As we look forward to 2022, we outline Etch's key trends and priorities whilst reflecting on what we achieved in 2021.
It's a New Year, and our entire focus turns to 2022 here at Etch. At our annual Vision Day in December, I shared six market trends we'll focus on in 2022 and why they matter to our clients and Etch as a business.
Every team at Etch have their own goals and objectives, and these six market trends will run through every department and person in the Group. The team we're building and developing will focus on the new propositions, which we'll be talking to our clients about, to help them make sense of the opportunities and challenges that we see in both the trends and their marketplace. So what are they?
- We're moving from the age of digital transformation to CX transformation – this will be the critical accelerant to growth.
- Automated customer experiences are the expectation of the next generation of customers.
- Sustainability is no longer a choice – consumers, investors, and regulators demand it.
- Big data has made way for small data and is the key to the future of AI – data is no longer the opportunity of large companies with deep pockets.
- The consultancy model is ripe for disruption – the days of strategic advisory in isolation are over. The ability to implement and deliver change, too, is the differentiator.
- Ecosystems and partnerships – building them to be ready with the right skills mean that the availability of talent is no longer the limiter to what we can achieve.
You'll hear much more on these trends as the year progresses, but sometimes to look forward, you have to look back. 2021 was a transformational year for Etch, and I wanted to use the clarity gained from a restful Christmas break to reflect on our achievements and outline why I believe they will ensure this year is even bigger for Etch.
Firstly, how do the numbers say we performed? Well, like any business, the past couple of years have been challenging. However, at the start of the pandemic, we made a clear decision to invest in the business, our team and our clients. And it's beginning to pay off. More on that later.
Whilst revenue growth for the last financial year was just 6.6%, significantly lower than the 40-50% we've seen in recent pre-Covid years, it's a result I'm proud of given the many challenges businesses, and more importantly, the clients of businesses like Etch have had.
Profitability growth tells a clearer story. Despite significant investment across the Group, we saw net profit grow 29% last year. Net profit is the most crucial metric in enabling our ongoing plans for further investment as we drive towards our vision and mission – to create a credible alternative to the large consultancies and enable our clients, people, and partners to go further and faster.
Perhaps most pleasing, though, is how we've started our new financial year. Our financial year at Etch begins 1st October. In the first quarter of the year, we've seen several "biggest ever" wins that are validating the work we've been doing over the past 18 months. I'm a firm believer in making sure your fundamentals are strong and you earn momentum; never has this been more evident than the way we ended last year at Etch.
- Biggest ever revenue month in November
- Biggest ever sales month in November (clients/work won)
- Biggest ever revenue month for our Play team in November
- Biggest ever sales quarter (clients/work won)
At the heart of all of this have been three strategic decisions:
1. Sales & Marketing
Firstly, like any business with growth aspirations, sales and marketing are critical to achieving this, and a more predictable pipeline is essential to making better, longer-term decisions. Our heritage as an independently owned, founder operated business has meant there was previously a strong reliance on the founder to generate sales. Last year, we invested in a Go To Market team to remove this reliance, a blended sales and marketing team of permanent employees and fractional contractors that would drive our propositions in the market and generate future clients and projects at Etch.
It has been truly transformational. We have tried to do this in many guises before, but the number one factor contributing to the success we're seeing this team generate is that they don't work on any existing clients. Too often, businesses in our space drop business development the minute there is a delivery or operational problem, and it stunts growth and, in time, leads to decline. The focus this team has on generating conversations with new prospects every single week is driving momentum, which at the moment frankly feels unstoppable!
2. Our Purpose
Secondly, we've focused on the articulation of our purpose. As an executive team, we have long been aligned on a shared passion for helping our clients, people, and partners go further, faster through better ways to work, live and play. Still, the articulation of that and how it comes to life has been left open to interpretation.
Last year we decided to be more explicit and specific about what it means and, more importantly, living it. So we are actively experimenting with better ways to work, live and play across all business areas.
