The launch of the Tomorrow’s Business Owners Report

Today, with Tomorrow’s Company, the IoD and Lord Young we launched the Tomorrow’s Business Owners report. Below is my speech introducing the report. Thank you to those who came.

“Thank you to Simon, to Lord Young and to Mark. It is a real privilege to be here to mark the end of the writing of this report and to begin the next path on the journey.

I used to think of myself as fast, entrepreneurial and decisive but in reflecting on what to say tonight I have realised that this report has been 18 years in the making, a year in the writing and 2 years in the launching. So, perhaps I should start to think of myself as determined and thorough! My wife would definitely say slow!

Tomorrow marks the 18th anniversary of when I met my first business partner, a journey which saw the creation of 2 businesses, over 80 jobs, rapid growth, the promise of riches and numerous disappointments. In our time together, we put over 400 candidates through NVQ qualifications, opened 8 health clubs, turned down an approach of £12m and 2 years later put the business in to administration.

After a year in, what I like to call “rehab” on an MBA at the Cranfield School of Management, the journey shifted. I joined Telos, a business committed to helping its clients create sustainable success, and one that had formed after the original Tomorrow’s Company enquiry by the RSA.

This not only provided me the opportunity to work with a rich variety of international global corporations, but it has also provided me the opportunity to work with over 500 ambitious business owners on growth programmes, helping them in the process but learning huge amounts along the way.

In 2010, as part of the celebration of the Telos’ 10th anniversary, we decided to capture the learning of our first 10 years.

Whilst other colleagues did this for our global clients, I chose to do this from the perspective of our work with ambitious business owners and in the process, we reconnected with Tomorrow’s Company.

When we set out on the journey to write the report, we were keen to understand and highlight what distinguished those who did from those that did not.

We interviewed people and ran numerous workshops. What began to emerge was a journey from inception to exit. These themes were developed and further evolved in more workshops and what seemed like an endless editorial process, thank you Pat and Jaishree for your help and patience.

The end result is a report that summarises the stories of hundreds of business owners and the essence of what it takes to create, establish and grow a successful business. It looks to describe the differentiators at each step along the way. It offers no answers but instead looks to challenge people to think longer-term and ask some important questions.

It is certainly very appropriate that the writing of this report symbolises the very essence of running, establishing and growing a business – it was a real rollercoaster, there were no short-cuts and it all took a lot longer than we thought!

So what of the journey?

The journey seems to pass along and through 7 key steps, so let me talk briefly about each of those.

Starting the journey
They say curiosity killed the cat but it seems that it makes the entrepreneur.

Of all the success stories that we have seen over the years there is one thing that connects the founding moment – it was born from a question rather than a dream.

Perhaps my most favourite story to illustrate this comes from a friend Eyal, who, on standing in a queue, papers in hand, applying for his visa to the UK, realised that his CV was the only thing that was never truly verified. It sparked a question, was it possible to verify the facts on a CV and provide a stamp of authority?

Ten years on, Verifile is now one of the most well-renowned employment background checking services within the UK.

Making it happen
A business doesn’t start the way it ends. The original idea always evolves. The vision at that start is often hazy. It is more of a direction or an energy than a clear picture of the end result.

In talking with Tristram Mayhew of Go-Ape, I have always been struck by the story he tells of going to the Forestry Commission, with this mad idea to get people to live more adventurously and swing through the trees! He was asking permission to run the first Go-Ape site in one of their forests and if it was successful, he wanted an exclusive deal on the next 5.

Their response? If you can make one successful, we want you to do it across all our forests. Out of the conversation popped a vision to have 40 sites across the UK!

It would appear that an open exploration of the question with others builds the energy and momentum required to help an idea take flight. Success appears to be borne from a process of solving small problems before taking on the bigger ones.

Maintaining a driving ambition
It is ambition, a strong sense of dissatisfaction with the current state combined with a belief that it can and must be better, that drives a business forward.

The process of running a business wears you down, your attitude to risk changes over the years, there comes a point when you have more to lose than win. We have met many businesses owners who have built successful businesses, only to stagnate because of these facts.

Those who master this task and push on seem to use life’s milestones to drive them on to the next level. In doing so, they find a way to maintain a youthful driving energy and combine it successfully with the wisdom of experience.

