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Home / Notes from Fusion Events Notes from Fusion EventsRenewables Investment: Inverness, 29 April 2008 Creating and Sustaining an Entrepreneurial Ecosystem Failure - learn from it, celebrate it, support the 'failed' entrepreneur, give credibility to these 'weird' people More women entrepreneurs would indicate a stronger system Seems to be a low level of ambition -few signs of global domination -probably need to take people out of the region and certainly need to plant an office in continental Europe if the entrepreneur is serious Building teams, selecting great people with great care, stimulating intense team work - the entrepreneur is a team (not an individual) Private /public partnership is strong and networks are strong There is no shortage of ideas, creativity and new science and technology -the weakensss is the building of teams to take them to market Metcalfe's Law - the usefulness of the network increases to the power of the numbers in the network; work at your networks Routes to market much easier through collaborations; collaboration is key The Highlands ecosystem has higher levels of entrepreneurship than perceived; those that are hidden would help if approached The UK cultural barriers are 'tall poppy' concept-the successful people are unapproachable; and fear of offending people if they were to be approached - solutions include getting them out to experience other cultures and being taken to rub shoulders and break down the barriers. A unique strength in the Scottish system is the Determined to Succeed programme in schools building the next generation but we need to do more to get entrepreneurs into schools and colleges.
People as Investment Finding the right people as a key investment for future success. The cost of getting it wrong can be 10 x the cost of the person's actual salary! Due diligence is therefore critical: the process needs to be sharp and efficient. The whole hiring process needs to be seen in a new and more rigorously controlled manner. Laura had 8 key characteristics for effective entrepreneurs; these were added to by the rest of the people around the table so this isn't Laura's original list. 1 Excellent communicators 2 Common sense in spades 3 Nose for a good/bed deal 4 Prepared to challenge the status quo 5 Be prepared to outsource the mechanical business functions early rather than get bogged down in it. 6 A quick learner/intelligent/high energy/ability to deliver 7 Integrity 8 High tolerance for risk and uncertainty 9 They are interested in wealth creation not for the money per se but for what it can actually do for them Money is used to 'keep score'....
An Entrepreneurial CEO needs to think like an investor An early start-up investor is looking for someone who is: highly passionate; coachable/capable of listening and asking for help; entrepreneur must lead the company; must be open to moving into different roles in order to learn. Does an investor look at the market or the team? Most investors look at the market first, then the people! Honesty is required when making difficult management decisions, firing non-performers (they usually know it's coming....) Different types of people are required at different stages of a company's lifecycle: the Mad Scientist plus the steady business person, both are required! Be aware that some venture capitalists sometimes don't have the right practical background in business management, no real operational experience.
Some Scottish companies 'sell out' before they reach the 'value' stage... Too soon? Lack of market knowledge prevents a fuller understanding of the potential size of the business. A company selling out and making £20 million in Silicon valley is a nobody, selling out and making £20million in the North of Scotland is a superstar...discuss...! Isolated entrepreneurs need other entrepreneurs - this is a major reason for failure, lack of network/lack of advice.
Building teams Hiring a 90 hour per week CEO in Scotland is difficult. How about a non-executive Chairman? Is there a phase where skill sets become insufficient? How and when to let go of the reins. Failure can be caused by the inability to let go. Hire Hard, Manage Easy! If it is difficult to find the right person within a small pool of talent move quickly outside the region!!!
Managing Recruiters. Treat a recruiter as a full time member of the team. Review the recruiters, reference the recruiters as you would a potential employee. Generate a focused recruitment process with a fully engaged recruiter. The deal with the recruiter might include equity but never agree to the recruiter's initial payment structure. Demand performance. Interviewing the Referee... Laura tries to find at least referees per applicant... Search deeply and as early as possible into the applicant's history and even family: this will begin to uncover key traits and behaviours and also begin to uncover new potential referees which may prove useful down the line.. TORC - Threat Of Reference Check: be aware of applicant responses and learn. Be fully engaged with the referee and dig deep!
