M&N Business Leader Magazine: Issue 11 by Business Leader magazine

Midlands & North Edition

Issue 11: Nov - Dec 2019

Has the business world finally woken up? BLM talks to Jo Fairley â&#x20AC;&#x201C; Co-Founder of Green & Black's - about why it pays to be sustainable in business

What's behind the WeWork crisis? Page 8

What are the challenges facing tech companies looking to scale? Page 20

Should business leaders speak more on public issues? Page 40

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FROM THE EDITOR

40 54

20 36 44

Contents IN THIS EDITION 2

Latest News Breaking business news from around the region and UK

Agenda: WeWork Crisis What is behind the WeWork crisis?

10 Cover Story: Jo Fairley Green & Black’s Co-Founder talks about her business journey and the challenges she faced in scaling the business

FINANCE 14 Feature: Pitching for Investment What are investors really looking for when being pitched? 18 Report: Clean Air Would businesses back employees to go smoke free?

GROWTH 20 Debate: Technology What are the challenges facing tech companies looking to scale? Business Leader - Inspire • Inform • Connect

BUSINESS LEADER VISION: INSPIRE

26 Fast-Track: Brightpearl Meet the multi-national retail software firm that looks set to dominate the market 28 Growth: International Trade How to launch your business in South Africa 34 Review: Stewart Golf Business Leader Launches the Stewart Golf X9 Follow

ECONOMY, POLITICS & MARKET 36 Report: Chinese Investment What do Chinese investors really think of Brexit?

INFORM

CONNECT

HR 46 Feature: Technology in the Workplace BLM looks into the true impact of technology on our working lives 50 Interview: Jens Nordfält Global retail guru talks to BLM about the future for the retail sector

REGIONAL FOCUS 54 Manchester: MediaCityUK How has the development changed Greater Manchester?

LEADERSHIP 40 Feature: Reputation Managment Should business leaders speak more on public issues? 44 Interview: CEO in Focus BLM talks to Craig Unsworth of Upgrade Pack about his plans for the company 1

LATEST NEWS

Ascot Group first company in town to install dedicated EV station Inspire • Inform • Connect EDITORIAL Oli Ballard - Editor E: editor@businessleader.co.uk Barney Cotton - Assistant Editor E: barney.cotton@businessleader.co.uk DESIGN/PRODUCTION Adam Whittaker - Senior Designer E: adam.whittaker@businessleader.co.uk Melissa Larkin - Website Development E: melissa.larkin@businessleader.co.uk SALES Sam Clark - Business Development Manager E: sam.clark@businessleader.co.uk Emma Filby - Business Development Manager E: emma.filby@businessleader.co.uk CIRCULATION Adrian Warburton - Circulation Manager E: adrian.warburton@businessleader.co.uk ACCOUNTS Jo Meredith - Finance Manager E: joanne.meredith@businessleader.co.uk MANAGING DIRECTOR Andrew Scott - Managing Director E: andrew@businessleader.co.uk

No part of Business Leader Magazine may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior written consent of the editor. Business Leader magazine will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the print process, images can be subject to colour variation of up to 15%, therefore Business Leader Magazine cannot be held responsible for such variations.

If you would like to get involved or have any news you would like to share, please contact us on 020 3096 0020 or email: editor@businessleader.co.uk. Follow us on social media

The Ascot Group is leading the way when it comes to tackling air pollution by becoming the first company in Weston-Super-Mare to install a dedicated Electric Vehicle (EV) charging station. The company had the full-stack charging station installed in the car park of its south west headquarters and North Somerset Council’s only approved EVCP installer confirmed that it is the first company in the town to install a dedicated EV station. Andrew Scott, Ascot Group CEO, said: “We have always taken our corporate responsibility very seriously and are committed to the environment and sustainability. “Electric vehicles are integral to tackling the air pollution issues facing the UK.

“More and more people are turning to electric vehicles, with more than 4000 per week being registered in the UK alone, and our dedicated charging station is ideal for customer use.”

Europa starts work on £60m logistics project Work has started on Europa Worldwide Group’s new £60m, future-proofed 715,000 sq. ft. state-of-the-art logistics facility. Based at Midlands Logistics Park in Corby, the scheme is due for completion in June 2020. Europa Worldwide Group is an independent logistics operator with five divisions – Road, Air & Sea, Showfreight, Warehouse and its newly acquired Europa Contact Centre – and the new Corby site will become Europa’s largest facility in the UK.

Award-Winning Legal Advisers to Regional Businesses 2

“They are better for the environment, providing less pollution and renewable energy, while reduced harmful exhaust emissions means better air quality, which is good news for our health.

Andrew Baxter, Managing Director at Europa Worldwide Group said: “We’re delighted to announce this huge investment in our logistics operation at a time of massive growth at Europa.”

0117 925 2020 vwv.co.uk Issue 11: November - December 2019

SALFORD BUSINESS SCHOOL In partnership with industry

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CASTLE BUSINESS FINANCE – PROUD TO CELEBRATE THE SUCCESS OF GREAT SMALL BUSINESSES Castle Business Finance is proud to have recognised the achievements of some of the best of the South West’s small businesses by sponsoring the Business of the Year Award (1-10 employees) at this year’s Business Leader awards. With experience of building businesses from scratch into multi-million pound entities, Castle Chief Executive Jeremy Coombes is a champion of recognising and supporting potential. He says the winners of the category, Aquarian Cladding, who have taken the title for two consecutive years, have all the hallmarks of a winning company. “Entrants had to show sustained year-on-year growth and profitability, evidence of a strong business plan and future forecasts, and robust plans for staff development,” says Jeremy. “Aquarian Cladding demonstrated that they have the commitment to invest in their staff, the community, their IT systems and product testing, whilst still managing to achieve year on year growth with very impressive levels of profitability.” Castle Business Finance are specialists in providing bespoke funding solutions to SMEs and lend across a varied cross-section of businesses, with manufacturing, wholesale, haulage and recruitment already proving to be key sectors. They are known for their common sense approach to lending, with decisions often taken within a matter of hours by a qualified decision maker looking at each opportunity, and funds released swiftly.

Jeremy Coombes says the awards are an effective way of showing that the South West region is a force to be reckoned with. “As a company based in Portishead, Castle Business Finance engages with many young, growing companies, and with a senior team that has a combined wealth of close on 60 years’ experience in the business, we understand the challenges that smaller businesses may have to face. “In our experience, the South West has many small businesses that have the potential for great things, and we were delighted that a company of Aquarian Cladding’s calibre were selected as winners of this award.” Almost 600 guests including CEOs, VIPs, business leaders and professionals attended the black-tie event at Ashton Gate Stadium in Bristol, which featured a champagne reception, gala dinner, awards presentation and charity casino. The winners were presented with their awards by Michael Portillo. To find out more about invoice and trade finance, visit Castle’s new website at www.castlebusinessfinance.com or call 01275 390 665.

Jaguar Land Rover unveils advanced product creation centre Jaguar Land Rover has unveiled new facilities at its Gaydon site in Warwickshire, creating one of the UK’s most sustainable non-domestic buildings and the country’s largest automotive creation and development centre. The Gaydon site forms part of Jaguar Land Rover’s Destination Zero mission; an ambition to make societies safer and healthier, and the environment cleaner. The company’s focus is on achieving a future of zero emissions, zero accidents and zero congestion – across its facilities, and through its products and services. Gaydon is home to almost 13,000 highlyskilled engineers and designers, who are developing the current and next-generation Jaguar and Land Rover vehicles. The centre is also creating future autonomous, connected, electrified and shared mobility technologies that will enable Jaguar Land Rover’s long-term, sustainable growth. Sir Ralf Speth, Chief Executive Officer, commented: “At Jaguar Land Rover, we not only participate – we are shaping future mobility. Our vision is for a world in which zero-emission vehicles, public transport and self-driving pods will form one smart integrated and networked transport system.”

Issue 11: November - December 2019

LATEST NEWS

Birmingham's Jewellery Quarter set for new £125m development

UK Government ends support for fracking Plans to transform the four-acre AE Harris industrial site in the Jewellery Quarter into a major residential-led, mixed-use scheme have been given the go-ahead by Birmingham City Council. Joint venture partners Galliard Homes and Apsley House Capital plan to create a new neighbourhood called St Paul’s Quarter. Designed by Glenn Howells Architects, the £125m scheme, which is bounded by Newhall Street, Graham Street, Brook Street, James Street and Northwood Street, will comprise 305 apartments – including lofts and duplexes - and circa 100,000 sq. ft. of commercial space, including affordable business and retail space, across 20 buildings, as well as new public realm. Stephen Conway, Executive Chairman of Galliard Homes, said: “The Jewellery Quarter’s historic buildings give the area its special character. Galliard has a track record of restoring listed buildings across London and we are looking forward to bringing this experience to Birmingham.”

Fracking will not be allowed to proceed in England, the government has announced, following the publication of new scientific analysis. Ministers took the decision on the basis of a report by the Oil and Gas Authority (OGA), which found that it is not currently possible to accurately predict the probability or magnitude of earthquakes linked to fracking operations. Fracking already takes place across the world including in the US, Canada and Argentina. However, exploratory work to determine whether shale could be a new domestic energy source, delivering benefits for our economy and energy security, has now been paused – unless and until further evidence is provided that it can be carried out safely here. On the basis of the disturbance caused to residents living near Cuadrilla’s Preston New Road site in Lancashire and this latest scientific analysis, the government has announced a moratorium on fracking until compelling new evidence is provided.

New £20m Silverstone Circuit museum set to open A new £20m museum dedicated to the history of British motorsport has opened at Silverstone Circuit in Northamptonshire. Visitors can expect to learn about the science behind some of Britain's most famous race cars and bikes, as well as reliving some of the circuit's most famous moments. Sally Reynolds, Chief Executive of Silverstone Heritage said: “Creating a home to tell the historic story of Silverstone was first discussed by the BRDC as long ago as 1971, so I am immensely proud to see this seven-year long project come to fruition.” Silverstone Heritage was granted £9.1m by The National Lottery Heritage Fund and received loans from South Northamptonshire Council, Aylesbury Vale District Council and Buckinghamshire County Council for the scheme.

Business Leader - Inspire • Inform • Connect

LATEST NEWS

England international Chris Smalling invests in Ananas Anam AS Roma (on loan from Manchester United) and England International footballer Chris Smalling have announced an investment into Ananas Anam, acquiring a stake in the company that manufactures and sells Piñatex – a natural, non-woven material made from pineapple leaf fibre which can be used as a sustainable alternative to leather and petroleum-based textiles. Smalling comments: "To be a part of a movement that is making conscious positive steps to benefit the environment is hugely rewarding. Ananas Anam is already making noise in the fashion and upholstery industries and I hope to utilise my brand and my platforms to compliment and accelerate company growth. I’m excited to be a part of the journey."

City football group announces global partnership with Cisco City Football Group (CFG) has announced a new global multi-year partnership with Cisco, a worldwide technology firm, focused on using technology to drive innovation, enhance connectivity for clubs, players and fans, and positively impact people and communities around the world through sport. With the agreement, Cisco will become an Official Technology Partner for five CFG clubs; Premier League champions Manchester City, New York City FC, Melbourne City FC, Yokohama F. Marinos and Sichuan Jiuniu FC, including the women’s teams of Manchester City and Melbourne City FC. Damian Willoughby, Senior Vice President of Partnership at City Football Group, said: “We are delighted to announce this new partnership with Cisco which will span four continents across the City Football Group network. CFG is an organisation built on people and we are excited to embrace Cisco’s technologies to better connect our clubs, players and fans across the world.”

Bentley announce intake of 93 trainees As Bentley Motors celebrates its centenary year, the company has welcomed the next generation, by employing 93 trainees. The new recruits, consisting of apprentices, undergraduates and graduates, will be working across different areas of the business. This includes commercial areas such as Sales and Marketing, People and Digital, Finance and Purchasing, Engineering and Manufacturing. Dr. Astrid Fontaine, Member of the Board for People, Digitalisation and IT, said: “This has quite rightly been a year of celebration, marking the extraordinary achievements this company has made over 100 years, however now is the time to look ahead. The industry is changing faster than ever and so recruiting the engineers, designers, marketeers and digital leaders of the future will be a key part in achieving our objective of becoming the leader in sustainable luxury mobility.” 6

Issue 11: November - December 2019

ADVERTORIAL BARCLAYS

How are Barclays supporting John Anthony? BLM recently sat down with Mark Brewer, Director at John Anthony (Swindon) Ltd, to talk about how they established themselves as a fashion brand in the South West, the challenges facing the retail sector, and how Barclays have helped the business.

Can you give me an overview of the company? John Anthony was first established in 1979, the founders, John and Joe, were involved in the hospitality industry but wanted to be more involved in fashion. They established their first shop in Swindon by providing men’s fashion at a reasonable price that was a cut above the usual run-of-the-mill high street clothing that was available at the time. From there on they embarked on an expansion process over a number of years, culminating in five shops located in the South West. How has the company changed over the last 40 years? In the first instance, the ownership has changed from the previous owners, with an agreed internal take-over with three of the original employees that had worked in different parts of the company. These three individuals were selected for their experience and dedication. We are also now one of the largest independent men’s fashion companies in the UK. The internet has also been a major player in the evolution in the company, whereby 15% of our sales are achieved online. How have you established yourself in the South West and what sets you apart from other outlets? Our initial store was in Swindon and then

expanded to Bristol, followed by stores in Bath, Bournemouth and Southampton. We felt the towns in question had a need for our take on fashion and had the capacity to sell the brands we had. With this and our outstanding customer service, we have achieved repeat sales and have a customer loyalty card that offers rewards, this gives us a lot of repeat order sales with a very loyal customer base. We also endeavour to be part of the community where we have stores, by supporting charities and other good causes. What are the main challenges facing the retail sector? Brexit has taken its toll on the retail industry. Due to the political uncertainty it has been very difficult to plan any expansion of the business – we don’t know if tariffs will be put in place or whether the country could face a recession. With a number of our brands coming from Europe, the Euro exchange rate has a big part to play in this as well. Also, business rates and rents need to be addressed as they have become a burden on the high street for small and medium sized companies. The internet has also affected our footfall into our bricks and mortar outlets – as the internet is price driven, other companies are discounting or promoting online constantly, affecting margins – so with low margins,

high rates and Brexit uncertainty we have a lot of challenges to deal with going forward. How have Barclays helped the business? The Barclays' team support and commercial knowledge has helped us move the company forward. They have also aided us on our day to day banking requirements, such as introducing Barclays Collect. They have introduced us to other local business owners, enabling us to share ideas and methods. We now use Barclays BARX platform and have a dedicated FX trader, who have visited our offices to provide advice. This helps us monitor and trade in Euro, which enables us to plan better and reduce some of our exposure to currency fluctuations. Have they been a vital business partner? Barclays provided support and guidance throughout the management buyout process. Our Barclays Relationship Director, Martin Crook's knowledge of the business and sector greatly helped over this period. Martin and his team have continued to provide good advice on our ideas, with a commercial approach which has helped us achieve a good level of growth in a changeling retail environment. John Anthony (Swindon) Ltd Email: help@john-anthony.com Call: +44 (0)1761 435833

To find out more about how we can help your business success please contact Martin Crook, Relationship Director: Mobile: +44(0)7920 266032 Email: martin.crook3@barclays.com

www.barclayscorporate.com

Barclays Bank PLC is registered in England (Company No. 1026167) with its registered office at 1 Churchill Place, London E14 5HP. Barclays Bank PLC is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority (Financial Services Register No. 122702) and the Prudential Regulation Authority. Barclays is a trading name and trade mark of Barclays PLC and its subsidiaries November 2019 + Please note: this is a mobile phone number and calls will be charged in accordance with your mobile tariff.

Business Leader - Inspire • Inform • Connect

AGENDA

What is behind the WeWork crisis? BLM investigates the recent challenges WeWork has been facing and also explores the topic of company valuations

Article written by Patricia Cullen Unveils IPO documents to go public

he cautionary saga of WeWork involves a combination of corporate failures and a tenacious CEO who, in the face of conflict, jumped ship before his coworking empire hit the skids.

Founded in 2010, WeWork was at the forefront of the shared workspace industry, and until recently, it was amongst the most valuable start-ups in the US, disrupting the sector at every turn. Operating in 29 countries, 111 cities and 528 locations, and counting businesses like Reddit and PepsiCo as customers, the company played a crucial role in popularising co-working, with a motivated CEO who had ambitions to “change the world". The darling of Silicon Valley investors, WeWork was valued at $47bn (£37bn) during its peak, and positioned as the 2nd largest IPO of 2019, trailing only behind Uber. Within 33 days the offering was destroyed amid doubts over governance and valuation, 8

with a more realistic $15bn-$20bn (£12bn£15.5bn) advised by Wall Street. Since then, its biggest backer, SoftBank, the Japanese tech conglomerate, is building an emergency funding package valuing WeWork at less than $8bn (£6bn), while JP Morgan Chase is trying to organise financing packages with outside investors and lenders. Rupert Dean, co-founder of new co-working space, x+why said: “The problem with private company valuations are that they can be easily propped up by just one willing buyer (in this case the Vision Fund) based, not on the fundamentals of the business, but on a “vision” and the allure of the CEO to paint that vision. “This is not what the public look for anymore. Get-rich-quick schemes are yesterday’s news. The public now look at the underlying business plan, fiscal responsibility and performance as well as positive environmental and social impact – all of which WeWork have lost their way on, and the reason their IPO has been resisted.”

