach rarely provides the depth required to make a real impact.
Because HR professionals tend to be people-oriented, it is often assumed they will fit right in and that the department will welcome them with open arms. On the face of it, this might even appear to be the case—initial relationships may seem smooth, and the HRBP might quickly establish rapport. However, even with a warm reception, the HRBP will be far better placed to support the department if they are fully immersed in its operations. This means not just attending meetings and shadowing team members but, where relevant, aligning their working patterns with those of the department. For example, if the department works shifts, the HRBP should occasionally work shifts as well. By experiencing the realities of the team’s schedules, challenges, and culture firsthand, they can gain insights that are impossible to achieve from a distance. This level of commitment demonstrates to the team that the HRBP is invested in understanding their world, building trust and credibility while equipping them to provide more effective and tailored support. Without this level of immersion, even the most personable and well-intentioned HRBP will struggle to move beyond surface-level engagement.
Why Qualification and Business Acumen Are Non-Negotiable
If you are investing in HRBPs, you must insist they are genuinely qualified to partner with your business. This doesn’t just mean being proficient in HR processes; it means having a deep understanding of the business itself. An effective HRBP should speak the language of the teams they support, understand their pain points, and propose solutions that make both operational and commercial sense.
Some of the best HRBPs I have encountered didn’t come from a traditional HR background. Instead, they started their careers on the shop floor or in operational roles and later retrained in HR. This experience gives them an invaluable edge: they’ve lived the realities of the business, understand how it works, and can connect with frontline employees. They don’t just bring theoretical HR knowledge—they bring practical insights that translate into meaningful, actionable support.
In contrast, career HR professionals without this exposure may struggle to gain the trust and credibility of the teams they support. This isn’t a criticism of HR expertise, but rather a recognition that to truly partner with the business, HRBPs need more than HR knowledge—they need business acumen.
Building Better HR Business Partners
To realise the full potential of the HRBP role, organisations should:
HR Business Partners have the potential to transform the relationship between HR and the business, shifting it from a source of tension to a powerful driver of organisational success. But achieving this requires more than good intentions—it requires ensuring that HRBPs are equipped with the skills, knowledge, and mindset needed to truly partner with the business. When done right, HRBPs can elevate both HR and the teams they support, creating lasting value for the entire organisation.
Navigating Trust, Betrayal, and Resilience in Leadership
Navigating Trust, Betrayal, and Resilience in Leadership
Starting with Empathy: “What’s on Your Mind?”
Leadership often begins with empathy. When coaching, I always open with the question, “So, what’s on your mind?” This simple question sets the stage for open dialogue and helps clients explore their challenges. Recently, during a coaching session, one of my clients, James, who runs a professional services business with a turnover of £2 million, shared a deeply personal and troubling situation. He explained that he was being taken to an industrial tribunal by an employee he had supported more than any other team member. The employee had not only named him personally in the claim but was also attempting to sue him personally for alleged misconduct.
James was devastated. He had mentored this employee, taking her under his wing and treating her with exceptional care. He even shared text messages from her, where she expressed gratitude, stating he was the only boss who had treated her with respect and inclusivity. Yet now, she was accusing him of being a bully, discriminatory, and prejudiced—the very opposite of what he stood for. When I asked James if he had documented any of these positive interactions in the form of performance reviews, he admitted he hadn’t. This lack of documentation meant he had no concrete evidence to back up his support for the employee, leaving him vulnerable in the dispute. This betrayal had shaken him to the core, to the point where he considered closing his business.
This guide explores the complex emotions leaders face when trust is broken and how to navigate such situations with clarity and resilience.
The Devastation of Betrayal
Being taken to an industrial tribunal by someone you’ve supported, mentored, and even protected can be one of the most emotionally jarring experiences a leader endures. It feels deeply personal because leadership is personal. You’ve likely invested your time, energy, and perhaps even your heart into building a team and a business that feels like a family. But when an employee, particularly one you’ve gone out of your way to support, turns against you, it shakes the very foundation of that trust.
Let’s address some critical truths:
Understanding these dynamics doesn’t excuse negative behaviour but helps frame it within the broader context of human motivation and psychology. This perspective can equip leaders to respond with greater resilience and less emotional reactivity.
What Do HR Always Tell You?
As a professional leader, it goes without saying that performance improvement is a large part of your role. This is not just about satisfying HR requirements but about effectively leading your team. By taking performance management seriously and changing your mindset from seeing HR as a bureaucratic necessity to viewing it as a performance-enhancing function, you can transform HR into a force multiplier for your business.
