SE Business Leader Magazine: Setember 2020 by Business Leader magazine

South East

September 2020

THE ENGINE OF THE UK ECONOMY Supporting the UKâ&#x20AC;&#x2122;s leading entrepreneurs

Interview with the man who saved the BBC Page 12

Your guide to outsourcing Page 48

Revealed: 32 fintech leaders Page 62

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IN THIS ISSUE

12 22 16

Contents

BUSINESS LEADER VISION: INSPIRE

INFORM

CONNECT

IN THIS EDITION

FINANCE

OUTSOURCING

30 Feature: Funding for Tech Looking at current funding levels and what the aspirations for tech companies are going forward

48 Feature: Outsourcing What are the benefits of outsourcing? Business Leader Magazine investigates

Latest News Breaking business news from around the region

12 Feature Interview: Anthony Rose Business Leader sat down with Anthony to discuss his involvment in the iPlayer and tech invesment 22 Fast-Track: Huel We investigate the story of Huel and how they became the world's best complete food brand

GROWTH

34 Feature: Corporate Insolvency Is this the lifeline businesses need or the beginning of accepting corporate failure? Business Leader looks at the Corporate Insolvency and Government Bill

16 Feature: High Growth & Scale-Up How are scale-up companies adapting and how optimistic are they for the future?

36 Debate: Future of Work Business Leader brings together a panel of experts to look at the current work dynamic and how it is likely to change in the future

26 Sector Report: Online Retail Business Leader reports on the growth of the online retail sector and how consumer demands have pivoted

40 Feature: Health & Wellbeing How can leaders ensure that mental health and wellbeing are at the forefront of the new age of working?

Business Leader - Inspire â&#x20AC;˘ Inform â&#x20AC;˘ Connect

LEADERSHIP 58 Interview: CEO In Focus Meet one of the key faces in the UK gaming industry and the country's leading hyper-casual game publisher 62 Top 32 Fintech Leaders Highlighting one of the most established sub-sectors, fintech, and the entrepreneurs that lead the companies within it

REGIONAL REVIEW 68 Feature: Sustainable London What steps have been made so far? What are the targets it needs to hit? What areas of the capital have adapted to a modern way of working?

LATEST NEWS

Inspire • Inform • Connect EDITORIAL Oli Ballard - Editor E: oli.ballard@businessleader.co.uk Barney Cotton - Digital 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 Josh Dornbrack - Head of Multimedia E: josh.dornbrack@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.

Business Leader ‘Insight’ live interview series attracts hundreds of thousands of views When the pandemic hit, Business Leader launched its ‘Insight’ live interview series, where it broadcasts live interviews with some of the UK’s most iconic entrepreneurs and business figures. The series went down a storm, attracting thousands of viewers for each broadcast. The business leaders that have taken part in the series include Barry Hearn, Joel Blake OBE, Anthony Rose, Jackie Fast, Lara Morgan, Spencer Matthews, Jon Taffer and many more. In total, the series has attracted over 300,000 views and is typically broadcast on the Business Leader website and its social media channels. The interviews have also been supported by a new online panel and roundtable events series by Business Leader, which has seen expert debates covering subjects such as M&A, 'The Future of Work' and 'Funding for Businesses'.

Arbuthnot Latham Commercial helps Homesave UK make the shift to apartments with £2.2m loan Arbuthnot Latham Commercial has provided a commercial loan of £2.2m for Homesave UK Limited, helping the company to transition its business model from aparthotels to apartments, under its new HY Lettings Brand. The company, which has operated aparthotels since 2010 looked to the loan to preserve cashflow during the process, whilst also refinancing its debt across several providers. 2

Dan Yates, Director at Homesave UK Limited, said: “We have seen strong demand for apartments, reflecting wider consumer and property market trends, in addition to broader challenges due to COVID-19. Arbuthnot Latham Commercial was an excellent partner, providing a truly personal approach that was refreshing! We plan to use the funds to continue our growth strategy, with both hotel and residential investments in the pipeline.” September 2020

LATEST NEWS

Uber set to expand operations across the UK following blockbuster deal Global ridesharing platform Uber has announced the acquisition of its biggest UK rival Autocab - a ride-booking app for independent minicab companies in cities across the country. Autocab will remain an independent entity following the acquisition, with its own board of directors – but will have the use of Uber's platform. As part of the deal, Autocab would let make it possible to connect people with mini-cab firms in cities where Uber has no presence.

In total, Autocab's platform has access to more than 75,000 vehicles in those areas, as Uber is only currently present in 40 UK towns and cities. Following the deal, Uber will now be available in more than 180 towns across the UK. In a statement, Uber said: "Through Autocab's iGo marketplace, Uber will be able to connect these riders with local operators who choose to take their booking. In turn, operators should be able to expand their operations and offer more earnings opportunities to local drivers."

Williams F1 team acquired by US investment firm Dorilton Capital for £136.5m

Are we about to see the world's largest stock market debut? Chinese billionaire and founder of Alibaba Jack Ma, has announced that his fintech mobile payments firm Ant Group, will float on the Hong Kong and Shanghai stock exchanges. An international operator of a cloud-based financial platform designed to provide cloud computing services to financial enterprises and payment/financial services to consumers, Ant Group (through its Alipay platform) offers mobile payment processing services, consumer loans, wealth management, credit rating services and a financial services cloud platform. The significance of the flotation is highlighted by the news that it could raise between £23-26bn – meaning that it could become the largest stock market debut in history. Currently, the record debut is held by oil giant Saudi Aramco, whose IPO in December 2019 raised £19.5bn. Should the listing go ahead, the value of the company could hit £169bn. The group is 33%-owned by Alibaba and in the first half of this year reported a 40% year-on-year rise in revenues to £8bn. The company's profits, as a result, were 12 times higher than the same period in 2019. Business Leader - Inspire • Inform • Connect

Williams Racing has been acquired by US investment firm Dorilton Capital for £136.5m – signalling an end to an era for the familyowned Formula One (F1) team. Dorilton Capital is known for its long-term approach to investment and its key focus will be to restore the competitiveness of the team. This acquisition received the unanimous support of the Board of Williams, including Sir Frank Williams, who determined it would secure the long-term success of the F1 team. The team will continue to race and compete under the Williams brand, with the chassis name remaining unchanged. Dorilton has no plans to re-locate the team. Claire Williams, Deputy Team Principal, commented: "This may be the end of an era for Williams as a family owned team, but we know it is in good hands. The sale ensures the team’s survival but most importantly will provide a path to success. We are enormously grateful to Dorilton for the faith they have shown in our team and we look forward to working with them now. I would also like to thank the Williams Board and our advisers who have worked tirelessly over the past months to make this happen and our employees who have remained steadfastly loyal.” 3

