After almost three years overhauling ITV's finances, CFO Ian Griffiths is starting to reap the fruits of his labours at the resurgent commercial broadcaster
Viewers of ITV will probably have little idea of what's been going on behind the scenes of their favourite channel during the past three years. And we're not talking verbal fisticuffs between the judges of Britain's top talent show here.
If in 2008 ITV's executive team – of which Ian Griffiths, former finance director of media company Emap and current CFO of ITV, forms a central part – had not transformed its outdated business model it's very likely the FTSE 100 company could have gone the way of other former British FTSE darlings – into extinction.
But a new management team led by CEO Adam Crozier was catapulted in to save the day and has turned around the fortunes of this very British of institutions to transform the business into one ready to take on the challenges in the increasingly mobile, digitised world of media.
It has a long way to go, admits finance chief Griffiths, but at least now the company is still in the game.
"The business was not in great shape operationally. It had a very stretched balance sheet. If nothing had happened across 2009 it would have been a very different business to what we now have today," Griffiths tells CFO World in an exclusive interview..
It's rather an understatement. Clearly, he must have been itching for a challenge when he took on the role because things were dire. ITV went from being an investment grade to a low single-B credit very quickly.
Griffiths joined ITV halfway into the broadcaster's ratings decline when banks weren't rushing to talk to him and he had to hand back the banking facility "which wasn't a nice thing to do". But rather than breach covenants he dealt with it proactively.
In 2010 ITV chairman Archie Norman hired CEO Crozier, the former Royal Mail chief executive and FA boss, to develop and execute a new strategy. The move was seen as controversial by some observers who thought Norman should have opted for a heavyweight broadcaster.
But before being in a position to set out a new vision, the previous two years had been all about cost-cutting, which Griffiths helped to oversee. A total of £150 million in costs had to be taken out of the business.
As well as cutting jobs – and over 1,000 jobs went in total – the CFO took £200 million out of working capital through improved cash management. They cut back on capital expenditure because "there was no point in investing before we were clear on strategy", he says.
Griffiths says that the biggest investment has come from tight control on costs and clear strategies of cash management. One big change where the business has been able to make savings is in how it buys programmes.
In the past ITV used to have a large stock of programmes that weren't scheduled to air but that it had been already paid for. Now however the CFO says the company has moved to a 'just-in-time' commissioning process where it only takes delivery – and therefore becomes liable for payment – when it is going to air the programme.
Although an obvious call for finance, such changes took a lot of getting used for the commissioning teams – as Griffiths will openly admit – as broadcasters like to have a stockpile to fall back on in emergencies because of the nature of the media business.
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