HR professionals consistently stress the importance of proper processes for managing employee performance. We know we should follow these processes, but often HR systems can feel cumbersome and disconnected from business priorities. My processes, however, are specifically and directly linked to business goals. Here’s what effective HR practices look like:
By following these practices, you not only enhance individual and team performance but also build a robust file of evidence that could be crucial if disputes arise. This documentation is not just good HR practice; it’s the right thing to do for your business. Clear expectations and accountability improve operational efficiency and create a culture of trust and fairness.
The Legal Landscape: Can an Employee Sue You Personally?
In the UK, most employment disputes target the company rather than the individual employer. However, under certain circumstances, personal liability may arise. For instance:
How to Regain Trust and Confidence
The emotional fallout from such events can lead to a loss of faith in employees and even in yourself. However, as a leader, your ability to rise above personal setbacks is critical.
Final Thoughts: Building Resilience in Leadership
Leaders carry a heavy emotional burden, and betrayal can amplify feelings of doubt and isolation. However, moments like these are pivotal in shaping your leadership journey. Resilience doesn’t mean ignoring the pain—it means acknowledging it, learning from it, and using it as a foundation for growth.
Your business isn’t a family, but it is a professional ecosystem that you’ve nurtured. Protect it with the same diligence you’ve shown to your team, and remember that setbacks, while painful, often lead to reinvention and renewed purpose. Ultimately, leadership is about balance: understanding human nature, setting boundaries, and maintaining your vision through adversity.
The Hidden Cost of Remote Work
The Hidden Cost of Remote Work – Why Leaders Are Losing Their Influence
In the era of remote work, many businesses celebrate flexibility as a productivity win. But for leaders, there’s an unintended consequence: the dilution of their influence. Without regular in-person interactions, leaders lose opportunities to connect, align, and inspire their teams in ways that foster performance and growth. This guide explores why business leaders are losing their impact and how this affects team cohesion, performance, and culture.
The Cost of Leadership Absence
Leaders play a critical role in showing the way and leading by example. Their behaviours set the tone for the organisation, creating a benchmark for how to act, think, and approach challenges. When working remotely, leaders lose the opportunity to:
The Subtle Art of Leading by Example
Great leaders inspire action not just through formal communication but by their presence and conduct. In an office, this might look like:
When these actions are absent, teams can feel unmoored, leading to disengagement and a loss of momentum.
The Impact of Missing Visual and Subtle Cues
In-person leadership is enhanced by non-verbal communication and environmental observation. Remote work strips these tools away, making it harder for leaders to:
Quantifying the Value of Direct Influence
Studies consistently show that the physical presence of leaders enhances performance:
The performance gains are tied to the ability of leaders to influence directly through action, presence, and interaction.
The Cost of Lost Opportunities
When leaders are remote, they miss out on the small but impactful moments that define great leadership:
Stopping and praising: Without physical proximity, it’s harder to celebrate effort or outcomes in the moment, leading to diminished morale and motivation.
Real-time coaching: Correcting misunderstandings or guiding someone toward better performance is delayed in remote settings, which may allow small issues to snowball into larger problems.
Reinforcing culture: The visible embodiment of values—whether through work ethic, collaboration, or decision-making—is a powerful tool for alignment. Leaders lose this when they operate primarily via screens.
Hybrid Models: A Compromise, But Not a Solution
While hybrid work models allow for some in-person interaction, they are ultimately a compromise rather than a solution. As a leader, I am not a fan of hybrid approaches because they can often feel fragmented and fail to fully recreate the benefits of consistent, physical presence. However, they are better than nothing, and if a fully in-office model isn’t possible, hybrid arrangements can help mitigate some of the downsides of remote work.
Interestingly, there is evidence suggesting that employee turnover might be lower in remote or hybrid firms, which could be an argument in favour of maintaining some level of flexibility:
These findings suggest that flexible work arrangements may enhance retention by addressing employee preferences for work-life balance and autonomy.
That said, while lower turnover is beneficial, it doesn’t eliminate the challenges associated with diminished leadership influence, reduced alignment, and the loss of immediate coaching opportunities. Leaders must weigh these trade-offs carefully when designing their workforce strategies.
Embracing the Challenge
Leadership is as much about being seen as it is about communication. When leaders are visible, they can inspire, guide, and support their teams in real time, creating a culture of excellence through action. Remote work need not entirely erase these opportunities, but leaders must actively find ways to compensate for the gaps it creates.
By leading by example, praising, and coaching in the moment, leaders can retain their influence and foster the high performance that comes with it. Whether through hybrid models or increased strategic interaction, rethinking how leadership is practised in a remote world is essential for long-term success.