LATEST NEWS

DAC Beachcroft eyes new international markets with £65m finance facility International law firm DAC Beachcroft LLP is set to expand into new international markets after securing a £65m finance facility from longstanding banking partners, HSBC UK and Lloyds Bank. The top 25 UK law firm, which has 19 global offices and employs more than 2,600 people around the world, has increased its finance facility to ensure that its investment and trading plans will not be disrupted during the unusual and unpredictable circumstances caused, in part, by the COVID-19 pandemic. David Pollitt, Managing Partner, DAC Beachcroft, said: “DAC Beachcroft is a financially robust business with an international turnover of £258m and this latest finance facility from HSBC UK and Lloyds Bank has given us additional headroom to progress some of our strategic business objectives.

HSBC London Headquarters

“The international expansion plans, domestic growth agenda and technological innovations we are pursuing are driven by client demand and will allow us to serve our clients more fully as a truly international firm.”

McLaren Racing and Salus Optima announce global technical collaboration McLaren Racing has announced a technical collaboration with Salus Optima, a data driven software company that empowers its users to reach their health and well-being potential. They will collaborate on a remote coaching platform specifically for members of the race team to deliver improvements in human performance. The project will combine McLaren’s expertise in data, analytics and AI with Salus’ software platform and human performance framework to deliver personalised health and wellness recommendations, helping members of the race team achieve personal performance goals. Mark Waller, Managing Director of Sales and Marketing at McLaren Racing said: “We look forward to working with Salus Optima to develop this unique and exciting collaboration with the team at the heart.” 4

£3m US boost for innovative UK drink holder firm With people being confined to their homes during lockdown, a British product innovation start-up has experienced a boom in online sales to the US and is set to turn over £3m in US sales over the next five years. Hit Products is the business behind CouchCoaster, a patented drink holder designed to rest a drink securely on the arm of a couch or sofa, and TableCoaster, an anti-spill drink holder for flat surfaces. Purchases of CouchCoaster and TableCoaster accelerated during

lockdown with more people watching Netflix on their sofas and homeworking at their dining tables. Combined sales for the products to the US between March and June 2020 were up 33% compared to the same period last year. Hit Products Founder Barry Freeder said: "2020 has been filled with uncertainty but it just so happens that CouchCoaster and TableCoaster were the perfect ‘sit at home’ and ‘work from home’ accessories during a pandemic.” September 2020

LATEST NEWS

Amazon’s 16% investment in Deliveroo approved by CMA Following an in-depth investigation, the Competition and Markets Authority (CMA) has cleared Amazon’s 16% investment in Deliveroo after finding that it will not substantially lessen competition. The CMA’s final decision to clear the deal on competition grounds is the culmination of extensive analysis of internal documents from Amazon and Deliveroo, a survey of more than 3,000 consumers, and extensive submissions from interested third parties. The CMA’s assessment has focused on how a 16% shareholding held by Amazon would affect its incentives to compete independently with Deliveroo in both restaurant delivery and online convenience grocery delivery in the coming years. The CMA ultimately found that this level of investment will not substantially lessen competition in either market. However, if Amazon were to acquire a greater level of control over Deliveroo – through, for example, acquiring a controlling interest in the company – this could trigger a further investigation by the CMA. A statement from Amazon read: "We are delighted that the CMA has concluded its 15 month investigation and that the Amazon minority investment can now go ahead.

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"This is fantastic news for UK customers and restaurants, and for the British economy. British-born Deliveroo will use the investment to increase choice and value for customers, support for restaurants and will be able to offer more riders the flexible work they value as the company expands.”

INNOVATION WORKOUT  FREE TO ATTEND  Designed for digital innovation businesses  Delivered by expert mentors - online  Dates: 14, 15 & 18 September (half days)  Additional dates throughout 2020

22/07/2020 15:38

LATEST NEWS

Monzo announces losses of £114m due to COVID-19 British challenger bank Monzo has been hit with a devastating £114m loss due to the ongoing impact of the COVID-19 crisis. Losses for the disruptive firm have doubled during the pandemic. The bank’s losses increased from £47.2m to £113.8m – all while in the midst of a high profile hiring spree and US expansion. Monzo announced that revenues had more than tripled to £67.2m from £19.7m prior to the lockdown in March. The bank revealed that it had lent £143.9m in loans, compared to just £19.2m in 2019. As a result, credit losses are predicted to rise to £20.3m from £3.9m.

In preparation of this announcement, Monzo last month raised £58m from its investors at a 40% discount to its previous valuation. Monzo CEO TS Anil said: “Similar to many businesses, we’re seeing a significant impact from COVID-19 and the resulting economic downturn. While I’m confident these are short-term, we’ve taken decisive measures to reduce the financial impact. "Over the coming months, we’ll launch powerful new products that help people manage their money better, as well as drive revenue, and cement our place as the UK’s most recommended and fastest-growing bank.”

The retail arm - Direct Energy - which was acquired by Centrica in 2000, is a part of the firm's major shake-up. More than 5,000 jobs are now under threat. Centrica also announced that it has halved its pre-tax loss to £264m in 6

A swift switch to eCommerce has saved healthy snack start-up OLLY’S during the coronavirus pandemic after 40% of its monthly revenue disappeared due to grounded airlines and cancelled rail services. Founded in his parents’ kitchen three years ago, a love of olives inspired Olly Hiscocks to create the world’s first unpasteurised olive snack pouch. He quickly went from selling them at Richmond’s Duck Pond Market to supplying major airlines and over 8,000 global stocking points. Due to growing demand for nutritional snacks, Olly had just decided to expand his company’s portfolio to include nuts and pretzels when the pandemic hit. Olly Hiscocks, Founder and Director at OLLY’S said: "With no airlines, trains, or pubs to supply our products to, we had a large amount of leftover stock at the start of lockdown. We knew that we had to find a way to sell this stock in order to stay afloat, so we decided to ramp up our online store and launch our new range of bulk nut mixes on Amazon. The response was incredible – our monthly online sales are up 800%.

Owner of British gas sells off US energy retail arm for £2.8bn Centrica - the owner of British Gas - has announced that it plans to sell off its US energy retail arm for £2.8bn to NRG Energy - a North American rival.

