People are the key to growing any business

SME discussion

 

As part of our SME Week TheBusinessDesk.com held a panel discussion looking at the issues surrounding growing and running a business.

The discussion was held at JMW’s offices in central Manchester and covered a wide range of topics from innovation to funding.

The week-long series has been sponsored by JMW along with ETC Tax and the Growth Company.

And the themes were centred on the secrets of starting a business and turning it into a successful enterprise.

The first part of the discussion very much centred around the issues of leadership.

Those who took part in our debate were:

Gordon Kermode, who worked with Kellogg but now works with SMEs advising them on leadership, management and team building.

Steve Trainor who has many years of experience leading businesses and most recently co-founded procurement firm Odesma.

Ged Rooney who is director of construction firm Bardsley Construction.

David Byrne, former PWC director, who is now chief financial officer with Converge Technology Specialists.

Joy Kingsley, senior partner at law firm JMW.

The conversation started by looking at the area of growth.

Joy Kingsley

Joy Kingsley said: “The biggest challenges are getting everyone to come on the same journey you are taking. Growing a business means new people will come on board and you have to put people together and make sure they work alongside one another.

“You have to make sure your infrastructure supports what you are doing in terms of your people.

“If you stick bits on a business and keep adding, then you can get to situation where you have to throw everything away and start again. You have to make sure everything moves at the same pace.”

David Byrne

David Byrne added: “For us scalability is the key word. We have a £10m turnover and are growing quite quickly. That in itself brings a number of challenges.

“The scalability of both bringing new people and integrating them with the people we already have is really challenging, not just in recruitment but in the work that is done afterwards to get everyone pulling in the same direction.

“I think processes and systems are really important. When you are a small business you can rely on internal communication.

“As you start to grow it’s all about having systems and processes in place so you don’t drop the ball along the way.”

Ged Rooney agreed: “The challenge at the beginning is to find the right people to grow a business, but your systems need to grow with you.

“Once you get to a certain level, because the construction industry is very much boom and bust, you need to keep the business at a certain level to ensure continuity.

Ged Rooney

“Systems are important in any business. You need to ensure that systems and processes are integrated with new staff.

“We can’t leave old staff behind, and one of our biggest issues is making sure everyone is at a common standard.”

David Byrne said: “The best teams I have worked with have a very strong story and the team have clearly bought into the culture.

“And the best businesses I have worked in will take mergers in their stride. With the businesses that have flaws and weaknesses, when you put that pressure on, of mergers and acquisitions, the issues become apparent.”

Steve Trainor commented: “From our point of view, we are still a small business.

“Knowing when is right time to bring new people into the business, and then doing the right thing by them to allow them to develop and grow, is part of the challenge.

“That can be as much about the owners’ personality as anything else. The value you want to create should be associated with the business rather than the leadership group.

Steve Trainor

“Our business in the early days was about what we were doing as people and you need to step out of that. That can be a big change.”

Gordon Kermode said: “For me people are the greatest asset for a business.  It’s probably also the biggest nightmare, the greatest opportunity and probably the biggest cost.

“You have to be really deliberate in what you do with your people, both in terms of culture and leadership.

“Often with SMEs in the first phase of growth it is all about survival. As you come to scale that business and you hand your baby over to someone else you have to be really deliberate in terms of the culture you want to create and in terms of the vision.

“If you are not deliberate about that then you risk bringing big leaders into the business that don’t necessarily align with the culture you are trying to create.

“People start off in business because they are good at what they do, but achieving results built on the performance of other people requires a slightly different skillset.

“Finance and understanding cashflow is critical but it is not just about survival. It is also about deciding how to grow the business, it is about how you are going to get other people as passionate about the business as you are.”

Joy Kingsley said: “You always have to start with what people are trying to achieve. It still surprises me that people are thinking about their exit almost before they start.

“We are not like that, we are trying to build sustainability. That means we need to have the next generation of managers in our head already.

“Lawyers like to have people who are lawyers leading them. There have been a lot of instances where people who are not lawyers coming in to legal businesses, and it hasn’t gone well.

“Our next management team are likely to the very people who are already in the business.

“There is a problem that people who have had one success can assume that in a totally different business they will have equal success. It can be almost arrogant.

“I know people who have lost everything doing that. We like entrepreneurs here and we like to employ entrepreneurs, but it doesn’t have to be all boom or bust.

“Some people are built on risk and they don’t mind taking risk. There a few individuals who seem to have the talent that whatever they touch turns to gold.

“I know how to build a law firm, but if you put me in a property company, I would probably be a disaster.”

Ged Rooney said: “Just because you are good lawyer or a good surveyor doesn’t mean you are good at running a business.

“When the industry is busy people can make a lot money, but it can drop off a cliff very quickly.”

Steve Trainor said: “I have experience in working in a start-up that grew very quickly, but the guy who started the business turned out not to be the best person to run it once he had floated it. The business just imploded over time.

“There was a rear-guard action to replace the leadership with a more established chief executive.

“I think there is a difference between being an entrepreneur and kicking a business off and then running once it is established at a certain size.”

Gordon Kermode

Gordon Kermode added: “You need a variety of skills to ensure the success of a business. It amazes me that businesses promote people for technical excellence.

“What happens is you get 12 people who are highly driven and with big egos and you stick them in a room and expect them to play nicely with one another.

“You have to put some effort and energy into understanding what makes a great team and what makes a board successful. It doesn’t just happen by sticking 12 people in a room together.

“If you do decide that this is the team that is setting the strategy and vision, then the way in which it works together is critical to put the work in. It is a bit like buying a gym membership and then wondering why you are not losing weight.

“It is all about vulnerability-based trust and it is all about having constructive conflict.

“It is not about people just trying to push their ideas through, it is genuinely about having the tough debate to get the conversation going so the outcome the board arrives at is the product of 12 views around the table, not just one.

“So often you see boards where people are competing rather than thinking about what is the best solution for the business.”

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