Sources:
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Managing Post-Funding Decisions – Avoiding the OPEX Trap
Managing Post-Funding Decisions – Avoiding the OPEX Trap
Securing an injection of funding is a pivotal moment for any business. It validates your vision and provides the resources to pursue growth opportunities. However, this influx of cash can tempt management teams to expand operational expenditure (OPEX)—particularly through increased headcount—without fully considering the financial impact.
While optimism and ambition are crucial, it’s essential to remember that increasing OPEX too quickly can erode profitability, leaving businesses scrambling to maintain performance rather than improve results. This guide explores how to make smarter, more sustainable decisions when managing post-funding spending, linking costs to revenue, and maintaining profitability.
The Challenge: The Temptation to Over-Invest in OPEX
One common post-funding misstep is rapidly expanding management headcount or other fixed costs to demonstrate progress. With the average UK management salary at £40,000, adding headcount can quickly escalate OPEX.
It’s vital to calculate the financial impact of these decisions. For example:
This makes it imperative for businesses to align spending with achievable revenue targets while ensuring that profitability is preserved.
The Context: Trends in UK Gross Profit Margins
Over the past three years, the average gross profit margin for UK companies has shown modest improvement:
While these figures represent a positive trend, they also highlight how narrow profit margins remain for many businesses. It’s important to note that these averages vary significantly by industry, meaning your specific gross margin may be higher or lower.
This variability underscores the importance of understanding your business’s unique financial metrics before making significant OPEX decisions.
Recognise Internal Pressures to Expand Teams
It’s not uncommon for existing management to push for the recruitment of additional subordinates after a funding round. In my experience, your management team will often be convinced they need more heads to handle the additional workload and expectations.
While these requests can have merit, it’s essential not to take them at face value. Don’t assume the need for additional headcount is entirely factual. Instead, work through the specifics:
Taking the time to evaluate these pressures critically helps avoid the “easy option” of expanding headcount unnecessarily and ensures every hire contributes directly to value creation and sustainable growth.
Challenge the Justification of Additional Costs
I often hear management teams justify a £40k investment by breaking it down into monthly salary terms—seeing it as a manageable £3,333 per month. While this might make the cost feel more palatable, it’s only part of the picture.
Instead, consider the £702k in additional revenue required to cover that £40k annual cost (based on an average 5.7% gross margin). Spread that revenue target over 12 months—suddenly, it’s a staggering £58,500 in extra revenue per month just to stand still.
When viewed from this perspective, does the investment still feel like a “no-brainer”? Reframing the conversation this way encourages leaders to assess whether the additional cost is truly necessary and whether the associated revenue targets are realistic.
Reframing the Post-Funding Conversation
Instead of asking, “What can we do with this funding?”, ask:
By shifting the focus from spending to sustainability, businesses can avoid common pitfalls and ensure that growth efforts lead to tangible, profitable results.
Practical Framework for Post-Funding Decisions
1. Understand the Financial Impact of Additional Costs
With average UK gross profit margins at 5.7%, it’s essential to calculate the revenue required to break even on new expenditures. For example:
This highlights how even modest increases in OPEX can have outsized implications for revenue targets.
2. Optimise Existing Processes Before Expanding
Use funding to address inefficiencies and strengthen existing systems before committing to increased OPEX. Scaling flawed processes amplifies inefficiencies, leading to wasted resources and reduced profitability. Focus on:
3. Invest Strategically, Not Reactively
Expanding headcount is often necessary for growth, but it should always align with clear ROI. Before making new hires, assess whether the role:
4. Link Expenditure to Revenue-Generating Activities
Ensure that every expenditure contributes directly or indirectly to revenue. For example:
5. Foster Financial Awareness Across the Team
Educate your leadership team on the relationship between OPEX, profit margins, and revenue. Encourage them to think critically about how each decision impacts the bottom line. This not only leads to better decisions but also creates a culture of accountability and strategic focus.
Key Questions for Post-Funding Spending Decisions
The Leadership Advantage: Sustainable Growth Over Quick Wins
Post-funding decisions set the tone for your business’s next phase. While it’s tempting to ramp up OPEX to deliver immediate results, it’s crucial to prioritise profitability and long-term sustainability.
By understanding the financial implications of decisions—such as the revenue required to support an average £40k management salary—you can ensure that your growth efforts are strategic, measurable, and sustainable.
At NorthCo, we specialise in helping leadership teams navigate these critical moments. Our tailored leadership and operational support services ensure that businesses maximise the value of their funding while avoiding common pitfalls.
Conclusion: Grow Smarter, Not Harder
Post-funding growth should be exciting, not stressful. By linking spending to achievable revenue targets and maintaining focus on profitability, you can avoid the OPEX trap and position your business for sustained success.