Take John Maxted’s example, who founded and grew Digby Morgan an HR recruitment consultancy which he sold to Vedior in 2008. He describes his business in two distinct phases, the hedonistic phase and the heritage phase. It was his 40th birthday that shifted his approach. Subsequently, it was his 50th birthday that marked the start of his exit process.

Each milestone fuelled his ambition further, he drew upon the experience gained and brought younger energy into the business to provide the drive that was required.

Building resilience to crises
Crises are inevitable in business, they also stimulate growth.

Creating personal and business resilience to these crises and learning to sail on the changing tide is critical to the achievement of continued growth.

Every successful business has stared disaster in the face. Early warning systems, the ability to confront brutal facts, and the courage to adapt are common to all the success stories that we have observed and seen.

Perhaps, none more so than Vivian Woodell of The Phone Co-op. Telecoms is a tough industry to start a business in, particularly if you are trying to do it through a different business model to the norm and starting from your own bedroom.

The fast changing environment and saturated industry has required the business to be innovative and adapt to the new challenges it faces. In recent years, it has continued to grow its phone and broadband business successfully, but has also begun the move into other utility growth products, for example solar panels and renewable energy.

In doing so, it has predicted future challenges before they have arisen, maintained a clear sense of purpose and values and continued to be entrepreneurial in its approach.

Learning to lead
Many business owners change the title on their business card as the business grows but very few manage to adopt the behaviours required for their new role.

Learning to act and behave as the MD, CEO or Chair of your own business is the most fundamental and challenging aspect of achieving success. It is like weaning yourself off the drugs of your previous role.

Perhaps our most prevalent successful example of this, is Sir Richard Branson. Love him or hate him, he has managed to extract himself from the business whilst maintaining a strong influence on the purpose, values and vision.

Very few can claim to have done the same to such effect.

Holding yourself to account
Owning, leading and governing your own business comes with a great responsibility. Behaving as a good steward is critical. The act of creating formal and informal ways to build accountability for thought, action and result is an absolute necessity.

Over the last 3 years, we have partnered with Kent Business School to provide intensive support to local businesses. Getting them to think longer-term, to write down their plans, to communicate and involve their staff, and to revisit and report on their actions.

Whilst, relatively early on it is journey, over the last year this approach has not only generated an average increase of 19% turnover and 13% employment, but it has also significantly increased people’s ambition and enhanced their leadership capabilities.

An added benefit has been to provide a stronger link with the university allowing the businesses to access the rich resources that sit within. Something I am sure Lord Young will be pleased to hear.

Much of these benefits have come from the simple process of having an outside sounding board that supports and challenges the thinking of the business owner.

So, on to our final theme.

Creating a successful exit
Of the business owners that we have met who have successfully sold their businesses, many are rich and unfulfilled. In their stories you sense an element regret and remorse.

For those who you don’t, it appears that they recognised it was the right time to go, they knew what they would do next and the transition was deliberately managed.

In a conversation with Richard Salvage, who sold his business Shield Medicare in 2006. He told me the story of turning down the original offer because he realised that he wasn’t ready to sell.

He spent the next few years, putting in place the team to run the business, incentivised them to work beyond the finish line of the exit and worked out what it was that he wanted to do next.

When he was ready, the offer on the table had significantly increased!

Perhaps exit should not be viewed as selling the business – perhaps it should be about creating options for the business to live out the founding principles and finding the right leadership and ownership for the next stage of growth.

The focus can then be on building a strong business, whilst exploring how and when the transition will take place.

For me, the essence of these seven steps highlights three key messages: the importance of purpose and the absolute clarity on why; the constant need to pass on the baton relinquishing control and empowering ownership within others; and, the ongoing requirement to answer the question what next?

It has been a rich and challenging journey to get here. We are forever grateful to all those business owners, who lent us their stories for the report and helped to create the toolkit.

Exploring the question has grown a stream of work for the SME practice of Telos Partners, one which is growing, currently supporting the growth of over 50 ambitious business owners, partnering with academic institutions, banks, accountants and solicitors to better support local businesses.

And we are taking on people ourselves, so the journey continues and is now focused on delivering and understanding impact.

Thank you for taking the time to come along today to find out more about the report. Thank you to all those at Telos and Tomorrow’s Company who helped. And thank you to the IoD and Lord Young for your support tonight.

Now, I’d like to hand you back to Simon.”