Interview: Sandy Manson
4 Aug 08
From his North of Scotland roots, Sandy Manson has built Johnston Carmichael, where he is chief executive, up to be Scotland's top independent accountancy firm
by Robert Outram
Sandy Manson has every reason to be upbeat. He is chief executive of Johnston Carmichael, and his firm has announced results that establish it not just as Scotland’s largest independent accountancy firm but also in the top 25 in the UK. Fee income was up 12 per cent in the year to 31 May, to £22.6m. Not only that: earlier this year, Johnston Carmichael was named Large Firm of the Year in the inaugural Scottish Accountancy Awards.
Manson says: “The firm is going through an exciting stage in its development and growth. Our central belt operations have enjoyed double-digit growth in the year and we have also
significantly strengthened our Glasgow team, which I believe will make a major contribution to our operations there in the coming year.”
He adds: “There are pockets of ‘super growth’ – for example Edinburgh has grown around 30 per cent, Inverness over 20 per cent and Aberdeen is in the high teens. These results are excellent, but above all we want to ensure that it’s sustainable growth.”
Not too long ago, Johnston Carmichael was seen as a regional firm, strong in its heartland, North-east Scotland; less so nationally. Under Manson’s predecessor, Patrick Machray – the first CEO rather than managing partner – the firm pursued expansion outside its home turf, to establish itself as a strong mid-tier Scottish firm, not just a regional player.
Under Manson, that continues. He says: “Brand awareness and recognition are the real focus. It’s about ensuring that the market is aware of your capabilities, and that what you say the brand stands for is what the client experiences.”
Manson says that over the past year, as well as standard service lines such as audit, tax and corporate finance, the firm’s wealth management arm has grown considerably. He says: “We’re seeing more private wealth generated and that will broaden the demand for private wealth services [Johnston Carmichael Financial Services] and the ‘family office’ type services, including record keeping, working with the clients on strategy, and generally helping to protect and grow their ‘pot of gold’.”
Overshadowing all this is the uncertain economic situation. Manson says: “The credit crunch is already having an impact in terms of the cost and availability of credit and the confidence of the market to engage in transactions. The Scottish economy is still robust.
“The risk is we can talk ourselves into more bad news, but the reality is there are a lot of good things happening in Scotland.”
The biggest challenges facing Johnston Carmichael, Manson says, are about investing to ensure the sustainability of the firm’s growth, in technology, facilities, up-to-date practices and people. He says: “It’s recruitment, retention, development. That underpins everything we do.”
The firm took an innovative approach to recruiting tax specialists to its Inverness office, producing a DVD, Why wouldn’t you? that extols the undoubted virtues of the Highlands as an area to live and work. To jaded tax accountants commuting every day on the crowded roads and railways of the Home Counties, the appeal is clear; as is the message that you can have work/life balance and great scenery without losing out on challenging work and interesting clients.
Manson says: “You can work with some of Scotland’s greatest companies but also have an attractive environment in which to do so.”
He goes on: “The most important thing is the atmosphere you create within the firm. Being well rewarded is almost a given in accountancy, but you also have to have an exciting, stimulating environment. It’s important to have interesting work, to have training and to feel part of the business. For example, we share our written strategic plan for the next five years with everyone at Johnston Carmichael, and we consulted with all our people when we were drawing up the firm’s core values.”
Manson trained as a CA with Arthur Andersen in Edinburgh and worked for the firm in London and Zurich. It was when he decided to return to his own part of the world, North-east Scotland, that he joined Johnston Carmichael in Aberdeen, in 1991. He became a partner in 1997, when he also became managing partner of the Aberdeen practice. He became CEO in June 2007 after Patrick Machray retired.
Johnston Carmichael, especially in the 1990s, must have been a contrast to working internationally with what was then one of the biggest accountancy firms. Manson says: “The differences are really to do with having a worldwide brand, at Andersens, as opposed to a countrywide brand. We are just as passionate about our business as any Big Four firm, if not more so.”
The Big Four’s hold on the plc audit sector has been the subject of debate for some time. Manson says: “That is not the market we’re in – we do compete in our market [the owner-managed sector] with the big firms, but competition is a healthy thing.
“Mid-tier firms that aspire to do large company work should get their own houses in order and build up their resources and their capabilities. I’ve never been a believer that you need regulation to do that. I think the market should decide.”
Manson expects to see further rationalisation among smaller and mid-tier firms, especially where smaller firms have no succession plan. He adds: “I also think we’ll see a greater number of strategic alliances. We’ll increasingly see alliances between CA firms and other providers of services, such as financial services or law, in order to provide a one-stop shop for clients.”
Meanwhile, growth is still on the agenda for Johnston Carmichael. The Edinburgh office – in the city’s West End – will be moving this year to bigger, though still central, premises. The Inverness office is also moving and doubling its size, in spring 2009, and the offices in Forfar and Inverurie are also expanding.
Manson says: “It is good news, because we’re growing, but the property issue is a challenge!”
Johnston Carmichael’s clients are mainly owner-managed businesses and still include many farming businesses in north-east Scotland. Despite his ambitions for growth, Manson has stayed close to his firm’s roots. He is a burgess of the City of Aberdeen and a former director of the Royal Highland and Agricultural Society of Scotland, as well being involved with a number of local charitable, sporting and political bodies – he was a Conservative parliamentary candidate in 1992.
Manson lives, with his wife Barbara and two sons, on the family farm in Aberdeen. He loves it – as the firm’s DVD puts it: “Why wouldn’t you?”