Discipline must run in parallel with Innovation

31/03/2015

High growth companies are disproportionately innovative to those that are not, and whilst I believe creativity is the ultimate source of competitive advantage, I must caveat my views. The importance of embedding a culture to allow free thinking that stimulates new ideas is well documented. However, without control you end up with pet projects, loads of possibilities and hundreds of potential initiatives that absorb time, energy and resource. Large companies have processes to deal with their ideas pipeline, but in smaller high growth businesses the danger is that there is too much innovation and entrepreneurship and not enough control and discipline.

Commercial problems potentially loom when there is too much lateral thinking and lack of order. Jim Collins in Good to Great uses a very powerful phrase – “Disciplined Entrepreneurship”. This embraces the notion of balance – innovative thinking and behaviours being guided within a framework of performance measures and KPI’s.

Too much Discipline – then a disconnection with customers, markets and new possibilities takes place

Too much Entrepreneurial flair – nothing gets done because everyone is bouncing off the walls with great ideas

Successful high growth companies tend to have a disciplined approach to new idea generation and implementation – a form of commercial filter. I often wonder how much smaller high growth companies can teach large corporates about innovative thinking and entrepreneurship. The reverse is also important – how can big companies help ambitious founders embed better housekeeping within their organisation? Feels like a powerful learning forum!


John Leach – An interview with Carter Corson

16/03/2015

John Leach, Chief Executive, Winning Pitch, describes how it is always important for entrepreneurs to consider the emotional as well as financial costs to growth.

Click here to the article and more from Carter Corson

In your work you talk about “profitable, sustainable high growth”. What does sustainable refer to?

One of the key things around growth is that it all starts at the top. When we talk about high-growth businesses and organisations, what we’re referring to are those that can sustain 20% growth each year. This level of growth usually pivots around an individual who has a high degree of energy and wants to take the business to places where other entrepreneurs don’t want to go.

It begins with a mind-set driven by a genuine intention and ambition toward growth. There are many individuals who state that they want to grow but there’s a lack of genuine commitment. There are many people who talk about growth who are actually hallucinating rather than visioning.

Sustainable growth starts with genuine, sustainable intent that is actually followed through with strong execution. Sustainable intent translates into building the right team, working out the business model, financing it in a feasible and taking calculated risks.

There is a common misconception that entrepreneurs are nutcases who play the lottery with the family jewels. In fact, successful entrepreneurs are very much about assessing risk rather than taking risk. This gives them clarity in deciding what mitigating actions are required to avoid doing something calamitous.

When we talk about entrepreneurship, do you think that we sometimes over-focus on the individual? Can we lose sight of how while individuals may be the driving force behind a company, it takes a team to build it?

It does indeed start with the individual. The founders who grow their businesses into something quite special are the ones who have a high degree of self-awareness. However, it is important to think about the DNA of a great team, which I call the Thinkers, Doers, Sellers and Controllers. When you first set up, the founder is all of those things but they typically have a natural orientation to one or two of them. Successful entrepreneurs build a finely tuned engine that has an even mix of all four. Self-awareness is such an important part of the growth equation. You can’t do it all yourself – the minute you try to, you have a serious problem. You really need to build a team around you that is significantly better than you in lots of different areas.

Often, entrepreneurs can suffer from an imposture syndrome. They end up sitting in the board room thinking “everyone in here is smarter than me”. In reality, they have got themselves that far by being clever enough to have the right people around them. That is such an important part of the mix. .

In the UK there are 4.8 million businesses. There are only 36,000 that employ over 50 people. Why? Because it is so difficult. To grow beyond 50 you have to really be good at managing and building, which means recruiting while retaining the right talent. When they have 25 or more people, many entrepreneurs give up, sell up or they choose to downsize. Ultimately, sustaining profitable growth is a leadership challenge and this is a big problem for the UK plc. It comes back to the issue of recognising what skills needs to fit around the top table and who needs to sit in the right seat.

In a recent report, the problem of ‘leadership capability’ was cited as the second most important reason for the failure of UK businesses to scale up…

Absolutely. What you do when you start-up on your kitchen table is very different to when you are running a business of 150+ people. You have to develop and change.

I explain it as the Mind-set Staircase. Your mind has to make various transactions across the staircase where you go from being a founder, to a social worker once you have more employees. Then you assume the role of a strategic manager once you have other layers in there that are dealing with the numerous aspects of managing a business. That is one of the main reasons people don’t grow. Entrepreneurs say “the more people I employ, the harder it gets”.

Again, finding the right talent to sit in the right seat is crucial. I am a non-exec on four fast-growing businesses. In each of these, the first challenge to address is the people/talent issue. Often we find we have the wrong people, so invariably we start to look at the team. In most instances it has grown and has a product and a market, but the team running it is not fit for purchase. In many instances, we work on team dynamics – getting the right people doing the right jobs while building a culture that is conducive to innovation and success. That is one of the hardest things to do in business.