Almost a decade ago it became clear that the traditional office rental market didn’t suit modern companies, and serviced office use in London rose 600% between 2010 and 2015, peaking at 1.4 million sq. ft., of which 558,000 sq. ft. was acquired by WeWork. “The way people work is undergoing a fundamental shift, and more enterprise leaders are recognizing the correlation between physical space and performance,” said Dave Fano, Chief Growth Officer at WeWork. WeWork were initially onto a winning formula, and in a move toward domination in the business sphere, it acquired tech startups like Welkio and physical data software company Euclid. Dean goes on to explain: “You will note, no-one is saying the WeWork’s product is a bad one. There is a large gap between saying Issue 11: November - December 2019

WEWORK CRISIS something is overvalued and saying the product is flawed. They still fundamentally have a good product and they have still tapped into the changing way in which we work, including happy employees, increased freelancers and a sense of community.” Approaching 2020, a flat white and a mellow workplace are standard office expectations, and WeWork positioned themselves as the champion of this social change. Before WeWork, the typical rent model was a closed office space. Their first innovation was offering hot desks with flexible rent terms, catering for the growing freelance market. However, it appears that WeWork had merely copied an old business model of office leasing, modernised it with some tech lingo and fooled venture capital investors into valuing the firm at more than 10 times its nearest competitor.

IWG, an early mover in serviced offices has more sq. ft. and earns more revenue than WeWork, but has a market cap of $3.7bn (£2.8bn), less than 10% of WeWork’s recent valuation. Neumann’s removal may placate the company’s critics, but it won’t correct the risk innate in WeWork’s business model, which includes lease timescales that are far longer than what’s typical in the industry. Concerns about the flexible workspace model include companies taking out longterm leases but only renting to clients on a short-term basis. According to WeWork’s IPO filing, it owes $47.2bn (£37bn) under its leases. “The average length of the initial term of our U.S. leases is approximately

Mounting losses - Operating losses 0

-200

-400

-600

Dec 2017

Mar 2018

Jun 2018

Sept 2018

Business Leader - Inspire • Inform • Connect

Dec 2018

Belle continues: “The whole market stinks of misallocation of capital. Low rates lead to equity risk premium compression and this is causing massive risk distortions. At the current price/earnings levels, coupled with the corresponding lofty index levels, the market is thin on confidence and IPO-ing up here is ridiculous.”

Dean concludes: “While there may be a short term market tremor around flexible real estate it won’t have medium or long term consequences on commercial real estate. This product, hopefully manifested in a less obviously financially greedy way, is here to stay."

SoftBank announces $9.5bn (£7.4bn) rescue deal

Sept 2017

David Belle, author of the Macrodesiac Newsletter and Macro Trader reveals: “It was very telling that they tried to push for WeWork to be classed as a tech firm. Classing yourself as a tech firm in this market gives you a ridiculous multiple. As we've seen over the last year or so, big name IPOs haven't been hugely successful. The way in which Neumann conducts business leaves a lot to be desired, in that he picked the $702m (£545m) debt issuance figure from thin air because he believed the number to be lucky, whilst also leasing the WeWork buildings to his own company."

However, WeWork isn’t a lost cause yet. Will it perform the biggest U-turn in history? Possibly. Could it go straight to bankruptcy? Maybe. Will the Vision Fund make money? This depends on numerous variable factors. However, WeWork remains a bricks and mortar company, and the impact on the wider industry is forecast to be minimal.

Adam Neumann steps down as CEO

June 2017

15 years,” WeWork noted in its IPO filing. By contrast, from 2006 to 2017, the average term for leases signed by US publicly traded property investment trusts was 6.8 years, according to Morgan Stanley.

Mar 2019

Jun 2019

-800

Belle reiterates: “The problems WeWork faced was largely internal. One thing that may be an issue is the short term hit that many start-ups will face. If anything, being made to find alternative space is a plus for the London commercial property market and may provide a short-term boost to commercial property data. Of course, the business cycle will have a bigger effect on practically everything versus this, however, and the commercial property market will always be based on the strength of consumer and business demand for goods and services.” With a variety of outcomes still possible, WeWork is still a work in progress.  9

COVER STORY

JO FAIRLEY

SUSTAINABLE BUSINESS SUCCESS BLM met with Green & Black’s Co-Founder Jo Fairley to talk about her business journey and the challenges she faced in scaling the business. CAN YOU TELL READERS ABOUT YOUR BACKGROUND? I left school at sixteen and then trained as a secretary. One of my first jobs was working for the boss of a magazine and I ended up becoming the youngest ever magazine editor at the age of 23. This happened after he started to give me things to write and I ended up falling into the role full-time. I loved working as a journalist, and it was certainly more interesting than typing up other people’s letters. HOW DID YOU END UP FORMING GREEN & BLACK’S CHOCOLATE? I started living together with my now husband Craig Sams in 1989 – he was a health food pioneer and had formed and run various businesses in this space including Whole Earth. One of his suppliers came to him with some cocoa beans and asked if he could do anything with them. He said that he couldn’t as his Whole Earth products were no added sugar brands and this was the product’s whole USP, but he organised for a contact to get a sample chocolate bar made with the beans and myself and Craig ate the bar and it was excellent. The rest, as they say, is history, and we founded the business in 1991. 10

HOW DID YOU GET THE BUSINESS OFF THE GROUND? We leveraged invoice discounting to finance the growth of the company for the first nine years. It’s not the cheapest way to grow a business but it means you’re not giving away equity to grow the company; and you don’t need to keep raising extra capital. The business grew very quickly, and we knew after nine years that it was really rocking because we had achieved supermarket distribution and were exporting all across the world. We realised that we needed to take investment to catapult the business to the next level and this is when it started to grow exponentially. DO YOU FEEL YOU WERE AHEAD OF THE TREND REGARDING SUSTAINABILITY IN BUSINESS? The business was always a reflection of our values and we didn’t realise at the

time that we were doing anything that was extraordinary. It was interesting because I belonged to a group that was set up by The Body Shop founder Anita Roddick. It was a group of people that were all trying to achieve social good through their businesses. For example, Ben and Jerry from Ben and Jerry’s Ice Cream were members of the group. They would get together to discuss ideas and reassure each other that we weren’t mad. Traditional businesses didn’t seem to understand the message about the importance of looking after the planet and having a social purpose. Here we are thirty years later, and it seems that this is changing the business world which is much more aligned to this purpose.

Cont.  Issue 11: November - December 2019

THE PERFECT GIF T THIS CHRISTMAS. greenandbl acks.co.uk

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COVER STORY

JO FAIRLEY

IN WHAT WAY WOULD YOU SAY THAT THE BUSINESS WORLD IS MORE ALIGNED TO THIS PURPOSE? For example, Fairtrade alone is now a $2bn (£1.5bn) a year business. It has achieved from a standing start in 1994. The message is finally getting through that businesses have a responsibility to embrace sustainability and consider the treatment of its workers and supply chains, both at home and abroad. You can no longer go to market and offer people a product or service that isn’t offering something better than what they can currently buy; and more importantly isn’t trying to help the planet in some way.

"I’M PROUD THAT CRAIG AND I ARE STILL INVOLVED, AND THAT CADBURY AND KRAFT COULD SEE THE VIRTUE IN THE FOUNDERS OF THE BUSINESS STILL HAVING A RELATIONSHIP WITH THE BRAND."

Craig Sams and Jo Fairley

WHAT WOULD YOU SAY WERE THE MAIN CHALLENGES YOU FACED WHEN SCALING YOUR BUSINESS?

until you’ve sold it, so you’re working on the business right up until the sale. You can never assume that the sale has happened, so you’re occupied with both selling the business and running the business.

running it. It was hard for me to relinquish control of the company, but they brought in so much fantastic talent to run the business that I felt comfortable they were going to take it to the next level.

I would say cashflow, cashflow, cashflow. The faster you grow, the bigger this challenge often becomes. You are never paid as fast by your customers as you need to pay your suppliers and contacts.

We had planned to go to a trade show in California, but we were in negotiations to sell the business until 3am and we then had to go and collect our suitcases and go to the airport for the early morning flight.

Invoice discounting was crucial in this sense as it meant we could draw down 75% of what we were owed by suppliers and this allowed us to fund the next purchases of stock.

We had finished the negotiations before we left but there was no inflight Wi-Fi, so we didn’t know if the deal had gone through. It was torturous and when we landed in Los Angeles, we called the lawyers and the deal hadn’t gone through, but we agreed to leave it in their hands.

I’m proud that Craig and I are still involved, and that Cadbury and Kraft could see the virtue in the founders of the business still having a relationship with the brand. 14 years on we still have a role at the company and I’m proud that we’ve managed to make that work.

CAN YOU TALK ME THROUGH THE SALE OF THE BUSINESS? Cadbury acquired us in 2005, but in business nothing stays the same for very long and Kraft then gobbled up Cadbury, which is what we didn’t expect. What has been good to see though is that our values have rippled up into that organisation and provided a beacon of how big businesses can change.

We then had to spend the next three days at the trade show and that was a stressful period. I remember on the third night in America, I told Craig that I felt something was wrong. We called our lawyers and they told us there was a spanner in the works. This ended up being resolved and the business ended up getting sold but it was stressful at the time.

WHAT WAS THE MOST STRESSFUL PART OF SELLING THE BUSINESS?

HOW DID YOU FEEL WHEN THE DEAL WAS FINALLY COMPLETED?

The night before. When you're selling a business, you are still running your company

It was a relief and very quickly they started to take control of the business and start

WHAT ADVICE WOULD YOU GIVE TO ANYBODY LOOKING TO GROW AND DEVELOP A SUCCESSFUL BUSINESS? Well the first thing is to start because things only get done if you do them. At some point you must stop telling your friends about your ideas and go and make it happen. In the early stages there are a million things that need to be done but once you've done them, you can cross them off. In today's climate you shouldn't need to use your property as leverage as there are so many funding options you can use. On this subject, the next bit of market research you can do is to create a pitch and put it in front of investors to see if they will back it. If they are willing to part with their money, it’s likely you have a good business idea. 

Issue 11: November - December 2019

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FINANCE John Stapleton - Entrepreneur and Investors

Heather Frankham – Whiteoaks Capital

Jenny Tooth OBE – UKBAA

What are investors really looking for when being pitched ideas?

he investor landscape is changing – with more focus now being placed on what market problem the business solves, in addition to how inspirational the person pitching is. There is also more of a focus on emerging sectors and ensuring businesspeople from more diverse backgrounds receive investment. To find out what investors are looking for from business owners – BLM brought together an expert panel that operate across the full business cycle, investing in start-up and scale-up companies.

DO YOU FIND THAT MOST PITCHES FOR INVESTMENT YOU RECEIVE HAVE WHAT YOU’RE LOOKING FOR? John Stapleton: "Most don’t. Occasionally, there is a gem, but these are the exception to the rule. However, this stands to reason, given the explosion in start-ups and early stage growth businesses in the food and drink sector. "Many entrepreneurs pile into the food and drink sector – which is where I specialise – 14

because they believe they have identified a gap in the market but have very little idea how they should go about addressing it."

parameters, whether because of size or maturity, we politely and swiftly decline so that we don’t waste anyone’s time."

Heather Frankham: "I would love to say yes – because I receive a lot of pitches, however only 10% are relevant to me. The pitches I spend time looking at are those that understand what I’m looking to invest in. Unfortunately I get many pitches, often through LinkedIn, where they have not even read my profile and understood the areas I’m interested in investing in.

Ian McLennan: "No, in fact most pitches we see are unfortunately not what we are looking for. We receive over 1,000 opportunities a year in terms of companies looking for funds.

"I would always advise those seeking investment to carefully consider what they are looking for and then focus on finding an investor who can support them achieve this and who is looking to invest in their area." Tim Smallbone: "We receive a large number and range of proposals which vary in terms of quality as well as our ability to back them. We are looking for companies which are well established, led by ambitious teams, with a rhythm of profitable growth, typically with profits in excess of £2m. "If a proposal is clearly outside of our

"Often the most basic problems are that companies are slightly too early stage for us to consider and that they do not fall within our investment themes (Impact EIS and B2B Software). Many companies are completely pre-revenue generation and we only allocate a max of 10% of funds to that stage."

"I BELIEVE PITCHES WOULD BENEFIT FROM INCLUDING MORE DETAIL AROUND NON-FINANCIAL METRICS, FURTHER INFORMATION ON AREAS SUCH AS THE HUMAN CAPITAL AND PHYSICAL RESOURCE REQUIRED" Andrew Boyle Issue 11: November - December 2019

PITCHING FOR INVESTMENT

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Andrew Boyle: "Most pitches focus on financial forecasts and detailed projections. However, I believe pitches would benefit from including more detail around non-financial metrics, further information on areas such as the human capital and physical resource required, the knowledge that has to be gained to properly market the product or service, the skills that need to be developed in the company and the corporate culture that should be fostered to enable the business to deliver and succeed." WHAT DON’T YOU LIKE TO SEE WHEN YOU’RE BEING PITCHED? John Stapleton: "Valuations which are not based on reality. Evaluating an early-stage business is notoriously difficult and, is quite subjective. However, the entrepreneur needs to base their valuation in the real world, reflecting all three elements: potential, evidence and momentum. Secondly, not having a target market. In FMCG, it is essential to define one’s target market very carefully. "Thirdly, entrepreneurs who don’t listen. I’m all for being challenged and being pushed back by the entrepreneur with a better idea or reasoning for doing something differently. However, when an entrepreneur simply ignores or becomes defensive in the face of a challenge or searching question, then I lose interest rapidly. Finally, business ideas which are not scalable." Heather Frankham: "I don’t like to see pitches that only tell part of the story, or ones that look like an academic exercise rather than a real business. A good pitch tells the full story of the business. Firstly, it must tell me why – why is it a good idea and why are the founders better placed than someone else to deliver it? It needs to be clear on what it is. You would not believe the number of pitches I read where I still don’t know exactly what the business does at the end of the pitch! "Finally, it needs to have sensible financial projections – that relate to the rest of the pitch! Cost of sales need to be consistent with the proposed route to market and ideally should reference related examples." Tim Smallbone: "Because we only back established, fast-growing companies, we don’t like to see lumpy earnings growth. Equally, we want management’s ambition and enthusiasm to extend through the company, and so look for engagement of Business Leader - Inspire • Inform • Connect

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staff. Therefore, high turnover of key staff may suggest the team isn’t as cohesive or ambitious as we’d like to see." Ian McLennan: "At a high level we don’t like to see a pitch that is too rehearsed – we like to see an honest explanation of the founder’s story. We don’t like to see labour intensive, one-off revenues. So, for example, a business that has a large element of consultancy work may be one that is good for the consultants,

but it is unlikely to be one that is attractive for venture capital. We prefer to invest in less capital intensive, less labour intensive digital or software products where companies or consumers will sign up for repeat business."

Cont.  15

FEATURE

PITCHING FOR INVESTMENT Tim Smallbone – Inflexion

Andrew Boyle: "Probably the element in pitches that investors most recoil from seeing is a hockey stick revenue projection with no substance to support it. The pitch has to make clear what capital requirement is needed, how much investment, what are the overall costs that will be incurred to deliver on the forecast so potential investors can take an informed decision on whether the revenue projection can be achieved or not." WHAT ARE THE EMERGING TRENDS YOU ARE SEEING AMONGST THE COMPANIES THAT PITCH TO YOU? John Stapleton: "Over the last five years there has been an explosion in food and drink start-ups. Several drivers have fuelled this such as the difficulty big food is having trying to convince consumers (particularly Millennials and Gen Zs) that they have their best interests at heart. "Younger consumers are increasingly sceptical of big food claims and motives and find start-ups, with savvy entrepreneurs explaining how they are going to make the world a better place, much more convincing." Tim Smallbone: "In our 20 years of backing businesses, we’ve noticed a shift in what founders and owners are looking for when they seek a partner for their growth.

Ian McLennan – Triple Point

"We’re seeing more UK businesses looking for support to grow their businesses internationally. "Many companies are seeking capital as they wrestle with technology changes in their markets. We are also seeing an increasing number of deals which seek to provide liquidity for existing shareholders who wish to cash out." Ian McLennan: "Some emerging areas where we are starting to see good ideas are the circular economy; open banking; the agile workforce and wellbeing." Andrew Boyle: "We see three sectors dominate regarding companies looking for investment. Fintech firms; Healthcare companies, principally, Medtech and biotech firms, and engineering companies." Jenny Tooth OBE: "I am delighted to say that I am receiving more proposals from female founders and co-founder teams, although still not enough. "I am also seeing more entrepreneurs coming from the regions outside the Golden Triangle to seek investment, but this also reflects that gaps in funding that still exist in many other parts of the UK and which we are working with all key players to resolve."

Andrew Boyle - LGB&Co

"YOUNGER CONSUMERS ARE INCREASINGLY SCEPTICAL OF BIG FOOD CLAIMS AND MOTIVES AND FIND START-UPS, WITH SAVVY ENTREPRENEURS EXPLAINING HOW THEY ARE GOING TO MAKE THE WORLD A BETTER PLACE, MUCH MORE CONVINCING. John Stapleton

IN YOUR OPINION WHAT MORE NEEDS TO BE DONE TO ENCOURAGE INVESTMENT INTO FEMALE ENTREPRENEURS? Jenny Tooth OBE:"A key challenge for women entrepreneurs is the lack of gender balance among the angel and venture capital community and this results in either deterring many women from going forward for investment or affects their experience when pitching for investment. "We need to attract many more women to engage as business angels across the UK since we know that women who invest tend to back female entrepreneurs. With so many women who are now successful in business and other professions, we need them to bring their spare financial capacity and business experience to back more female entrepreneurs." 

Issue 11: November - December 2019

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REPORT

Delivering a smoke-free future

PHILIP MORRIS LIMITED

South West businesses would back employees to go ‘smoke-free’ Survey finds companies lack facts and advice on how to help smokers quit or switch

YES

AS AN EMPLOYER, WOULD YOU CONSIDER ALLOWING STAFF TO ATTEND SMOKING CESSATION SERVICES OR ADVICE ON SWITCHING DURING WORKING HOURS?

37.9%

17.2%

UNSURE

44.8%

BUSINESSES

WOULD INCENTIVISE OR REWARD EMPLOYEES FOR QUITTING OR SWITCHING TO A LESS HARMFUL ALTERNATIVE

8 IN 10 BUSINESSES DO NOT CURRENTLY OFFER SPECIFIC HELP FOR SMOKERS

AS AN EMPLOYER, WOULD YOU BE INTERESTED IN RECEIVING A TOOLKIT TO HELP YOUR ORGANISATION SUPPORT EMPLOYEES IN MAKING HEALTHIER CHOICES IN GENERAL?

