Nurturing the seeds of success

Nurturing the seeds of success

The issue: How can we support growth and enterprise across Yorkshire, helping local businesses maximise opportunities and achieve their ambitions?

Taking Part 230315Discussions began with delegates voicing their concerns about the issues holding back entrepreneurial success in Yorkshire.

Philip Bartey, who formerly held senior posts in the food and drink industry before getting involved in the third sector, questioned the often disjointed nature of funding schemes.
He said: “I think there’s a great need for levels of bureaucracy to be removed both at central and local government and to bring an end to the stop start process of funding. We need consistent levels of funding support to drive the regional economy forward.

“There are 13 local authorities in the Leeds City Region and nine in Sheffield City Region. My question is with all these local authorities fighting each other for a diminishing pot of funding from central government, is the system bust?”

Gavin Leverett, who oversees finances at a £60m+ turnover construction firm headquartered in Rotherham, suggested a lack of connectivity between regional businesses as a major challenge.

“We probably have our strongest order book for 10 years but virtually none of it is in this region. So we would like to see some way of finding more work in this area.”

Santander’s Barry Dillon pointed out that poor signposting to funding and finance was a common hindrance to emerging enterprises.

Young entrepreneur Lewis Bowen – creator of a fast-growing Sheffield-based gel fuels business – warned: “There is no vibrancy around the investment community in this region, especially in Sheffield. So how can we encourage that instead of having to go to London to seek investment?”

For Rob Moore, who works with businesses from a range of sectors across the region, succession issues within organisations are particularly concerning. He said: “At many SMEs, directors are getting to the point where they want to retire but the next generation of people are just not interested in becoming leaders of their businesses and generating growth.

Often people in their 20s and 30s are more interested in that work/ life balance. So how do we fire up the younger generation to actually want to go out there and be the risk takers that will generate the growth?”

Andy Tuscher said businesses needed more encouragement to invest in R&D.

Alastair MacColl, who runs business services firm BE Group and also chairs Teesside University’s board of governors, highlighted a lack of long-term planning among businesses as a threat to their success.

“What we don’t do well in this country is plan for the long term,” he said. “When it comes to creating industrial and commercial frameworks, we need to start doing it collaboratively to build a long term vision for the kind of economy we want to be. I don’t see that happening at the moment.”

Andy Tuscher agreed, explaining: “Things change parliament to parliament. As an example, it’s uncertain whether the next government will actually continue to invest in catapult centres [facilities aimed at turning ideas into commercial successes].

R&D tax credits are coming to an end, but are they going to be replaced? We just don’t know. How as an investor in a business can you plan ahead? How can you guarantee a five-year cycle or invest in a new plant in the UK if you don’t know whether the return on investment is going to happen because interest rates are going to spike or the tax landscape is going to change?

At EEF we are constantly pushing to get ministers and senior civil servants to look at UK plc with a long term view, rather than just chasing votes.”

Julie Kenny suggested that local enterprise partnerships (LEPs) would also benefit from longer term clarity around government policy.

As would free business support initiatives like Business Sheffield, according to Matthew Sibley, who said annual budgets for publicly-backed schemes were often not confirmed until the last quarter of each year.  

Andy Tuscher: “We need to have stability in what we’re doing. Labour has committed to LEPs, which is great, but Conservatives and Lib Dems seem very much to have devolution on the agenda with combined authorities and city regions. It just seems like a whirlwind out there at the moment. If we in the know [in business support] are unsure about what’s going on how can businesses deal with it?”

Julie Kenny: “Publicly-backed initiatives should be able to commit for more than a year ahead. It’s shocking that staff are put in a position that three months before their contracts are due to expire they don’t know what their future is.”

Moving away from talk of funding schemes, Kevan Bingham – whose engineering firm works in a diverse mix of sectors including rail, subsea and steel – focused on how businesses might better help each other to succeed.

He said: “How do we get businesses together and networking when often they are just too busy surviving. We are based in Sheffield and we subcontract things outside of Yorkshire, but there is probably someone in Sheffield that could do the work. We are so insular because we have our noses to the grindstone.”

