Building Scale-up Leadership Capacity

‘Leadership capacity’ is mentioned by many scale-up founders that I speak to as an area of need – it’s also identified by the Scale-up Institute as the 3rd most significant challenge that businesses they survey face. However, ‘leadership capacity’ means different things to different people. The challenges that I’ve heard fall into four main categories:

  1. “I can’t find peer-to-peer support networks that reflect my business interests and needs and I want to learn from others”
  2. “It’s difficult to find relevant, quality leadership training appropriate for scale-up leaders”
  3. Recruiting senior people into my business has been the number 1 challenge”
  4. “People tell me I need to engage with Non Exec Directors (NEDs) but I don’t know why or how”

The last of these four challenges has also been raised by support providers and incubator leaders across the region and this prompted me to look a little closer.

The need for NEDs

On Wednesday 6th December 2017, we brought together a small group of friends old and new for a workunch (a unique Briony-style blend of workshop and lunch). Together we explored the challenges and opportunities associated with development of an advisory group or more formal governing board and this blog shares the outputs.

I started the session by sharing some insights from the Scale-up Institute, according to their latest report, 65% of scaleups said that leadership development was “vital” or “very important.”

The Challenges

We spent some time exploring the challenges of engaging with NEDs. To help structure the groups thoughts, I provided a simple 5 stage ‘framework’ for the process of engaging with a Non Exec Director:

REALISE                RECRUIT               REFINE                  RETAIN                 RELEASE

We thought about the challenges from three perspectives:

  1. The NED themselves
  2. The support provider/incubator etc.
  3. The Scale-up business founder

I expected the challenges to be clustered in one section or another, or to at least show some pattern but my main observations from the process were that:

  • Working with NEDs has inherent challenges, particularly for the scale-up business founder
  • There is a lack of awareness and understanding of the value of NED support, they’re seen as an added expense and complication by some. Both founders and NEDs report concern about finding the right ‘fit’
  • When it comes to recruitment, clarity of expectations and role description on both sides is a sticking point. Along with a lack of awareness about the available opportunities and how to set up the right ‘package’ to attract an NED with the required skillset.
  • Like any other employee, a NED can benefit from metrics to shape their approach (depending how you run your business), however, this is too often overlooked in the case of an NED. However, metrics should be carefully considered as a NED’s value may be realised through longer term strength and resilience within the business rather than delivery against specific metrics.
  • Retention was more of a concern for founders and support organisations particularly in relation to the nature of the relationship and the ‘right’ length of tenure.
  • Release was something that’s too infrequently considered – having navigated the perils of recruitment, there seems to be a reticence to move on. However, this raises a concern of objectivity (“have they gone native?”) being one of my favoured quotes from the session suggesting that they are no longer adding the ‘objectivity’ that a NED should bring.

It was at this point in proceedings that we talked about good practice we’ve seen elsewhere including two paid-for models which are endorsed by the Scale-up Institute:

  1. The Supper Club – a 14-year-old membership community of founders and CEOs of high-growth businesses with average turnover of £18M and an ambition to grow. Members benefit from connections, support and specialist insights.
  2. The Platinum Group – bringing business founders together for regular events, meetings and ‘practice sharing.’

And a few examples that colleagues had first had experience of:

  1. Chairman recruitment bursary – a government scheme which supported the recruitment of chairman, a hurdle which encouraged business founders to recruit where perhaps otherwise it wouldn’t have been a priority.
  2. In Cornwall, Oxford Innovation offer a growth coaching programme. For those scaling fastest, they are bringing in non-execs to continue support. Endorses concept of NED.
  3. SETsquared offer the support of Entrepreneurs in Residence, Business Review Panels + Mock Boards to help founders experience the power of specialist support first hand.
  4. Executive Foundation offer membership community and event series to support leadership development and provide peer to peer support
  5. Chairman’s network – which is based in Gloucestershire and exists to address the business needs of Chairmen, CEO’s and Independent Directors in the SME sector.
  6. Threads is a small network in Bristol which offers regular facilitated discussion events based on specific themes/challenges identified by founders.

What could the West of England do to support Leadership Capacity?

For Founders

  • How can we engage more people with small peer to peer support groups? There’s great deal of value in a small group (max. 8) of founders meeting regularly, with some degree of facilitation, to share their challenges and ideas in a trusted space.
  • Can we create ‘action learning sets’ for groups of founders? Bringing together 6-8 founders with a couple of facilitators.
  • Can we better curate NED opportunities and facilitate recruitment? Perhaps by improving recruitment through a single list/bank of potential, validated NEDs? E.g. Those who have worked with 2 min. Bristol businesses; those who have completed xx training.

For NEDs:

  • Optimise effectiveness of existing boards? Helping to unpick issues they face. Better advertising available training and development opportunities for NEDs and for founders in this regard.
  • Develop a community of NEDs and build engagement of experienced NEDs with those who are less so. Building understanding of what it means to be an NED – helping increase the engagement

There are a growing number of scale-up leadership initiatives that are available in the West of England, you’ll find some listed in my last blog about Scale-up support Programmes and we’ll be sharing news of others at the forthcoming Scale-up Briefing on 7th March 2018 at 16:00. RSVP now if you’d like to find out more and learn from a seasoned Scale-up founder and theorist.

If you’re interested in supporting businesses as a Non Exec Director it’s worth approaching local support services like SETsquared incubator and Entrepreneurial Spark many of whom support founders in finding suitable advisors and setting up advisory boards – and later recruiting NEDs.

If you offer training or recruitment designed to help scale-up founders to overcome these challenges, and you’d like to be included on my ‘Ecosystem Map’ please get in touch.

This blog series tells the story of the Scale-up Enabler, Briony Phillips. Briony joined the Engine Shed team on a 1 year contract in June 2017 funded by Business West, Engine Shed, The University of Bristol and the West of England Growth Hub. This group have a shared ambition – first, to identify scale-up businesses in the West of England region and to better understand their challenges and second, to design, facilitate and support initiatives that will make it easier for businesses to scale-up more effectively – in the long term.

Links and information are correct as of February 2018.

Briony – Scale-up Enabler