51.7% 27.6%

YES

20.7% UNSURE

62% OF BUSINESSES WERE AWARE OF THE UK GOVERNMENT’S HARM REDUCTION APPROACH TO SMOKING THAT ENCOURAGES SMOKERS TO SWITCH TO LESS HARMFUL ALTERNATIVES IF THEY DO NOT QUIT.

Issue 11: November - December 2019

CLEAN AIR

PHILIP MORRIS LIMITED

lmost 40% of businesses in the South West would allow their staff time off to attend smoking cessation services during work time, a new survey commissioned by Philip Morris Limited has found. 1 in 6 companies would incentivise or reward employees for giving up smoking. However, the majority of businesses were unaware that smoke-free alternatives are less harmful than cigarette smoke.

Delivering a smoke-free future

Do businesses have a responsibility to help their workforce go smoke free? Peter Nixon, Managing Director at Philip Morris Limited (PML)

employees to quit cigarettes is that many are simply unsure as to whether it’s even their place to do so. The good news for businesses is that they don’t need to hire a team of experts or run complicated programmes to start creating a smoke-free workplace.

Businesses in the region were responding to a survey asking what support they have for employees who smoke. They were also asked questions on their familiarity with quitting aids and smoke-free alternatives for smokers who do not quit. Key findings of the survey include: • 8 in 10 businesses do not currently offer specific help for smokers. • Over half of the businesses polled would be interested in a toolkit to help employees make healthier choices in general. Mark MacGregor, Director of External Affairs at Philip Morris Limited, believes that while the survey uncovered a desire for businesses in the South West to support their employees, it also showed that many lack the practical information and advice to do so: “This survey shows local companies are committed to helping their staff to go smokefree. But they need much more information and support to translate this into action. Businesses can play a vital role in helping employees to either quit altogether or switch to a better alternative.” There are currently 577,000 smokers in South West England, with 56,000 smokers in Bristol alone1. According to Public Health England, nearly half of all smokers do not realise that smoke-free alternatives are less harmful than cigarettes.2

1 Office for National Statistics, Adult smoking habits in the UK: 2019 . 2 Public Health England, December 2018.

Business Leader - Inspire • Inform • Connect

Peter Nixon, Managing Director at Philip Morris Limited

Every business wants the best for their workforce. That is why many support wellbeing initiatives to help employees cope with the different stresses of life. But, as a recent report by the British Safety Council concluded, there’s much more to employee wellbeing than free bowls of fruit in the office. Ensuring that employees receive the support they need can be difficult. But one of the biggest challenges is how to help people give up smoking. Although numbers have been falling in recent years, more than 7 million people still smoke in the UK. We know, however, that many employers want to play their part in helping their staff to quit cigarettes. Our own research found companies in the South West would allow their staff time to visit smoking cessation services during work hours. One in six would even reward their employees if they stopped smoking. But what is stopping more companies from providing help for their

I have seen first-hand what can be achieved when businesses partner with, for example, those equipped with the tools and knowledge needed to help smokers make better choices. In Japan and Russia, we have developed programmes with numerous businesses that enabled thousands of smokers to switch. Here in the UK, Business in the Community (BITC) recently published a toolkit setting out a range of practical steps on how employers can support their staff stop smoking. We are partnering with BITC to ensure that advice reaches Bristol businesses. Critically, employers need to be aware of all the options available so they’re in a position to give guidance to those smokers who either want to quit or switch to a better alternative. Philip Morris Limited is working with businesses across Bristol to understand the facts about smokefree alternatives, so that employers feel confident in being able to offer practical guidance when needed. By working together, I believe we can help businesses in Bristol and beyond achieve a smoke-free future.

GROWTH

WHAT ARE THE CHALLENGES FACING TECH COMPANIES LOOKING TO SCALE?

usiness Leader Magazine recently hosted an event at Level39 in London, looking at the challenges facing tech companies looking to scale; and provide an insight into current tech and business trends in the UK.

WHAT ARE THE MAIN CHALLENGES FACING YOUR BUSINESS? Oz Alashe MBE: "Cybsafe has grown year on year since its inception and we now employ more than 50 staff; and one of the issues we have faced is attracting and retaining the right talent. The political situation hasn’t helped this, as many people aren’t sure whether they want to come and work in the UK." Romina Savova: "I started Pensionbee after I left Morgan Stanley and I had to move my 20

pension and found that nobody wanted to take my money without me having to fill out reams of paperwork. "The challenges we have faced have been different at each stage of growth and what works when you are at 30 employees, won’t necessarily work when you’re at 60 people or 90 people. You need to keep changing your systems and processes in order to maintain the culture in your business." Andrew Scott: "We have four main businesses within the Ascot Group – a publishing business, tech/CRM software company, full-service marketing company and investment business. My challenge is being able to swap hats and go from working on the financial side of the business to then focusing on operations and people." Paresh Modi: "One of the challenges we have at Vodafone is consumers and businesses knowing exactly what it is we do and how to navigate working with us.

"The UK brand is a very small microcosm of our global operation and is the fourth largest of our territories. We have over 500 million customers globally and the largest broadband footprint across Europe. We are also the biggest provider of TV content and distribution across Europe. "My role is to connect the start-up and scale-up ecosystem with what we’re doing at Vodafone. Our goal is to be a world leader in what we do and we can’t achieve that only through our own efforts; which is why we want to talk to businesses because they will often have the solution. "Our key priorities are leading on 5G, the Internet of Things (IoT) and digital transformation." Vaidas Adomauskas: "Revolut has grown from £6m to £7m revenue in less than a month and we are signing up around 50 businesses a day to our service. As part of this growth, we’ve also gone from employing Issue 11: November - December 2019

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TECHNOLOGY

700 people to 1,500 in only six months. This presents a big challenge; as you must keep evolving your culture and how you work.

with a solution and then got traction in the market; rather than funding an idea which is much more challenging.

"A future challenge for us is also around scaling globally in countries like Australia, Singapore and Japan."

"In the UK many scale-ups say that funding is the biggest challenge, but I wouldn’t agree with that because there is lots of funding available, especially from overseas investors and this is partly because the UK is cheap now due to exchange rates."

HOW HAVE YOU FOUND SECURING THE FUNDING YOU NEED TO ACHIEVE GROWTH? Oz Alashe MBE: "We have undergone two rounds of funding – a seed funding round early on in our journey and a Series A funding last year. We will raise again in the future and this will most likely be a Series B funding round. "We haven’t struggled to access finance and have found that there is a diverse offering in the market. This may be because we found the problem, came up Business Leader - Inspire • Inform • Connect

Andrew Scott: "I would like to highlight a potential bubble, whereby many tech entrepreneurs are too focused on raising capital and not always with making a profit. "There is lots of funding available and that is due to the weak pound and trends such as pension funds that used to invest in property now investing in funds and businesses.

Romina Savova: "We raised capital at the idea stage, which was a seed round of around £1m as we needed a long runway to deal with product development and other factors, such as becoming compliant with the Financial Conduct Authority (FCA).

"My concern is that with so much capital available, many businesses are focused solely on raising money and not making a profit. You can also get into the habit of creating technology but not focusing on what this means for the customer and how it solves a problem in the market."

"We like to raise money from individuals and have utilised government’s EIS scheme and have raised over £18m in total. We have also combined this with attracting funding from strategic foreign investors."

Cont.  21

DEBATE

Ann Hiatt: "I come from the crazy world of Silicon Valley, where we do things backwards and I have been surrounded by venture capital people and investors for many years. They have traditionally put people and ideas ahead of answering the question of how it converts into customers and profits. "This is starting to change though, and the trend will be shifted I believe. The problem was created in Silicon Valley where the idea of the brilliant CEO and fundraising has been so prevalent, but you also need to know who your customer is, how you will make a profit and what the exit strategy is." Paresh Modi: "What I find is when you see a customer facing pitch you can often feel that is this a customer facing pitch turned into a fundraising pitch. Honestly you can see it. The question I always ask is explain to me which of my problems you’re solving as opposed to how amazing the technology you have is. The pitches that are focused on problems are ones I will want to work with." WHAT IS DRIVING THE US INTEREST IN UK TECH SCALE-UP BUSINESSES? Ann Hiatt: "We have really good value from dollar to pound right now and the quality of talent is high in the UK and universities are good too. You also find that most disruption and innovation come from the bottom up; rather than the top down in the UK." Andrew Scott: "Britain is also seen as a safe place to invest in as it has a very robust legal system and is seen as world leading in respect to its laws around employment and business practice."

"THE QUESTION I ALWAYS ASK IS EXPLAIN TO ME WHICH OF MY PROBLEMS YOU’RE SOLVING AS OPPOSED TO HOW AMAZING THE TECHNOLOGY YOU HAVE IS. THE PITCHES THAT ARE FOCUSED ON PROBLEMS ARE ONES I WILL WANT TO WORK WITH. Paresh Modi

REGARDING PEOPLE AND TALENT – WHAT HAVE YOU FOUND TO BE THE BIGGEST CHALLENGES? Vaidas Adomauskas: "When you are growing very fast you need to look at how you recruit and retain talent, and how you maintain your culture. We are open that in the early stages of our business we had some bad press about our internal culture, but this is now in the past and our culture is changing a lot. "Another challenge is making sure you hire the correct people at every stage of your growth cycle. We hired senior level people from other banks who were very good at getting the business to a certain level but don’t have the skills to then take it to the next level. At every stage of the business you need to consider your staff and the skill profile. "A good way of getting this right is to invest in internal recruiters and not rely on external agencies. I would also say that having biweekly meetings where recruitment is put on the agenda and discussing what skills are needed helps a lot." Romina Savova: "We have created our own recruitment process and tend to only hire

people who wouldn’t have planned to go to university or work in pensions. We bring them into Pensionbee and train them up initially within our customer services team; so they can learn the culture of how we interact with customers and stakeholders. "We then recruit from this pool into other areas of the business and people have come through the team to work in roles as diverse as technology and marketing. "You find that this allows you as a business to be sure that whenever anybody takes on a position of responsibility, they understand the company culture." DO YOU FEEL ENOUGH IS DONE TO SUPPORT EMERGING FEMALE TECH ENTREPRENEURS? Romina Savova: "It is possible to be a successful female entrepreneur, but I don’t think it’s an easy journey though, especially if you want to raise venture capital. Women have a different approach to running a business, taking on capital and what they promise to investors. "They are less likely to run multi-millionpound losses, and this doesn’t always align with what a VC wants."

Issue 11: November - December 2019

TECHNOLOGY

"The future of technology will be partly driven by how we democratise and make better use of data; and it will help to drive the use of autonomous vehicles, smart cities and the way we trade space and knowledge. A future like this is not too far away from us; should we chose to lean into it." Andrew Scott: "Clearly there are lots of tech advancements that will shape the future of business and life, but I also think it’s important to focus on the concept of speed. The idea that you will place an order today and have it an hour later. All the companies that are leading in their markets are winning the battle around speed and delivery to their customers." Ann Hiatt: "I would also say that the future of technology will be influenced by millennials and we’re already seeing a shift around consumers and employees only wanting to work – and engage with – brands that are solving the problems in the world that they care about. Ann Hiatt: "This is an active discussion now in Silicon Valley because we still see females receiving 10% of what male investors do from VCs but the data shows that this trend is changing. The more forward-thinking organisations are now looking at this. "We need to keep having this conversation because it uncovers unconscious bias that people may have. Education is a key part of this too as, for example, Google only recruit from the top five universities which means the base code for artifical intelligence (AI) is being written by white guys who all have the same level of education. We need to look at fixing this problem." WHAT ARE LIKELY TO BE THE MOST DISRUPTIVE TECHNOLOGIES IN THE FUTURE? Paresh Modi: "In ten years’ time I would say it will be around quantum computing, DNA storage and data but in the short term – for us at least it’s about 5G. "5G is important because it will enable new experiences for consumer and businesses. The key difference with it is that it will allow huge bandwidth and up to ten times what you would get with 4G. It is also ultra-low latency which means you can influence Business Leader - Inspire • Inform • Connect

something somewhere at the press of a button. "The final point about 5G is how it will unleash the Internet of Things (IoT). Compared with being able to connect thousands of devices in a square kilometre, you will be able to connect hundreds of thousands. This will open so many opportunities in relation to Smart Cities, planning and autonomous vehicles."

"ALL THE COMPANIES THAT ARE LEADING IN THEIR MARKETS ARE WINNING THE BATTLE AROUND SPEED AND DELIVERY TO THEIR CUSTOMERS." Andrew Scott

Oz Alashe MBE: "I would say it is access to and how we look at data sets. Data is becoming more relevant to people and we are realising that we own this data and that we are often giving it away too easily; or on the flipside it is taken from and monetised.

"People are willing to pay more if they feel the brand they are investing in aligns with their values and serves a higher purpose. Data can help to drive these decisions." WHAT ROLE DO PROFESSIONAL SERVICES COMPANIES HAVE IN SUPPORTING TECH SCALE-UPS? Oz Alashe MBE: "You are very well served in the sense that there are lots of legal and accountancy firms in the market giving advice. In some respect there is no shortage of advice and you must sift through it to make sure it’s the right advice. Regarding the cost advice – it’s hard to know if it’s at the right level and you need to consider whether the advice fits for the stage you’re at in your business." Romina Savova: "I feel that accountants serve start-ups and scale-ups well and provide advice for businesses, whatever the stage of their lifecycle. I don’t see that in the legal sector and you often need a different firm, for whatever stage you’re at in the businesses growth cycle. You must keep moving around firms and you end up with a patchwork of legal support." 

TECHNOLOGY

What are the challenges facing UK tech companies looking to scale? The UK is now home to more than one-third of Europe’s fastest-growing tech companies. It’s an impressive achievement, but could that proportion be even larger if access to funding was improved? Tech businesses face unique financial challenges because of the high research and development costs associated with proving their business models. Where traditional firms can offer a single product or service before steadily scaling-up, tech companies need large initial investments due to the cost of building their technology. Even if they prove this technology, they have limited funding options when it comes to scale-up and growth. The government’s digital strategy boasts that the UK’s digital sectors received a record £1.57bn in equity finance in 2015, and although it’s crucial that seed investors and private equity firms continue to support start-up growth, this figure overlooks the next step in the process. Where can tech businesses turn if they’re ready to grow but don’t want to dilute equity any further? Traditional banks aren’t interested because these companies may be loss-making or demonstrating minimal profitability. Many alternative lenders also want to see profitability, with several years of financial accounting to back this up. For

BOOST&Co, the answer is venture debt because the product can support firms that are pre-profit but have high potential for growth – as many tech businesses do. “The challenge for these businesses is to know who to go to for funding,” says BOOST&Co’s principal Lauren Couch, who leads the lender’s Bristol office. “It’s our job to educate the market and ensure they know that there is another option, beyond delaying growth or sacrificing equity. We want to encourage a collaborative approach with start-up lenders, so that UK tech companies are supported at every stage of their growth journey.” BaseKit is one of the South West tech businesses that have benefited from BOOST&Co’s collaborative vision. Basekit first secured support in 2008, via the Seedcamp start-up accelerator and incubation programme, which enabled the firm to set up its first office in Chepstow.

Fast-forward a few years and a £2.5m venture debt loan from BOOST&Co enabled BaseKit to expand its reach within the telecoms sector and invest in sales, marketing and product development, advancing the company’s growth. The tech business community needs to see more of this kind of collaboration. Seed and start-up investors must work with growth lenders like BOOST&Co so that the UK’s tech companies don’t simply dominate Europe, but become leaders in innovation and growth around the world.

SETsquared ranked top global university business incubator for third time The SETsquared Partnership has been ranked the global number one university business incubator for the third consecutive time by research and advisory firm, UBI Global. The title, which was awarded at the World Incubation Summit in Qatar, continues SETsquared’s ongoing success, having maintained its world-leading position since 2015. This year, the Partnership was commended for demonstrating exceptional value for tech start-ups and the local ecosystem. With bespoke entrepreneur training programmes and unrivalled access to a network of mentors, alumni, investors, corporate partners and the knowledge base of five research intensive universities, SETsquared has supported over 4,000 UK high-tech start-ups since its inception, helping them raise more than £1.8bn of investment and creating £8.6bn of economic impact to date – a figure which is set to rise to nearly £27bn by 2030. 24

Issue 11: November - December 2019

Business Leader - Inspire • Inform • Connect

GROWTH

“People are saying that UK retail is dying – it’s not – it is just being disrupted. And we are central to that disruption”

Meet the multinational retail software firm that looks set to dominate the market

n each edition of Business Leader Magazine, we profile a UK business experiencing exponential growth in a feature called BLM FastTrack. This time it is Bristol-based software company, Brightpearl.

partner for many small merchants in the UK, but three-and-a-half years ago, Brightpearl appointed Derek O’Carroll to lead the company as its new CEO. From that point on, the company experienced exponential growth across the world.

One of the companies looking to take advantage of the evolution of the retail sector is Brightpearl – a multichannel retail operations platform for large wholesalers and brands – whether they are online, instore, or both.

O’Carroll comments: “I joined with a remit from the board to take the company onto a faster pace of growth and success. Since joining, we have invested $10m (£7.7m) to capitalise on the foundation that Chris had built and we are now serving over 1,000 companies, in 20 countries across the world. Our platform is now processing over $2.5bn (£1.95bn) in invoice orders, for those customers, every year. The average rate of growth for customers on our platform is 30% year-on-year, which is counter to the normal doom and gloom story you hear from UK retail.

Brightpearl’s platform offers a wide array of useful tools to help retailers manage their stock and orders, and help facilitate growth.

“People are saying that UK retail is dying – it’s not – it is just being disrupted. And we are central to that disruption.”

FROM SURFING TO SOFTWARE The company was founded in 2008 by entrepreneur Chris Tanner, who was previously selling surfing and skateboarding equipment – but soon realised the mounting challenges of the operations side of the business – especially as the company grew.

Today, the company now has almost 100 employees with 50% of the business in North America, and the other 50% spread across nine countries – with the HQ remaining in the UK.