For entrepreneurs, what do you see as the emotional costs to growth?

Growth is more than just a series of spreadsheets showing financial projections. There are a lot of decisions that need to be made that impact on people around the entrepreneurial team – family, kids, wives and husbands. When making an executive decision, very often there is a difficult conversation going on back at home: “I need £200,000. I am going to re-mortgage the house.” “What does that mean for us?”

These are emotional decisions and they start to weigh heavy. There is often not only a financial cost to growth, but very often there is a medical cost. I see so many health-related complaints with ambitious people – anxiety, high blood pressure and ulcers. We never read about this but within my own networks, I see the impact that running a business actually has. It ends up running your life. This means you have to be mentally resilient, being capable of switching off and or to cope with uncertainty. Because we are British, we don’t talk about these things.


A decade of supporting high growth businesses

11/03/2015

This year marks Winning Pitch’s tenth anniversary of being in business. The very reason I founded our organisation was to provide the tools to create, build and support individuals get the most from themselves and their companies. To achieve our mission it was imperative that Winning Pitch demonstrated an authenticity that could never be challenged, in other words we practiced what we preach. Ten years on, I am very proud to announce that we have worked with some 6,000 companies. Those we have supported over the past two years have grown 4 times the rate of GDP, the average change achieved in net worth, following Winning Pitch help is 335.5%, their balance sheet value has also increased by more than £181.96m. Impact on local economies is so satisfying to observe, Winning Pitch assistance has delivered approximately 5,000 new jobs. As a business we have reached revenues in excess of £10M and over 100 full time employees across the North and rest of UK. These impacts are testament to our core beliefs of authenticity, trusted adviser and an ability to deliver.

There is no finishing line in business and complacency is a danger zone that every entrepreneur should avoid entering into. After a decade of passionately supporting the entrepreneurial business, we ourselves have moved up a gear in terms of our growth plans and ambitions. Helped by a £2.5M investment last year, I am delighted to announce a new look Winning Pitch – one that’s aims to deepen even further our profile and brand in the SME growth space. Growth SMEs are going to be even more important to local, regional and national economies over the next decade; they are the job generators, the source of innovation, graduate jobs and foreign earnings. I want Winning Pitch to be at the heart of making these businesses succeed – with clarity of vision, superior propositions, strong leadership and teams, an ability to live in the customers world as well good housekeeping and financial strategy and control, everything is possible.

I want to carry on supporting individuals to grow and helping the next generation of stars to accelerate their performance and win. More specifically, we want to give more attention to those companies that can scale their operation. These are the businesses with global potential, they become bedrocks of local economies by delivering jobs, this in turn helps communities to prosper and thrive. We will be placing increased emphasis on this unique set of companies, whose business support needs are more sophisticated and complex to deliver.

I look forward to another ten years of innovation and obsessive focus on unlocking entrepreneurial ambition. We will continue to build and expand the Winning Pitch entrepreneurial community by giving courageous individuals the trusted guidance they need to achieve both profitable growth and a business they can be proud of.


John Leach – An interview with Global Innovation Magazine

03/02/2015

This interview with John Leach, Non-Executive Director of Trustech was published in the Global Innovation Magazine.

Click here to read the rest of the article ‘NHS Manchester – Global Healthare Innovation

John Leach is a non-executive director of Trustech and is a well-known speaker on business and innovation as well as being a lecturer of entrepreneurship.

Do you think that the NHS on the whole ignores the revenue it could bring in through innovation?

Yes. There’s more that we could extract from the NHS in terms of enterprise, knowledge and Intellectual Property and I think that’s also the case with surrounding universities. There could be and should be a better way for value extraction without taking away the quality of care that the individual receives. More could be done. The real challenge is cultures colliding.

Is part of the issue that NHS staff are measured on performance and not innovation?

That’s the point. There are a couple of Trustech innovations that have come from clinicians, consultants. That takes a very enlightened person. People join the medical professions with the aim to make sure that their patients leave the hospital fully intact. They’re not looking at value creation.
If we can find those role models and we can find those individuals that have done it, then we can expose those heroes that have been able to balance commercial with science, with healthcare. It then makes it real to others. You can do both. It’s not wrong to do both. We don’t celebrate the success enough.

What’s the solution?

One way you address this is to create communities of people that have done it. That have been successful in the innovation process. Create a community of people that have come-up with an idea and got it to market. A community that is willing to share experiences and talk to others. That for me is where the gap is.

Trustech started in 2001, where is healthcare innovation in the UK heading now?

