You may recall that much earlier in the Summer I rather enthusiastically asked all scaleup founders and leaders that I’ve ever met (and a few more besides) to complete the Scale up Institute Annual Survey. In case you missed it, every year, the Scale up Institute (a private sector-led, not-for-profit organisation which exists to help the UK become the best place in the world to grow a business as well as start one) runs a survey to establish what challenges are influencing fast growth business success and also undertakes a comprehensive review of the data and support pertaining to scaleups.
Tuesday 13th November was a momentous occasion as Nick Sturge (Engine Shed Director) and I ventured to London for the launch of the results and the latest iteration of the Annual ScaleUp Review. The ScaleUp Institute-led event was, rather glamorously, hosted at Canada House in Trafalgar Square and saw nearly 250 people from across the scaleup and scaleup support communities and local and national government come together to hear the latest insights into ScaleUp challenges, share learnings and discuss potential solutions.
This year the report included insights from more than 2,000 scaleups (including 514 completing the Scaleup Survey), and analysis of the entire population of more than 35,000 scaleups in the UK using data from the Office of National Statistics (ONS) and nearly 4,500 using data from Beauhurst. What did I learn or observe today that you should know about? Here’s my top 8:
1. Ministers love scale ups:
Both Robert Jenrick MP Exchequer Secretary for the Treasury and Kelly Tolhurst MP for Small Business, Consumers and Corporate Responsibility and Scale up Champion attended and spoke warmly about the role that scaleup companies have in our economy today and for the future. Robert stressed that the Government recognises its role in supporting scaleup’s development and highlighted some useful government initiatives like the Small Business Leadership Academy and ‘Be the Business’ and the National Retraining Partnership, in collaboration with CBI and The IoD. Kelly was equally supportive of the community and of the work being undertaken with the Scaleup Institute and discussed the need for consistent quality for UK wide scaleup support which was echoed by the Institute’s call for a kite mark for scaleup companies – quality, quality, quality.
2. Data doesn’t have to be dull:
Scaleup CEO Irene Graham and Chair Sherry Coutu made a brilliant double act and gave us a high-speed, information rich, characterful run down of the key takeaways from the report. a. Latest data (2016) suggests there are 35,210 scaleup companies in the UK, 715 of which are in the West of England with a collective turnover of £7.1bn in the region. b. The number of scaleups per area has increased since last year with average growth of 4 scaleups per 100k population. West of England is above average with 6.0 increase per 100k population (we’re second only to Cornwall & Isles of Scilly). c. Top challenge spot was taken by access to talent and access to markets came a close second – these are the two challenges that most trouble fast growth scaling businesses. In 2018 8/10 companies identify access to talent as the most significant barrier to growth. d. Other top stats include: 58% of firms think Brexit will have a negative impact and 2/10 scaleups expect their turnover to grow by 50% or more in the next year. e. And, as my scale-up friend Zara Nanu taught me, a great way to get the measure of a new report is with the ‘ctrl f’ of the pdf… Engine Shed is mentioned 24 times and included as an exemplar, West of England mentioned 26 times and Scale up Enabler 21 times – and is described as a ‘role model to emulate.’ *> Read more in the full report here: http://www.scaleupinstitute.org.uk/scaleup-review-2018/ *
3. Programmes programmes programmes:
There are an impressive 219 scaleup programmes in the UK currently, and 9 identified as being in the South West. I’ll be sharing a blog about 4 of these later this week when the latest one launches (watch this space). There was some speculation as to how many of these are experienced when working with scaleup companies or perhaps just jumping on the topical bandwagon. There was also some discussion about the need and opportunity to introduce some consistent measures/metrics that allow us to compare the impact of different programmes. Sherry Coutu highlighted the Scaleup Institute’s appetite to review more of these programmes and to add the best of the bunch to their endorsed case studies: http://www.scaleupinstitute.org.uk/scale-up-programmes/ One in three of these programmes is funded by ERDF which was seen to be both a risk and an opportunity as this funding landscape changes. The majority focus on leadership development and capacity building.
