"Scaling businesses are dynamic and agile": Scaleup North East on Black Swan moments, Brexit concerns and the region's growth potential
A programme known throughout the region for its involvement with scaling businesses, Scaleup North East works closely with ventures looking to high levels of growth.
With an array of support available to local businesses and entrepreneurs, the programme has amassed a wealth of knowledge of both the intricacies of scaling up and the economic landscape of the North East.
As part of Scaleup Focus Week, Bdaily spoke with some of Scaleup North East’s scaleup partners and management to get their take on the scope for scaling up in the region: from Black Swan trigger events to scaleup challenges and Brexit concerns.
There is a theory that scaleups are triggered by ’significant unpredictable events’ known as Black Swan trigger events. What are your thoughts on this and have you experienced any notable examples?
“I first heard the term applied to NE Scaleups during Roy Stanley’s presentation at our Scaleup Summit last year, when he highlighted the direct relationship between Black Swan events and high-growth business stories.
“It was a sobering point because, ultimately, the message was that all the planning and strategising in the world can be superseded by a completely unexpected turn of events – for example, a huge customer order, the collapse of a competitor, an unexpected change in regulation – that creates a massive opportunity for a business to grow. In other words: luck!
“Whatever the trigger, the key thing is always for companies to be conscious of the event, take stock of how sustainable it is and what they want to do about it. Will the demand for their product or service last and / or is it likely to change with other external events?
“Right now Brexit feels like the biggest genuine Black Swan event affecting everyone in the country, not just businesses, and while so many predictions are being made about the possible ramifications, we’re hearing many clients taking a ‘wait and see’ approach to how they respond to what happens next.”
Laura Foster, scaleup partner
As a scaleup funding and development programme in the North East, what region-specific challenges do you see local scaleups coming up against? What is your advice for businesses coming up against these barriers?
“The most common challenges we come across are leadership, access to talent and access to markets.
“With leadership, it is common that scaleup business leaders are spending too much time working “in the business” rather than “on the business”.
“One of the simple measures we advise leaders is to invest some time in getting out of their businesses and meeting with others, as invariably, whatever problem they are grappling with, someone out there will have faced the same problem and developed a great solution!
“With regards to access to talent, all growing businesses need to recruit. Some have a ready pool of talent, but for others this is a first-time experience, and they may never have engaged with either recruitment consultants, or apprentice providers.
“For access to markets, many businesses have grown to where they are through establishing relationships with a small group of customers, and the whole process identifying and engaging with a new group of customers can be daunting.
“Often, the simple advice we give is to help businesses develop and implement a systematic sales process to create a new pipeline of opportunities.”
Andrew Esson - scaleup partner
How can a business receive the financial support necessary to scale up?
“Many businesses require investment in order to scale, but there are many different types of investment and the investment landscape can be confusing.
“Working with the scaleup partners from Scaleup North East, companies have the opportunity to identify the best type of investment for the scaling activities that they are proposing, whether that is equity, loans or even managing the cashflow within the business.
“In addition, there are a limited amount of capital and revenue grants available across the region that your scaleup partner can signpost to, along with really valuable workshops delivered by organisations such as the Innovation Super network, the North East Funds etc.
“What’s most important is being investment ready. Through business plans, governance and structures, ensuring that any investor has the confidence to invest. Whether it’s a grant, equity or a loan, the provider must feel confident that they will get the return on the investment that they are looking for and the Scaleup NE Team can help to do this.”
Ailsa Anderson, project manager
Despite the Brexit extension, companies are still concerned about the impact that Brexit will have on their ability to scale. How important is it for businesses to develop strong international relationships before the deadline of January 31?
“When the Scaleup Institute conducted its initial research, it found that most scaling business engaged in three key areas to which their scaling success could be, in at least part, attributed to.
“These were digitisation, innovation and internationalisation - so of course it’s very important for businesses with scaling ambitions to develop strong international relationships, regardless of Brexit.
“Our relationship with Europe and other international markets post Brexit is largely unknown and its apparent that whilst it’s wise to consider the implications and potential impacts, the lack of clarity or certainty does make this challenging.
“From our experience with Scaleup North East, it’s important to view internationalisation in its entirety and not only the potential access to a much larger market.
“Scaling businesses are dynamic and agile so will find a way to navigate whatever circumstances prevail so they can maintain an international perspective which will provide a real competitive advantage.”
Craig Huntingdon - scaleup partner
How has the programme engaged with scaleups so far? Has the delivery evolved to overcome any challenges?
“We work with different sizes of businesses across many sectors, and often our delivery style must adapt to suit the specific sector.
“For example, manufacturing business are much more process driven than creative sector businesses, so we are constantly flexing our delivery style to meet the needs of the client.
“This process is helped by the fact that we have a pool of Scaleup Partners with a broad mix of styles, personalities and sector experience.
“The programme has engaged with scaleups through providing 1-1 support from our experienced scaleup partners who have been able to act as a sounding board, confidant, accountability partner and experienced mentor.
“Additionally, we have created peer groups of like-minded business leaders, offered insight workshops delivered by experts in their field which have been specifically developed to help businesses overcome their challenges to growth.
“Some businesses have received support in developing a 1-page strategic plan and have had facilitated team days to align the team to the company vision and values, the yearly and quarterly priorities and targets.”
The Scaleup North East Team
We’ll be talking more with Scaleup North East tomorrow around how scaleups can stay innovative, and what the future looks like for the programme. Join the conversation on Twitter with @Bdaily and #ScaleupFocusWeek.
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