FUSION/INVERNESS CHAMBER EVENT: SPOTTING NEW BUSINESS OPPORTUNITIES
(2) If you have a proven technology concept in one market your first step should be to look how that idea can be implemented for other markets. Workshop 2: Stewart Graham, Gaelforce Marine 1. Look for what people are buying - try to supply it yourself, but offering better value. 2. "Better value" doesn't HAVE to mean cheaper. "Local supplier" can also be a competitive advantage. 3. Once customers are buying from you, see what ELSE they are buying from other other people - and repeat the cycle. 4. As the business grows, a new approach to management will be required - more up-to-date and more sophisticated management information needed. 5. Instinct plays a role - but it's better when backed up by experience and information! 6. Avoid governments schemes such as those provided by DTI etc: there is no substitute for personally speaking to the people you want to sell tour. (Example: in the early days of Gaelforce Marine Stewart made a tour round the coastline of the UK, personally SELLING to everyone he met. He also did the equivalent when moving into international markets. Getting out there and "just doing it" is the only way.) 7. Review goals and strategies every 3-4 years - set ambitious goals. 8. The driver is hard to identify: in Stewart's case it's no longer financial; more a competitive streak that means he wants to achieve and win. 9. Challenge of staff recruitment in the Highlands: new employees rarely have all the required skills so need to be trained up on the job. However, this is offset by the fact that staff turnover is generally low. 10. Incentivise staff to help reach your goals: share schemes etc. 11. Be entirely transparent with staff re sales, costs, profitability, management incentives, even your own earnings - "if you can't justify it, you shouldn't be doing it". 12. An issue that arose in discussion was the need for succession planning - even when a management team is in place to handle the day-to-day running of a business, who will be out spotting new opportunities when you're no longer doing it yourself? 13. Some opportunities are just too good to miss so you have to go for them, even if they do not seem core to your business to date. An example is "Gaelforce Properties", Stewart's first foray outside the marine leisure sector. Workshop 3: David Newman, Plexus Media Meet people; try and have some impact so that people remember you. Opportunities can come forward from people interactions, and by making an impact you are likely to be remembered if opportunities present themselves at a future time. Listen; opportunities come from other people and situations, so active listening is a technique that can be used Business comes from business interactions, so maximize these as much as possible Recognise "eureka" moments in Daves case the idea of Spanglefish&..to give it away. In a sense this is counter-intuitive, but the key to success is the opportunity to sell in additional services and upgrades after the giveaway. Having recognized the "eureka" moment apply the usual good business principles Bridging the gap i. Get the necessary financing ii. Research know your market iii. Speak to people who you trust and respect to bounce/test/proof your ideas be prepared to listen iv. Identify the risk profile understand the implications Timing is important i. Some opportunities are good but too early ii. Establish the "potential" of an opportunities i.e. how long might this opportunity work 6months or 3yrs Try not to be too close to a topic See things in the round by asking questions and seeking input from others who might help or know something about the idea. CREATING A COMMUNITY OF SUPPORT AROUND YOUR BUSINESS: A facilitated dinner-discussion, Inverness, 20 February 2008 Notes /jottings from the meal 1. Each person at the table was asked If there was one thing you could have had when you had originally started out in business what would it have been? The responses included: Provision of a simple guide to funding for business in H&I A business buddy, somebody with a sensible head on their shoulders, somebody to either encourage you down a specific route or to tell you that your idea is insane, stop it!! A business buddy to offer confidence building A business buddy who has been there, seen it all, bought and sold the T-shirt..!a sponsor or best friend.. Public sector bodies offer advise but do not take any material risk unlike the entrepreneur who may be risking everything, a good buddy understands the difference The business buddy MUST be somebody who understands the risks involved intimately having been there.. A guide to approaching the banks, what should we ask and in what terms..? All agreed that the mechanics of running a business that is, reporting, accounts etc etc should be done by professionals it is money well spent and leaves the entrepreneur free to actually build and add value to the business Perhaps a sector specific list of people to talk to&similarly who are the contacts at HIE? 2. What is a Community of Support and some personal experiences? Family support is critical at all stages in the growth of a