E-commerce drives UK exporter's healthy snack revolution

the six months to 30 June. Centrica CEO Chris O'Shea said: "Our mission now is to turn around the company by putting customers at the heart of everything we do and creating a simpler, leaner, more modern and more sustainable company. The sale of Direct Energy is a fundamental step towards this, and although we have a lot more to do, we have the people, the brands and the market positions to deliver a successful turnaround."

"We are now focusing on the launch of OLLY’S PRETZEL Thins and continuing to work with the Department for International Trade as we look to maximise our online sales and tap into new markets." OLLY’S currently exports to nine countries, with overseas sales accounting for 20% of the company’s annual turnover. In July, OLLY’S secured a contract with a distributor for the Gulf Cooperation Council (GCC) countries and signed a deal with Middle Eastern supermarket retailer Spinneys.

September 2020

CORPORATE PENSION AND EMPLOYEE BENEFIT SPECIALISTS Quantum Advisory is a national, independent financial services consultancy with a strong commitment to quality and value for money. As an industry-leading firm we offer a wide range of employee benefit services to employers, scheme trustees and members. We pride ourselves on the quality of people we employ, our personal approach to client care and the smart solutions we come up with, which allow us to offer greater choice, more flexibility and personal tailoring. We have offices in Amersham, Birmingham, Bristol, Cardiff and London. If you are interested in finding out more, why not contact Phil Farrell on 020 3008 7197 or visit our website at www.quantumadvisory.co.uk to see how we can help you with your pension and employee benefit challenges.

E: phil.farrell@quantumadvisory.co.uk

WWW.QUANTUMADVISORY.CO.UK

LATEST NEWS

BMW supporting entrepreneurship in the UK by partnering with the Amazon ScaleUp Awards BMW is delighted to support entrepreneurship in the UK by partnering with Amazon Scale-Up Awards. BMW creates driving pleasure through its perfect combination of dynamic, sporty performance and breath-taking design. Whether it’s a traditional Combustion Engine, Plug-in Hybrid or Electric, it’s still The Ultimate Driving Machine.

Brought to you by Business Leader Magazine

With the introduction of WLTP (the way vehicles are tested for emissions and efficiency), there are now even more incentives for businesses to use low-emission vehicles, such as Electric or Plug-in Hybrids. BMW’s range of Plug-in Hybrids deliver superb eDrive performance, seamless connectivity and luxurious comforts with the added benefit of improved economy, low CO2 emissions and lower running costs for your business. Understanding which cars make sense for your business, and why, is a challenging task. BMW Group brings you compelling business contract hire rates across the range, along with industry advice. Search www.bmwbusinesspartnership.co.uk to learn more about the programme benefits, search for models based on monthly budget or model preference and find out the latest news from BMW and MINI.

London shoe brand secures deals in US and Dubai

TfL deal with Capita to create 900 jobs A £355m deal between outsourcing firm Capita and Transport for London (TfL) is set to create an extra 900 jobs in the capital. Capita will continue to help run the city's congestion charge and low emission zones for a further five years as part of the agreement. However, Capita will now be recruiting for roles to help with the expanded Ultra-Low Emission Zone (ULEZ) and other future TfL initiatives. Capita CEO Jon Lewis said: " Working with TfL, we will roll out new, expanded programmes that reduce the effects of air pollution on Londoners and make the streets safer for all road users and pedestrians." 8

The unique designs of an alternative shoe brand in London have grabbed the attention of buyers in the US and Dubai, led by a founder who continues to break the mould in the traditional art of shoemaking. Signing these two new international sales deals has provided hope for Leather and Cotton London Director Eze Nwaka whose entrepreneurial journey has been filled with challenges, not least running the business while working full-time. Nwaka explains: “There are not many black-owned companies in the British shoe manufacturing industry, but I aim to one day become one of the leaders in the sector, and hope to inspire other upcoming black designers in the process. “I’ve faced so many obstacles, from difficulty obtaining finance to working

double shifts and constantly having to prove myself in the industry. I had to get out there on my own to present my case, crowdfund, and use my own salary. “I even had to borrow money from the high street with a 50% interest! Luckily, I found four people that believed in me and invested in my business so that I could make my vision become a reality.” September 2020

ADVERTORIAL Artist’s illustration of Drivers’ Club Miami (USA)

Creating game-changing opportunities “Goodwood has been home to my family for over three hundred years. Eleven generations have shaped the story of our sporting heritage as we’ve shared our love of sport with friends and guests. "Along the way we have created events, venues and experiences that have become known around the world. Always balancing an innovative spirit with an appreciation for heritage, we’ve made sure that Goodwood remains authentic and relevant in modern times. "This is thanks to a team of innovative and inspiring people who are passionate about delivering unique and unforgettable experiences. "Now I believe the time is right to share our knowledge and experience with those who share our passions. We have chosen a family name – Kinrara – for our consulting team, capturing in a word the expertise, authenticity and passion we’ve nurtured over centuries of creating only the most exceptional experiences.” The Duke of Richmond and Gordon EXPERTS IN MOTORSPORT AND MORE Kinrara is the consultancy arm of Goodwood, where we share the breadth of experience, knowledge and expertise that has grown out of our sporting heritage, the success of our range of events and an extensive team of passionate people. We work with businesses across sport, entertainment, property and events on

Business Leader - Inspire • Inform • Connect

range of projects, with specific focus on providing commercial solutions in the initial concept development, creative, content, operations and marketing aspects of our clients’ businesses. We help them to activate and connect to their customers, creating exceptional experiences. We have collaboratively consulted on the development of project masterplans, sponsorship strategies, media and communications planning, business review, new and existing event critique, sustainability planning, brand experience, integrated guest and membership experience and real estate development where the resident is placed at the heart of the design. As a truly global brand, the association with Goodwood brings instant recognition and respect amongst target markets, industry partners, future customers and potential members. CLIENTS Oro Station (Canada) is a 212 acre, purpose-built, motor circuit and automotive innovation campus, one hour north of Toronto, Canada. Kinrara was tasked by the principals of Oro Station to input into the overall design concept for this large multiuse automotive destination and members’ club. Drivers Club Miami (USA) will be a spectacular new driver resort and exclusive members’ club in South Florida. Kinrara played a vital role in defining the concept of the development and its target

