Tarsem Dhaliwal, FD of food group Iceland, talks FD Intelligence through his route to the top, his career highlights and why inflation will be the big issue in 2012.

How did you career begin, and how did it lead to your role as FD?
My career started when I used to help my dad do his market stalls. That was a great education for me, because it taught me about the value of money. I never really wanted to work for my dad long term, so I decided to become an accountant at Iceland nearly 28 years ago. I came to Iceland, trained and qualified, and my initial intention was to leave simply because frozen food is not the most exciting product in the world. However, the company had a buzz about it.

New management came in 2000. They got rid of the old management including the founder of Iceland, Malcolm Walker, and myself. At the time, the business had a turnover of £5bn. During my period away, Iceland did badly. Share price was on the floor. Malcolm Walker, Andy Pritchard and I put ourselves together with a number of backers to buy the group and make it a private company, which we did in 2005. We’re now in a position where the business has done well, to the point that our backers want to sell their stake. Obviously we have an interest in buying that stake but there are other parties interested.

Are they any recent business trends that you don’t like?
The biggest issue you’ll find is liquidity. Bank liquidity is the oil that keeps this machine running, and when that dries up people don’t invest. Not just companies but individuals too. You don’t buy a car, you don’t extend your house… That’s because confidence is hit, but also because you can’t get the funds to do so. Thankfully for Iceland that’s not a big issue for us because we are cash-rich at the moment.

What is the biggest barrier to success in your role?
The biggest barrier is being an accountant. It seems an odd idea, but if I just sat in my office and behaved solely as an FD the value I can bring is limited. FDs have to get in the middle of the game. Every decision has a financial implication, and you have to be central to that. You have to understand the business and what you’re trying to do.

What companies do you think have a strong finance model that others should follow?
Iceland has the greatest finance department in the world. You have to be proud of what you have, and I’m proud of ours. What I have is a team of people who absolutely care about this company and what they do. They regard the money that comes into this business as their own and manage it accordingly. They have a passion and desire to do well. That’s what I want. Don’t tell me what you can do, show me what you can do. And I’ve got a team of guys here who do that every day. I wouldn’t change any of them.

What is your take on the alleged double dip recession?
It’s not going away and it’ll be a slow recovery. I think we’ve learnt our lesson over the last couple of years that we can’t just borrow our way out of the problem. There are going to be more job losses, consumer confidence isn’t terribly high and we need to get the economy to grow.

What are the big things to look out for in 2012?
Base rates will be pretty static for the next two or three years, but the cost of funding will probably rise. Inflation is a big issue. Whether we’ve peaked at 5% or 6%, I don’t know. Next year I think companies, particularly retail companies, are going to be pushing the value proposition and giving their customers a reason to shop based on value. If you look at the pay rises that happened this year, not too many companies have given even 5% pay rises, so people have less in their pocket. It’s going to be a continuation of where we are today, and I think that will last until at least 2013.

What are the biggest challenges facing your sector specifically?
In food retail the biggest threat is inflation, and the question is how you pass that inflation on to the consumer while they’re looking for value. We’re all going to be fighting over the same space. There is no volume increase in this sector at this time; customers aren’t buying more products. They’re paying more for the same amount, simply because of inflation. How do you counter food inflation? And more importantly how do you keep hold of what you have [your existing customer base] when everyone is talking about price all the time?

What is the best piece of advice you’ve been given about your role?
The advice I’ve always given myself is: do the job that you’re paid to do. Make sure you’re competent at what you’re paid to do and that you can do that well, and then get out of your office and be a part of the business. Understand it. Be an integral part of the decision-making process.

Who has had the most profound affect on your career?
Malcolm Walker, as CEO of Iceland. Apart from my father, who put that work ethic in me as a young lad, it would be Malcolm. He gave me that opportunity to develop, grow and learn, and I wouldn’t be where I am today if it wasn’t for him.

Can you name five key assets that are a prerequisite to becoming a successful FD?
Being able to communicate, being a good listener. Being patient as well, I think that’s important. We FDs are good at throwing numbers in different ways at people. We understand them, but not everyone else does. I think you need to be patient with people and be good at explaining things. You also need to be integral to the business. And the most important thing in all of this is care. Care about what you do.

What makes a great FD?
Somebody who is able to give confidence to the business that financial affairs are strong and robust. They are always looking forward, and at the same time they have an ability to be commercial within the business, to provide advice when necessary to drive it in the right direction. They have trust – that means the trust of your colleagues, and more importantly trusting your colleagues in return. Without that, everything is irrelevant. We all have to trust each other in the roles we have.

Do you have a business hero?
I like Richard Branson. He’s done fantastically well, but when you read his book he’s always been on the edge. In his early days, they [Virgin] were always very close to the edge of survival, but they always found a way of making it happen. It’s having that vision to keep going despite all the obstacles in front of you.

What are you most proud of in your career to date?
Probably the acquisition of Iceland five years ago. It took a lot of time and effort. At the time, Iceland were doing very badly so nobody wanted to provide any funding to buy the business. I think that decision and that process was the biggest step change for me, a career-defining moment.

If you weren’t an FD what would you liked to have done instead?
I would have loved to have been a doctor. If I had applied myself a bit more at school and educated myself a bit better I would have focused my attention on being a doctor.

How do you switch off from the pressures of work?
In this day and age it’s hard to switch off, especially with the technology that you have: your work and social lives are integrated. I also can’t go into an Asda or Tesco without looking to see what’s in the frozen foods cabinet, or what promotions they have. When I do relax, it’s with my beautiful wife and four fantastic kids.