business and family members would be part of the learning process. Time MUST be made for family! Trusted partners should be identified, play to peoples strengths, pay for professional help in areas where there is weakness. Self belief can be strengthened with family and friends in support. Move away from mad family members& A fully functioning broadband facility is crucial Non-exec directors who can help with the paperwork Rent a non-exec for a few days& Get to know your bank manager and accountant, work out some form of umbrella commercial agreement which allows for regular phone calls at no additional charge. Make sure you understand what facilities are free and use them, dont be shy, take your accountant to lunch! Talk to people in other sectors, you never know what youll learn! If you are looking for investors dont just look nationally, take a look at the international investment options. For example try the Linkedin website -http://www.linkedin.com/ 3. Community of support features Openness to new ideas Talk about the good and the bad Must keep talking to people even the shortest of exchanges can be useful, maybe not immediately but you never know& Must not be shy, must be prepared to ask for help. Must get out and be noticed, tell a story, try and make sure you are remembered for something.. you are more than simply your business! Stretching out beyond Inverness or your own area for support Are different kinds of support required at different stages of a companies development/ 4. Different kinds of Support There are large numbers of semi-retired and retired people with vast amounts of knowledge and experience, try and find them. We must be careful to find the right people, they must be able to cast a dispassionate eye over your ideas and you must let them give you feedback&we must not be blinded by our own genius! A Good business buddy will help you to think more clearly A Good Coach can help you with the detail and offer options rather than sending you down the one route which they recommend. The should offer the pros and cons and leave the rest to you. Buddies can help you find the right trade shows/conferences/ exhibitions, make sure you get to know the speakers and try and speak to the event your self, get up there and sell yourself and your business.! Marketing expertise is critical and a wide net is required to find the right person 5. Use of Technology Use of the web for access to technical help. Try Forums of various kinds were seen as positive, discussion threads are useful Rather than asking everybody to get involved with every forum, targeting would be a more effective solution, to target specific clusters& A warning from the table, dont forget that you cant beet getting into your car and getting out and about, hit the trade shows& Accessing SDI can help you gain access to International Markets, http://www.sdi.co.uk/pages/index.asp?e=sdi.co.uk We at FUSION will be incorporating all of these positive and constructive thoughts as we move forward in identifying key elements of a community of support for entrepreneurs. In particular we will be looking at the different kinds of support that were highlighted and how we can best exploit some of the technology ideas expressed. WORKING IN PARTNERSHIP: A facilitated lunchtime discussion. Inverness, 8 February 2008 CONCLUSIONS: How do you find new people and partners? - "Network like fury", you must sell yourself, find people with the same values, work step by step to build up trust by doing what you say you are going to do and maintaining the values. How do you develop relationships? - Create clear expectations at the beginning. Don't just be nice - be honest, clear about each other's needs; be very open, ethical and honest about the difficulties; be flexible in resolving the difficulties; hide nothing. Contracts need to express these agreements. Don't shirk from negotiating the financials. Would a facilitator be useful in helping you reach agreement? (Fusion may be able to help here.) What contractual arrangements should be set up? - Views on this were polarised, with some participants emphasising the need for fully written agreements including severance options (more appropriate to overseas arrangements perhaps?), and others who strongly believed that deep relationships obviate the need for detailed agreements. A flow chart to clarify who does what was also considered helpful. How do you maintain relationships? - Keep considering future challenges together, never accept the status quo; frequent communication. Virtual communication may help: Base Camp or Groove. Allocation of Intellectual Assets - Agree right at the beginning. Again, there were two views - just share 50:50, or allocate in proportion to the degree of input. Where to go for advice in developing partnerships - There is no substitute for being able to discuss challenges with other entrepreneurs who have faced the same issues. Contacting Fusion with the request to be linked in this way would be the first step. Summary - CREATING AN INNOVATIVE CULTURE IN YOUR BUSINESS, Inverness , 23 January 2008 NOTES FROM WORKSHOPS: NB. Cairngorm Mountain and Synergie Scotland have both