audience. Kinrara brought in their most trusted associates, collaborating on the architectural design process with Foster + Partners, and the track design with Driven International. Messe Frankfurt’s Festivals of Motoring (Global) provide a new and exciting alternative to the traditional motorshow. The Festivals are held at various racetracks around the world and offer interactive motoring entertainment, combining familyfriendly, educational activities with track content. Reef Estates on Fourth Mile (London) is a new real estate development in Chiswick, London. As primary consultant Kinrara is helping develop the world’s first site that blends new mobility concepts with pioneering living technology. Nanoli Speedway (India) will be an FIA grade 3 circuit situated within the stunning surroundings of an established farm, near Mumbai. The track will offer exclusive facilities for a members' club, including a private clubhouse, hospitality accommodation, and a sports and leisure retreat all carefully created through collaboration between the circuit designers, architects and Kinrara. For more information or an informal chat on how we might help, please contact Dan Hughes, Director, Kinrara Consulting. E: Dan.Hughes@Goodwood.com

goodwood.com/kinrara-consulting 9

LATEST NEWS

UK SME wins £19m deal to export electric car battery parts made from organic waste TRB Lightweight Structures (TRB) has won a £19m deal to export electric car battery parts made from organic waste to the United States. The strong components, which are made from recycled plant waste and moulded into shape using high-tech machinery, are manufactured in the UK at a similar cost to heavier aluminium. The joint venture with Toyota Tsusho America will see the enclosures shipped from TRB’s Cambridgeshire headquarters and assembled at a new manufacturing facility in Richmond, Kentucky. The finished products will then be supplied to a

Honest Burger

Fortune 500 global engine producer. Andrew Dugmore, President at TRB said: “Sustainability is important to us and we are passionate about developing lightweight solutions for transportation, which will make vehicles more efficient and reduce CO2 emissions. “Since setting up in the US, interest has been high, and we are negotiating potential multi-million-pound deals with other clients. The UK and US trading relationship goes back decades and we hope that any new free trade agreement will make trading with the US easier for us.”

Barclays prepares £3.7bn emergency funds to deal with full impact of COVID-19 Barclays has set aside £3.7bn to cover possible loan losses caused by the impact of COVID-19 on the business. The bank's latest financial results showed that it has set aside £1.6bn to cover bad debts during the second quarter - the height of the lockdown. Credit impairment charges and loan loss provisions during the same time period hit £200m, and the group's pre-tax profit for the first half of the year fell to £1.3bn. This is compared to £3bn in the same period last year. A statement from Barclays read: "Our consumer business income decreased by 11% in Barclays UK and 21% in CC&P (consumer, cards and payments) as a result of the lower interest rate environment, fewer interest earning balances, reduced payments activity and action to provide support for customers".

THIS closes £4m Seedrs funding round featuring investment from England international footballer UK plant-based meat company THIS has closed its Seedrs crowdfunding campaign, which was publicly live for less than three days, before hitting its £4m stretch target. Venture capital firms involved in the round include Backed, Five Seasons Ventures, Idinvest Partners, Seedcamp and Manta Ray Ventures, alongside England international footballer Chris Smalling. Andy Shovel and Pete Sharman, THIS Co-founders, commented: "After three or more weeks of not sleeping because we

thought no one would invest - we broke loads of records on Seedrs! We were publicly live for all of two days, before we hit our £4m overfunding limit. We haven’t clicked refresh that often since our online dating days." Smalling, Co-founder of ForGood added: “I’ve been really impressed with what Andy and Pete have achieved in such a short time. They’ve created a killer brand with amazing products. I am thrilled to be part of their journey.”

September 2020

LATEST NEWS

Airbnb files for IPO as concerns over impact of COVID-19 ease Home rental giant Airbnb has filed initial public offering (IPO) with US regulators, setting the stage for one of the most highlyanticipated US stock market debuts in history. Goldman Sachs and Morgan Stanley are lead advisers on the IPO. The move continues the trend of a rebound in parts of the leisure and travel sector which was decimated by the onslaught of the COVID-19 pandemic, and subsequent lockdowns experienced across the world. The number of shares Airbnb will offer has not been revealed. A short statement from the company read: "Airbnb confidentially submitted a draft Registration Statement on Form S-1 to the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions."

No timeline has been given for the IPO, however, the company has long debated making this move. The reported timeframe is before the end of the year, but that could yet be dependent on how the coronavirus pandemic develops over the coming months.

Tandem Bank acquires Allium Lending Group efficient and environmentally friendly, by financing everything from home insulation, energy efficient boilers and double glazing, to solar panels, heat pumps and home charging stations.

Ricky Knox - Co-founder and CEO, Tandem Bank

Tandem Bank have announced the acquisition of Allium Lending Group, a green lending business, as part of a £60m fundraising deal that was finalised last week. For the past six years, Allium has been helping customers transform their homes, to become more energy

Tandem Co-founder and CEO Ricky Knox commented: “Our journey so far has been filled with finding innovative solutions to customers’ money problems such as our incredibly successful Autosavings feature. We now have an opportunity to do even more than that. We’re delighted to welcome Paul, Allium’s team and their thousands of environmentally conscious customers to Tandem and we are excited for our future together. I look forward to helping many more people help the planet over the coming months and years.”

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AA subject to £3bn takeover bid AA, Britain’s biggest roadside recovery service, is reportedly being subject to a £3bn takeover bid from American investment firm Apollo Global Management (AGM). The firm that acquires the AA will take on the responsibility of the company's £2.65bn debts. The AA said: "The group needs a more stable and sustainable capital structure and this requires a significant amount of additional new capital in order to reduce the group's indebtedness and to fund future growth."

GROWTH INTERVIEW

DISRUPTION OFTEN IS NOT ABOUT TRYING TO TAKE DOWN AN INDUSTRY BUT INSTEAD ITâ&#x20AC;&#x2122;S ABOUT FORMING A PARTNERSHIP WITH THE INDUSTRY."

September 2020

ANTHONY ROSE

‘IT’S NOT ALWAYS ABOUT WANTING TO CHANGE THE WORLD BUT ABOUT FINDING A SOLUTION TO A PROBLEM’ For its latest Business Leader Magazine CEO In Focus, we spoke to the ‘man who saved the BBC’, serial tech entrepreneur and the CEO of Seedlegals, Anthony Rose.

