roundtable: accelerating growth 55


keep very close to our suppliers, particularly through product training courses. We learn from them, but equally we feedback our suggestions to them.”


West said good practice and achievement was shared within Portal. “We sell social collaboration to others, but we also use social collaboration in our own business to communicate our achievements and improvements throughout the company.”


. . .and the value of walking into work feeling stupid


Heynen: “It is such a positive force for beneficial change and growth if you can get the culture right; where staff feel privileged to work in your business environment and know they will be listened to and can impact the future.”


Steer: “It’s about genuinely allowing people to show initiative and take an element of calculated risk in what they do. One of our core beliefs is to challenge the norm, not accept that ‘We’ve always done it that way’, but instead always aim to make the business the best that it can be.”


Disruptive thinking needs to achieve something that benefits your business, Heynen commented: “As human beings we all develop habits, and ways of doing things. At work we tend to do the same, but my company likes to encourage the ‘walk-in stupid’ attitude. Come into work as if it was your first day. Assume you know nothing. The challenge then is how to do what you need to do, but with a fresh purpose and in a different way.”


Should profit be THE key growth driver?


West felt turnover and profit were both good growth indicators, but less obvious factors that add business value and sustainability were more important. “Factors such as improving our technical competence, reputation and regard within


the market, long-term contracts, adding value for our customers, and selling solutions rather than products. Business value growth is a difficult one to KPI or put on our P&L, but I don’t mind if our turnover or profit reduces too much if I can see that we are progressing in these added value areas.”


Rogers said profit and turnover were obviously critical for M&A evaluation purposes, but agreed that other factors helped businesses differentiate themselves and establish the value of a business for prospective purchasers. “If there are seven similar houses for sale in a street, people look for the advantages of one against another.”


Gibson: “When it comes to M&A, such factors help create unique business values that can’t be replicated.”


David Murray


Rogers added that many companies should determine how big they wanted to grow. “A lot of businesses don’t go beyond £50-60m because they come to the end of their business lifecycle or the core competencies of their management. A good question is: ‘Who is the best owner of my business?”


Heynen: “Our company has a record of sustained growth spanning more than 65 years, so our challenge is to continue building on that, as well as delivering against our short and mid-term goals. Turnover and profit are both important, and that really means being focused on providing our sales team with the information, knowledge and resources that contribute towards that aim.”


Phillips highlighted profit margin erosion in his industry. “Nowadays we are running twice as fast to earn half as much profit. Everyone is into smarter buying today with technology, ‘me-too’ products, and stronger procurement teams pushing the prices down. Every customer wants a deal. No-one sells at their list price.”


Steer countered that JCA had grown its gross margin by 10% in the past three years, while achieving double-digit growth. “There are incredible downward pressures so you have to be focused on turnover. No matter how well you manage business costs and margins, unless you are pouring enough into the top there won’t be enough running through the business. Frankly, turnover has to be the principal driver, then margin management and profit can be addressed.”


Peter West THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER 12/JANUARY 13


Ironically, said Steer, JCA had run close to breaches of bank loan covenants purely because it was trying to invest in growing turnover within its business.


Is the Government succeeding as a growth facilitator?


Murray asked if the Government should “get more involved with business through schemes such as the Growth Accelerator, or should it get out of the way?”


Phillips: “There is too much politics coming from the Government. They see things as soundbites and headline grabbers, but they don’t deliver on what they have said. As businesses and SMEs we have got to stand on our own two feet and work with people who want to work with us. The Government has become too media-centric and often their publically stated policies don’t flow down to us SMEs.”


West was less scathing. “The Government has to try to keep doing something to help, but admittedly I have not seen many SMEs benefit from any Government grant or scheme.”


Heynen: “It’s far too simplistic for the Government to say it will remove all the red-tape. You have to understand what legislation is required to allow businesses to grow. If getting the economy growing is their No1 priority, they need to live up to that promise, and that’s not necessarily through monetary aid.”


The last word went to Holmes: “Having worked with several government initiatives over the years, I firmly believe this Growth Accelerator scheme is the best yet. It is focused on sustainable growth and companies that have the ability, commitment and management drive to achieve that growth. It is also supported by experienced high-calibre coaches who don’t get paid by the Government if they don’t reach objectives agreed and signed off by the participants.”


www.businessmag.co.uk


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