been working to create a culture that encourages innovation within the business; Aquascot have created a culture in their business that is innovative in the sense of being new and highly unusual. This difference in emphasis is reflected in the notes below, as is the fact that each set of notes was provided by a different attendee. CAIRNGORM MOUNTAIN'S APPROACH: Two aspects to Innovation: processes and products Processes: b Establish values early on - induction process c. Create lots of ways of collecting ideas d. Recognise that those at the shop floor often have the solutions e. Champion empowerment and the concept that every one can contribute - marketing meeting example f. Specific initiative with managers - Paul Sloane book on Innovative leadership - 2008 Managers' Challenge g. Recognise failures early - important h. Recognise the difference between a cock up and a self-adjusting cock up. Products: b. Identify USP - core product is the mountain c. Examples - weddings ( 14 in 2007) / corporate dining - both on and off site d. Not everything tried has worked - e.g. bike hire e. "National Centre for the Mountain Environment" - changes a potential threat (the risk of damaging a fragile environment) into an opportunity (the opportunity to protect it). __________________________ SYNERGIE SCOTLAND'S APPROACH Business Context Business intended to offset adversarial culture of construction industry and trying to move away from being just another project manager. The relationship with clients is more teamworking than contractual. Started with public sector building contracts and diversified into private sector clients and energy. Grown to 20 employees by 2008. Key Concepts for innovative culture
__________________________ AQUASCOT'S APPROACH: Wanted to create a sustainable, healthy working environment, though this rapidly extended beyond pure health to encompass general well-being as well. The aim was to create a working environment that everyone actively enjoyed being in, and to make Aquascot a great place to work. They recognised that partnership with the workforce - the entire workforce, not just salaried staff - was the only effective way to achieve this. A steering group of 10 people was established, with members from all departments and all levels of the company, to be responsible for driving and energising the process of cultural change. The first task was to consult with all staff to identify the key values they wanted to foster. This involved intensive consultation with all 120 employees in groups of 10 over a period of 3 days, and then a one-day staff conference with all employees. This was a huge undertaking, since it entailed a complete break in production, but the company decided it was worth doing, since it was essential that the values genuinely emerged from the workforce and were not imposed by management. The resulting values were: Commitment, Effective teamwork, Respect and Trust. These values were turned into behaviour in a variety of ways: the recruitment process - even for management posts - now gives more weight to people who demonstrated these values in their behaviour, rather than their skills and knowledge (which could be taught). Staff appraisals also focus on these 4 values: a 360 degree appraisal process has been introduced, whereby the members of a team all appraise one another specifically in terms of how their behaviour has reflected the values, and appraise their line manager on the same basis too. This has had a major impact on people's behaviour and, consequently, on the culture of the business. All staff get the opportunity to participate in a 2-day programme at Cadboll House. There is no pre-set agenda for these programmes and no management expectations. The groups simply enjoy two days where they can relax, enjoy themselves and do exercises to stimulate creative thinking. The programme includes plenty of opportunity for self-analysis, and participants then feed back to the group what they see as their strengths and opportunities for improvement. This is a totally confidential process and the results are not fed back to management. Each group contains 8 people and costs ?5k so it is a big investment in the staff, but one that has paid dividends in terms of staff feeling valued and empowered, and in creating a culture of trust and respect. As part of the new approach, senior management now clearly identify two separate types of meeting: Management Meetings, to deal with day-to-day issues, KPIs etc; and Leadership Meetings, for creating the vision and identifying new ways for self-development. Leadership meetings are non-hierarchical, with staff representatives fully involved. RESULTS: Overall the results have been dramatic: Staff turnover is approx 1.5% (compared with an industry average of 15-18%) Staff absence is also approx 1.5% (compared with an industry average of 10-12%) Given the beneficial effect of both these factors on productivity, it seems reasonable to attribute the company's doubling of turnover (from ?10-11m 3 years ago, to ?21m now) at least in part to the working culture that has been created. |
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