CAN YOU START BY TELLING US ABOUT YOUR BUSINESS BACKGROUND? In my business career, I have built and sold various companies, including a music file sharing business. I ended up moving to the UK to help create the iPlayer for the BBC and subsequently I have been involved in other business ventures. I am also an active investor. Most recently, myself and my business partner created a business called SeedLegals, which allows entrepreneurs to speed up their UK or French funding rounds and the legal aspects around them. Essentially, it’s a platform for all the legal work you need to start, raise and grow your company. You can also create employment systems for your team, and the goal for the business is to be the operating system for all your company legal requirements. CAN YOU TELL US MORE ABOUT YOUR WORK AT THE BBC? The BBC had been thinking about the iPlayer for years and it had been part of their research and development plans. Historically, broadcasters had been focused on television and the internet was something where you watched cats on skateboards, and they felt it was for kids. But the BBC were visionary in that they could see where consumer behaviour was going and how technology could support it. I was approached by their Future Media Team to join and create the iPlayer. My first thought was – ‘where are the stock options!’ – but I was persuaded by the project and in 2007 Business Leader - Inspire • Inform • Connect

I flew over from Australia to meet the team and my job was to launch the iPlayer by Christmas, with a multi-million pound budget.

IDEAS ARE CHEAP THOUGH AND IMPLEMENTATION IS EXPENSIVE, SO HOW DOES AN INVESTOR DECIDE WHICH BUSINESS TO PICK? THIS IS WHERE IT IS IMPORTANT TO SHOW PRODUCT MARKET FIT AND WHAT PROBLEM YOU ARE SOLVING."

Considering this, it is not about disrupting an industry, it is about identifying a consumer need and finding a solution to a problem. You can take the iPlayer as an example. We travelled from people only being able to watch a programme whilst sitting in front of a TV to saying they could watch it whenever they want. That is disruption and innovation. We didn’t get rid of the TV, but we evolved things alongside it. Disruption often is not about trying to take down an industry but instead it’s about forming a partnership with the industry, and it’s about being humble and not wanting to change the world but finding the fastest solution to a problem.

I was at the BBC from 2007 until 2010 as Chief Technical Officer, leading a team of 250 people.

You need to do that first and then you can think about how the world plays out afterwards.

I WANT TO NOW MOVE ON TO TALKING ABOUT BUSINESS – YOU HAVE BUILT AND SOLD FIVE BUSINESSES IN YOUR CAREER. WHAT WOULD YOU SAY MAKES A DISRUPTIVE BUSINESS?

CONSIDERING THE PANDEMIC AND SUBSEQUENT RECESSION DO YOU FEEL THE FUNDAMENTALS TO RAISING FUNDS FOR A BUSINESS CHANGED?

It is an interesting question and I would like to talk about what does not make a disruptive business. Often people feel they are being disruptive because they are looking to change the world and they are often fixated on an existing industry. For example, we do not like how the legal sector works and it needs to be democratised. This might be interesting as an idea and it might make the world a better place but unless it aligns with the user needs in the market, the company will forever be chasing an uphill battle.

Through SeedLegals, we have the advantage of being able to access funding data and what we were seeing was that in April there was a huge drop in funding rounds and we were also seeing around a 50% drop in SEISled investments. This lasted for about 45 days, but funding is now back at pre-COVID-19 levels according to our data. I keep reading that investments are down, but the data is not showing that.

Cont. 

INTERVIEW It is bouncing back quickly, and many businesses have proven themselves to be COVID-proof and have resilient founders. They will be able to raise funds because they have strong fundamentals in their businesses. Smart investors have continued to invest in smart businesses for the fear of missing out, despite the pandemic. KEEPING WITH THE SUBJECT OF FUNDING, DO YOU FEEL IT IS BECOMING MORE IMPORTANT TO FIND PRODUCT MARKET FIT AS WELL AS FUNDING A GREAT IDEA? Everybody sees the stories from Silicon Valley of somebody’s idea raising millions and millions and they will understand the concept of 'go big or go bust' and becoming a ‘unicorn’. This is the risk profile for many US investors, but in the UK and Europe, it is very different as investors do not want to see a bottomless pit for their money. Instead, they want to see a revenue model for the business that is cash-flow positive and has a path to profitability. In this context, product market fit becomes more important, and a business plan that shows this and a path to revenue will be one that is more likely to raise the funds it needs.

IN YOUR OPINION IS IT IMPORTANT TO HAVE A CO-FOUNDER ON YOUR BUSINESS JOURNEY?

I WANT TO TALK ABOUT EXITING A BUSINESS. YOU HAVE EXITED FIVE BUSINESSES – IS IT GOOD TO START A BUSINESS WITH SUCH AN END GAME IN MIND?

Most common for businesses is to have two founders and I think this is because there is only so much time in the day to have everything on your shoulders. In this respect, it’s important to have a confidant.

I think it’s a bad thing to show that you want to exit on your pitch-deck - or start a business with a view to exiting - because the primary goal should always be to grow an amazing business and team, and deliver on your vision.

More broadly, I would say there needs to always be three roles in a business. The domain expert who is the person that has the vision and the burning passion; the product or delivery person – you could say the CTO that can deliver the vision; and Mr or Mrs money who understands the finances and how to get funding.

You should not aim for an exit because in doing so, you might optimise your business for the wrong things. For example, if you’re aiming to exit, you will want to generate a great deal of hype in the hope you get acquired at a high valuation, but if this doesn’t happen you may have an issue.

IT IS AT TIMES LIKE THESE WHEN LEADERS ARE JUDGED AND ONCE YOU HAVE PROTECTED YOUR TEAM YOU NEED TO LOOK AT THE OPPORTUNITIES THAT THE SITUATION PRESENTS."

You need to look at yourself and ask, ‘which one am I?’ and then find others that compliment this. MOVING ONTO THE TECH SECTOR – WHAT IS EXCITING YOU NOW AND WHERE SHOULD INVESTORS BE LOOKING? I am privileged to see an endless number of pitch-decks and they are so diverse. One minute you have an AI-powered drone for crop optimisation and the next one is a shoe with a camera in it to help people with sight problems. Ideas are cheap, though, and implementation is expensive, so how does an investor decide which business to pick?