The retail sector is currently experiencing drastic changes. With the rapid rise of ecommerce, the well-documented struggles of the high street, and the impact of Brexit – the sector hasn’t ever seen this level of disruption.

The company became an established tech

But, what has driven Brightpearl’s growth? REPURPOSE AND REPOSITION The company’s initial plans for when

"BRIGHTPEARL HAD BUILT A SIGNIFICANT AMOUNT OF TECHNOLOGY AND CAPABILITY, WHICH WAS MORE SUITED TO BIGGER MERCHANTS THAN THE SMALLER ONES THE COMPANY HAD HISTORICALLY WORKED WITH. ALL I DID WAS REPOSITION THE BUSINESS TO SERVE LARGER MERCHANTS – THAT IS ESSENTIALLY ALL THAT HAS CHANGED OVER THE LAST FEW YEARS.”

O’Carroll joined was to change the strategy and take a larger market share within the retail sector. He explains: “Brightpearl had built a significant amount of technology and capability, which was well suited to bigger merchants. All I did was reposition the business to serve these larger merchants – that is essentially what has changed over the last few years.” However, this move alone has resulted in significant growth for the company. Order values on the Brightpearl platform have increased by over 700% when compared to four year’s ago. Year-on-year new business growth is running at 75% across the world – and the growth in the US is over 100% year-on-year growth. The growth year-on-year is 40% in the UK. BRIGHTPEARL IN BRITAIN The growth is softer in the UK though, due to all the challenges across the retail sector and the general uncertainty in the market. O’Carroll believes that merchants who are planning on taking advantage of that and disrupt the market with a high-quality service across multiple retail channels – both physical and online – are the ones that are winning and largely driving the firm’s growth. He said: “Brands that are real disruptors in their own right tend to be the ones that are joining the Brightpearl platform and leveraging our tech to achieve their own growth.” The company’s tech isn’t just helping firms grow, but also make plans for their future, due to extensive capabilities Brightpearl’s platform can offer. In order for a large retail business to survive,

Issue 11: November - December 2019

BRIGHTPEARL

compete, and ultimately thrive in the sector, they need to embrace and utilise modern tech across the whole company. O’Carroll comments: “With Brightpearl, our clients get the vendor and the tech provider of the service under the same company. In the modern world, to be successful in this industry, all retailers need to also be tech companies. Companies today that do not have a data-centric approach to marketing and customer service are not going to win. “Merchants need flexibility, so when they do adopt a technology-centric approach that allows them to play in a cost-beneficial manner, is to decide which channels they are going to activate. They can test different countries and markets at low costs to gauge the appetite for the products in that area. That then gives them a better strategy going forward. Business Leader - Inspire • Inform • Connect

“Through this, the customer can create a unique offering – either retailing online, in store, or both – and this can vary depending on which country they operate in – creating a bespoke retail offering. Having that single platform to run all those varieties of businesses is why Brightpearl have seen such growth in the last few years.” THE B WORD Growth at Brightpearl has not come without its challenges – something shared with both the retail and tech sectors. One of the primary challenges the UK operation has faced is Brexit. When the vote was made back in 2016 that Britain would leave the European Union, Brightpearl made the decision to shift its focus to the USA. O’Carroll explains: “In the UK, when the Brexit decision occurred, we made the

decision to really double-down on the USA – to give ourselves that insurance. Two years ago, we saw a real slow down in the adoption of the platform in the UK, so we decided to rebalance our resources. I then directed nearly all of our investments out of the UK and into the USA. We retained our significant investment in R&D – but maintained minimum investment levels in the UK.” This was in anticipation of a major decline, however, the implications of Brexit turned out to be nowhere near as bad first expected, and the numbers prove that. He continues: “The numbers are 40% up year-on-year for new business, which was a massive surprise. I think it was down to the fact that the merchants that choose Brightpearl now are bigger companies, and they tend to be the disruptors within the sector."  27

GROWTH

HOW TO LAUNCH YOUR BUSINESS IN

SOUTH AFRICA F

or our latest business trip feature, where we look at the UK’s most interesting export markets, Business Leader gives you an in-depth look into everything you need to know about doing business in South Africa.

As Africa’s second largest economy, with an ever-increasing annual Gross Domestic Product (GDP) (2018; £272.3bn), South Africa has become an emerging import/ export destination for leading nations across the world. Since the turn of the century, the country has risen to become the world’s 47th largest economy, 34th largest export nation (valued at £84.2bn), and 38th largest import nation (valued at £63.9bn), with only Nigeria being higher up on those lists from the whole African continent. Bilateral trade between Great Britain and South Africa has increased to over £10bn annually, and with a drastically improved business infrastructure and political climate; is now the time for British companies to look at South Africa as a business destination? What opportunities are available to UK companies? Traditionally, South African business was focused around its abundance of natural resources. In recent years there has been an 28

emergence of modern professional, financial and legal services, among many other developing industries. However, it isn’t just this modernisation of the country’s business environment that has made it emerge on a global stage. Leon Ayo, British Chamber of Business in Southern Africa President, comments: “Traditionally, the South African economy has centred around natural resources and extractives such as gold and platinum mining. In recent years the decline in commodities prices has seen British companies in South Africa focus more on professional services.

One of these tech-focused SMEs is SoPost, an international online product sampling firm. The company has had a lot of success in the country.

“Over the past few years, SMEs in all sectors have steadily been coming in including in automotive, retail, food & drink, and more recently we’ve been seeing interest from companies in the medical/health sectors, technology and education.

CFO Russell Brown explains: “For companies like ours there is significant potential. Many of the global brands we work with in other markets are present in South Africa and we have the opportunity to gain first mover advantage in introducing our technology before anyone else.

“Technology and specifically smartphoneenabled products present good opportunity – we’ve seen technology ventures in the HR and retail spaces coming in from British companies, and these have been well received.”

“South Africa has a population of over 58 million, which provides a substantial consumer base as well as a well-established creative and media industry, with an infrastructure which can support our business services.” Issue 11: November - December 2019

INTERNATIONAL TRADE

How developed is the business community? South Africa has the unique feature of being both a sophisticated but largely untapped and developing economy. There are big opportunities in the education sector, particularly utilising technology and online options to deliver in various sectors. Ayo continues: “South Africa is still one of the best gateways into Africa, so for companies with a view to develop further into the rest of Africa, this is a good base to operate from. Africa has the world’s youngest population and by 2035 will have the world’s largest working population. The opportunities presented by the scale of this potential market are significant, particularly given the shifting demographics of Europe.” Sandra Warne is an International Trade Adviser for the Department for Business Leader - Inspire • Inform • Connect

International Trade (DIT), and worked in the country for several years. She comments: “With just under £10bn of bilateral trade, there are opportunities in advanced engineering, agribusiness, creative industries, infrastructure, energy, education, professional services, food & drink, ICT, life sciences, sports and retail. “There are 11 official languages, with English being the most commonly used in business. It remains the most sophisticated and developed economy in Africa and has an abundant supply of natural resources with a well-established and modern infrastructure including well-developed

financial and legal services. In fact, a lot of clients that I used to work with would often use South Africa as a springboard into other Southern African markets.” Trade Commissioner for Africa at the Department for International Trade, Emma Wade-Smith OBE echoes this sentiment: “The scale, breadth and sophistication of South Africa’s economy and the relative ease of doing business means that there are a wide range of business opportunities for UK companies, across many sectors and industries.

Cont.  29

GROWTH

"South Africa’s regional position and ability to act as a base for critical services means it can also be a springboard to doing business across Southern Africa and beyond, extending the market base for UK companies looking to do business here.” How has the relationship changed? South Africa has emerged as a key outlet for British businesses looking to increase their global presence, and potentially start expanding into a new continent. But what are the challenges? Despite the current and emerging opportunities for companies looking at moving into South Africa, there are unfortunately several difficult obstacles to overcome. As it is with starting a business venture in a new country, establishing local partnerships and working with government institutions can help businesses navigate the minefield that South Africa can be for international companies. Wade-Smith comments: “Through a number of programmes and activities DIT are working with the South African government to increase transparency in public procurement and to build a market environment that supports the private sector to innovate and scale – a necessary driver of sustainable growth and diversification. We are a strong supporter of President Ramaphosa’s personal commitment to mobilise c.£88bn of investment into South Africa over the next five years, which aligns with the UK’s ambition to be the leading G7 investor in Africa.” The political aspect of the business relationship has conjured up several 30

INTERNATIONAL TRADE

"SOUTH AFRICA IS STILL ONE OF THE BEST GATEWAYS INTO AFRICA, SO FOR COMPANIES WITH A VIEW TO DEVELOP FURTHER INTO THE REST OF AFRICA, THIS IS A GOOD BASE TO OPERATE FROM." Russell Brown challenges British businesses need to be aware of. Ayo comments: “Political uncertainty can be a concern to many investors and recent challenges to the constitution regarding land reform has been unhelpful. That said, South Africa’s institutions have proven to be robust and recent elections have been peaceful. “Recently, visas for non-South Africans and their families coming to work and live in South Africa have been an issue. This is something that has been raised at many levels from business to government and we hope to see some improvement in the system soon.” Another key element to South Africa business is the Black Economic Empowerment (BEE) programme, designed to raise the black population’s share of the economy through fixed quotas and shares, could discourage foreign investment due to the skills shortage. Ayo continues: “You need to be knowledgeable about BEE legislation and requirements so you can incorporate this into a business strategy, as this can be a deal breaker. I think companies don’t always

understand the vast social-economic divide in the country and how this translates for their target markets and the way that they would need to operate.” Tanya Giles, South West Regional Manager of trade credit insurer Atradius, echoes this and highlights several other issues to be aware of: “Unemployment is high with two-thirds of those unemployed under the age of 35 and there are still pockets of deep poverty, high crime rate and BEE legislation with affirmative action to right the wrongs of the past. The current market conditions are challenging, evidenced by South Africa’s fall in the Ease of Doing Business Index from 39th position in 2013 to 82nd this year. With this in mind, businesses must ensure they fully understand the wider market as well as the opportunities and manage the risks accordingly.” However, despite the concerns, the UK Government has recently announced an Economic Partnership Agreement with the Southern African Customs Union that will allow business to keep trading freely after Brexit. This will help further strengthen the trade relationship between both markets and lay the foundations for new trade and investment in the future.  Issue 11: November - December 2019

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Our services are designed and proven to help people believe things can be done differently, show them how to do this and give them the confidence that they and others in the organisation can and must continue to adapt to new opportunities. At the core of our services lie well-proven techniques including agile methods, that have been applied in sectors such as software development for a couple of decades or so.

We’re excited by our continued success with clients, globally. We’re the global partner for one of the world’s largest software manufacturers, so we’ll continue to support them and the many hundreds of people we work with. We have just begun to work with a global financial services brand too.

Simply put, we provide consulting and training services to help transform business outcomes. WHAT DO YOU FEEL ARE THE MAIN CHALLENGES FACING BUSINESSES AT THE MOMENT? It depends which sector they operate in, but the general challenges relate to changing customer expectations and behaviours. Much of this has been driven by the advent of digitally based services and with this comes the opportunity to innovate but also to be disrupted. Although technology brings opportunities, it is the people within businesses who will either respond to new challenges or be resistant to change, so this is why we focus upon people. 32

WHAT DO YOU FEEL ARE THE BUSINESS TRENDS THAT ARE LIKELY TO COME TO THE FOREFRONT IN 2020? Businesses generally will continue to be expected to adapt or die. The necessary changes will be expected to be achieved at an ever-increasing rate. More organisations will identify the need for transformation across the enterprise, with many adopting agile practices in key business areas such as marketing, finance, HR and operations. The opportunities for agile working within global marketing functions will grow, as organisations realise the power of a responsive voice to the world.

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REVIEW

BUSINESS LEADER LAUNCHES:

STEWART GOLF X9 FOLLOW F

or this edition, the BLM team got the opportunity to review Stewart Golf’s latest piece of tech – the X9 Follow – a revolutionary addition to the golf trolley market.

Gloucestershire-based Stewart Golf are a leading firm for British engineering within the golf industry – and for almost 20 years they have brought out a wide range of trolleys – both electric and push versions – to challenge the likes of other global brands, such as Powakaddy and Motocaddy. The company’s innovations even led them to be a recent finalist at the Business Leader Awards for the Manufacturing Business of the Year. Stewart Golf was founded with the sole intention of designing and building the world’s finest golf trolleys here in the UK. As a company owned and run by a group of engineers, the company’s ethos is to ‘design, innovate and build’ market leading golf trolleys.

SO, WHAT DOES THE X9 FOLLOW OFFER? Although Stewart Golf have several different electric trolleys on offer, the X9 is their flagship product. The X9 has its patented follow technology, which allows golfers to stroll the fairways with their bag of clubs following them a short distance behind (two paces). This is achieved through a handheld device with Bluetooth connection between that and the trolley. For those golfers who might find it unnerving having an unmanned piece of tech on wheels following you in close proximity, the X9 Follow also has incredibly responsive downhill breaking which means it will not crash into the back of the user. The remote also allows users to control the movement of the trolley, in any direction, with a distance of up to 50 metres. It is also possible to manually control the trolley by clicking the desired direction on

the remote, enabling users to then handle it through tight spaces, over bridges or in the car park. A Stewart Golf spokesperson stated: “The X9 Follow lets you focus on your game, not your gear and gives you the best chance of playing your best golf.” Weighing in at 14kg, and easily foldable to fit in a car, it is a quick and stress free set-up before a round. One of the biggest advancements within the industry as a whole has been the introduction of lithium batteries – and even with the introduction of the follow/Bluetooth technology, the X9 will last a whole round, even on hilly courses and difficult terrain. Price for the X9 Follow depends on which battery is selected; £1,499 for a ‘Standard Lithium Battery’, or £1,599 for the ‘Extended Capacity Battery’. It is also possible to get the trolley in three different colours; Pearlescent White, Metallic Black and Metallic Silver. Stewart Golf even claims that out of a survey of 1,146 customers, 91% felt more relaxed on the course and 68% claimed an average handicap improvement of three shots. But, does this hold up on a wet and waterlogged course in Bristol? BLM investigates.

Issue 11: November - December 2019

STEWART GOLF

BL REVIEW Assistant Editor, Barney Cotton As golfers, we are always looking at finding the latest tech or clubs to mask any shortcomings we have in our own game – and sometimes they do and sometimes they don’t help. The X9 can definitely make a difference to your game. Once the X9 Follow had arrived at Business Leader HQ, it was easily assembled and comfortably fitted in the backseat or boot of a normal-sized car. Both the lithium battery and handheld Bluetooth device were easily charged separately on household plug sockets. I will urge anyone to fully charge both, as when the X9 runs out of battery, with bag/clubs/etc, it is very difficult to push manually – and very heavy to carry. However, once fully charged and ready to go, the X9 took the stress out of carrying a bag and left you handsfree to enjoy the walk, have a drink or snack, or maybe plan your next shot. Business Leader - Inspire • Inform • Connect

In a world where many golfers have an electric trolley, the X9 Follow was definitely eye-catching and many other players stopped to ask about the follow function and how it works – showing that this is not just a fad, but the future of golf around the world. The follow function affords the player to just enjoy the walk without having to carry or push a bag – often the cause of back issues for many golfers. Even on wet ground in the rough, the X9 Follow kept up with me and didn’t get stuck – despite the fact there were a couple of wheel spins. I would advise purchasing the winter wheels for winter use – however, this comes at an extra cost of £99. This standard trolley is ideally suited to warmer and dryer courses – however, the X9 with winter wheels would be the most convenient as it allows golfers to keep both hands free to stay warm and dry. The course I played was especially undulating and due to the integrated stabiliser, it never fell over or went miles off course. It may be initially unnerving to see your trolley pulling wheelies – but you don’t need to worry about damaging your bag or clubs. On the remote mode, it is very useful to have the ability to turn 360 degrees, in order to drive the bag to your next destination – whether it be the next tee, near the green, or (hopefully) when you’ve bombed a drive past your playing partners.

The handheld device never loses connection from within the 50 metre range, and the variety of settings are incredible responsive. You may feel awkward about the buggy following you or running away – but after a few rounds, you know you can have 100% faith in the product. However, for future editions of this trolley, I would like to see more from the handheld device. Although the tech is sound and very responsive to your selections via Bluetooth, for the money the whole package costs, I hope in future the device has a digital display – maybe even with a built in GPS and scorecard, like it is with the golf watches? Other improvements I would like to see is the ability to see how much life is left in the battery – something that many of their competitors have. I would also encourage anyone interested in the device to get the X Series Travel Bag (£50), as the back of your car will end up being covered in grass and dirt – especially if it has been through a wet and wintery golf course. As it was when electric trolleys were first introduced, the price is quite steep for the X9 Follow. However, electric trolleys are now commonplace throughout golf courses across the country, and the X9 is blazing a trail for the industry to try and follow – no pun intended. 

ECONOMY, POLITICS & MARKETS

USA

£7.5bn

What do Chinese investors really think of Brexit?

CHILE

£5bn

BLM looks at the role Chinese investors are playing in stimulating the UK economy and how Brexit is influencing their involvement?

he ever-evolving story of Brexit has gripped the nation for more than three years, with every facet of business and wider-society feeling the impact of the vote to leave the European Union.

The major nations around the world have been interested onlookers, with some looking at the advantages a weaker Pound presents. But, what does the world’s largest economy think of the debate, debacle and, ultimately, the decision? BLM investigates. What do the statistics show? A total of 67 investments into 57 UK companies have included involvement from a Chinese fund since 2011. However, since 2017, the number of annual investments into UK companies that included a Chinese fund has dropped slightly from 19 to 16 in 2018 and just 12 in 2019 so far. Q3 2019 has seen the most investments of any quarter, with Chinese investors participating in seven equity deals. Henry Whorwood, Head of Research & Consultancy at Beauhurst, comments: 36

“The third quarter results are reassuring, and indicate that the yearly drop is unlikely to be because of political uncertainty. This fluctuation could simply be down to natural fluctuations in deal flow, or due to Chinese investors increasingly using different vehicles to invest abroad. This likely change in investor habits will have followed the highprofile scrutiny over Huawei’s attempted deal with US telecoms provider, AT&T. Instead, Chinese investors may be making investments as individuals or through Special Purpose Vehicles, through which deals are less visible.” It appears that overall Chinese investment in the UK is only going to rise though. According to FDI Markets, London is the leading European destination for Chinese Foreign Direct Investment (FDI) into the UK and Europe. In fact, it is the second largest recipient globally behind only Hong Kong. Chinese contributions account for over 10% of total FDI into London. Latest statistics compiled by law firm, Baker McKenzie and research company, The Rhodium Group, confirm that, last year, the UK overtook the US as the largest recipient of Chinese outbound foreign investment.