Gavin Leverett: “I think one of Sheffield City Region’s problems is that we are maybe a little bit too inward-looking and we need to be a bit more expansive. Leeds seems much more cosmopolitan and outward facing.”

Andy Tuscher, referring to his board position at a further education college, said: “We are doing a £12m rebuild of the college and we struggled to get a Yorkshire-based company to apply to do the work. We put it out to our whole network and the response was woeful.”

Lewis Bowen pointed out that poor understanding of the internet might be a contributor to such problems. He said: “When we were starting up the challenge for us was that we had nine suppliers who were all within a 30-mile radius, but none of them had an online presence.

It involved going to back rooms and asking around. Nobody knows what anyone else does and I’ve honestly been to businesses where they’ve said ‘what’s a website? Can we send you a fax? We don’t have email’. It’s shocking.

Leeds is quite vibrant in terms of digital and communications but in this area of South Yorkshire, we should be getting everybody online and communicating what they do and shouting about it.”

Andy Hanselman: “Don’t you think if somebody hasn’t been convinced by the power of the internet by now they never will be? You can have all the digital initiatives in the world, but some businesses will still say they don’t need it.”

At the same time, some businesses are overly reliant on the web and missing out on the opportunities of face-to-face networking, according to Julie Kenny.

She said: “In the digital age you can find out what you want by just asking the internet a question – and that’s what youngsters do. So how do you actually get youngsters to learn the art of communication and actually go out to meet people? It’s really important for younger people to meet more established entrepreneurs to learn from them.”

Andy Hanselman explained that his consultancy runs a networking group called Next Generation Sheffield that regularly brings young entrepreneurs together to network. “We have 50 or 60 people meeting up and there are probably three generations of entrepreneurs there. They can ask questions and share stories and find ways around challenges, such as the fear of going to a lawyer, for example.

Live Debate 230315 02

What we’ve found is that a lot of people go to networks and come back and say it wasn’t for them. They felt too young, they were patronised or maybe they were scared of going to professional established networks.

We’ve tried to create something about learning and to create a framework to get that advice across.”

Next, Alastair MacColl underlined how the sharing of supply chain opportunities had the potential to accelerate business growth. He referenced NDI (Northern Defence Industries), a support organisation formerly operated by BE Group and now under EEF’s control.

He said: “It specialises in aerospace defence and security and spots supply chain opportunities for its members. If you think of the subsea sector, for example, how do you get advanced warning of all the opportunities coming down the line?”

Andy Tuscher: “NDI helped something like £450m worth of orders reach the SME supply base. So we want to learn lessons from NDI and expand it out into the wider supply base and we’ll be doing a number of networking events around the region.”

Andrew Sale then explained further education’s role in bolstering business success and the importance of the private sector and education working more closely together. “As a college we are nationally recognised. We are still the largest enterprise academy in the country and we are a leading light in that area, to the point that other colleges come to us for support.

We will also soon become the first college to have academy status with SFEDI, the UK’s only dedicated awarding organisation for enterprise and entrepreneurship. Sheffield is also held up as a beacon in terms of young entrepreneurs and the enterprise pipeline. So we are pretty good at what we do in Sheffield.

“The worrying thing when I look at statistics is how many business start-ups we have, then how many business deaths we have, and the two more or less knock each other out. So we are trying to work on business survival and how we can improve that. Obviously our job is education so we will be about qualifications but we are trying to make this as flexible as possible. So how we can help businesses to survive is key.”

Philip Bartey then reminded delegates that: “We shouldn’t look at the world in an unbalanced way and think that the only people who are going to start businesses are people with qualifications.

You only have to look at Richard Branson and Alan Sugar [both non-graduates].“Many of the disabled people I work with don’t have qualifications but they want to work. They are very skilled and if you can tap into that talented resource and find a different way of getting them to the market and into employment, these are some of our future business leaders.”

But Rob Moore pointed out that encouraging more entrepreneurial success may require a shift in the mindset of young people. He said: “Part of the problem I see is that we work more hours than anywhere else in Europe; we work stupid hours. People question whether they really want that? Do they really want to be a slave to their desk all day?

