For founders of companies, getting to the finish line of a merger or acquisition is a dream of a lifetime. But how important is it to maintain trust and alignment when someone else is taking over? In this episode of Can You Hear Me? Podcast, co-hosts Rob Johnson and Eileen Rochford interview James Rose, CEO of the Inflectiv Group which specializes in backing independent marketing and communications agencies through minority investments - leaning heavily on founder alignment and collective ambition.
James is an entrepreneur and commercial leader with over 20 years of experience building and scaling businesses. He has founded companies from the ground up, helped grow private equity-backed businesses, and now leads the growth of a media and communications group through mergers and acquisitions. He also co-owns a podcast production business and a creative communications agency.
Connect with James: james@inflectivegroup.com.
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Rob Johnson: Hello everyone and welcome to another edition of the Can You Hear Me podcast. I'm Rob Johnson, President of Rob Johnson Communications.
Eileen Rochford: And I'm Eileen Rochford, CEO of the marketing and strategy firm The Harbinger Group. For founders of companies, getting to the finish line of a merger or acquisition is a dream of a lifetime. But how important is it to maintain trust and alignment when others are taking over? That is one of the topics we will be discussing today with James Rose. He is the CEO of Inflective Group, a Great Britain-based firm that backs independent marketing and communications firms through minority investments. James, thank you for joining us on Can You Hear Me today. Welcome to the show.
James Rose: Thank you. Pleasure to be on. Thank you Rob, thank you Eileen.
Rob Johnson: Great to have you, James. Now before we get into our topic today, why don't you give our listeners a little bit about your background, your origin story as it were.
James Rose: Sure, yeah, quite a varied background, but I'll try and summarize it in a succinct manner. I'd say for the past 20 years I've been scaling SMEs, either as a founder or a commercial leader. I left university and spent the first seven years building a group of companies in Eastern Europe. One was a furniture retailer servicing expat property investors, and then we got into property development and real estate. That was straight into the financial crisis, which was great timing for any young startup trying to make it as an entrepreneur!
From there, I moved into the media and tech world and spent a lot of time as a commercial leader helping to scale other people's businesses. Seven years of which was at a video agency where we raised private equity and grew from eight people to over 70 over a seven-year period. That journey really led me to what we're doing today at Inflective—building a group through minority structures as opposed to a traditional private equity model, which is very much dependent on high amounts of capital and significant resources.
Eileen Rochford: Very interesting path. Super unique, I would think. Have you ever met anyone like you who took a similar path? I'm curious!
James Rose: It's funny because when you mention the Bulgaria thing, they're like, "Oh my god, that is so different to what you're doing now! How did that happen?" It leads into a whole different conversation, but it was just timing, to be honest. At that time, there was significant investment in the region, and I was fascinated by how a market like that was evolving so quickly. But very different from marketing agencies, for sure.
Eileen Rochford: Well, okay, so here on Can You Hear Me we talk about how to use communications effectively. It's for leaders who want to get really serious about using communications to take their organizations to the next level. With that backdrop, would you please tell us a little bit more about your current venture with Inflective Group, and what you do really well there and who you do it with?
James Rose: Absolutely. The marketing landscape is changing quite rapidly. There's been a lot of traditional holding companies in the public markets that have grown through 100% share acquisitions and built real shareholder value over the past 20 years. But recently, that model has started to change. Shareholder value has been reducing, and founders that have sold to larger groups have actually found that integrating culture and operations can not necessarily be a great outcome for them.
We come in as a minority shareholder, which means the founders of these agencies continue to be in charge of their own destiny, but they have the support of a bigger group. What that enables us to do is leverage the group ecosystem for cross-sells, upsells, support, and centralized finance, but not impact all the aspects that made those agencies great in the first place. We're specifically focused on agencies that have been trading for at least 10 years. They want to increase shareholder value, provide legacy for their teams, and ultimately exit that business on the terms that are right for them. We like to look at it as a founder-friendly group.
Rob Johnson: So James, I would think that maintaining culture would be top of mind for many founders when they're close to making an exit. How do you integrate the companies without losing culture? Or is that something you even focus on?
James Rose: It's a really good question. We purposely don't integrate. All of the agencies have their own office locations, company policies, and management teams. If you walked into those offices, you wouldn't necessarily say they were all part of the same group because they are run differently and have different personalities. We've purposely not impacted the culture, but we've tried to instill a shared set of beliefs.
Especially in the marketing world, agencies are built on people. There's very limited IP and not a huge amount of assets—it's just teams of creative people that love doing their work. If you start to interfere with that, the output of work will drop, motivations will be reduced, and they won't enjoy the environment. They're working for small independent agencies because they like that environment. We purposely don't want to bring them into a big corporate environment if that may not align with the employees' interests.
Eileen Rochford: Nice. Interesting. I mean, you're absolutely right. It's the people which make small entities special and successful. Stepping in knowing that is fantastic.
Eileen Rochford: Let's move into another area we're really interested in: AI. Nearly every episode we have these days, we have to talk about AI in some capacity. What is your perspective on AI's impact on the small agencies you're backing, and what are you seeing in the future?
