The Independent CFO talks Covid, strategy and newsby
The new CFO of The Independent, Richard Langrish, shares how the online newspaper and its finance team adapted to the challenges of Covid and the rapid change in the publishing industry.
2020 presented a lot of challenges for newsrooms. Every day brought breaking news from the latest Covid restrictions to the US presidential election and the eleventh hour Brexit deal. While journalists documented the events in newspaper columns, below the fold, finance teams in this sector also weathered a similar pace of change.
“Finance teams have gone through a huge amount since Covid broke,” Richard Langrish, the CFO of the Independent, told AccountingWEB. “We’ve done many forecasts and scenario planning to see what the business will look like. Everyone in finance has worked hard to keep the business working, and for some publishers that means coping with restructuring.”
Shifting sands of news publishing
But then the publishing sector is used to upheaval. Print media has been in decline since the advent of online publishing. However, The Independent is an example of a newspaper that has always been forward-looking. In 2016, the newspaper took the ballsy move to close its print edition and pivot to become digital-only.
Impressed by the brand’s innovation and “young, thrusting start-up” feel, Langrish recently stepped in as the online newspaper’s new chief financial officer. He’s no stranger to the challenges of publishing, having spent 12 years at The Economist as CFO of client solutions and global events.
Langrish saw firsthand the rapid change in print media. "In 2008 when I joined the Economist, publishing was a much simpler business based around physical distribution, since then we have seen an evolution to a digital world where publishers have a complicated tech stack and have to partnering with multiple channels, including Apple and Facebook to distribute your content."
And Covid has only accelerated the pace of change in the publishing sector. “There was already a trend of migrating from print to online and the way people consume media on their mobile phones, but Covid has exacerbated that. The Independent, however, was ahead of the curve in developing a technology stack and has been hugely successful in growing an audience during the pandemic. The question is, how can we take this forward as the world changes?” noted Langrish.
Indeed, The Independent has also seen a landmark set of financial results which delivered record revenues of £30m (up 12% year-on-year) and profits of £2.7m (up 18%).
Continuous structural change
Always acting more nimble than its old guard rivals, Langrish is now tasked with The Independent’s global expansion, diversification and growing portfolio of B2B and B2C businesses
But then Langrish has always gravitated towards the cut and thrust of structural and organisational change. Unlike audit where the opportunities were too restrictive, he found consultancy at PwC exciting because he was helping businesses improve and change.
Combined with his passion for politics and current affairs from studying history at university, news publishing was a natural fit for him due to the massive structural change that the sector has undergone.
For Langrish, the way finance professionals can help manage an industry that is constantly evolving is to “get out from behind the spreadsheet and understand what drives the business and to talk to people about what is happening day-to-day”.
How business partners can enforce cost control
As a medium-sized organisation, the CFO explained that finance teams can effectively manage costs and be more responsive through business partners.
“That way, finance becomes a partner in helping them manage their costs, rather than being the gatekeeper or police telling people what they can’t do,” said Langrish.
“You’re trusted by the business and have a much more productive conversation around whether that cost is effective. Once you have buy-in, you're able to have conversations without being a barrier.”
Get out from behind the spreadsheet and understand what drives the business
Langrish wants everyone in the team to see business partnering as part of their role and not something that sits outside financial control. “It’s not true that it’s just the glamorous FP&A team that does these analyses and the rest does accounting. [Business partnering] has a huge impact on the success of the business if finance is a proactive, trusted partner.”
Particularly over the past year, strategic roles like business partnering have shored business confidence with scenario plan after scenario plan.
“Scenario planning was key when all we could see was a future that was not clear,” he said.
“There was no point in forecasting one number. You had to forecast whether the recovery from Covid would take place quickly, within one year, or longer. Once you have those scenarios you can decide if there are structural things you need to do in the business or to accelerate changes. Once you settle on one or two versions you can look at the cash and manage it effectively that cashflow issues do not hold the business back.”
Tech strengthens the finance team
What has made this transition into business partnering easier is the availability of forecasting and analysis technology. But with this comes the challenge of finance teams having too much data. Here, Langrish sees an effective partnership between finance teams and data teams.
“They have skills more advanced than accountants and the ability to extract data sets and analyse them is valuable. The massive evolution in FP&A and technology has shifted finance away from being just transactional towards analytics and business support.”
In the last 18 months, Covid has also acted as an accelerator in finance teams adopting untapped technology. Video conferencing tools like Zoom is an obvious one; but Langrish has also seen synergistic technology like Office 365 used for teams to work collaboratively on documents, while he’s also explored tools like Trello and Miro to run virtual workshops.
“It’s healthy to get accountants away from Excel. We found that there are new features and tools out there like Google Sheets that are richer solutions due to its collaborative functionality. Through using this technology, we’ve seen finance teams are more open to using collaboration tools to help with operational efficiency.”
Keeping up with the pace of change
The upheaval of Covid may have dropped off, but the pace of change in journalism and publishing hasn’t slowed down.
Langrish believes his accountancy skills have equipped him for an ambitious upstart like The Independent. “One of the most important lessons as you go through being a junior accountant to a CFO is that, in order to grow, you need to take risks.
“With the pace of change going on, you’re talking about fast moving opportunities and things that may or may not come off. Having 80% of the data to make a decision is good enough. Sometimes it’s better to be fast and launch something and monitor closely. Sometimes they work, sometimes they don’t. But you have more options and you’re able to find the things that work and gain traction.”
One decision many digital news outlets are making is whether to move to a paywall subscription model. The Independent’s premium gives subscribers access to exclusive articles and contributions from popular household names such as Janet Street-Porter and Jenny Eclair. But Langrish isn’t convinced that putting all content behind a paywall is the answer.
Everything comes back to if our journalism is successful and if the readers are coming back
“It’s hard to ride multiple horses,” he said. “There is always a trade off between making content available to and making people pay. Organisations have gone for the paid-for content model, but that then impacts how you can monetise advertising.
“The Independent is largely free to read and that makes it hard to build a subscription business, and it also takes a lot of time and investment. Premium content will be part of the mix but won’t be the main part of the commercial model in the near future.”
My key KPI
Instead, Langrish’s post-Covid strategy is to continue to invest in high quality journalism and to build on the success of The Independent’s pandemic coverage. The key KPI in measuring this strategy is the site’s traffic.
“At the end of the day, everything comes back to if our journalism is successful and if the readers are coming back. Web traffic is key. It’s the core of the business. Everything else flows from it. And that can be monetised.”