To understand the drive, hard work and investment into organisational culture it takes to lead a business to success, we recently met with the CEO of leading Mortgage Provider - CMME.
In this Q&A, Jason Powell shares his secrets for success and how he has managed to create an agile, innovative and highly performing team.
To find out more, take a look at what he had to say...
1. Tell us about your journey with CMME Jason and where did it all start?
CMME created a category (mortgages for independent professionals) and spent 15 years dominating that category.
Two years ago, our founder decided it was time to take the business to it’s logical next step and take on external funding. That’s when he got into partnership with Living Bridge and bought the number two player in the market- Contractor Financials.
During the first 15 years, the business model was very much direct capture through Google searches for ‘contractor mortgages’. At this point we know a potential client is a Contractor and wants a mortgage.. Our strategy was to to own google and have strong SEO. For anyone that types in contractor’s mortgages we’re going to come up, and by providing calculators we’d hope to convert these leads into sales.
The website was very much fundamental in capturing data and driving a highly motivated, high service, highly experienced sales team to convert the leads.
The reason we existed at all was because banks failed to recognise the role of contractors as good risk with stable incomes. Even now they struggle. For instance, I believe Halifax recognise contractors as contractor PAYE (Pay as You Earn). They will only report on self-employed / PAYE and contractors and contractors are lost, which causes a problem because they have very specific needs and often complex income. Multi contracts, gaps in contracts. People choose contract work as a lifestyle and for the freedom and flexibility. Although they are classed like PAYE, they don’t behave the same and this is why many of our clients come to us having failed to secure a mortgage with a bank or through an IFA.
You hear a lot of stories about people who have been contractors for 18 months but when they go to lender, they require them to have been working as one for at least three years! It’s a problem if banks don’t fully understand their own criteria.
That is why we exist. The founder was passionate putting Contractors firs and finding them the mortgage they deserve.
Over 15 years, the business got to the point where many things had fundamentally changed in the market and we needed to create a new vision and a new strategy. So, that’s really where I joined the journey and what CMME now is.
2. When did you begin your journey as CEO and how has the business changed since taking on this role?
One year as CEO, my work birthday is today!
What has changed since taking on the role? When you buy two businesses, with two very different cultures, it can create issues which mean you can lose focus, almost get consumed by the internal problems that inevitably arise and lose sight of how the market is changing. I came to the business with considerable business experience specifically in turnaround / M&A. So one of the key things that has changed is we’ve been able to get morale back to where it was, we have a clear plan and some great people to help me execute it.
The first thing we had to do was get everyone to come together under a single business. We had this crazy divide where one site was Red and the other Blue, we hadn’t integrated at all.. So, we had to get people on board and say to them “you’re not enjoying working here, which means we are not giving good service to our clients, and the business is not performing well. We have a high staff turnover and need to sort this out.”
This meant three months of sitting down every week to have breakfast with everyone in the company and asking. “Tell me how to feels to work here, tell me about what’s wrong.” This ranged from “we don’t do the wonderful things we used to do anymore and we want to do them again” to “when this company came in and bought us it made changes that didn’t make any sense.”
Where the changes didn’t make sense I just reversed it. The classic one was on one site they only had a 30 minute lunch break, which worked for their culture but when the businesses merged they changed everyone’s. So, we reversed it and said it’s now an hour’s lunch for everyone.
You could feel the change. We didn’t lose any productivity and we didn’t lose any money. It was about connecting to the people of the business and understanding them. Let’s face it, these issues were just small things for the business but meant a lot to our staff.
Within the first few months we were up 10 - 15% in productivity on spirit alone.We also needed to get a collective view of what was going on in the company and that’s when Max Hayden – COO and (our Cultural Officer) arrived. Within 15 days we created a data model and created complex algorithms that gave us one single view of the business, now we could operate as a single business with common goals and definitions. For example, at one point we had over four definitions of what a 'sales lead' was. This data model allowed us to agree and use the same definition, simplifying the business.