There’s been a real reaction to that and the rise of this work/life balance. People would rather go to work do a decent job but also have a life. So how do we actually create an environment where we can get the next generation to be prepared to work as hard as we have to get where we are? But also to protect this work/life balance which is so important for them now? I don’t know what the answer is to that.”

Lewis Bowen: “I think it would be dangerous to tell everybody to start their own business, as we’d have a country of failed businesses.  But I think we need to create a balance of people that want to lead a business that other people want to work for, perhaps those who don’t want to work long hours.”

Liz Pickering suggested that entrepreneurial mentors could help achieve that.

Julie Kenny: “Why don’t more entrepreneurs help those earlier on in the journey?”

Gavin Leverett: “Mentoring within organisations is also a no-brainer because you get better qualified people who want to stay with you because you are investing in them. So why wouldn’t you do it?”

Lisa Leighton: “Our business relies on us having responsibility to train people. We bring them in at the bottom, rather than higher up, because we believe in growing our own.”

Rob Moore: “It’s a continuous educational process. In our organisation it doesn’t matter what level you’re at, we’re all continually being trained and mentored. It’s not just about giving people the skills to do the job, it’s about making more rounded business people.”

Andy Tuscher: “You’re in a regulated service industry, so you have to do that. In manufacturing we are trying to encourage more and more firms to do apprenticeships. But the biggest issue is that they are threatened by the big boys. They know if they train somebody up that’s going to be good, they’re going to be poached and go with one of the big boys. Siemens had 1,000 applicants for one job in Hull recently, for example.”

Julie Kenny: “There was one particular guy in my business that wanted a degree and I knew that he would use it in order to leave in the future. But I had an agreement that I would pay for his training, and if he left within two years of completing it, he would pay me back proportionately. So I knew that if I committed to him I would either have him for two years at the end of the training, or for four.  If you’re employing good people, it’s fantastic to know you’ve got somebody for four years.”

Andy Tuscher: “One business I know had a KPI [key performance indicator] that they would lose two people per year through professional development. They knew they didn’t have the opportunities within the business for career enhancement. But they also knew they were on the up and in a few years would have more higher paid roles.”

Meanwhile, apprentices have served Alastair MacColl’s business well recently. He said: “Last year we took on our first two apprentices and it’s been a revelation. We took them on at 17 and, as well as being good at what they do, they’ve actually been a breath of fresh air. They approach things with a different mindset and ask questions more senior staff might not. Now we’ve committed to taking on apprentices every year.”

Julie Kenny has had similarly positive results through the work experience system: “I had someone on eight weeks work experience recently and ended up giving them a job. Work experience and internships allow you to try before you buy and make sense.”

Bringing talented graduates into businesses can also reap rewards. But, said Jonathan Thompson, post-university recruitment is fraught with challenges. “Why is there a default amongst graduates that they want to work in a blue-chip organisation? Why do people leave SMEs to join blue-chip businesses? Is there a negative perception about SMEs?”

Julie Kenny: “Actually some of my longest serving people have left and come back. You never shut your door because when people come back they’ve learnt new skills and what’s good about your business, so they come back more committed.”

Lisa Leighton: “They realise the grass isn’t always greener.”

Philip Bartey: “I promoted a social care support worker who left Sheffield Hallam University, couldn’t get a job in his chosen profession and came to us as a support worker.

“I saw the potential in him, promoted him and he gradually worked his way up in the business and left me as director of development and joined my old employer Leonard Cheshire as head of business development. So that’s an example of a person worth investing in to bring them along. It brings benefits to your business and when they leave they say nice things about your business.”

Large ImageMatthew Sibley: “We’ve said a lot about training and skills below executive level. But what about what you’re missing yourself. How do you know when it’s time to say you need help and get a consultant in for example?

“I find it very a macho thing, whether owner managers are male or female, to not want to talk about having a consultant. It’s a very difficult thing to overcome to say ‘I’ve had people come in to help me’. People who own businesses are very averse to the idea that they can ask for help.”

Kevan Bingham: “I think there is a confidence issue for business leaders, especially in my sector if you’ve worked up from the craft. I’ve just finished a Goldman Sachs programme in Leeds, working with 24 other business owners and MDs.