Perhaps the most significant impact will be operational as we explore a move away from traditional consultancy/agency models where time and materials are everything. Instead, focusing on outcomes, performance, value and shared risk with clients. This one is the key to challenging the constraints of current models and plays directly into one of our core values – Liberated.
But whilst the operational impact is significant, the people impact and, more excitingly, the opportunity is not to be underestimated. Mental wellbeing has always been high on our agenda, but the effect of the pandemic means it is essential to go further than just caring. So we have rolled out initiatives that focus on all aspects of what it means to be human – how we look after ourselves and others.
An early initiative was to become a "remote first" company offering greater flexibility and removing location from hiring decisions. We then introduced the concept of quarterly "Retreats" to ensure we remained connected as a team, to work on ourselves, not just our "work selves", and above all, to have fun together. I believe the relationships and understanding developed due to the Retreats are pushing us to the next level.
We have focused on the impact that we, as people and as a business, make on the wider world through our charitable foundation, The Wildman Fund. We allocate 10% of our net profits to charities aligned with the UN Sustainability goals – ending poverty, improving education and achieving gender equality.
In addition, we are taking steps to reduce the impact our business has on the environment and help the planet and people who live on it. We have made a pledge, underpinned by the UN's Sustainable Development Goals, and we have committed to the SME Climate Hub, Climate Neutral Now and UN Global Compact – you can read more on the details of our pledge here.
Finally, we rolled out our new flexible working policy just before Christmas, captured in just three words – "We Are Accountable". It's a simple policy with one rule – be accountable to your clients, team and self, and you can work your hours in whatever way suits you best.
We didn't want to roll out flexible working in the way other companies do with core hours which only really works for some people and not others. We trust our team 100%, so in line with our purpose, our policy needed to focus on a new way that challenges established and outdated conventions.
The simplest way to sum up the impact of our purpose work is that I shared my belief that we have the best team we've ever had at our annual Vision Day in December. The most talented, the most aligned and the most committed. I genuinely believe that getting super clear on our purpose and living it has been key to unlocking growth. As a result, we've become super picky about who we invite into our exceptional team, which leads nicely to the final strategic decision we made.
3. Our People
The last decision is all about people. In fact, everything I've written about is about people, but to be specific, the acquisition of new talent. A mistake so many businesses make, which we at Etch have made in the past, is not rigorous enough in the hiring process. There are a couple of conversations/interviews, a healthy dose of gut feel, and suddenly someone new is joining your team. It's crazy when you think about it. The culture within a team that has grown and developed together can be disrupted by someone who "might" be the right fit.
Last year, we became intentional about only acquiring A player talent and introduced the Topgrading hiring process to ensure the people who joined us were truly right for our business and, most importantly, for the clients we serve. It means the hiring process can take longer. Still, I've now lost count of the number of times the hiring manager has said, "I'd rather take our time and find the right person," and it's true, hiring is a considerable investment that we have aligned to our strategic plan, culture and values.
The impact has been incredible. Our clients have instantly felt and seen the value of these hires as we push our offer at Etch to the next level, and the integration to our team and culture has been seamless. Perhaps the most explicit metric is that our hiring success rate has increased from around 50-60% to 90%, and the biggest anecdotal one is positive feedback from clients on every hire.
We have also focused heavily on our ecosystem of freelancers, contractors and partners, launching both Etch Community and Big Radical to ensure our clients have access to the best talent regardless of their employment status. This is in recognition of the changes in the labour market we're seeing with more people moving to self-employment, increasing salaries and "the great resignation". We've long worked with very talented and trusted freelancers and contractors but never before have we had something that holds the ecosystem together even when we're not working on a project together. It's a key differentiator, enabling us to build and spin up teams around a project at exceptionally short notice in a way that others who've not made the same investment can't.
As you can see, 2021 was hugely successful for Etch, with successes way beyond just the numbers. This combination of solid fundamentals plus a focus on continually evolving our propositions to help our clients with the key challenges we see in their marketplace means we go into 2022 with confidence, clarity and energy and, above all, a commitment to going even further, faster!