We shouldn’t underestimate what has already been achieved. With initiatives like Citylabs and hopefully a move into other parts of the UK, we can start to bring it together by creating conversations with those that have already capitalized on their innovations. Growth essentially. You get entrepreneurial growth by pulling people together. A fast-track learning environment, a safe environment to share experiences and ideas. That’s where it’s at, that’s what Trustech offers.

How has Manchester become a global hotspot for healthcare innovation? It’s a combination of academia, access to Europe’s biggest hospital site, research, a readily-available skilled workforce and determination, all being pulled together by the innovative approach of Trustech; an NHS organization.

Find Trustech at http://www.trustech.org.uk


We need more mid sized businesses (MSB’s) – 10 ways to build one

16/10/2014

The need to help and support medium sized businesses (MSB) is very much at the heart of economic policy making at the moment. The missing component of the great work research institutes, accountants and think tanks have come up with is, just how difficult it is to set up and build one? Having done it with Winning Pitch (and working with a handful of others to do the same) there are so many lessons I would like to share. Here are 10 platforms critical to anyone on a MSB journey:

  1. Think big – genuine ambition is vital – be clear on your higher purpose.
  2. Be clear on the business model – a detailed plan to execute and operationalize the strategy to scale is crucial.
  3. Understand the different funding routes and instruments to fuel growth.
  4. A high quality senior team is vital, combine this with a great culture and you have the magic dust – values become more important the more staff you recruit.
  5. Consider the role of NEDs – having someone who has already done it sat round the boardroom table offers many advantages.
  6. Don’t be too precious about hanging on to your equity – smart people want a share of the value they bring.
  7. Embed tight operational control and strong performance management – remember it comes down to always having enough cash.
  8. Establish a clear brand and communicate this with passion – celebrate with fervor what makes you different and why you are the “go to organisation” for what you do.
  9. Strong internal (in the office) and external (in the market place) leadership is vital.
  10. Stay one step ahead of your competitors by living in the customer’s world – deliver innovative propositions with an edge.

From a UK business base of 4.8M companies, 99% employ less than 49 staff. So the current stock of mid sized businesses is less than 50,000. We must not only look at helping existing mid sized companies we also need to address how we fill the pipeline – the next generation.

Sustaining growth beyond 50 staff is a massive task – this is why so many entrepreneurs sell out before they burn out. Beyond 50 staff, business help and guidance becomes more sophisticated – PE/VC, NEDs, headhunters, governance, IPO’s, expensive lawyers and financial engineers, corporate finance… trusted support is pivotal to sustained growth. A community of trusted help is vital to the entrepreneurs who are aiming to do something special with their business.


High growth entrepreneurs have an innovation department

26/08/2014

Business incubators have become a common feature of public sector enterprise support in recent years; many of these establishments have proved to be highly effective in nurturing early stage entrepreneurs. They don’t just provide a desk and somewhere to turn up every morning, their added value comprises: a place to network, share ideas and collaborate. The really good ones offer mentoring and coaching, this is often what makes the real difference between success and me too performance. In many UK regions, incubators have become a hot bed of exciting new businesses, the potential employers of graduate talent – Autonomy in Cambridge is a fantastic example.

This concept of incubation needs to feature prominently in the culture and mindset of winning businesses – any ambitious entrepreneurial company should have a “department” or function responsible for building a pipeline of new thinking that delivers potential new revenue streams or adds value to existing customer experiences. I don’t mean a department literally – it’s about having an organisational process that brings together thinkers, doers, sellers and controllers, one that not only develops new ideas but also implements the commercially viable nuggets that emerge from the process of discovery. The concept of incubation delivers a major thrust for gaining an edge in the market place.

It is my opinion that creative intelligence is the ultimate source of competitive advantage – high growth companies tend to be disproportionately more innovative than the rest of the SME population. They explore, embrace diversity, live in their customer’s world, experiment with new possibilities and avoid complacency by making creative thought a habit, not something they do once a fortnight on a Friday afternoon. It must form part of an organisations “soul”. 


Disciplined entrepreneurship

12/08/2014

High growth companies are disproportionately innovative to those that are not, and whilst I believe creativity is the ultimate source of competitive advantage, I must caveat my views. The importance of embedding a culture to allow free thinking that stimulates new ideas is well documented. However, without control you end up with pet projects, loads of possibilities and hundreds of potential initiatives that absorb time, energy and resource. Large companies have processes to deal with their ideas pipeline, but in smaller high growth businesses the danger is that there is too much innovation and entrepreneurship and not enough control and discipline.

Commercial problems potentially loom when there is too much lateral thinking and lack of order. Jim Collins in Good to Great uses a very powerful phrase – “Disciplined Entrepreneurship”. This embraces the notion of balance – innovative thinking and behaviours being guided within a framework of performance measures and KPI’s.