Subscribe to our newsletter for more actionable insights on leadership, operations, and sustainable growth strategies.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Why Most CEOs Waste Their HR Function—And How to Fix It
How HR Professionals Can Drive Strategic Priorities Beyond “Personnel” Matters
I’ve always believed that people make the difference in business—whether for good or bad. The right people in the right roles can drive extraordinary outcomes, while the wrong dynamics can bring even the best-laid plans to a grinding halt. Yet, I’ve also observed how many businesses squander the potential of a strong, operationally oriented HR professional.
Too often, HR is relegated to the rear echelons, focused on policies, compliance, and firefighting. But HR shouldn’t be confined to personnel matters—it should be forward deployed at the sharp end of the business, directly supporting strategic goals and operational needs. If businesses want a personnel manager, they should hire one and save the expense of a Chief People Officer or HR Director. But if they’re going to invest in a senior HR professional, they need to fully utilise the range of skills they bring to the table.
The challenge is that many CEOs and MDs simply don’t know how to use professional HR effectively. HR leaders often find themselves underutilised, operating reactively rather than proactively. CEOs need to ask themselves whether they are equipping their HR function to drive the business forward—or keeping them in a “personnel” box that limits their potential.
Here’s how CEOs can get HR out of the personnel shadow and forward deploy them as critical players in achieving strategic goals.
Integrate HR into Strategic Planning
The first step is to stop treating HR as an afterthought in strategic discussions. Too often, HR is brought in to “make it happen” once the plan has already been written. Instead, involve HR from the outset, giving them a seat at the table when strategy is being shaped.
When HR is part of strategic planning, they can align their initiatives with the broader goals of the business, ensuring that people-related efforts are fully integrated into the roadmap.
Define HR’s Strategic Role in the Business
Many CEOs expect HR to focus on compliance, recruitment, and employee relations—important, yes, but hardly strategic. To unlock their potential, CEOs must clearly define the role they want HR to play in achieving the company’s goals.
By framing HR as a performance enabler, CEOs can push the function to rise above transactional work and deliver meaningful results.
Demand a Talent Strategy, Not Just Hiring Plans
If talent is the lifeblood of any business, HR should be the architect of how that talent is acquired, developed, and retained. CEOs must expect HR to take a proactive approach to workforce planning that directly supports the business’s strategic goals.
A professional HR leader should be able to articulate how their talent strategy is enabling the business to hit its targets—and adjust that strategy as the business evolves.
Use HR to Build a Culture That Drives Results
Culture can make or break a business. Yet many CEOs leave it to chance, assuming it will take care of itself. HR is uniquely positioned to shape and embed a culture that supports the organisation’s strategic objectives.
By tasking HR with owning and shaping culture, CEOs can ensure it becomes a competitive advantage, not a stumbling block.
Insist on Data-Driven Insights
CEOs rely on data to make decisions—but often, HR is left out of the equation. Modern HR should be as data-savvy as any other function, providing insights that inform strategy and demonstrate impact.
A professional HR leader who can speak the language of data will quickly earn their place as a trusted advisor to the CEO.
Empower HR to Lead Change Management
Strategic priorities often involve significant change—whether it’s restructuring, entering new markets, or adopting new technologies. HR should be at the forefront of managing these transitions, ensuring they succeed from a people perspective.
By empowering HR to lead on change, CEOs can ensure that strategic initiatives are not derailed by poor execution or resistance to change.
Expect Strategic Impact from HR
Finally, CEOs must set the expectation that HR will deliver tangible, strategic results. This means moving beyond vague goals like “improving employee satisfaction” and focusing on outcomes that directly support the business.
When CEOs hold HR to high standards of performance and impact, they create the conditions for HR to truly excel.
Final Thoughts
Many businesses underutilise their HR leaders, keeping them stuck in a “personnel” mindset that limits their potential to add strategic value. But HR has the capability to be so much more. When fully utilised, HR can act as a force multiplier for achieving business goals—driving performance, shaping culture, and enabling change.
If you’re a CEO or MD, it’s time to ask yourself: Am I using my HR team to their full potential, or am I keeping them in the shadows of “personnel” work?
Businesses succeed or fail on their people. HR has the potential to tip the scales—but only if they’re given the tools, mandate, and trust to lead from the front.