According to this joint report, Chinese outbound FDI in the UK stood at £3.83bn, followed by £3.73bn in the US and £3.14bn in Sweden. What is driving Chinese interest in British companies? To the Chinese, ‘Brand Britain’ has always represented quality, heritage and uniqueness, and still does. According to research recently released by Barclays Corporate Banking, Chinese consumers are still nearly 40% more likely to buy a product if the packaging features a Union Jack on it.

"TO DATE, THE UK HAS YIELDED ROBUST RETURNS FOR CHINESE INVESTORS. THE 30 FASTESTGROWING CHINESE COMPANIES WITH INVESTMENTS IN THE UK EMPLOY MORE THAN 3,500 PEOPLE AND ENJOY A COMBINED TURNOVER OF MORE THAN £43BN." Wendy Wu Issue 11: November - December 2019

REPORT

FINLAND

£4.5bn

£5.5bn Germany

£10bn

BANGLADESH

£4.5bn

NIGERIA

£5bn

AUSTRALIA

£2.5bn

As well as being an important trading partner for China, the UK is also considered to be China’s friendly ally in the West. The UK was the first to join the Asian Infrastructure Investment Bank, and after Chinese President Xi Jinping’s 2015 visit to the UK, the counties entered a new golden era of political relations. This has led to many current investors from a Chinese perspective viewing the UK as a country that is open to doing business. However, other global issues have impacted on the UK-China relationship. Wendy Wu, Director of China Outbound Desk at the TMF Group comments: “At a time when the UK’s traditional ally, the US, is at odds with China over a growing range of issues, Chinese investment into the UK is flourishing. We saw in 2017, intensified scrutiny on overseas deals, as the government sought to curb the unbridled outflow of capital and a build-up in corporate debt. Consequently, there was a steep 29% drop in overseas investment. However, from 2018 we noticed rising outward investment, thanks to clarity on the government’s strategic investment priorities, after new Business Leader - Inspire • Inform • Connect

rules governing outbound investment which took effect in March 2018. “This development has impacted the increasing investment into the UK. China Daily reported in August that Chinese businesses invested more money into the UK between January and August 2019, than they did in all of 2018. “To date, the UK has yielded robust returns for Chinese investors. The 30 fastest-growing Chinese companies with investments in the UK employ more than 3,500 people and enjoy a combined turnover of more than £43bn. According to the Tou Ying investment tracker, compiled by Grant Thornton and the China Daily, these 30 companies saw 66% average revenue growth in 2018. In my observation, for many Chinese businesses, Brexit is not deterring investment. Chinese investors realise that Brexit is both a challenge and an opportunity.” Jinzhao Li is the Managing Director of Cambridge China Centre and the cocurator of the annual Cambridge China Forum comments: “While 2018 began with

a large drop of activity, the second half of the year recovered to the previous year’s levels – and 2019 has seen continued growth to record investment levels. “More long-term reasons for the increase in Chinese investment include London’s position as a world finance centre, access to world-leading experts, favourable conditions for establishing a presence in Europe, strong IP protections and the consistent record of innovation in the UK.” And the Chinese government has been open in its support of Chinese investors and entrepreneurs looking to expand into the UK. What sectors have received the highest levels of investment? It is the Chinese focus on the tech sector that is the primary interest for investors – many of whom view Brexit as an opportunity, rather than a hindrance.

Cont.  37

REPORT

CHINESE INVESTMENT

Russ Shaw, Founder of Tech London Advocates & Global Tech Advocates, comments: “China has been a global leader in technology for some time, but now its innovation is going global. As with many prominent tech hubs, inward investments will stimulate growth to an extent, but the next stage is about connecting with other hubs around the world. “According to FDI Markets, financial services, creative industries, business services and tech are the largest sectors of investment – together accounting for two-thirds (66%) of FDI projects from China. However, China’s investment in its technology businesses and rapid growth of its start-up ecosystem means that we foresee particular interest in the UK tech sector moving forward.”

British tech companies and, in this respect, Brexit has done little to dent Brand Britain’s reputation. UK assets are still considered to be high value. However, as Chinese investors tend to invest in the UK first before moving deeper into Europe, many of them are holding off for now until they see what’s going to happen with Brexit.”

"IN THE UK WE HAVE THE CREATIVITY, THE TALENT, THE INNOVATION – WITH CHINA OFFERING THE CAPITAL, AMBITION AND UNDERSTANDING OF SCALE – THAT COULD LEAD TO COLLABORATION IN A NUMBER OF AREAS TO MUTUALLY BENEFICIAL ENDS." Russ Shaw Ting Zhang is founder and CEO of Crayfish.io, a full-service platform offering expertise, connections and capital, enabling businesses to achieve better engagement with China. In August, Crayfish.io launched the first ever funded initiative in the UK to help tech start-ups and small businesses get ‘China-ready’. She comments: “Chinese investors are still hugely interested in investing in innovative 38

According to a Tech Nation report, for the first seven months of 2019, foreign investment into the UK tech sector was £5.5bn, more than the whole of 2018. However, it isn’t just tech that has received interest from Chinese investment. Wu explains: “We believe thanks to investment in long-term projects, there will be a sustainable investment flow from China to the UK. As Chinese companies further establish themselves in key UK industries, we believe there will be expansion into broader sectors of the UK economy. “Consumer products, financial services, high-end manufacturing, healthcare, tourism and education, are well-known in the UK. It matches perfectly with China's demand to upgrade consumption and development thanks to rising living standards in China.” Will interest in British companies increase? Despite the looming spectre of Brexit, Britain appears to remain an attractive investment

opportunity, largely due to its thriving tech sector. Therefore, Chinese companies and others from around the world are still looking to invest in the UK and take advantage of the innovation, talent and resources available. Shaw comments: “In the UK we have the creativity, the talent, the innovation – with China offering the capital, ambition and understanding of scale – that could lead to collaboration in a number of areas to mutually beneficial ends.” Zhang continues: “From a Chinese perspective, Brexit has done little to damage ‘Brand Britain’ in Chinese eyes. Quite the opposite in fact. In China, ‘Made in the UK’ means three things: quality, heritage and innovation. And China remains as keen as ever to do business with the UK as a standalone unit from the rest of Europe, making this market a fantastic business opportunity for any UK business.” It is this mix of accessibility, talent, innovation and openness to China – as well as the view that Brexit can provide opportunities – that has led to Britain and China forging a new expanding relationship that looks set to keep evolving in the years to come. 

Issue 11: November - December 2019

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LEADERSHIP

SHOULD BUSINESS LEADERS SPEAK MORE ON PUBLIC ISSUES?

s our world continues to become more divided on major issues, should CEOs take a public stance on contentious subjects? Does doing so boost a leader’s credibility and their profitability, or does it hinder it? Charlie Mullins OBE

BLM investigates.

Is 2019 the time to take a stand? An ever-increasing number of global brands are taking a more active stand on environmental and socio-political issues. Firms like Ben & Jerry’s, Starbucks, CrossFit, Nike and Lush, have all recently used marketing campaigns and adverts as platforms to start a public debate around the importance of sustainability in consumption, racism, gun control, working conditions and the importance of LGBT rights and diversity, among others. Tim Martin

Deborah Meaden

Dale Vince

Sir James Dyson

Not surprisingly, this activist orientation that many firms have embraced is often broadcasted through their CEOs, with a number becoming more vocal and more willing to step forward and discuss political and social values that go beyond their company’s core business. Jackie Fast, star of The Apprentice, comments: “It is now time for businesses not only to stand for something, but to communicate their values to the world. Not only is this more sought after by younger generations from a purchasing perspective, but it’s also important as a differentiator in the market. A business with a clear mission and vision can become a brand – without it, you are just flogging a product or service. Issue 11: November - December 2019

REPUTATION MANAGEMENT

“As part of this shifting communication between brands and consumers, it’s not only important for CEOs to fly the flag, but to lead the entire company towards their vision and having a viewpoint on leading public issues is a sign of strength.” It is this shift in mentality that has seen many CEOs and leaders go from keeping their opinions in private to speaking out on public issues. Dr Achilleas Boukis, Lecturer in Marketing, University of Sussex Business School, comments: “While further study is needed into the longer-term implications for activist CEOs, this is a phenomenon that is not going away and many will feel that CEOs have a duty to take a stance and have a say on some of the most fundamentally important political and social issues. “To make the most of these opportunities and grow their company’s public standing and customer base, CEOs need to be seen to be taking a stand on important social injustices and to choose causes that are most relevant to their firm and its corporate history champion. Getting this right can be worth its weight in gold.” This evolution of leadership has been a recent addition to the role of a leader of a business, and one that has implications outside of their own company. Professor Michael Beverland, Head of Strategy and Marketing at the University of Sussex Business School, said: “Taking some form of leadership position has always been essential for brand authenticity and endurance. With the emergence of brand purpose, leaders taking a firm stance on key issues are a critical means to enhance the brand’s authenticity among customers, employees, and the wider public.”

"CEOS NEED TO BE SEEN TO BE TAKING A STAND ON IMPORTANT SOCIAL INJUSTICES AND TO CHOOSE CAUSES THAT ARE MOST RELEVANT TO THEIR FIRM AND ITS CORPORATE HISTORY CHAMPION. " Dr Achilleas Boukis

It is therefore an extra responsibility for a modern CEO, and something a business leader in 2019 needs to embrace. Dr Liz O'Driscoll, MD at Exeter City Futures comments: “Many of the challenges facing our society today are beyond the power of government alone to solve. Businesses therefore have a critical role to play and have a powerful voice in discussions around carbon neutrality, sustainability, smart cities, and many major issues. “CEOs can choose to directly engage in these conversations – but sometimes their decisions speak louder than works. Collectively, businesses have the power to make decisions that can change our entire system: choices about supply chains, resource management, and engagement with our local communities, which can all make big, important statements that can ultimately influence public policy.” Impact of millennials Another major influence on how leaders behave has been the changing demands of millennials, who will make up more than 45% of the workforce by the end of next year – overtaking the number of Gen X in employment (those born between 1965-80). It is their influence that is set to revolutionise the workforce and how a company and its leaders portray themselves to the public. Fast comments: “The influence that millennials have is completely different to that of previous generations, due to this demographic having grown up in the ‘Information Age’. With so much information available to them to inform their purchases and the direction with which they choose their careers, they are now able to make more conscientious decisions – and are choosing to do so. Brands need to have a strong and clear voice in the market if they are going to attract these savvy customers and this new workforce. “Millennials demand authenticity in brand messages and quickly disregard obvious whitewashing. With only 4% trusting the advertisements they see, it’s now critical for brands to utilise other communication channels to show that they stand for something – and one channel of ease is the CEO, who is typically followed on social media more than the brand they lead.”

Jackie Fast

"IT IS NOW TIME FOR BUSINESSES NOT ONLY TO STAND FOR SOMETHING, BUT TO COMMUNICATE THEIR VALUES TO THE WORLD. NOT ONLY IS THIS MORE SOUGHT AFTER BY YOUNGER GENERATIONS FROM A PURCHASING PERSPECTIVE, BUT IT’S ALSO IMPORTANT AS A DIFFERENTIATOR IN THE MARKET." Jackie Fast

Role of social media Mirroring the emergence of millennials in the workplace, is the influence social media now has on our everyday lives. Leaders can be eulogised and criticised instantly on social media – which provides a platform where views can be amplified. Journalist and broadcaster Neil Sean comments: “Businesspeople are always told that they need to personalise their brand or company. I disagree! What people want is direction, clarity and more positive information. CEOs are not movie stars or actors; they are running a company and how you portray yourself across the world of social media is vital to success.”

Cont.  Business Leader - Inspire • Inform • Connect

FEATURE

REPUTATION MANAGEMENT

"PEOPLE LIKE TO HEAR FORTHRIGHT OPINIONS, PARTICULARLY THE MEDIA AND IT HAS HELPED OUR COMPANY AS WE ARE NEVER AFRAID OF PUTTING ACROSS OUR POINT OF VIEW." Scott Mullins In regards to whether or not leaders should be worried about having a presence on social media, Emeric Enoult, CEO of social media management software, Agorapulse comments: “Social media solves more problems than it causes for CEOs. It is a bridge for both online and offline conversations with the people that CEOs and business leaders most want to reach. “At its core, social media itself is just a tool, but it needs to be wielded intelligently and purposefully. By listening, monitoring, and engaging in online conversations with target audiences, CEOs and business leaders can better understand them and ultimately strive to create better business products or experiences that make life better for customers.” However, it took only a tweet from Houston Rockets’ GM Daryl Morey in support of protesters in Hong Kong (“Fight for Freedom, Stand with Hong Kong”) to create a major diplomatic incident with China which threatens to derail years of work by the NBA to open up a $4bn (£3.1bn) market. With so much at stake from just 280 characters, many boards might well ask if it's worth the risk of having an outspoken CEO who wants to engage with controversial public issues. Even more destructively, some CEOs unreasonably jump into controversial debates or share regressive and unpalatable views that polarise their audience and put the value of their brand at risk. David Gelb, CEO of JBi Digital agrees: “If you have a genuine angle or personal experience, then express it, but do it in line with your company values or that of the industry you’re working within. Social media provides a platform for anyone to express an opinion with little fear of castigation. “Too often CEOs put personal image above their company’s reputation by jumping on popular bandwagons for publicity. The end result often causes more harm than good 42

Scott Mullins

because the public is often quick to point out the hypocrisy of CEOs who’s personal and business conduct does not match the social media line they’re pedalling.”

“People like to hear forthright opinions, particularly the media and it has helped our company as we are never afraid of putting across our point of view.”

How to deal with an outspoken CEO So, with all these outlets for CEOs to speak their mind in a very public arena, how do marketing teams and PR companies deal with outspoken business leaders?

It is a different case for some outsourced PR companies, who must take into consideration that their client might say something damaging to the brand at any point. However, it also can lead to new opportunities to grow.

Gelb continues: “Social media has been a gamechanger for the public, CEOs, and their respective crisis management PR teams. Many CEOs leave their profiles in the safe hands of their PR agencies. That way everything can be fact checked and edited to ensure comments don’t cause the company’s share price to plummet, much like it did for Tesla when Elon Musk unexpectedly announced over Twitter he was taking the company private.” Scott Mullins, Operation Director of Pimlico Plumbers, is the son of the outspoken and often controversial Charlie Mullins, and he believes that his father’s approach has overwhelmingly been good for the business. He comments: “It’s an exciting experience – we have never been shy about putting our head above the parapet and its part of our approach to life and business. We’ve always been bold in how we run the company and most of our customers like the way we operate.

"TOO OFTEN CEOS PUT PERSONAL IMAGE ABOVE THEIR COMPANY’S REPUTATION BY JUMPING ON POPULAR BANDWAGONS FOR PUBLICITY." David Gelb Hannah Haffield, MD of PR firm Make More Noise comments: “From a PR perspective, working with an outspoken CEO provides the opportunity to be bold, as long as they are outspoken in the right way. In fact, we have achieved far better results for the CEOs that are happy to share their opinion, as the media are far more interested in those who have something different and disruptive to say. “However, it is important to get this strategy right from the outset, where any ‘outspoken CEO' will need to be clear and consistent on what subject matters they can speak on, and how their opinion and content is positioned in the public domain.”  Issue 11: November - December 2019

NEWS

Neeta Atkar joins British Business Bank board The British Business Bank has appointed Neeta Atkar as Senior Independent Director to its Board. Atkar steps up into the role having served as a Non-Executive Director since July 2016 and will continue to Chair the British Business Bank’s Risk Committee. The previous incumbent, Christina McComb, steps down from the Board, having served two terms as Senior Independent Director since 2013. Lord Smith, Chair of the British Business Bank, comments: “I am pleased to welcome Neeta to her new role as Senior Independent Director and look forward to working with her closely as we continue to make finance markets work better for smaller UK businesses. “I would also like to thank Christina McComb for her contribution in providing valuable expertise and guidance over the last six years, including acting as interim Chair from October 2016 until July 2017.”

Lloyds bank profits wiped out by £1.8bn PPI claims The Lloyds Banking Group has recently announced that it has taken a huge £1.8bn hit from payment protection insurance (PPI) mis-selling compensation claims – which has almost wiped out its third quarter profits. Lloyds has now had to pay out almost £22bn in compensation for PPI. This latest update in PPI payouts meant that the bank reported profits of just £50m, and had a knock-on impact on the first nine months profits, which have fallen 40% compared to the previous year, to a total of £2.9bn.

You could be eligible for R&D Tax Credits You might be surprised by what can qualify as R&D (it’s not always about white coats and hadron colliders). We’ve helped numerous businesses claim back significant sums of money in all sorts of sectors. Here’s one bit of research you needn’t spend any more time on. Ask us about your own tax affairs today.

Find out more: rdtc@finchassociates.co.uk | 01275 867350 @finchassociates | www.finchassociates.co.uk Business Leader - Inspire • Inform • Connect

f FINCH

& ASSOCIATES

C H A RT E R E D TA X A DV I S E R S

INTERVIEW

CEO IN FOCUS:

CRAIG UNSWORTH C

raig Unsworth is the founder and CEO of ambitious tech business, Upgrade Pack. Here, he talks to BLM about his plans for the company.