Too much Discipline – then a disconnection with customers, markets and new possibilities takes place

Too much Entrepreneurial Flair – nothing gets done because everyone is bouncing off the walls with great ideas

Successful high growth companies tend to have a disciplined approach to new idea generation and implementation – a form of commercial filter. I often wonder how much smaller high growth companies can teach large corporates about innovative thinking and entrepreneurship. The reverse is also important – how can big companies help ambitious founders gain a better handle on their organisation? Feels like a powerful learning forum!


Strategic thinker and shopkeeper

29/01/2013

Every business needs strategic thinkers. They have an ability to look over the horizon and spot the next wave of opportunity. Great entrepreneurs, who are usually the visionary, do this by immersing themselves in the customers world, gaining an intimate understanding of current and future needs. They test new ideas in a controlled way, seek feedback and iterate until they get it right. In my view this is what innovation is all about – experimenting, trying, getting it wrong, refining ideas and eventually coming up with propositions that can be monetized. Be clear on how the ideas you develop will ultimately generate revenue. So many small businesses fall short in this area – too much innovation not enough focus on sales. Ideas are great but if they don’t add value or generate cash, then what’s the point.

This is where shopkeeper mindset is very important. Every company needs someone in the team with such a mentality. The classic British comedy Open All Hours with Ronnie Barker playing the archetypal corner shopkeeper Arkwright is something all entrepreneurs should be mindful of. A very simple approach to business – more should go in the till than goes out. So why do so many growing businesses lose sight of such a basic principle?

As a company grows, the monthly invoices get bigger month on month. This can lead to complacency and corresponding spend can get out of control – usually money wasted on bonkers marketing activities that deliver nothing but an empty wallet.

So what’s the lesson? Always stay grounded, think big, think strategically, live in the customers world…..but please don’t burn cash or waste it on silly ideas – PR that delivers no results, website advice that offers no added value, marketing fads that look great but fail to drive the sales engine….the list goes on…

Balance strategic thinking with shopkeeper thinking.


Beat yourself up

11/11/2012

Highly successful entrepreneurs have a strong tendency to be highly critical of themselves, very often more so than they are of others. Why? The strive; almost obsession of getting it right becomes a major driving force of the entrepreneurs mindset. Whether it’s giving great customer service, launching a new service or product, winning an order or raising that much needed finance, delivering positively is the only outcome. Failure to do so usually results in firstly, the onset of tourette’s and secondly, a period of self-flagellation and personal mental torture. Running and rerunning the series of events over and over again in our minds, dissecting every action with fine detail is a common trait of winners.

This is a healthy way of dealing with failure, it means that we care about getting it wrong, its got to be right, coming second does not pay the wages. Beating ourselves up in a controlled way is vital, however, when we fail – get over it, refocus and learn from what went wrong. The old cliché of fail fast and move on is extremely accurate, but one thing I would add is, fail fast and do it without emptying the till.

Controlled paranoia is an important leadership behavior. The moment you think you know it all, then you give rise to the seeds of complacency – what a danger zone you have entered into now! The resultant effect of complacent leadership is: reduced revenue, erosion of profits, poor customer service and retention, loss of new contracts, disconnection from the market, arrogance…the list goes on. One thing is for sure, complacency and loss of competitive advantage go hand in hand.

Go on, do your colleagues and customers a favour – beat yourself up!


Controlled Experiments – vital to innovation

07/11/2012

Fast growing companies are likely to be more innovative than those that exhibit a more pedestrian approach to life. Gazelles display an edge; this in turn makes them memorable within the market place therefore delivering enhanced customer connectivity. Innovation is more than research and development in its purest form; it’s about looking at everything you do through a different pair of glasses. Innovation spans a wide spectrum – office décor, staff development, strategic partnerships, the way you communicate and work with customers, financing your business, packaging of your products and services, IP and brands – this list goes on.

So many entrepreneurs ask me – how can we become more innovative? There is no switch or magic wand to turn it on. It’s about leadership and culture. Innovation comes from people and if you are the leader/founder it starts with you. Are you set in your ways? Do you avoid routine? Do you encourage people to take risk? Are staff encouraged to make suggestions? And do you listen to new thinking?

One of the best ways of driving innovation is through controlled experiments. Iterate, try out new ideas, test them and seek feedback from staff, customers and stakeholders. A little bit of courage goes a long way. The fear of failure or getting it wrong is such a powerful barrier to creativity and innovation. The word controlled is extremely important when you are exploring new possibilities. Don’t risk anything you can’t afford to lose. Small steps, nudging forward within a framework of good financial practice is key to unlocking new ideas with strong commercial potential. I have seen some real horror stories where entrepreneurs place everything they have at risk, personal assets, business brand and reputation – insanity not innovation.

Test your new ideas rather than talk about them – but tread carefully! A behavior of think, do and review goes a long way to creating a culture and habit of innovation. Get more controlled experiments going, it makes life, business and work far more exciting for all concerned.