This guide is part of NorthCo’s Leadership Series—designed to help leaders unlock the full potential of their teams. Subscribe to our newsletter for actionable strategies and insights that keep you one step ahead.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Come On, Mav, Do Some of That Pilot Stuff
Come On, Mav, Do Some of That Pilot Stuff
In the iconic scene from Top Gun: Maverick, Maverick’s co-pilot shouts, “Come on, Mav, do some of that pilot sh**!” It’s a moment that epitomises trust, confidence, and clarity of roles. Maverick, the leader in the cockpit, doesn’t hesitate—he does what he’s there to do, performing at his absolute best.
This principle applies beautifully to leadership, particularly at the top of an organisation. A CEO, like Maverick, needs to focus on doing their “pilot shit”—steering the business, making the critical calls, and driving the company toward its mission. But this is only possible if they’ve built a senior team they can look to, left and right, and trust implicitly to do their job exceptionally well. Unfortunately, for many leaders, that’s not the reality they’re living.
The CEO and the Mediocre Team
I’m currently working with a talented young CEO who finds himself in this very predicament. He’s running a business with incredible potential, yet his senior team isn’t up to par. They’re good, but not great—and in some cases, they’re mediocre. The CEO knows this, but he’s been tolerating it for too long. The consequence? He’s constantly drawn into the weeds, firefighting problems that his team should be solving. Instead of focusing on what he does best, he’s caught up in operational distractions, unable to perform at the level the business demands.
This isn’t uncommon. Many leaders—particularly first-time CEOs—struggle to recognise when their team isn’t cutting it. They rationalise the situation, telling themselves it’s better to stick with familiar faces than disrupt the status quo. But here’s the hard truth: a CEO’s performance is only as strong as the team supporting them. If that team isn’t A-grade, the CEO can’t fly the plane properly.
Why Trust and Excellence Are Non-Negotiable
For a CEO to focus on their role, they need to know that their senior team is rock-solid. This isn’t about micro-managing or second-guessing—it’s about absolute trust. When a CEO has a capable, high-performing team, they can focus on the big picture:
When a CEO is forced to micromanage or compensate for weak team members, they lose the bandwidth to excel. Worse, the business stagnates because the leader is operating below their potential.
The Danger of Accepting Mediocrity
Accepting mediocre performance in a senior team isn’t just a small problem; it’s a silent killer. Mediocrity breeds complacency, and complacency is contagious. When a team member consistently underdelivers, it sends a message to the rest of the organisation: “This level of performance is acceptable here.” It erodes standards, diminishes morale, and ultimately hurts the business’s ability to compete.
In the case of the CEO I’m working with, he’s come to realise that tolerating mediocrity is no longer an option. The business is at a pivotal stage, and to achieve its ambitions, he needs a team that matches his drive and ability. It’s time for a restructure.
Building the Right Team: A Playbook for CEOs
If you’re a CEO looking to build—or rebuild—your senior team, here are the key steps to take:
Be Honest About Performance Take a hard look at your team. Are they truly delivering what the business needs? If the answer is no, it’s time to address it. Be clear about your expectations and give people the chance to step up—but don’t be afraid to make changes if they don’t.
Define Roles and Expectations Every member of your senior team should have a crystal-clear understanding of their role and what success looks like. Ambiguity is the enemy of high performance.
Recruit for Excellence When bringing in new team members, aim high. Look for people who not only have the skills and experience but also align with your values and culture. A strong senior hire can elevate the entire team.
Foster Collaboration and Trust A great senior team isn’t just a collection of talented individuals—it’s a cohesive unit that works seamlessly together. Invest time in building trust and ensuring alignment.
Hold People Accountable Once you’ve set expectations, hold your team to them. Accountability drives performance and reinforces a culture of excellence.
Be Willing to Restructure Sometimes, the team you started with isn’t the team you need for the next stage. That’s okay. Leadership is about making tough decisions in the best interest of the business.
The CEO’s Moment of Truth
For the young CEO I’m working with, the challenge is clear: he needs to look left and right at his senior team and see a group of people he can trust unequivocally. Only then will he be able to step back and focus on doing his “pilot shit.” It’s a tough journey, but one that will pay dividends—not just for him, but for the entire organisation.
So, if you’re a CEO struggling to perform at your best, ask yourself this: is your team enabling you to lead, or are they holding you back? If it’s the latter, it’s time to take action. Because at the end of the day, your job is to fly the plane—and you can’t do that if you’re constantly worried about the people in the cockpit with you.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Spotting The “Best Practice” Facade.
Challenging “Best Practice”: Are You Using It to Signal Authority or Drive Real Value?