4. Waste wins public procurement:
For the first time ever, the Scale up Institute worked with Tussell to identify public procurement patterns for scale up companies required to file full accounts with Companies House (visible scaleups). This report shows that Scaleup companies win more contracts per supplier than SMEs but that they win less by value. Two thirds of those contracts awarded to scaleups are from Local Government buyers so there’s room for central Government to do more. AWM, a waste management company based in Leeds won the most in award value and Eastern Shires, the Cabinet Office/Crown Commercial Service and South East Shared Services are the most likely buyers from scaleups. The University of West of England (UWE) was identified as one of 17 contracting authorities to have awarded 7+ contracts to visible scaleups. **> Check out the procurement checklist created with Nesta to help awarding organisations be more scaleup friendly.
Read the full procurement report (link on the RHS): http://www.scaleupinstitute.org.uk/scaleup-review-2018/ **
5. Beauhurst Scale up Index highlights opportunities:
Beauhurst worked in collaboration with ScaleUp Institute to announce the latest Scaleup trends based on a sample of 4420 ‘visible’ scaleups. a. Four in ten scaleups have a female C-suite member but only 4% have a female founder. SUI/Beauhurst Scaleup Index highlights that there is more work to do on female founders. b. There was a record level of investment in scaleups in 2017 of almost £2.75bn. BGF remain the top investor by number of deals (72 equity deals). c. Companies in the 10-15year age bracket are more likely to be growing at the fastest rates of over 80% d. 57% of directors at visible scaleup companies are 60years or older *> Read the full Beauhurst Index (link on the RHS): http://www.scaleupinstitute.org.uk/scaleup-review-2018/ *
6. Everyone (including scaleups) can learn from their aunts and uncles:
Ann Pickering, the brilliantly charismatic Chief of Staff at O2, shared some creative approaches to enabling talent – she started by explaining that over 30% of her staff are under 30yrs and that they ask for flexibility, trust, social media freedom and work mobility before they worry about the salary. She also described approaches that have worked particularly well for her – a fully paid phased return to work after maternity leave and returnships in the operations department which led to 80% of participants being employed by O2, 10% recognising they weren’t ready to return to work and 10% finding employment elsewhere.
7. Patient Capital is coming of age:
Keith Morgan, CEO of the British Business Bank brought a balanced view of patient capital in the UK – his comparison chart which showed the stark difference between the UK and US from Series B funding rounds onwards in terms of volumes of deals done was rather sobering. And Keith’s slides He wrapped up with the suggestion that we both need to boost the amount of available capital and also leverage more private capital – needless to say, this work is not yet done; thankfully though the panel discussion that followed was jolly upbeat and indicated that there are new patient capital initiatives in the pipeline including an announcement in the budget for BBB to conduct a feasibility study to explore pooled investment in patient capital by large defined contribution pension schemes.
8. Soundbite soup, these are the quotes and nuggets that most caught my imagination:
a. Culture eats strategy for breakfast – Grainne McVeigh – Invest Northern Ireland b. A new solution for the gender paygap – allow women to work term time only and/or school hours and pay them the same rate. c. Collaboration and connectivity will drive this work – and enable us to become the best place in the world to scale a business – Irene Graham, Scaleup Institute d. 12-hour business assist support packages received some notable criticism (and audible cheers from the crowd) for both failing to serve the needs of businesses and for being difficult to deliver effectively. e. Tell stories of local growth heroes and role models – make space regionally and provide support for them to lead the change they want to see in the region – Charlotte Keenan, Goldman Sachs and Sahar Hashemi, Coffee Republic f. The best response to a headwind (like Brexit) are innovations that are scaleable globally – Mike Biddle, COO InnovateUK g. Let’s take lessons from science and consider/address the ecosystem as a whole – we can’t solve these challenges in silos – Alice Hu-Wagner, British Business Bank
There are a few recommendations in there if you’d like to read the reports for yourself or perhaps you’d prefer to review the one-page summary:
There was a lot more discussed and some brilliantly informative panel discussions too so if you want to know what other people said about the event, check out the hashtag #ScaleUp2018
If you are keen to learn more about the support available for scaling companies in the West of England, please check out scaleupgenerator.co.uk and get in touch with firstname.lastname@example.org as she is our regional Scale up Enabler. The Scale-up Enabler is a collaboration between Engine Shed and the West of England Growth Hub/LEP. This article was originally posted in the Engine Shed news.