James Rose: It's a really hot topic. We see varying levels of adoption across the group; some entities are more advanced than others. We have a group-wide working group for AI where we bring different initiatives to the leaders. There's a lot of experimentation. Teams are empowered to go and create things to become more efficient.
Our ethos is that it shouldn't replace people; it should just increase output. The judgment layer is critical. Creative people in agencies are naturally very independent thinkers, and I think the best way to use AI is to streamline things. Maybe 70% of the work could be automated in some way, but that top layer has to remain people-focused. None of our agencies have reduced headcount for AI. They're all experimenting with it, we've brought in external consultants to advise us, and we are still trying to figure it out ourselves. We do recognize the opportunity and we don't want to get left behind.
Rob Johnson: Would you say that the agencies you're dealing with are really eager to adopt it, or are some reticent?
James Rose: It's quite mixed, to be honest, and I think it comes from the top down. If the leaders are naturally AI-native and very innovative, that fosters that culture. But these are established businesses; some founders are later in their careers and maybe a little more stuck in their ways, whereas other agencies are slightly earlier in their careers. With smaller teams, they can test and learn. They can give the sales team a project to work on with AI versus trying to push it across the entire business.
Eileen Rochford: I'm curious, in the agencies in your fold that are embracing AI, what other elements are present aside from leader adoption?
James Rose: One of our agencies is a market research and insights agency, and they've had to be quite forward-thinking. The risk in their space is that people see market research as something that will be commoditized through AI. What they've been able to do is bring some back-end systems in place that drive efficiency, but also make it very clear that there's a human level above that verifying the inputs and outputs.
About 18 to 24 months ago, they made an investment in a closed environment. Instead of using open AI tools, they set up their own secure server in the office. This gives more trust to their clients that if they are experimenting with AI, it's secure. They've really thought it through and put the right processes in place rather than just running and testing something.
Eileen Rochford: Okay, so I've also heard that you are creating something called Inflective Intelligence. Is that true? Tell us what it is and how it benefits your clients!
James Rose: Firstly, I can't take any credit for it—just to be clear! Our CFO built this through necessity. Through group-level financial reporting, we recognized that traditional tools connecting into Xero and Sage aren't delivering accurate data. That can get quite problematic when looking at consolidated accounts.
He recognized the gap and started to think, "How could I create a version of that tool?" That became a monster project. It now brings in all financial and non-financial data into an online app that gives founders absolute clarity on financial reporting to make decisions on agency growth. A lot of small agencies have never had that data; they typically look historically at what they've done over the past six months. This starts to show: If we want to go from A to B in the next six months, these are the five things we need to do. We feel it solves a problem not just for us, but for a lot of independent agencies and CFOs. We're opening a waiting list on the 1st of August.
Rob Johnson: What do you think that's going to do to enhance your business?
James Rose: It's a recurring revenue product, which is naturally beneficial to us because right now we're focused on a much bigger strategic play. Having an operating entity that combines the app, centralized finance, and other resources becomes our operating entity for this group and future groups.
Eileen Rochford: And Inflective Intelligence is a standalone product? You don't have to be in Inflective Group to use it?
James Rose: Exactly. I don't want to share pricing just now because that may change before we go live. We've got over 50 test users right now feeding back bugs, and we want to stage the rollout so that we can properly service demand. I will say it's going to be very affordable—not enterprise-level pricing. It's something any small business can afford, and will probably just be a displacement cost for a tool they are already using.
Eileen Rochford: So now we're at the part where we get to ask you: what else would you like to tell our listeners? What wisdom from your successful career would you like to share?
James Rose: I think the market right now is prime for acquisitive growth. There's a level of fatigue within founders where, if you've got a synergistic business and you can engage with those founders authentically, there are surprising M&A opportunities out there. It can be a much quicker path for growth than just grinding the organic route.
It starts with having those conversations. If you're not intentionally looking for it, you're not going to get the inquiries. Don't get bogged down in the detail early on thinking you don't have the capital or experience—you can bring in the right advisors for that.
Eileen Rochford: It's not just founder fatigue because we've been doing it a long time. What else do you think is contributing to that feeling?
James Rose: The AI revolution is the fastest adoption of technology we've ever seen, and that is causing disruption. In the UK specifically, we've got macro headwinds around political policy and taxes. Inflation has been rampant over the past five years. Employees are demanding more salary, but margins haven't increased. Customers are saying they can't swallow additional costs and are asking for savings using AI. Founders are stuck in the middle. Value-based selling and training people on how to overcome objections is critical, because it's a sales problem ultimately. If your team isn't trained to handle it, you're just going to get run over by clients putting pressure on you.
Eileen Rochford: How can people learn more from you? What's the best way to connect?
James Rose: Probably LinkedIn. If anybody wants to reach out with specific requests, I'm happy to take an email and see if I can help. The best email is james@inflectivegroup.com. Following our company page, Inflective Group or Inflective Intelligence, is also a great way to stay updated.
Rob Johnson: Absolutely. Thank you, James. You had wonderful wisdom, and that's going to do it for another edition of Can You Hear Me. I'm Rob Johnson.
Eileen Rochford: Thank you, Rob, and I'm Eileen Rochford. If you liked what you heard today, please consider giving our show a positive review wherever you get your podcasts. Thanks for being here today!