During a recent assignment, I attended a presentation from a CTO who was outlining the company’s technology strategy. Midway through his slides, he mentioned that certain processes were “aligned with Best Practice”—a phrase he seemed confident would solidify his position. However, as the presentation unfolded, it became clear that this endorsement was, at best, a veneer. There was little evidence that he actually understood the “Best Practice” he was referencing, nor could he explain how it applied specifically to our challenges. The phrase had simply been added because it sounded credible, as if invoking “Best Practice” alone would close down debate and validate his decisions.
It’s a scenario I’ve encountered repeatedly in leadership discussions. While “Best Practice” can be a valuable concept, too often it’s used as a placeholder—a buzzword that fills in for genuine understanding or critical analysis. Leaders invoke it as a signal of authority, but all too often, it becomes a way to avoid difficult questions, diminish curiosity, and stifle innovation. This trend begs the question: does invoking “Best Practice” truly reflect a commitment to excellence, or are we merely following a script?
In this article, I want to encourage you, as a leader, to rethink your reliance on “Best Practice” as an unexamined benchmark. Instead of using it as a conversational trump card, let’s foster a culture where each so-called “Best Practice” is scrutinised, questioned, and adapted to meet the unique needs of your business. This means asking uncomfortable but necessary questions when “Best Practice” is cited and encouraging your team to demonstrate real understanding and curiosity.
Recognising the Hidden Motives Behind “Best Practice”
One key issue with “Best Practice” is that it’s often wielded as a tool for control. Some leaders use it to assert authority or shut down debate, making it difficult for alternative perspectives to surface. Rather than fostering a culture of inquiry and adaptability, this approach creates a rigid environment where questioning is subtly (or not so subtly) discouraged.
As a leader, it’s essential to recognise when “Best Practice” is being used as a tool for avoiding scrutiny or as a quick fix to justify decisions. When left unchecked, this can lead to stagnation and missed opportunities. The true value of “Best Practice” lies not in its mere adoption but in its thoughtful, context-specific application.
Spotting the “Best Practice” Facade
Here are some signs that “Best Practice” might be used without genuine understanding:
Equipping Yourself to Question “Best Practice”
To move beyond surface-level adherence, start by encouraging your managers to ask questions that reveal the depth of understanding behind “Best Practice” claims:
These questions prompt presenters to prepare meaningful answers, grounded in specifics rather than generic phrases. Moreover, they signal that “Best Practice” isn’t a substitute for critical thinking or adaptability—it’s a baseline that should always be subject to scrutiny.
Building a Culture of Curiosity and Customisation
To move beyond superficial references to “Best Practice,” aim to foster a culture of curiosity. Empower your team to question established norms and to approach challenges with an open mind. When managers are encouraged to develop solutions that fit their specific circumstances, they develop a stronger sense of ownership and a greater capacity for innovation.
Imagine leading a team that not only follows “Best Practice” but adapts it intelligently to fit its unique goals. Such a team moves beyond imitation and becomes a driver of true best practices within the business, building a legacy that goes beyond adherence to industry norms.
Conclusion
The next time “Best Practice” is cited in a presentation or strategy meeting, pause and consider its application. Is it there as a shield, an empty phrase, or is it truly adding value? By fostering a leadership culture that values understanding over signalling, curiosity over complacency, you can move beyond buzzwords and into a realm of genuine, sustainable success.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Shifting Mindset in Distressed Business Situations
Navigating the Winds of Change: Shifting the CEO and Senior Management Mindset in Distressed Situations
In a previous post, Navigating turbulent waters, , I explored how a CEO coach or interim leader can support management teams through turbulent times by offering structured guidance and fostering a mindset shift. My own experience as a CEO in challenging situations uniquely positions me to empathise with the CEO and management team when I am brought in during times of crisis. I understand the weight of responsibility they carry, having been there myself. While I am no pushover, I pride myself on creating a collaborative, supportive relationship, fostering a team environment that allows the leadership group to work together effectively. My role is to help them move from ‘business as usual’ (BAU) to a mindset equipped to navigate distress, maintaining authority with respect and guiding them through a transition toward a shared, strategic vision for recovery and growth.
This collaborative approach is especially critical when the business has breached its covenants, and management teams, understandably, may feel defensive or uncertain about next steps. By prioritising empathy and open communication, we can begin to make the shifts necessary to transform entrenched ways of thinking into proactive, resilient strategies.
Why Changing Mindsets is Crucial in Distressed Situations
When covenant breaches occur, the immediate reaction from senior management is often defensive. This is understandable – the leadership team has likely invested years into developing and executing strategies they believed were sound. But when those strategies falter, it’s imperative to see this as an opportunity to reset, re-evaluate, and create a new path forward.