This is where it is important to show product market fit and what problem you are solving. On what is exciting me now? Well, I do not really like to categorise businesses but FoodTech and MedTech are two verticals worth looking at right now. FINALLY, ANTHONY – WHAT ADVICE WOULD YOU GIVE TO BUSINESS LEADERS DURING THIS TIME? It is interesting because as a business leader you can find your heart not always focusing on the existential ‘stuff’ – instead, it is about making and selling products and services. But then a pandemic comes along, and people look to you as a leader and you are thrust into the limelight. And you rightly start to focus on your team, their health and whether they should work from home or not. It is at times like these when leaders are judged, and once you have protected your team, you need to look at the opportunities that the situation presents. Clearly, if you are a fintech business, you are likely to be less affected than a gym, but both need to see what opportunities are available to them. If your investors can see you are being opportunistic too, that can only be a good thing. I would also say that failure to make decisions as a leader is fatal, it really is.  September 2020

NEWS

COMPANY CHANGES BUSINESS MODEL DUE TO PANDEMIC AND HITS £1M SALES IN ONE MONTH A pair of quick thinking entrepreneurs who feared COVID-19 would drain the life from their mobile charging business, switched focus in just six days and are reaping the rewards. Hugo Tilmouth (24) and Charlie Baron (26)’s technology company was fully charged to take on 2020, but the coronavirus lockdown almost brought the firm to its knees, bringing about the furlough of staff. The astute young tech founders redesigned their mobile charging docks into hand sanitiser stations, and in less than a week, landed their first lucrative contract with transport giant Transport for London (TfL), providing a vital lifeline for their business and 45 staff. The start-up, born in the midst of the pandemic, turned over £1m in its first month. Hugo comments: “I have to give Charlie all the credit for the CleanedUp idea. We were set to roll out 150 mobile charging stations across UK airports, train stations and shopping centres the week lockdown hit, completely halting us in our tracks.”

(L-R) Hugo Tilmouth & Charlie Baron - Founders, CleanedUp

“Immediately, we were like, how on earth do we keep the company afloat? “Somewhat serendipitously, the mobile stations sat dormant had been designed specifically for high traffic locations – which spurred Charlie into thinking they could be refined into large capacity affordable hand sanitising bays with minimal investment.”

GET A COPY OF BUSINESS LEADER MAGAZINE SENT TO YOUR HOME With many people now working from home, our circulation team is working hard to make sure that our readers don’t miss out on receiving their copies of Business Leader Magazine.

To have your copy sent to a new address, please email editor@businessleader.co.uk or call 020 3096 0020

www.businessleader.co.uk/mailing Business Leader - Inspire • Inform • Connect

FEATURE

‘SCALE-UP COMPANIES ARE FACING THE SAME CHALLENGES THAT ANY PREMIER LEAGUE TOP FOUR TEAM IS FACING’

rior to Lockdown, the scaleup concept was gathering real momentum and highgrowth entrepreneurs were gaining the type of attention typically afforded to start-ups. But then the pandemic happened, and for many high-growth companies, survival mode kicked in. This feature looks to answer the question – how are scaleup companies adapting and how optimistic are they for the future?

WHAT ARE THE MAIN CHALLENGES YOU ARE SEEING HIGH-GROWTH COMPANIES FACING IN YOUR NETWORK? Mike Dias – Chief War Office, ScaleUp Valley: "I would say that it is the same challenge that any Premier League top four team is facing now: how to retain, attract and build a world class team and how to keep that team focused on doing what it takes to win each game, instead of complaining about the threats that they can't control." Juliet Rogan - Head of High Growth & Entrepreneurs, Barclays: "The challenges facing the segment are much like that of other businesses, particularly if they 16

are in a deeply affected sector such as hospitality and leisure. That being said, we have seen entrepreneurs and high growth businesses be relatively quick to adapt to the ‘new normal’ – both from a remote working perspective, but also through pivoting to leverage potential commercial opportunities." Mark Sanders – Executive Chairman, Scale Space: "I’d group the key challenges into three phases of the response to COVID-19, which are survive, adapt and restart. "For many, job one was survival - managing cash flow, cutting costs, taking advantage of government support and opportunities to defer or reduce expenses. "Then a challenge around what the business can continue to deliver and develop – both practically and financially. Remote working technology has enabled businesses to stay productive, but again, the challenge of finding the right tools and rolling them out takes time and effort. Many scale-ups already adopt agile and remote working models, so they were better placed to respond, but the pandemic has forced businesses to adapt to different ways of working.

manage their teams and their projects has been a real challenge. "Finally, a challenge, but also an opportunity – especially for scaleups has been around becoming focussed on solving customer problems, resetting the company and restarting with a new focus. Accepting that we are in a 'new reality' and focussing on the opportunities will be key for those who are going to make the most of the crisis. This may require adding new capabilities or raising new funding."

WE HAVE SEEN ENTREPRENEURS AND HIGH GROWTH BUSINESSES BE RELATIVELY QUICK TO ADAPT TO THE ‘NEW NORMAL’ – BOTH FROM A REMOTE WORKING PERSPECTIVE, BUT ALSO THROUGH PIVOTING TO LEVERAGE POTENTIAL COMMERCIAL OPPORTUNITIES." Juliet Rogan

"For many businesses, adapting how they sell, how they serve customers, how they September 2020

HIGH GROWTH & SCALE-UP

Mike Dias– ScaleUp Valley

Juliet Rogan– Barclays

WHAT ARE THE MAIN CHALLENGES YOU’RE FACING NOW AS A COMPANY THAT IS CONSIDERED HIGH-GROWTH/ SCALE-UP? Adam Ludwin – Co-founder, Captify: "International expansion is a key part of our high-growth journey, but with so many restrictions on travel, we have been forced to put certain parts of that plan on hold until travel starts to reopen and we feel confident our staff can travel safely at all times. So, although international expansion is still a key part of our growth plan, it has taken a back seat as we focus on other areas right now. "There is also this area of uncertainty over a second, or even third wave, which has led to a much leaner recruitment plan, only hiring the critical roles we need right now for instant growth, versus some other roles that wouldn't contribute instantly, but would be more of an investment into future growth. "This poses quite a problem as you become slightly less opportunistic as you do not know what’s around the corner, or how hard you as a business will be hit." Peter Rabey – Founder, X4 Group: "The threat of a second lockdown. As we never hire sales experienced people, their ability to work from home is extremely limited. What we would do on a second lockdown is under much debate currently." Business Leader - Inspire • Inform • Connect

Mark Sanders– Scale Space

WE WILL BE HIRING MORE PEOPLE OFF THE BACK OF LOCKDOWN, BUT WE WILL ALSO BE RE-ALIGNING OUR BUSINESS. WE KNOW THIS FINANCIAL YEAR IS A WRITE OFF SO IT IS ALL ABOUT GETTING GOING WITH DECISIONS THAT WILL AFFECT NEXT YEAR." Peter Rabey