CAN YOU TELL READERS ABOUT HOW YOU CAME TO START THE BUSINESS? I previously worked as a management consultant, where I would help companies that were around ten to fifteen years old and focused on what their next phase of growth would look like. I gradually started to see that technology was running away from many of them and often they had created a business that was too reliant on the founder; so, I would work with them to create and build tech products that could create additional revenue. 44

After several exits – including trade sales, Private Equity buyouts, and an IPO – I decided it was time to do it in the hot seat, as CEO. CAN YOU ALSO TELL US MORE ABOUT YOURSELF? I originally wanted to be an IT lawyer and studied at Edinburgh University. I have always manged to work at an incredible pace and get things done from an early age; for example, I completed my GCSEs in one year, which meant that I attended university at an earlier age than most. I became involved with business at university and started to establish contacts in industry – at places like RBS who funded part of my time at university. Building these contacts and investing time to learn about business and technology is what inspired me to become a consultant whilst I was studying.

I set up a business helping companies to get the most out of new media and e-commerce opportunities. I had built a successful consultancy business in Edinburgh within six years, before selling it to my management team. Following this I moved to London.

"FROM THE BEGINNING I WANTED TO BUILD A GLOBAL BUSINESS, SO NATURALLY WE’RE EXPOSED TO GLOBAL PRESSURES BUT AT THE SAME TIME WE’RE NOT JUST A UK BUSINESS RESPONDING TO A MACRO AND MICROENVIRONMENT IN ONE PLACE."

Issue 11: November - December 2019

CEO IN FOCUS

"WE HAVE ALREADY RECEIVED OFFERS FROM PEOPLE WANTING TO BUY THE BUSINESS, BUT WE WANT TO BUILD SOMETHING VALUABLE; AND BUILD AS QUICKLY AS POSSIBLE TO CRITICAL MASS."

but we started in June. 14 months later, our tech platform are fully built with offices in London and Singapore and employing 26 people in total. HOW IS THE BUSINESS BEING FUNDED? Last year, we raised £4.1m in private equity from investors. We actively decided to not take venture capital funding in the beginning, partly because we felt the restrictions and reserved matters that most term sheets had (we were made three offers by some truly brilliant VCs) would have slowed us down. But mostly because we felt that if we were going to take a cheque and form a new partnership, we’d wait to do it properly i.e. when we look for significant scale-up capital. Our aim is to be employee-owned and independent. WHAT IS THE FUTURE FOR THE BUSINESS? We are doing something that has never been done; so, the future is exciting. We of course want to continue to maintain our pace; and keep doing things that aren’t being done.

SO, WHAT DOES UPGRADE PACK DO? We help large corporates and banks reward and retain their best and highest value customers and employees. We do this by giving them exclusive access to rewards such as upgraded flights and discounts on hotels. Upgrade Pack have created the technology and platform that they can access to do this. We bring the airlines and hotels on board and don’t charge them fees. All our revenue comes from the banks, credit card operators and corporates. Originally this couldn’t be built because consumers don’t want to pay for discounts, so we needed to create the tech and marry up the consumers with the professionals. The business was incorporated in April 2018, Business Leader - Inspire • Inform • Connect

We have already received offers from people wanting to buy the business, but we want to build something valuable; and build as quickly as possible to critical mass. We’re also open to looking at partnerships or acquisitions as part of our growth.

Flexibility is important to us and our staff can access a pot of 50 days a year holiday and work anywhere in the world. ARE THERE ANY OTHER SECTORS YOU’D LIKE TO DISRUPT? I don’t think the venture capital sector is in a great place now. It’s very strong if you’re a 22-year-old software developer with an app and your happy to hand over a chunk of the business. But if you’re a seasoned businessperson with exits under your belt – there isn’t much in venture capital other than the money that you need. I’ve often thought about creating a hybrid between VC and private equity funding – which can add more value. I’m also curious about hotels. Could I build and run one? I don’t think I’ll ever retire. HOW DO YOU SEE THE TECH SECTOR CHANGING? I’m looking forward to moving beyond the current phase where the tech sector is seen as a rockstar movement, where you have computer science graduates getting poached with ridiculous salaries. Technology should be a facilitator and used to make change because we have phenomenal power at our fingertips. Is it right that our brightest minds are working on dating apps?

I want us to achieve unicorn status and have a billion-dollar valuation. We’ve already been valued at four to five times our current revenue.

I also think the novelty around fintech and AI is wearing off and we need to start taking advantage of how we maximise the opportunities they offer.

WHAT DO YOU SEE AS THE MAIN CHALLENGES YOU FACE? From the beginning I wanted to build a global business, so naturally we’re exposed to global pressures but at the same time we’re not just a UK business responding to a macro and microenvironment in one place.

YOUR FINAL THOUGHTS? We are building a business that we hope is different. There is little textbook to how we’re building it but lots of instinct.

Another challenge we face is talent and acquiring the best tech talent. We are building a different type of organisation that is very authentic and driven by diversity and inclusion, so finding the right people is key.

I believe that dropouts and entrepreneurs produce different thinking and outcomes and it’s always interesting to how they approach business. We also have a huge amount of rigour and robustness in areas like finance and operations – so I guess it’s a hybrid approach. 

Technology in the workplace – a force for good or bad?

he workplace is going through one if its most disruptive periods of change in history, with the evolution of technology being the main driving force of its transformation. But, has tech changed the workplace for the better? Do we now have an overreliance on it? BLM looks into the true impact of technology on our working lives.

Communications, data, office design, HR and the workplace have been impacted by technology, and business owners looking to scale-up are always trying to find new ways to integrate tech into their business to improve the way their staff work and increase productivity. The real impact of technology But is this always the case and does adding in layers of tech always benefit a scaling business?

Christopher Allen, Founder and Managing Director of MONTROC Consulting Ltd, comments: “Technology in the workplace has made them more agile; laptops and mobile phones are the basic tools for agile working. However, it has also made them more connected; the workforce can reach more people, more easily, more often than ever before.” Regarding agile or remote working, Susie Al-Qassab, Employment Partner at Hodge Jones Allen echoes Allen’s comments: “A key improvement of technology, is to enable remote working of employees, through the aid of laptops, mobiles, teleconferencing, and co-working spaces. While cloud technology and IM systems have allowed workplaces to become interconnected; workers can work from anywhere. This is particularly helpful for employees with young families, as it enables more flexibility in the working day than was previously achievable.”

almost three quarters of the UK workforce appreciate being offered flexible working, and many would now prefer this option to a pay rise. With technological developments such as video conferencing, online project management platforms, and enhanced communications tools, remote workforces are now a real possibility for many businesses. Dispersed workforce technologies enable businesses to widen their recruitment pools and target the best possible talent.

A KEY IMPROVEMENT OF TECHNOLOGY, IS TO ENABLE REMOTE WORKING OF EMPLOYEES, THROUGH THE AID OF LAPTOPS, MOBILES, TELECONFERENCING, AND CO-WORKING SPACES. Susie Al-Qassab

A study from Powwownow in 2018 found

Issue 11: November - December 2019

TECHNOLOGY IN THE WORKPLACE

Rob Orr, Executive Director at Virgin Media Business comments: “Over the past few decades alone, technology has transformed offices from rigid, hierarchical, paper-based environments into collaborative, intelligencedriven and productive environments. “It’s brought a wealth of opportunities for employees – the ability to work remotely; access and use data to improve performance and accelerate project delivery; and created countless ways to communicate with colleagues. It’s allowed businesses to manage their resources in a much more nimble and secure way, bringing the death of filing cabinets, ending reliance on network centres and enabling businesses to take advantage of cloud services as well as encrypted and scalable networks.” Is there an over-reliance on tech nowadays? It appears that technology has had a very positive impact on the workplace. Companies of all sizes and sectors now benefit from increased productivity and a more streamlined process. However, it is not all positive – just picture the modern office when internet goes down, for example. When the internet is working – emails are the primary source of communication for the majority of businesses. But, how has that impacted employees? Are there better alternatives on the market? Allen comments: “We have an over-reliance

Business Leader - Inspire • Inform • Connect

on email! Most of the tech tools we have access to are excellent but people often don’t know how to use them, mostly through a lack of training, are restricted from using them, or companies do not seek to analyse whether the tools they are using are still fit for purpose. Use of email should have reduced massively in favour of tools such as Slack, Workplace by Facebook, Microsoft Teams, Yammer and others.” The average person in the UK checks their phone every 12 minutes. It is not just social media that is at our fingertips as work emails and office-based tools are just a click away. In the quest to create a relaxed office environment, it can sometimes be hard to keep any work boundaries at all. Out of office worries can make the prospect of checking emails too tempting to resist. However, ‘checking in’ can have a detrimental impact on mental health, personal relationships and levels of productivity. Orr said: “Technology is vital to today’s workplace but amid all the conversations around digital transformation, and the wide array of solutions available, businesses can sometimes forget about the human side of running an organisation – looking after employees and customers. “Whenever a business leader invests in technology, they should challenge themselves. How will this impact customers? How will this make employees’

lives easier? The best examples of transformation combine an innovative spirit with an empathetic approach to people management and customer service.” It is this symbiotic relationship that is the key to both utilise the tech tools available, but also not become purely dependant on them. When modern technology first made strides into the workplace, many thought it would make working lives better. However, it could be argued that it has just shifted the issues of traditional working conditions to new challenges. Stephanie Kelly, chief people officer at IRIS Software Group comments: “At one time, it was predicted that our working week would become shorter, but instead, technology has created an ‘always on duty’ mentality. Having 24/7 access to work on your phone can be a double-edged sword, and technology should not be about squeezing more work out of employees.” Impact on productivity It is this combination of tech and human interaction that is at the heart of any successful innovation that is brought into a business. No matter what tech is introduced, it will undoubtedly impact on productivity and output.

Cont. 

FEATURE

TECHNOLOGY IN THE WORKPLACE

FIVE TECH BRANDS THAT HAVE CHANGED THE WORKPLACE

Allen comments: “We thought computers and the internet were going to free us all to have more leisure time didn’t we! Ironically we thought it was the desk phone that pins us to our office desks and yet we see presenteeism and a culture of mistrust creating just the same bind. Tech has the ability to make us more productive if we buy the kit that works for us, train staff how to use it, then drive and model the change in behaviours required to embed it and make it grow.” It is where this human understanding is key to introducing the right tech to improve productivity. He continues: “There are thousands of tech solutions out there, hardware and software, so understanding the flow from your business mission and values and into how your culture works is key to adapting to new technology. Employees can be swamped by an ever-increasing list of tools so keep it simple, run pilots, and start early!” But overall, the introduction of new technologies has increased productivity in the workplace claims Orr. He comments: “From retail to restaurants, architecture to the arts, technology underpins how we work today and provides an enormous boost to productivity. 48

"Technology has moved us away from ploughs and paper records, to self-driving combine harvesters and SQL databases, putting an almost unlimited amount of information and power at our fingertips. Technology allows us to connect with customers and colleagues in real time – supporting better and faster decision making – and helps boost productivity. It’s now virtually impossible for a business to have a meaningful impact without access to fast networks, mobile connectivity and the ability to complete tasks on the move.” Impact on HR The traditional scope of human resources – covering areas such as learning and professional development, performance management, and recruitment – is fertile ground for technological innovation too. Management teams now have access to a plethora of tech offerings, which shake-up tools like performance management models and training resources, or focus on specific areas for improvement like bias reduction in the recruitment process. Regarding the modern recruitment process, tech also plays a huge role. Whether it is to do with the tools any prospective employee will use, to how they apply for the role – there are many different factors to consider.

Orr said: “Talented workers want to join businesses that invest in effective technology. Talented people increasingly expect to work in a collaborative, flexible and effective way. They need to be able to share files seamlessly with colleagues, work from the comfort of their own home and make use of emerging technologies to improve the quality of their work. Unless a business focuses on its technology, it simply won’t be able to deliver all this and will inevitably miss out on attracting skilled employees.” 

Issue 11: November - December 2019

ADVERTORIAL CASE STUDY

Leading marketing agency stands out thanks to Clip A leading full-service marketing agency has been the star of the show at two recent exhibitions after teaming up with Clip. Purplex wowed delegates at two of the biggest events in the glazing industry calendar with the help of the Bristol-based leading exhibition stand supplier. They enlisted Clip’s help to provide a festival vibe at Birmingham NEC for this year’s FIT Show, and the result was an impressive 120m2 stand which also featured an enclosed seminar space, meeting area, music and a bar. The partnership continued for the Glazing Summit, a one-day conference that attracted around 350 industry leaders to Edgbaston for a day of debates and keynote speeches on the challenges facing the glazing industry. This time Clip provided a small, easy to erect stand which also got attendees tongues wagging and can now be used by Purplex at other events. A delighted Andrew Scott, CEO of Purplex, Business Leader - Inspire • Inform • Connect

said: “Exhibitions are hugely important for us as a business, but the challenge is to stand out and make sure your stand is the one that people want to go to. “Clip turned our ideas and vision into a reality thanks to their great design team and they were hugely supportive throughout the process. “The effectiveness and ‘pull’ of your stand cannot be underestimated at exhibitions and events, and thanks to clip both of our stands were stars of the show and we attracted great footfall at both events.

“Our motto is to make our clients’ life simpler, maximise their budget at a live event and make them stand out from the crowd and it’s great to hear that we did that.” Founded in 1979, Clip’s exhibition services team provide everything from exhibition stand management and consultancy through to stand design, build and storage as well as training and other value-added services. Clip also supplies many multi-event and display solutions ranging from bespoke exhibition stands to self-build exhibition systems.

“It doesn’t matter if you need a huge, highenergy stand or a smaller one, Clip will help make sure it gets you noticed.” Paul Runacres, Clip’s Business Development Manager, commented: “We’re delighted that Purplex enjoyed two successful exhibitions and our stands helped them connect with their audience. Their concept was challenging but our team enjoyed making it a reality.

To make sure your business stands out from the crowd, call 0117 937 2636 or visit www.clipuk.com 49

INTERVIEW

'90% of retail transactions are still carried out in physical stores' It’s time for a dose of reality about the retail armageddon

LM met with global retail guru Jens Nordfält to get the reality on retail and find out what the future holds for this sector in transition.

It’s interesting that online natives such as Amazon are making sure they have a physical presence. It’s not a coincidence that Amazon’s biggest investment was the purchase of a physical chain of stores – Whole Foods Market. What has happened is that omni-channel has become the key for retail businesses and it appears this if the future. WHERE ARE THE RETAILERS THAT ARE FAILING, GOING WRONG?

WHAT DO YOU FEEL ARE THE MAIN ISSUES AFFECTING THE RETAIL SECTOR? Digital transformation has had the biggest impact – whether that is around back office logistics and systems for retailer or e-commerce it has changed business models. Everybody in the retail world – whether you’re Amazon or bricks and mortar stores – are struggling with understanding what their role is and what type of business they are in. The impact of online is not having the impact that many think though. Five years ago, it was predicted that physical stores would be swept away by e-commerce but that hasn’t been the case and 90% of retail sales still go through the physical stores and only 10% is through e-commerce. Yes, most of the growth is through e-commerce but even that has declined in the last couple of years. 50

It’s about transformation and being able to adapt because the number of physical square metres being used by retailers is going up but just not in the traditional way. Retailers just need to find and adapt to their new roles because you don’t say much when a web page closes because it’s not as obvious as when a physical store does, but both will be happening. It’s also worth thinking about some statistics from Westfield – who are Europe’s largest commercial real estate agent. If you open a store in one of their malls, online sales go up by 53% in your business. You then close if you lost a third of your online sales. Physical stores work as an important advert and there are inherent problems with e-commerce because if you’re not in the top three or four in a Google search, you’re not visible. Successful brands need to have both a physical presence and slick online operation. The retail brands that aren’t surviving are either not running themselves properly, they haven’t adapted, or it was just bad luck –

like with the travel sector which has been disrupted by Airbnb or retailers that were selling DVDs or vinyl records. In some cases, digital has taken over but if you’re failing in verticals like grocery it’s because haven’t adapted or you don’t have the financial muscle to adapt.

"EVERYBODY IN THE RETAIL WORLD – WHETHER YOU’RE AMAZON OR BRICKS AND MORTAR STORES – ARE STRUGGLING WITH UNDERSTANDING WHAT THEIR ROLE IS AND WHAT TYPE OF BUSINESS THEY ARE IN. "

Issue 11: November - December 2019

JENS NORDFÄLT

CAN YOU GIVE AN EXAMPLE OF A RETAILER THAT HAS GOT IT RIGHT?

hasn’t been wiped out and I said earlier, 90% of sales are still in store.

Walmart is a good example of a store that has adapted. They have been very clever behind the scene and invested in operations, logistics and automation but if you were to look at their physical operation you wouldn’t be impressed. There are no drones just trucks and the distribution centre look old and it is very people intensive.

But it is being transformed as a sector and whilst I wouldn’t say a niche is at risk any retailer that holds lots of stock, whether that’s seasonal or fashionable are going to have to be on their toes because you have to be careful when it comes to being overthrown by your own merchandise.

It’s not always the case that the stores that survive are really on top of digital trends but it’s the ones that know what they should be good at and invest in the right areas of the business. IS THERE A SECTOR IN THE RETAIL SPACE THAT IS MOST LIKELY TO BE DISRUPTED NEXT? I’m never sure why the retail sector has been given so much media attention because it Business Leader - Inspire • Inform • Connect

Shoppers often know what they want before they come into the store, so if they get to the store and can’t find it then they will leave and go online. A solution to this is to be omni channel with some stock in store and a wider range online but with staff in store who can sell the online solution to you there and then, with fast delivery. That way you can service the customer and not have to hold too much stock.

It’s interesting to note that H&M have the highest online activity in the geographical regions or their stores. WHY HAS IKEA BEEN SUCH A RETAIL SUCCESS STORY? You’re starting to see more stores stealing ideas from IKEA because they do so many things well. In store, they are very good at presenting the merchandise in a way that you would want to use it. It’s almost impossible to go into an IKEA store and not be inspired. You may think it takes too long to navigate the store but there is always an idea or inspiration you can leave with.