One of the biggest and toughest challenges was the loyalty of staff to both companies. One of the reasons we created the brand CMME was because it served both needs. Internally everyone could come together under a new name and identity that they could start to be proud of but at the same time we could preserve the legacy of our founding business “Contractor Mortgages Made Easy”
That has been so powerful but what it has allowed us to do externally is address some of the strategic issues in the business. For example, we felt we could help all Independent Professionals (Contractor, Self Employed or Freelance) The new brand gave us the freedom and license to explore and innovate.
You also need to use this new Brand vision to develop and grow your employees. We need to have people in the business that represent where we want to be as opposed to where we are now. Now, we have the team the ambition and the energy. SO, the big challenge now is to go and own the Independent Professional category.
We are active in recruiting Independent Professionals for our business, we want to ensure our people live and breathe our category. 70% of our leadership team have been contractors in the past and this gives us the ability to leverage knowledge and understanding of the gig economy to drive forward the business.
3. Some of our readers will be contractors/ interim's looking for advice on how to manage their finances. What are the fundamentals of good financial planning as an Interim Contractor?
I was a contractor, I had a year when I wasn’t officially working and had work as a contractor and go through the process of getting an identity. So, I set up my website and formed a company. It was a nightmare!
The whole process took me over three months! The biggest pain was remembering all the passwords for the different government gateways and portals. Filing a VAT return… right how do I do that? I’m an Accountant and I didn’t even know how to do that!
The reality is that it’s hard becoming a contractor, there are many barriers but the reward in terms of freedom and flexibility are worth the effort. I believe the Financial Services sector needs to do more to help people make the transition. Let’s face it, with AI around the corner, we’ll all be contractors soon!
What are the issues of being a contractor?
First thing, being contractor gives you freedom to manage the time frame of when you pay tax. There is some good advice around that. You can end up with large pools of cash sitting in Limited Companies that you can’t distribute and you’re not going to spend it, so you kind of need a treasury. A lot of contractors purchase lots of 'buy-to-let' properties under their limited companies as they act as relatively safe investment vehicles, using gross income to invest, rather than post- tax income. So, I advise getting some good treasury advice.
What I have found is that contractors or freelancers generally have a good level of organisation because they have to think/ plan for this stuff. You want to be focused on building your business, you do not want to be distracted with having to deal with HMRC, Companies House etc. So, just organise yourself and get it right because if you hit all deadlines it won’t be a distraction. This stuff is key – don’t leave to last minute.
Independent Professionals need good routines or habits and to find structure in their day. Personally, I like to start my work when I wake up and 5.30, do some exercise and start the day positive with a clear understanding of what I want to achieve.
4. What mistakes do Interim Ltd Companies make when applying for a mortgage?
This possibly ties into organisation. One thing we see time and time again is the little mistakes around personal and company finances, which end up becoming issues in the application. Managing credit history is key – lenders want to see a good history that has been well managed, some will overlook the odd missed mobile phone payment but most don’t. This can be the biggest barrier, you do not want unnecessary poor payment history.
5. What trends or changes are you seeing in the market? And what longevity issues will there be?
In future I see freelancers being the majority. Maybe by 2050 I think Independent Professionals / Gig economy will be the mainstream part of the market because you can see this trend growing and growing. PAYE will become the minority for sure.
This is partly driven by AI and other technologies but also the price that comes with being PAYE is the lack of flexibility, you cannot choose when you work. So as a society I think people will increasingly choose to go Independent and take ownership for finding their own work, training and development.
I think independent working here to stay and it’s only going to get bigger and bigger. Especially with the new generation demanding flexibility and wanting to work for themselves, in 30 years’ time this will be mainstream.
What that means for our business is that we too will one day become mainstream and will have to ensure that as a business we are continuously innovating our technology, and ensuring our services are on point to accommodate that.
In the meantime, we would be keen to hear your comments below.