DO YOU THINK GOVERNMENT HAS PROVIDED ENOUGH SUPPORT FOR HIGHGROWTH COMPANIES IN THE UK, DURING THESE LAST FEW MONTHS? Mike Dias: "I would say that we can't control that, and it shouldn’t be a focus for those looking to scale their company. If it comes, great. If not, we need to be focused on winning all games, one after another. If we can do that, we will succeed no matter what happens." Adam Ludwin: "Yes and no. I think there were much faster ways to help businesses that would have prevented many businesses from going bust and saving hundreds of thousands of jobs. "For example, the furlough scheme is a great scheme, but when you compare it to other countries like France, where

Adam Ludwin– Captify

businesses could keep teams working at reduced hours and the government compensates them for the majority of hours they are not working, the UK scheme is not as effective. We were forced to furlough staff that for a period of time were completely detached from the business. This really had a negative impact, causing them to feel helpless, undervalued and detached. "It was also tough for the company because it put more strain on the existing team to cover wider areas, which resulted in a slower bounce back. "The Coronavirus Business Interruption Loan (CBIL) was a good scheme, but once again when you compare this to other countries like the equivalent PPP loan in the US, there is much better upside for US businesses whereby the loan from the government is in part, or fully forgiven, allowing business to come back into healthy profitability faster, versus the UK whereby we have an extremely vast and unhealthy amount of companies that are now (and many of them will be forever more) in debt to the government. "Furthermore, due to the UK’s reliance on the banks there was a massive delay in that money being approved and making its way through to businesses that needed it the most." Cont.  17

FEATURE

AS A LEADER HAVE YOU RE-ADJUSTED YOUR GROWTH PROJECTIONS OR ARE YOU STILL CONFIDENT OF MEETING PREVIOUS TARGETS?

Peter Rabey– X4 Group

Peter Rabey: "We will be hiring more people off the back of lockdown, but we will also be re-aligning our business. We know this financial year is a write off so it is all about getting going with decisions that will affect next year.

"As always with a business that has gone from three to 150 people, it is about making sure we retain a strong culture." Adam Ludwin: "Fortunately, despite the market downturns, we are still set for a considerable level of growth year on year. However, this is the first year we have had to settle for ‘good’ growth rather than ‘great’ growth. What this process has allowed us to do is stretch our teams and technology platforms to the max, leading to even greater efficiencies, which will certainly carry over into the future, allowing us to continue to grow more aggressively and even more efficiently." WHAT IS YOUR ADVICE TO SCALE-UP LEADERS ON HOW THEY CAN CONTINUE TO PROSPER? Mike Dias: "Do not skip your dailies, weeklies, monthlies, quarterlies, and annual team rhythms. Scaling a company is all about nurturing a culture of execution across your team, having the right people on the right seats for each stage of growth, and being the best of the best in a niche. Your job as leader is to simplify. Every fool can make things complicated. This discipline is even more important when you are facing huge disruption such as a pandemic." WHAT ARE YOUR THOUGHTS ON THE CONCEPT OF ‘SCALE-UP’ – DO YOU THINK THIS WILL BE REIMAGED GOING FORWARD? Juliet Rogan: "I think the concept and the challenges are more pertinent than ever, as companies will need support in navigating their environments. The scaleup challenges outlined by the ScaleUp Institute [SUI] are access to: finance, talent, leadership capacity, markets and infrastructure. These challenges remain the key areas of focus not only for scaling companies but companies looking to ‘survive and thrive’."  18

COMMENT

Irene Graham – CEO, ScaleUp Institute

CLOSING THE WIDENING GROWTH CAPITAL GAP - WITH ENHANCED COLLABORATION ACROSS THE PUBLIC AND PRIVATE SECTOR Scale-ups - those that are growing at greater than 20% in either turnover and/or employment each year - are key to economic recovery. They constitute a critical portion of the UK’s SME population. The latest ONS data shows there are 33,860 scale-up SMEs, who between them represent £1tn to the UK economy - that’s 50% of all SME turnover. Yet these businesses, whilst remaining resilient, continue to face challenges within the UK as they seek to scale - notably in accessing suitable talent, markets and finance opportunities - issues which existed pre-COVID but which are now exacerbated. The Future of Growth Capital report recently issued by the ScaleUp Institute, Innovate Finance and Deloitte, shines a particular light on the widening finance gap. Growth capital refers to the financing that enables scaling innovative companies, both young and established, to reach maturity. The report calculates the long-term growth capital gap - the difference between demand for and supply of growth capital - now stands near to £15bn annually. That effectively means the COVID-19 crisis has doubled the pre-existing gap, with widening regional and sector disparities. The UK has long grappled with how to solve the decades-long deficiency of having sufficient UK capital to meet the demands of our scaling businesses. Progress has been made with the establishment of the British Business Bank, British Private Capital and private sector led initiatives such as the bank-backed BGF. But, compared to our international counterparts such as the US and Canada, we have a nascent venture debt market and continuing barriers to releasing institutional capital towards our scale-up community. The Future of Growth Capital lays out five specific and practical recommendations to tackle this issue. This includes the creation of a ‘National Blueprint for Growth’ that delivers a strategic joined-up approach; the acceleration of the unlocking of institutional and corporate funding; the expansion of the British Business Bank’s role by strengthening their regional presence; an enhanced role for Innovate UK and the creation of a ‘Future opportunity Fund'. September 2020

HIGH GROWTH & SCALE-UP

YOU’VE GOT THE FUNDING, NOW WHAT? Picture this, you’re a scale-up, and you’ve just received that all-important funding which has unlocked a whole new world of potential. Now you’re ready to get cracking and really grow your businesses. To do that, you’ll need to get the right people on your team, at the right time – how hard can that be? After all, you’re an innovative business, with a great proposition, funky new offices, and the best boss EVER – you’ve got this in the bag right? Believe it or not, recruiting the right people on a regular basis is a lot more complex than you might think. Behind every good hire, is a well-honed and time-consuming process. From articulating your Employer Value Proposition (EVP), to building and nurturing a talent pool, effective advertising, application tracking, interviewing, interview feedback, and the on boarding of successful candidates, the list is seemingly endless. What if there was a way to effectively manage and fulfil all these elements at the same time? Business Leader - Inspire • Inform • Connect

This is where Revoco’s new service offering comes in… Revoco’s Recruitment as a Service (RaaS) is the perfect mix of strategy, tools and team capabilities wrapped up in a fixed monthly subscription – designed to save you time, hassle and money. How does it work? • No more charges per placement it's a fixed cost per month. •

Revoco will become part of your team, embedding an experienced tech recruitment function - with all the tools to support your organisation.