Cont.  51

INTERVIEW

JENS NORDFÄLT

At a more technical level there is also a science to IKEA. You’re not allowed to walk more than 17 metres before you must turn. You’re always turning because they realise that our eyes are positioned in our heads and not on our ears like rabbits and most stores don’t operate in this way. In retail, a key area of the store is known as a hotspot and in Ikea you will walk towards more than 100 hotspots in a store – way above the average. It is a unique retail experience, but it hasn’t been created by chance. Everything in the store is designed in this way to have an impact on the customer. WHAT IMPACT IS TECHNOLOGY GOING TO HAVE ON THE RETAIL SECTOR? I worked on a project that loaded loyalty cards with Near Field Communications (NFC) but regulations around GDPR has stalled this and I would say the next generation is now around facial recognition and how this impacts your journey in the store. Certainly though, NFC and iBeacons haven’t had the influence people expected and this has been due to regulation, friction and precision. One thing you’re seeing though is smart mirrors where you can communicate with it by voice control. You can try a top on and ask what the price is, where it is made, and you can ask to see it in another colour. This is just around the corner and we’ll start to see it more and more. AND HOW ABOUT THE IMPACT THAT SMARTPHONES WILL HAVE? We ran a rest around the use of phones in stores and whether a person using a phone spent more in the store or spent less. The results showed that shoppers who use their phone in store actually spend 40% more than those that don’t because often they’re on autopilot and don’t feel as stressed and compelled to leave the store as soon as possible.

"THE QUESTION IS – IF YOU COULD BUY EVERYTHING FROM YOUR SOFA WOULD YOU DO IT? OR WOULD YOU LIKE TO GO OUT AND MEET PEOPLE? STAFF LESS STORES ARE A SOLUTION FOR SOME BUT NOT FOR ALL."

This report has changed the face of retail because management now encourage staff to use their phone, stores have Wi-Fi – they want us to be on our phones. It’s completely flipped retail. WHAT DO YOU SEE FOR THE FUTURE OF AMAZON GO STORES? You will see more stores like this operating but they won’t be for everybody. Shoppers fall into the categories of economic, social, ethical and apathetic. Social shoppers make up one third and they like to have interaction and so they are less likely to use a store like this. The question is – if you could buy everything from your sofa would you do it? Or would you like to go out and meet people? Staff-less stores are a solution for some but not for all. CAN YOU TELL READERS ABOUT YOUR EARLY LIFE IN BUSINESS AND ACADEMIA? I'm from Sweden and I have worked in retail and academia for all my life. When I find that academia is too slow, I go back into business and when I find that businesses are too sloppy; I go back into academia.

a store and knowledge around visual merchandising and in-store marketing. Because of this, I asked my boss at the time if I could become a doctorial student and continue to work at ICA and I enrolled on a PHD at Stockholm School of Economics. Following this, I was asked by ICA to get up an experimental department within the business and as part of this I got to play with 2,500 stores and develop winning retail strategies. I could create and change merchandise and layout within the stores and my work had a huge impact on the business models of ICA. WHAT DID YOU DO AFTER THIS? I was then approached by the former CEO of ICA who told me that the industry had an issue with engaging young people, so I worked with him to establish a research foundation and I became CEO of this. I was then asked by the Stockholm School of Economics to set up a retail management school for them.

My career started at the head office of Sweden’s largest retailer ICA. It’s a grocery store and they have higher revenues than IKEA and H&M, even though they aren’t as well known globally or as big. But it gives you an idea of their size.

This had a major impact in Sweden due to its success I went to the USA, where academics and business leaders were looking at my research and were impressed because they had never seen field experiments of that magnitude. Normally experiments and research is done in a laboratory environment, but we were conducting studies with 200 or more stores influencing major change.

Whilst working there, I realised soon that there wasn’t much analysis and insight around how you can get the best out of

Being in the USA also allowed me to study retail models there, which I could implement in my own businesses.  Issue 11: November - December 2019

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REGIONAL FOCUS

Issue 11: November - December 2019

MEDIACITYUK

How has MediaCityUK changed Greater Manchester?

he 200-acre mixed-use property development on the banks of the Manchester Ship Canal in Salford has drawn the attention of some of the Britain’s biggest creative businesses.

Construction for MediaCityUK began in June 2007 on a former wasteland that once housed the Manchester Docks. Today, the site has been transformed beyond recognition and is now a world-class creative and tech hub.

In 2019, MediaCityUK is firmly established as the home for the BBC, ITV, the University of Salford and many creative SMEs that are revolutionising the media industry for the whole of the UK. Today, the site is recognised as one of Europe’s largest creative, digital and technological centres, employing 7,000 people. What is MediaCityUK? MediaCityUK is a joint venture between The Peel Group and Legal & General Capital to develop a world-leading business destination for the media and creative sectors. Rachael Dickie, Head of Urban Regeneration at Legal & General Capital, comments: “Legal & General wanted to back a well-known local developer and operator in supporting the regeneration of Salford Quays, with a bold ambition to transform it into a global media cluster.

growth areas of the economy where funding is not available, using our own balance sheet capital to drive further development of MediaCityUK. “MediaCityUK has created thousands of jobs and helped create new businesses. It has provided an economic powerhouse in the North West and established an anchor destination where people can live, work and play.” As well as being a hub for businesses, the site also has office space, retail, a tech centre and Lightbox – a group of luxury two and three-bed apartments. The Landing @ MediaCityUK is a co-working space, business support programme, event space and communal area for the site’s occupiers. All of these assets have given prominence to MediaCityUK as a leading business destination in the UK.

“It has been an amazing investment and provided many opportunities for us and its occupiers. As a business, Legal & General Capital’s purpose is to invest in and back Business Leader - Inspire • Inform • Connect

REGIONAL FOCUS

Stephen Wild, Managing Director of MediaCityUK comments: “MediaCityUK is a melting pot of creativity and innovation and home to a true cluster of incubators, SMEs and major multinational players. As a destination partnering with The University of Salford we have enabled industry and academia to collaborate with enterprises big and small, which has ultimately driven the innovation agenda across MediaCityUK and the wider Greater Manchester economy.” And it isn’t just the start-ups and SMEs that are taking advantage of everything that MediaCityUK has to offer. Wild continues: “Multinationals such as Ericsson, Kellogg’s, The Hut Group and Huawei are attracted to MediaCityUK for its digital and tech capabilities, enabling them to tap into the breadth of knowledge and skill onsite. They sit alongside our 250 strong SME community and as MediaCityUK expands there will be space for further occupier expansion.”

The impact of the BBC and ITV Perhaps the site’s most famous inhabitants, the BBC, have sang the praises of MediaCityUK, ever since they moved into Salford. When the BBC moved up North (starting in May 2011), there was a lot of public outcry at the decision to move out of London. However, both the company and the Greater Manchester region have benefitted greatly from the move. Wild comments: “BBC North and ITV have been the bedrock for content creation nationally and as a result of their presence here at MediaCityUK, Greater Manchester has become a place synonymous with highquality broadcasting output. It has been one of the main growth stories of recent times and has undoubtedly contributed to the region’s burgeoning economy and growth of other facilities in that sector. “The boom in the creative, digital and tech sectors has enabled us to nurture and retain talent in the North. There really is no need to relocate to London, as has historically happened.” And Wild believes the BBC’s decision cannot be understated when looking at how it has impacted the North. He comments: “The BBC’s decision to base a number of its departments in the North over 10 years ago not only kick started MediaCityUK but also influenced the creation of a powerful broadcasting proposition in the North.

"THE BENEFITS OF THE MEDIA CITY ECOSYSTEM ARE PHENOMENAL. THE BUSINESS COMMUNITY IS THRIVING AND THERE’S NEVER A DULL MOMENT." Lee Biggins

“Its presence has been a catalyst in pushing Greater Manchester to the forefront of content creation, and coupled with its technological expertise, BBC North is helping drive the innovation agenda.”

"ITS PRESENCE HAS BEEN A CATALYST IN PUSHING GREATER MANCHESTER TO THE FOREFRONT OF CONTENT CREATION, AND COUPLED WITH ITS TECHNOLOGICAL EXPERTISE, BBC NORTH IS HELPING DRIVE THE INNOVATION AGENDA." Stephen Wild

Adrian Mills, Director of Business and Operations for BBC England agrees with MediaCityUK’s assessment of the move. He comments: “It has been a great home for the BBC for a number of reasons. One is that we have a completely different operating model here. So, for example, we do not own the building, it is leased. So, straight away we operate differently to how we did in London. Yet, we have been able to have state of the art technology that would have cost us so much more if we had continued in London. It would have cost so much more to upgrade what we had, than it cost us to move here. Also, we are part of the community here that is very different – there is a creative background that backs up the creative legacy that the North has. “As well as the Imperial War Museum, The Lowry, the university and ITV – we are a part of a community that wasn’t necessarily there in London. There are a lot of financial, creative, and cultural benefits. And in terms of a work/life balance and quality of life, being in the north and here in Manchester means that there are a lot of advantages that people can enjoy. This is especially true for young people, as London prices them out of the market, whereas here there are affordable homes, a vibrant and young culture, world-class entertainment – that has all added to the region as a great home for the BBC. On so many fronts, there are a lot of advantages for being based here.” One of the BBC’s main competitors, ITV is also based at MediaCityUK, and has enjoyed the same success since they moved to the site in March 2013. Issue 11: November - December 2019

MEDIACITYUK

John Whiston, Head of ITV in the North comments: “ITV is thriving at Media City, we currently have over 1,000 colleagues on site and in the last year we’ve produced over 1,000 hours of content alongside our news output. With more production than ever coming from the North our new home has meant we’re at the heart of it all, something we're very proud of considering our northern roots. “Granada’s original buildings and studios had ceased to be fit for purpose so ITV needed to find somewhere where we could build bespoke studios and an outside lot for Coronation Street, as well as up to date office and studio space for our growing production and regional base in Manchester. “We needed modern, bright, streamlined workspaces with great connectivity to enable the company to fulfil its transformation plan and futureproof how it works in an increasingly fast-paced multiplatform world. MediaCityUK offered all these things, as well as having the proximity to other media companies such as the BBC. It was also a move to ensure ITV was placed at the heart of what is essentially one of the world's largest media hubs and enabled us as a brand to be recognised in what was fast becoming a unique and vibrant creative quarter.” Has it improved the Greater Manchester region? MediaCityUK has provided the pathway for growth for both large and small companies in Salford – but what impact has the site had on Greater Manchester and the North West? Wild comments: “Manchester is synonymous with the industrial revolution and today MediaCityUK is at the epicentre of the 21st century digital revolution. Some of the greatest digital and tech innovations of our time are being developed, tested and launched within MediaCityUK, enabled by the super advanced connectivity delivered by the Vodafone’s 5G hub based in The Landing. “Innovation drives economic growth and the presence of 5G at MediaCityUK is a game changer for the businesses, start-ups and tech innovators who are leading the way in exciting advancements. “Occupiers within The Landing continue to trail blaze across many sectors, notably Business Leader - Inspire • Inform • Connect

with the Smart City and Internet of Things agenda which we’re watching with interest.” One of those companies enjoying the ecosystem that MediaCityUK has created is CV Library, who are one of the main occupiers of the site. Lee Biggins, CEO of CV Library comments: “MediaCityUK has been a great home for us. There are plenty of dynamic companies based in Manchester, which means there are fantastic opportunities for us to connect with more organisations in the region and help them with their recruitment efforts. It has helped us to target more companies in the area and connect them with the right candidates. The benefits of the MediaCityUK ecosystem are phenomenal. The business community is thriving and there’s never a dull moment.” What does the future hold for the site? The joint venture has ambitious plans to double the size of the development by 2030,

after plans were approved last September, with a further £1bn of private investment to come. According to Legal & General, the broad plans going forward are; to link up with more local stakeholders on the estate and Salford area to consolidate MediaCityUK as a destination for media and technology as well as a great place to live. They will also be looking to develop remaining plots of land to provide more commercial and residential accommodation. Wild concludes: “The future is incredibly exciting which will see MediaCityUK double in size by 2030. A £1bn investment will bring ten new buildings, providing 540,000 square feet of modern work spaces which enhance collaboration, 1,800 new apartments, retail and leisure as well as attractive public realm areas. All this will be underpinned by our continued commitment to deliver a sustainable destination with enhanced physical and digital connectivity. As smart city and Internet of Things (IoT) concepts develop we will be in the right place to harness all these exciting innovations.”  57

LATEST NEWS

British Steel receive £70m rescue deal from chinese firm

British Steel has announced a £70m rescue deal with a Chinese industrial giant, which could save more than 4,000 jobs across the company's sites in Scunthorpe and Teeside. The Jingye Group has agreed in principle to purchase British Steel, where the government will help through loan guarantees and other financial support. British Steel has been kept running by the government via the Official Receiver since May, when the company went into liquidation. This deal came into place after talks with the company behind Turkey’s military pension fund, Ataer, stalled in October. The deal has also secured more than 1,000 workers in The Netherlands and France – as well as more than 20,000 in the European supply chain. British Steel will continue to be run by the Official Receiver until midDecember before being transferred across to the Jingye Group.

Two new government hubs announced for Birmingham and Peterborough

Two key city-centre sites are to be regenerated as part of a government programme designed to boost regional growth and save taxpayers’ money. The Government Hubs programme has so far seen the development of 14 office hubs around the country, providing civil servants with state-of-theart working environments designed to boost efficiency and drive savings through increased efficiency. The new hubs in Peterborough and Birmingham will be a boost to local businesses who can look forward to

increased footfall and a combined 2,700 civil servants using the local amenities. The Birmingham hub alone is set to save taxpayers an annual £6m annually through improved efficiency. The Minister for Implementation at the Cabinet Office, Simon Hart, said: "The opening of these new hubs is great news for local businesses in Birmingham and Peterborough. Developing Government Hubs helps to bring forward vital regeneration projects across the country and boost local economies.”

mac-group completes build of £5m Sheldon Retail Park West Midlands-based construction company mac-group has completed works at a £5m retail park in Birmingham. The former Severn Trent Water site on Coventry Road has been transformed into a 27,000 sq. ft. retail space, with a Marks & Spencer food store, B&M Bargains and The Gym Group. Altogether there are five retail units, all with full-height glazing 58

and external canopies, on the phase two development, between 3,483 sq. ft. and 18,646 sq. ft. in size, plus a car park with 582 spaces. CEO Paul McKenna, said: “We’ve delivered a very high-quality development for Chase Midlands Estates, which enhances the local retail offer and provides much-needed facilities for the area that will attract shoppers from across the area.” Issue 11: November - December 2019

LATEST NEWS

New production line starts at Nissan Sunderland following £100m investment Nissan has started production of the new Juke at its Sunderland plant, following a £100m investment. Designed, engineered and manufactured in the UK, the new Juke has been developed specifically for European markets, with Sunderland the only production location for this second-generation compact crossover. Nissan Europe Chairman, Gianluca de Ficchy, said: “35 years ago, Nissan decided to create a plant in the UK to serve our European markets. Ten million vehicles later, Sunderland is the biggest UK car plant in history and the all-new Juke is the most connected Nissan car. With more than 35,000 jobs supported by Nissan in the UK, I would like to thank our experienced and skilled teams in Paddington, Cranfield and Sunderland, and our wider supply base, for their efforts in bringing this all-new model to life.”

Macclesfield composting tech chosen for luxury Raymond Blanc hotel Raymond Blanc’s Michelin-starred luxury hotel and restaurant Belmond Le Manoir aux Quat’ Saisons has invested in food waste drying technology from Macclesfield-headquartered Tidy Planet, helping the site to compost 94% of its annual food waste.

Protolabs speeds forward with £5m expansion A Midlands-based digital manufacturer of custom prototypes and low-volume production parts has released investment on a £5m expansion plan at its European HQ in Telford. Protolabs, which works with thousands of product designers and engineers across Europe every year, is building a bespoke 50,000 sq. ft. extension to its Halesfield facility. It will house 50 additional CNC machines and 20 injection moulding presses. This investment will help the company meet growing demand from clients across the automotive, aerospace, medical, electronics and heavy industry sectors. Bjoern Klaas, MD of Protolabs Europe, commented: “The focus now, more than ever, is on speed and making sure new products and components are either first to market or ready when the end customer needs them.”

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The A1200 Rocket Composter is the waste solutions provider’s third largest machine and can handle up to 2.5 tonnes of food or organic wastes per week. It will be located next to the iconic restaurant’s gardens and process the kitchen’s compostable wastes, plus the site’s horticultural wastes.

generating 25-30 tonnes of compost. Belmond Le Manoir’s health, safety, security and environment manager Rhodri Williams said: “The Rocket Composter will not only enable us to implement a closed-loop system for our organic food wastes, but it will change our recycling and food waste culture, helping to further foster sustainable best practice."

Before entering the composter, a Gobi 400 Food Waste Dryer – also supplied by Tidy Planet – will be used to pre-treat these wastes, including post-consumer plate scrapings, single-use plastic replacements, paper hand towels and poultry bones. The resulting compost resource will be used in the hotel’s vegetable and herb gardens and orchards, to grow organic produce for use in the two-Michelin-star restaurant, as well as the Raymond Blanc Cookery and Gardening Schools. With the new equipment, Belmond Le Manoir expects to process around 50 tonnes of organic wastes per year – 59

LATEST NEWS

Manchester United hit record revenues Manchester United have reported record revenues of £627m from the year to July, despite the club's ongoing on-field decline.

Legal & General acquires Quarry House in Leeds for £243m Legal & General announces that it has acquired Quarry House in Leeds for £243m. Representing its eleventh Government hub deal, the deal brings its investment into the Government Hub programme to over £1.5bn and investment into Leeds to over £1.1bn. Acquired on behalf of Legal & General Retirement, the 373,913 sq. ft. office-based building is situated on the eastern fringe of Leeds city centre and let to The Secretary of State for Housing, Communities and Local Government for 25 years, on behalf of the DWP. Nigel Wilson, CEO of Legal & General Group, said: “We have never had such a great opportunity to shape our future cities in order to rocket fuel our economy and change lives for generations. $17tn (£13.2tn) earns less than nothing globally and we have growing pools of pension capital in the UK. Patient capital needs investment opportunities. That is why we will continue to invest in UK cities. Our latest Government Hub in Leeds is another great example.”