I went for the interview and I was thinking ‘these people are better than me’.” But the move paid off for Kevan, he explained, and he now also benefits from a business mentor.

He said: “The more I deal with him and the more I’m in a debate with him, the more it becomes a partnership. Having people come into your business and opening up to them is massive.”

The debate’s focus turned to the challenges of longer term sector skills shortages and how they might be overcome to help businesses succeed.

Kevan Bingham explained that his firm’s skilled workers are predominantly in the 50+ bracket, with a dearth in experienced younger people suitable for his business. At the same time, he is reluctant to put 16-year-olds on the shop floor due to safety issues, despite the pressing need for newly skilled staff.

Meanwhile, in the battle to survive and thrive in a business, there is little time to focus on plugging long-term skills issues, as Barry Dillon highlighted: “If you think of an SME’s long list of priorities on a day-to-day basis, where does that skills training and succession planning agenda fit? And is it too late when an SME realises that actually there is a gap there that needs to be filled?”

Julie Kenny: “You have to create new people within your business because new people will see you through. I chair an academy that feeds my factory, and that’s the kind of relationship you want to create. It suits you and lets others know that you’ve got a future.

“Apprentices have been my best people. The longest serving member of staff has been with me 28 years and joined me as an apprentice at 16. In the past I tried to engage schools and they wouldn’t talk to me, but today they will because they are judged on destinations of where kids end up.”

Andrew Sale: “Colleges are also now judged on outcomes and are desperate to get more links with businesses.”

Andy Tuscher added that University Technical Colleges (UTCs), which teach technical and scientific subjects to 14 to 18-year-olds, will also have an important role to play in tackling skills shortages. “There’s a very good one in Sheffield and, although there are only 150 young people per year group, what they are finding is that the surrounding schools are having to get their acts together and invest because the UTC’s are taking the best students. So they are a catalyst for skills improvement in the surrounding area.”

Lewis Bowen: “But it has to be in your strategy to keep people in the business, as well as bringing new talent through. When you are 16 you aren’t really planning your career at that point and you just want to be excited about what you’re doing. So it’s up to the businesses to create that excitement for someone coming in.

Every business should be giving young people the choice and opportunity to do some kind of work experience that gives them a project because if they don’t it’s boring. Filling out paperwork and making teas and coffees is not an apprenticeship.”

Jonathan Thompson explained that Santander has a network of university partnerships across the UK which funds internships into local SMEs. He added: “One of the most exciting things I get to do is site visits of manufacturing and engineering businesses and that environment is something that young people don’t normally get exposed to.

It’s fantastic for businesses to open their doors and let younger people touch and feel processes in action.”

Moving on from the issue of workforce skills, Philip Bartey said an element of calculated risk-taking was usually at the heart of business success. His organisation, Autism Plus Ltd, is itself involved with a number of entrepreneurial ventures including a chocolate factory in North Yorkshire and a classic car rental business for visitors to James Herriot country.

“A lot of the growth is coming from the SMEs across the region that are taking risks. Many of them might be micro but there are a lot of them here in Yorkshire and Humber,” he said.

One such risk taker, Lewis Bowen, agreed that giving businesses the encouragement and support to take calculated risks is essential to the long term health of the regional economy.

He said: “We’ve nearly been bust three times in three years, but we’ve also done very well in three years. In terms of risk taking I think we need more people in this area, especially in Sheffield, investing as angels because other finance streams aren’t always the best route for start-ups. Also, people who have great ideas need to know where to go if there is investment available as actually it’s quite hard to find.”

Julie Kenny, a board member of Sheffield City Region LEP, said: “At the LEP we’re creating an access to finance hub from April. I’ve been chairing this and bringing together banks, professional advisers, accountants, lawyers and so on to provide that service.

We hope small businesses within the city region could come to us and say ‘this is my problem can you help me?’ We want experts in finance to be able to advise you on where best to go, whether that’s equity, loans, grants or bank funding.

“We have to encourage and make available that kind of advice and assistance to companies and create the right infrastructure for them to succeed.”