Interview: Armstrong Watson corporate director on Leeds expansion

Accountancy firm Armstrong Watson has gone from success to success after expanding from its base in the North West.

Now a major player in Yorkshire, the company has expansion firmly in its sights.

Matt Osbourne, new corporate director at Armstrong Watson and formerly of RSM Tenon before their acquisition by Baker Tilly, has been in his current position 6 months.

Matt spoke to Bdaily about the future growth and direction of the firm, as well as the ethos and culture that makes the firm so special.

Why did you think Armstrong Watson make a good fit?

I really perceived AW as a forward-thinking and market-facing organisation. When I met Armstrong Watson Leeds office lead partner Mike Kienlen and managing partner Paul Dickson, this perception of AW was only solidified, and I liked their vision of how the company would and could fit into the Leeds marketplace.

After working at RSM Tenon for 10 years before it was acquired by Baker Tilly, I had the opportunity to hone my skills as a general practitioner, an accountant and advisor rather than solely a compliance-focussed auditor.

One of the reasons I joined AW was that the firm has enabled me to continue doing that. I wanted to work with owner-managed and family-owned businesses, because that’s where my skill set is, where I’ve worked for the last 15 years. Working in an organisation like RSM Tenon after the acquisition, I saw my opportunity to work with these types of businesses significantly reduced. Basically, I like to do what I’m good at, and Armstrong Watson helps me do that.

Have you found there’s a major difference in attitude when you’re dealing with owner/family managed businesses and say a serial entrepreneur who picks up companies and drops them pretty quickly?

From an advisory point of view, if you go into a business run by a board of directors, but the owner sits abroad or miles away, it can becomes a very one dimensional relationship.

You tend to provide maybe one or two compliance focussed services, like an audit. If you’re advising the business and whoever owns that business, lots of other things come into play; corporate tax planning, personal tax planning, financial advisory services, corporate finance. We get to know what the long term plan is, how are they going to sell that business potentially in 5 years time? How are they grooming the business for sale? What is their long term strategy? A management board might be less concerned about these issues, they can be more focussed on the short-term. I think owner managers do tend to be more tax sensitive! They are probably more fee sensitive as well!…. Well it is their money after all.

You do have to work harder to stress the value of your services to an owner-managed firm. It just means we need to articulate that added value and get the owner manager to understand that value. Once you’ve done that, the fee issue becomes less sensitive.

So what is the landscape of your sector look like in the North?

I think there has been a big change in the marketplace. When I first joined the industry about 15 years ago, clients seemed to hold their accountants in a position of esteem, like they did going to see the banker. Now its very much a customer role, we see our clients as the customer, with the transactional power.

The dynamic has definitely changed a lot over the years. Part of that is because clients have become more mobile. They’re happier to switch between accountants, which presents both an opportunity and a challenge. This was something basically unknown 15 years ago. It’s just the way the natural progression of the marketplace.

It just means that it is now the onus of the accountancy profession to add value and to give advice that auditors who are just dipping their toe in the water can’t give.

What do you think makes Armstrong Watson different from other accountancy firms?

As auditors and accountants, we have a privileged position. We get to know how the business is run, we get to have quite detailed and deep conversations with the owners and directors and we really get under the skin of the business.

What a lot of auditors don’t do is use that knowledge to give proper business advice. At AW we use the knowledge from that close relationship to identify issues within the business and bring solutions to the table using what we know about financial services and the particular business from working with them on that detailed level.

We’re putting a lot of focus on Yorkshire because we genuinely feel there is a need for our services here. Businesses in the region, from Leeds and in West Yorkshire to Harrogate, Skipton and beyond, require advisory services and they will pay for these services if they see the value in them. A lot of firms focus purely on compliance, rather than any added value services, which is where I think we have our niche.

Anyone supplying a purely compliance-based service is never going to provide that level of service.

What are Armstrong Watson’s expansion plans looking like?

The Leeds growth plans are ambitious and the management board recognise that there will probably be a need to acquire another business at some point in order to meet our growth targets.

With the acquisition of Skipton’s Robertshaw Myers for example, we knew that the firm would be a good cultural fit, and we have now given them the business development support they needed to be able to tap into to grow.

The reason for that is that they see Yorkshire and specifically Leeds as hugely significant to the growth of AW as a whole. We grew from the North West and now have a significant presence in Yorkshire and there are huge opportunities here. Leeds is a big economic hub and we want to replicate what we have in the North West here in Leeds. The only way to do that is through organic growth and also potentially acquiring another practice would be another one route to achieve that growth.

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