Last season, the club suffered a turbulent season which saw the club finish sixth and manager Jose Mourinho being replaced by United legend, Ole Gunnar Solskjaer. Broadcast revenue soared by 18% thanks to new Champions League and Premier League deals, however, the team expects revenue and profit to fall in 2019-20 after it failed to make the Champions League this season. Despite being the pantomime villain for the club's fans, Vice Chairman Ed Woodward was buoyant about the

future of the team. He said: "We remain focused on our plan of rebuilding the team and continuing to strengthen our youth system, in line with the philosophy of the club and the manager. Everyone at Manchester United is committed to delivering on our primary objective of winning trophies."

EdTech start-up secures significant investment Chester-based EdTech brand GoBubble has successfully raised over £300,000 in an investment round through a select group of prominent investors, supported in part by Leeds-based investment non-profit NorthInvest. GoBubble is an EdTech start-up, which offers children a safe social media experience, founded by e-safety pioneer Henry Platten. Following a successful beta, GoBubble currently has users across 24 countries and in 26 US states. The GoBubble global community offers children, educators and families the opportunity to create and communicate in a safe digital space.

Brabners nets new partnership with LTA The LTA, the national governing body for tennis in Britain, has appointed independent legal practice Brabners to provide legal and tax services to the organisation and its members across Great Britain.

As part of the service, Brabners will provide advice to over 2,600 LTA registered tennis venues, 38 County Associations, nearly 1,000 LTA Licensed Officials and almost 5,000 LTA Accredited Coaches.

Brabners will provide a free legal and tax advisory helpline to tennis venues, county associations and coaches to add to the comprehensive package of support the LTA delivers to those helping it grow the sport in Britain.

Lydia Edgar, Head of Sport at Brabners, said: “We have in-depth experience of the challenges faced by major sporting bodies and how the business of sport continues to boom, so we look forward to bringing our expertise to the table.”

Issue 11: November - December 2019

LATEST NEWS

Esports jobs platform Hitmarker smashes equity crowdfunding target

Whittlebury park invests £1m to create new hospitality space Hitmarker, the largest jobs platform in esports, launched its equity crowdfunding campaign on Crowdcube on Friday 1st November and had raised 250% of its target by the following Thursday. The company will now seek to double its full-time headcount in order to expand quickly into the wider video game industry. Hitmarker’s initial equity crowdfunding target was £80,000, which was offered in exchange for 4% equity, and the company set a cap of £200,000, which was offered in exchange for 9.43%. The campaign had a runway of 30 days to raise just the minimum amount but ended up being concluded after just six when Hitmarker hit their upper target well ahead of schedule. This amount was pledged by a total of 405 investors from 37 different countries and the average amount invested was £500. Over the six-day period, Hitmarker averaged one investment every 20 minutes. Hitmarker’s Founder, Phil Huggan, said: “Before we launched our crowdfunding campaign, we created cash flow forecasts based on the different amounts we thought we could raise, and £200,000 was accounted for in these. We’ll use the extra £120,000 wisely, by increasing our marketing spend and paying more competitive salaries with the view of dominating the video game industry’s hiring landscape, just as we’ve done in esports. We expect this to increase the number of jobs on our platform five-fold and lead to a similar surge in the number of users we have.”

Whittlebury Park has announced plans to invest £1m in its Conference & Events spaces. Phase one of the significant project commenced on 11th November and will include a range of new room concepts, including an ‘inside, outside’ space, contemporary corridor seating and brand new coffee stations. The project is being led by Monica Hira of Hira Hospitality Interiors, who has worked closely with the team at Whittlebury to design the new suite of inspirational spaces. Whittlebury Park’s facilities include 19 Training & Meeting Rooms and 15 Syndicate Rooms, all of which will be included in the refurbishment. The project will see every element of the rooms being

upgraded to introduce modern and functional fixtures and fittings as well as entirely bespoke elements and inviting colour schemes. Hira commented: “I am delighted to be collaborating with Whittlebury Park on this project. This will be a remarkable transformation and will include a diverse range of ideas, from new Biophilic flooring to the quirky indoor treehouse! "We have also included comfortable and stylish furniture along with new lighting concepts. We want to ensure that delegates have a memorable and unique experience at Whittlebury and so it was important for the designs to make a lasting impact.”

Shakespeare Martineau advises Grain LNG on major capacity expansion The energy team in the Birmingham office of law firm Shakespeare Martineau has completed the latest stage in a major piece of work for National Grid Grain LNG Limited, part of National Grid, as it announces its latest plans for a potential significant boost in capacity at its liquefied natural gas (LNG) importation terminal in the UK. Based in the Thames estuary, Grain LNG’s terminal is a vital part of the UK’s energy infrastructure, with the largest LNG tank capacity in Europe. Allowing direct access to the UK’s NBP (National Balancing Point) trading hub, current Business Leader - Inspire • Inform • Connect

capacity at the terminal is in high-demand among leading global energy companies. The next phase of redelivery capacity will be operational from mid-2025. Andrew Whitehead, Head of Energy at Shakespeare Martineau, said: “This is a milestone for Grain LNG and is a significant moment for the UK’s energy market. LNG will remain an essential part of the country’s energy mix for many years to come, so it is paramount that we continue to increase capacity wherever possible." 61

LATEST NEWS

Epic Games announces acquisition of Quixel

Epic Games have announced the acquisition of Quixel, a creator of a large photogrammetry asset library and bundled toolset. Financial terms of the transaction were not disclosed.

JDP’s vital signs are good after £3m healthcare boost

Teddy Bergsman and Waqar Azim founded Quixel in 2011. Since then, Quixel has given creators access to a vast library of 3D building blocks and easy-to-use tools to simplify the creative process.

A Bridgnorth architect practice is helping healthcare become accessible to more people after it was appointed to deliver over £3m of projects.

It has also just started work on an ambitious £2m project to develop a stunning new entrance and food hall to improve the environment for patients and visitors.

Bergsman and Azim comments: “We founded Quixel to make the creative process simpler and faster and with nothing less than photo realism. Project Rebirth is such an example, where we pushed the boundaries of what small teams can create in a short time. Working with Epic on Rebirth has been crucial for us to understand that they share the same values and vision as we do. By joining forces, we will be able to serve the creative community even better.”

Johnson Design Partnership (JDP) has built on its long track record in this sector by winning work to design and oversee a £650,000 expansion of Newbridge Surgery in Wolverhampton, the refurbishment of a dental practice in Shrewsbury and a £200,000 job for a medical practice in the South East.

Vic Johnson, who founded JDP in 2001, commented: “We are very strong in healthcare and, even by our standards, this has been a very good year, with over £3m of appointments and a number of contracts at the final tender stage."

Recruiter Sellick Partnership eyes new offices after profits soar by 81% Professional services recruiter Sellick Partnership is set to expand its offering after profits rose by 81% in the financial year ending February 2019. The business – which also recently sold a majority stake to French giant Samsic – enjoyed a healthy turnover of £48.6m, up 16% from the previous year. This success has been achieved by a growth in both temporary and permanent placements, despite the uncertainty and challenges 62

Brexit is putting on the UK recruitment sector. Both permanent and temporary revenue streams increased, with permanent placements rising by 15% to 418 and contractor numbers also up by 16% to 822. Jo Sellick, MD, comments: “The recruitment market can be volatile at times of change and uncertainty, but our growth and our placement numbers are an indication of confidence returning to the UK jobs market." Issue 11: November - December 2019

LATEST NEWS

Henry Riley appointed to work on £21m Morpeth Leisure Scheme Work is gathering pace on two schemes that will transform the Northumberland leisure and lifestyle scene. Henry Riley has been appointed lead consultant on a project to bring a £21m leisure centre to Morpeth. The Newcastle division of the international property and construction consultancy will provide quantity surveying, employer’s agent and principal designer services for the scheme, which will see the creation of a new centre with a 25-metre swimming pool, sports hall, spa facilities, fitness suite and studios. It will also have a new community services hub that will include a library, customer service centre and adult learning area. Construction work is due to start next year, with the centre open for business in 2021. Meanwhile, a £20m project to build a new leisure centre in Berwick has been given the green light by planners. The existing Swan Centre is being demolished in phases to ensure continuity of leisure services for local residents and replaced with a new facility.

Advance Northumberland, the development arm of Northumberland County Council, is project-managing both schemes supported by Henry Riley and several other key partners. Both schemes are being funded by the council. Joel Neasham, senior associate at Henry Riley (Newcastle), said: “We’re delighted to be involved in two schemes that will bring

£25m contribution for Commonwealth Games stadium redevelopment approved

a much-needed boost to Northumberland’s thriving leisure scene. Both centres will have top-quality facilities that will benefit residents of Berwick and Morpeth, as well as those living further afield. “There’s a huge demand for this type of facility, as consumers increasingly take up fitness and well-being activities to lead a healthier lifestyle.”

Willmott Dixon interiors to deliver refurbishment for £38m Civic Halls project

The West Midlands Combined Authority (WMCA) has announced a £25m contribution towards the cost of redeveloping the Alexander Stadium in time for the Birmingham 2022 Commonwealth Games.

Willmott Dixon Interiors has been named preferred delivery partner to refurbish Wolverhampton’s Civic Halls. Phase two of the £38m project will see the iconic Grade II-listed building transformed into a world-class venue.

The state-of-the art stadium, hosting the opening and closing ceremonies along with the athletics competition, will see the permanent capacity increased from 12,700 to 17,000 spectators.

Willmott Dixon Interiors is set to be awarded the job of delivering the remainder of the scheme that will make the major changes to the Civic

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Hall and Wulfrun Hall and keep the venue on track to reopen in 2021. City of Wolverhampton Council Councillor Harman Banger, said: “The halls have been around since 1938 and are an important part of our visitor economy, providing jobs and generating millions of pounds every year by staging nationally acclaimed shows.” 63

INTERVIEW What was your motivating factor behind setting up IC Resources? The only ‘deep tech’ recruitment companies in the UK were providing a poor service and had a litigious modus operandi. We saw the need for a recruitment organisation that worked in the long-term interests of companies and individuals and operated as a member of the technology community rather than an external supplier.

IC RESOURCES

an interview with...

NEIL DICKINS Meet one of the UK’s leading tech recruiters

FOUNDER | DIRECTOR IC RESOURCES

The recruitment industry hasn’t hugely changed You position IC Resources as a recruiter that since 1999. Technology has become an enabler that operates within the technology industry, rather than saves timeof and lot of paper (remember faxes?!?!). BLMserving interviews Neilthe Dickins, Founder ICaResources simply it. What’s difference and whyand is Director There will always be a small minority of people this important? who refuse to engage with recruiters entirely, but What’s the difference between a good song and a ultimately I think there is greater recognition now truly great song? It’s hard to define and it’s subtle, that a specialist, well connected, ethical recruitment but it exists and it means everything. Being a partner is a necessary business ally in the battle for member ofyour themotivating technology community rather than What was factor behind because the talent pool has been shrunk by business partner representing them in the talent. ansetting external supplier informs everything we doSo – we up IC Resources? nine! the biggest challenge is achieving ‘employment market’ and also educating give that is recruitment in the best long term interest Theadvice only ‘deep tech’ companies consistentofsuccess, year on year, to great them about the skills picture in general the candidates and clients we work even ifsuchThe in the UK were providing a poor service and with, companies as Qualcomm, ARM,industry in and about own recruitment start-up tech the UK their is a huge growth process the is less optimal forWeussaw in the short term.and Ultraleap, area at the doparticular. you support start-ups hadresult a litigious modus operandi. Graphcore all ofmoment. whom haveHow in They also need a partner who One example: in our first year of trading I sent a CV and why is it such a big focus for you? the need for a recruitment organisation exceptionally high standards. understands their funding struggles. We to a new client. The CEO contacted me to say the Startups are invariably had 100% focussed on needed the to hire a that worked in the long-term interests of a start-up client that candidate was perfect……and he alreadyYou had the high-profile, sponsor specialist challenges of product development and customer companies and individuals and operated senior technical person in order to obtain candidate on a ‘list to call’, he just hadn’ttechnology had timetrade fairs includingThey World need a business partner acquisition. as a member of the technology community funding, but they didn’t have the money to and was going to make the call on the Summit upcoming AI, AESIN and GSA Execthem Forum. in the ‘employment market’ representing rather thanContractually, an external supplier. pay a recruitment fee – classic catch 22. weekend. he ‘should’ have You paid us a also donateand to UKESF, support theirthem about the skills picture in also educating We undertook the assignment on the basis fee forposition our introduction we added any value?and general and about their own recruitment process in You IC Resourcesbut as had a recruiter campaigns sponsor awards, year in, that we’d only once they had secured Not really. So we waived our fee and organised the particular. They also need a partner whoinvoice understands that operates within the technology year out. Why do you feel it’s so important interviews anyway because the CEO was so busy. their funding. their funding struggles. We had a startup client that industry, rather than simply serving it. to support the industry in this way? We then worked with that CEO as a client for 17 needed toishire senior technical person in blog order What’s the difference and why is this The challenge of ‘deep tech’ in theaname, You’ve spoken on your about the need years until his recent retirement. to obtain funding, but they didn’t skilled have the money important? it’s deep, it’s ‘under the hood’. So it’s not to attract workers from outside to pay a recruitment fee – classic Catch 22. We What’s the difference between a good in the general consciousness of society of the UK. What single thing do you feel undertook the assignment on the basis that we’d song and a truly great song? It’s hard to challenge at largethat and politicians in particular. They would make the biggest difference when What’s been the biggest recruiting only invoice once they had secured their funding. definefaced and it’sso subtle, don’t understand the value that technology it comes to attracting the skilled workers you’ve far? but it exists and Toit be honest, the biggest challenge means everything. Being a member of is consistency. companies deliver to the economy and the UK so desperately needs? Bythe definition, the 10th inthat thethe same technologyfilling community ratherrequisition than an UK leads the world in many cutting The government has need finally woken up to the You’ve spoken on your blog about the to skill-set a company is a lot harder thedomains first, (which externalfor supplier informs everything we do –than edge unfortunately Brexit value of the graduate visa scheme and the attract skilled workers from outside of the UK. What because the talent has been 9! eroded So thebut by we give advice that ispool in the best long shrunk term byhas no means destroyed). need for make international professionals across single thing do you feel would the biggest biggest is achieving success, interest challenge of the candidates and clientsconsistent we Therefore supporting organisations beat all fields.the What we need now is difference whenthat it comes totechnical attracting skilled year on year, to ifgreat companies such as Qualcomm, workers UKway sotodesperately work with, even the result is less optimal the drum of ‘deep tech’ is athe great give clarity needs? on Brexit, and a rise in the pound to ARM, Graphcore and Ultraleap, all of whom have Thethat government has finally woken upa viable to the value for us in the short term. back to an industry we love. make the UK option. exceptionally high standards. of the graduate visa scheme and the need for One example: in our first year of trading I How has the recruitment industry changed What areall the biggest challenges that international professionals across technical fields. sent a CV to a new client. The CEO contacted since IC Resources first started out? you foresee to recruitment within the What we need now is clarity on Brexit - and a rise in You sponsor high profile, specialist technology me to say the candidate was perfect, and The recruitment the industry hasn’t industry in the next five years? pound to hugely make the UKtechnology a viable option. trade fairshadincluding World Summit AI, AESIN he already the candidate on a ‘list to changed since 1999. Technology has The biggest challenge is the increase in and GSA Exec Forum. You also donate to UKESF, What the biggest that you foresee call’, he just hadn’t had time and was going become an enabler thatare saves time and a challenges demand for ‘generalist specialists’ – for support their campaigns and sponsor awards, year to recruitment within industry in the firmware to make the call on the upcoming weekend. lot of paper (remember faxes?). There will the technology example full stack developers, in, year out. Why do you feel it’s so important to next five of years? Contractually, he ‘should’ have paid us a fee always be a small minority people who engineers or system architects. support the industry in this way? challenge for our introduction had we added engageThe with biggest recruiters entirely, but is the increase in demand The challenge of but ‘deep tech’ is any in the refuse name,toit’s Finally, where would youstack hope to see IC for ‘generalist specialists’ – for example full value? Not really. So waivedSo ourit’s feenot and in the ultimately I think there is greater recognition deep, it’s ‘under thewe hood’. general Resources in ten years’ time? developers, firmware engineers or system architects. organised the interviews anyway now that a specialist, well connected, ethical consciousness of society atbecause large and politicians We’ve built an outstanding team of leaders the CEO was so busy. We then worked with recruitment partner is a necessary business in particular. They don’t understand the value that who are responsible for heading up our eight that CEO as acompanies client for 17 years until his in the battle for talent. technology deliver to the ally economy Finally, where would you hope to divisions; see IC Resources different Software, Electronics, recent and thatretirement. the UK leads the world in many cuttinginindustry ten years’ time? The start-up tech in the UK is a Semiconductors, AI, Creative, Commercial edge domains (which unfortunately Brexit has We’ve an outstanding teamand of seniors / leaders What’s been the biggest recruiting huge growth area at thebuilt moment. How do (Sales Marketing), IT and Operations. eroded but by no means destroyed). Therefore who are our different challenge that you’ve faced so far? you support start-ups and responsible why is it such for a heading So, as weup turn 20,8I hope to see a 30-year supporting organisations that beat the drum divisions; Software, Electronics, Semiconductors, To be honest, the biggest challenge is big focus for you? old IC Resources in a place AI, I can’t imagine of ‘deep tech’ is a great way to give back to an Creative, Commercial (Sales and Marketing), IT and consistency. By definition, filling the Start-ups are invariably 100% focussed right now, because our leadership team industry that we love. Operations. So, as we turn 20, I hope to see a 30tenth requisition in the same skill-set for on the challenges of product development has taken it into areas I never would have year old IC Resources in a place I can’t imagine right a company is a lot harder than the first, and customer acquisition. They need a dreamed How has the recruitment industry changed since IC now, because our leadership teamof. has taken it into Resources first started out? 64

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