Shifting mindset patterns in a management team can sometimes feel like navigating sastrugi—(That’s Sastrugi in the image for thei post BTW) those sharp, wind-carved ridges of snow and ice that reshape themselves with every storm. Just as sastrugi require a careful approach to avoid tripping or losing momentum, entrenched ways of thinking within a team need gradual reshaping. By understanding these ridges as natural but mutable formations, we can begin to work collaboratively to smooth out obstacles, helping leadership teams transition from a defensive posture to one of opportunity.
My goal as an Interim CEO is to help the team understand that, while this may be an uncomfortable transition, it is also an opportunity to think beyond the old model and explore solutions that can fundamentally reshape the business. This is where the mindset shift becomes critical: to see this not as a breakdown, but as a chance to rebuild with a sharper, more resilient approach.
Bridging the Gap Between BAU and a Distressed Mindset
When a business is in distress, there is a need for a clear break from BAU. However, rather than dictating change, my approach is to bring the senior team on a journey of honest self-assessment and collaboration. This journey is crucial to achieving a mindset of adaptability and proactivity in challenging times.
Setting the Foundation of Trust and Mutual Respect
Creating Space for Constructive Feedback
Honesty Without Aggression
Fostering a Culture of Innovation and Flexibility
Driving Alignment Through a Shared Vision
The Role of the Interim CEO in Shaping a New Mindset
When I’m brought into these situations, it’s not simply to impose authority but to foster a culture that values adaptability, resilience, and mutual respect. Leaders often resist change not out of stubbornness but from a deep commitment to what they’ve built. By helping them re-frame difficult situations as opportunities rather than crises, I help them harness their expertise and passion to redefine the future of the business.
Final Thoughts
The CEO’s mindset is the cornerstone of organisational resilience, especially in distressed situations. Through candid discussions, like the one I had with the CEO after that challenging board meeting, leaders can transition from a mindset of defence to one of opportunity. By fostering an environment where feedback is valued, honesty is prioritised, and collaboration is central, the senior team can align on a re-imagined vision, build strength from challenge, and steer the business toward a dynamic, resilient, and ultimately successful future.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.
Managing Negativity Bias in Operational Analysis
Managing Negativity Bias in Operational Analysis and Strategic Problem-Solving
At NorthCo, our work often centres around identifying operational efficiencies, guiding contingency planning, and solving strategic challenges. Conducting in-depth operational reviews, planning for potential risks, and designing actionable strategies demand a careful balance of objective analysis and forward-looking optimism. Yet, as we delve into these high-stakes assessments, a common human tendency – the “negativity bias” – can sometimes cloud our judgement, subtly pushing us to focus disproportionately on risks over opportunities.
Negativity bias, a hardwired evolutionary response, favours attention to potential threats, which has served humanity well for survival. But in today’s business environment, this bias can lead to overly cautious decisions, missed opportunities, and an imbalanced focus that limits growth. In NorthCo’s context, understanding and managing negativity bias is crucial to delivering balanced and actionable solutions for our clients. Below, we explore how negativity bias can affect operational analysis, contingency planning, and problem-solving, and we provide actionable strategies to counteract it.
The Role of Negativity Bias in Operational Leadership
In operational and strategic consulting, our ability to objectively assess and guide our clients’ next steps is essential. However, negativity bias can lead us to overemphasise potential pitfalls or problems, obscuring an objective view of both the current state and the optimal path forward. For example:
A critical aspect of NorthCo’s role is to help clients achieve a balanced perspective that acknowledges risks while also focusing on their strengths and opportunities. By understanding negativity bias and its effects, we can guide clients toward well-rounded, resilient solutions.
Identifying Negativity Bias in Analysis and Planning
Recognising negativity bias is the first step in countering it. In our engagements, the following signs can indicate negativity bias is impacting our assessments or strategic recommendations:
Identifying these tendencies during planning sessions or reviews enables us to course-correct and maintain an objective stance.
Strategies to Overcome Negativity Bias in NorthCo’s Services
To deliver balanced solutions, NorthCo applies the following strategies to ensure that our assessments, planning, and problem-solving approaches maintain a forward-thinking and constructive focus:
Countering Negativity Bias in Business
To manage negativity bias effectively, businesses can adopt structured practices that promote a balanced approach to risk and opportunity. These methods help leaders maintain an objective perspective and make decisions that are as informed by possibilities as they are by risks:
Creating a Positivity-Conscious Framework for Clients
An integral part of NorthCo’s service is helping clients create an environment that balances caution with optimism, especially in high-stakes or operationally complex scenarios. We apply the following methods to help clients counter negativity bias within their own teams:
Building a Resilience-Oriented Culture
At NorthCo, we believe that resilience is essential for navigating business challenges, particularly in dynamic or high-risk environments. A resilience-oriented culture doesn’t simply bounce back from setbacks; it leverages them as learning experiences, which in turn reduces the influence of negativity bias. Here’s how NorthCo helps organisations cultivate resilience:
NorthCo’s Approach to Balanced Leadership
Counteracting negativity bias requires a deliberate and structured approach. NorthCo specialises in creating this balance, providing clients with tools to build resilience and optimism into their strategic planning and operational analyses. By focusing on both challenges and opportunities, we ensure that our clients are equipped to make confident, well-rounded decisions that drive sustainable growth.
Ready to overcome negativity bias in your organisation? Contact NorthCo to explore how we can help your team achieve a balanced perspective that empowers success.
Research and further reading
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profileand read what others say about Trevor.
Why Can’t Interim FDs “Really” Fix Operational Issues?
When businesses encounter turbulent times, it’s tempting to bring in an experienced Interim Finance Director (FD) to steady the ship. With cash flow under pressure and bottom-line metrics needing scrutiny, who better than a finance expert? But here’s the twist: if the issue is operational, a finance-focused leader may only scratch the surface without getting to the core problem.
The Pitfall of the “Obvious” Solution
Imagine a business struggling with classic financial symptoms — rising costs, declining profits, sluggish cash flow. The inclination might be to address these directly, tightening budgets, restructuring debt, optimising cash flow. While these steps may be essential, they often only treat the symptoms, the “obvious” pain points, rather than the root causes.
An Interim FD, for all their expertise, may view operational issues mainly through a financial lens, potentially missing deeper causes beyond the balance sheet. When a business faces operational challenges, it needs an interim leader with an operational background who instinctively asks: “Yes, but what’s the real issue here?” Without this operational insight, a purely financial approach might even compromise the long-term health of the business. Quick fixes aimed solely at financial metrics can create underlying stress points in the operation, resulting in team burnout, reduced efficiency, and ultimately a weakened competitive position.
Finding the Real Issue Beneath the Surface
A true operational problem solver knows that the first explanation often obscures the root cause. They won’t stop at initial answers but look beyond the obvious, drilling into details, understanding processes, and connecting the dots. An interim leader with a solid operational background can be invaluable in this way — they’ve seen how inefficiencies, cultural friction, or outdated workflows create hidden bottlenecks that manifest as financial symptoms.
Avoiding the Advice Trap
In The Advice Trap, Michael Bungay Stanier explores how rushing to provide answers can lead to surface-level solutions, overlooking complex underlying problems. For interim leaders, The Advice Trap offers a powerful reminder: effective problem-solving starts with curiosity, not quick answers.
An experienced operational interim doesn’t fall into this “advice trap.” Instead, they stay open, listen deeply, and ask probing questions, letting the full story emerge and building a multi-faceted view. When they finally act, it’s with a clear understanding of both symptoms and underlying causes.
Practical Questions to Ask
To truly uncover operational issues, a skilled interim will ask questions that go beyond the surface. Here are a few examples of questions that help cut through to the root of the problem:
These questions prompt the team to think critically and deeply, helping ensure solutions are comprehensive and sustainable.
Key Characteristics of an Effective Operational Interim
Here’s what distinguishes a truly effective operational interim:
Getting the Team Onboard
Successful change requires more than expertise; it demands a blend of authority and approachability. The best interims gain the trust and commitment of the whole team — a critical factor in ensuring operational improvements stick.
An effective interim leader knows that true success lies in harnessing the team’s knowledge to uncover solutions and overcome obstacles together. Rather than imposing fixes, they create a culture of collaboration, leading the team to dig into pain points and develop solutions they feel ownership of.
Long-Term Impact and Cultural Shifts
An impactful operational interim doesn’t just solve immediate issues — they build a culture of continuous improvement:
Reflection and Call-to-Action
Reflect on your current challenges: Are you tackling surface-level symptoms or focusing on the root cause? When you bring in interim support, are you choosing someone who empowers your team to drive sustainable improvements? Remember, prioritising operational insight over financial metrics alone may be the difference between a short-term fix and long-term success.
If you’re ready for true operational transformation, consider bringing in an operational interim who won’t stop at the first answer but will dig deep and bring your team along on the journey. With the right interim at the helm, operational success becomes a team effort — and the entire organisation moves forward together.
By recognising the risks of a finance-first approach to operational issues, leaders can safeguard their business’s long-term prospects. True success often requires seeing beyond the balance sheet, aligning operational improvements with a culture that values transparency, collaboration, and continuous growth.
About the Author
Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profileand read what others say about Trevor.