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You’ll get access to their readymade talent pool, rich with the best tech professionals in the country.

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Revoco will create a bespoke hiring strategy, tailored to your individual hiring needs and challenges.

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Giving you the ultimate platform to hire successfully!

Who are Revoco? Revoco was established in 2017 with the vision to turn a fresh page in the recruitment industry’s story. Revoco help their clients attract and hire the best tech talent. From searching for one-off candidates with niche skills, to project managing the recruitment of entire teams, or advising on Employer Value Proposition, Revoco offer a variety of services which enable our clients to succeed. Over the last few years, they have also developed several bespoke tools which enhance both the hiring managers’ and candidates’ experience, capturing insights along the way and maximising the chance of success for everyone.

Want to hear more about RaaS?

Get in touch with Revoco’s MD, Iain Blair: iblair@revoco-talent.co.uk T: 0117 440 7810 www.revoco-talent.co.uk/recruitment-asa-service/ 19

ADVERTORIAL

Three Types of Re-Organisation to Consider for your Business With 9.4 million people furloughed and potential redundancies on the horizon we are hearing a lot about reorganisation. However if you look below the surface not all re-organisational opportunities are as equal as they appear. Here are the top three types of reorganisation you need to consider. 1. The Financial Re-Organisation This means reactive redundancies for organisations of every size for whom the pandemic and the economic impact have significantly impacted the immediate or longer term demand for the organisation’s products and services.

a stake in the longer term future of the business and when prosperity is returned substantially, bonuses over many years can make up for the loss of income. 2. The Opportunist Re-Organisation Those who have wanted to make structural changes for some time are seizing the opportunity to push through the changes now, whilst the attention is focussed on the inevitability of large redundancies.

Many feel that they must cut deeply into their workforce now in order to keep their organisation’s afloat, in even the medium term. However what happens if there is a relatively swift return to demand?

Be warned – this is always harder to watch as staff and their industries can see what is going on! Loyalty will be given to those organisations who do the right thing during these difficult times, rather than those going down a path of what is fast or easy. You can break your loyalty with one poorly conceived action and spend years trying to repair that damage.

Many companies have successfully maintained workforce numbers by moving to partial week working with significant cuts in salary at all levels. This helps ensure that everyone has

This doesn’t mean that this is the wrong time to make structural changes but that transparency is king, as always, if you expect to take the residue of your people with you on the journey.

3. The Pre-Emptive Re-organisation Those who find the financial impacts of the post-pandemic downturn are uncertain, believe they should perhaps cut back or put effort into pivoting into the perceived new world. Again, I would highlight that reorganisations do not have to mean compulsory redundancies instead there are ways to retain your existing workforce and increase loyalty and productivity for the future. Emma Shenton is Director and Business Change Ninja at Oakwood Management Consulting. If you need help navigating the current situation and delivering a reorganisation that delivers successful, sustainable business change book a discovery call to discuss how Oakwood can help.

oakwoodmanagementconsulting.com September 2020

KEYNOTE SPEAKER

CHRIS YEH

Investor Author Mentor

Bridge the gap SKILLS STRATEGIES FOR SUSTAINABLE GROWTH AND INNOVATION We're delighted to announce Chris Yeh as our keynote speaker. Chris is co-author of ‘Blitzscaling’ with Reid Hoffman and has founded, advised or invested in over 100 tech startups. Join us online, for our live panel discussion and find out how to close the skills gap and protect your pipeline of talent.

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FAST-TRACK

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THE ‘FUTURE OF FOOD’ IS HERE

How did Huel become the world’s best-selling complete food brand?

n each edition of Business Leader Magazine, we profile a UK business experiencing exponential growth in a feature called BLM Fast-Track. This time, we investigate the rise of ‘complete food brand’, Huel.

Huel was launched by entrepreneur Julian Hearn and nutritionist James Collier in 2015, and immediately turned the industry upside down, becoming a leading brand in the meal supplement drinks category. James McMaster, CEO of Huel, talks more about the business: “Huel is described as ‘the future of food’. Our mission is to make nutritionally complete, convenient, affordable food with minimal impact on animals and the environment. Being nutritionally complete means each product contains the recommended balance of protein, carbohydrates, fibre and fats, plus all 26 essential vitamins and minerals. “This year, we reached a milestone selling over 100 million meals since launch, distributing to customers in 100 countries, making Huel the world’s best-selling complete food brand. Huel also topped the Alantra Food & Beverage Fast 50 list, making Huel the fastest growing food and drink brand in the UK.”

Huel’s sales soared to £39.8m – a 161.2% increase when compared to two years ago. Huel’s range of powder-form, ready-to-drink meals and bars have been a hit amongst its loyal fanbase and become synonymous with the modern health-conscious consumer. McMaster continues: “Huel has been established as the global leader within the category, changing the way people consume food that is better for themselves and for the planet. “Our run-rate revenue is around $100m (c.£76m), so it’s been a crazy journey for a brand that has just turned five years old.” A large percentage of the company’s growth in recent years has been down to its expansion abroad. However, there have been other benefits to expanding overseas. McMaster said: “Huel expanded internationally quite early on. Often that is a higher risk move for traditional retail businesses selling in stores. By being direct to consumer led, we can set

ourselves up to sell in 100 markets and that has helped us scale quicker. We also learn from being more international. For example, the customer service expectations are ridiculously high in Japan and we’ve upped our overall bar in other markets because of being exposed to that.” Why is Huel so popular? Over the last decade, the health and supplement drinks category has changed beyond recognition. Today’s consumer is more conscious with what they are putting in their body, and where the ingredients come from. There has also been a marked increase in the rise of movements such as veganism and plant-based alternatives. With more people also attending gyms and participating in sporting activities – Huel is at the crossroads of these two. McMaster comments: “What our customers want from Huel is healthy and convenient

Alantra is a global investment banking, asset management, and portfolio advisory firm, and their statistics revealed that in the last financial year,

July September - August 2020

HUEL

James McMaster - CEO, Huel

food. A lot of convenience food is low in nutritional value. Nutritious food which you may cook at home is not convenient and can be costly. Huel is quick to make and easy to consume. It’s got all the nutrients you need and costs only £1.22 per meal, providing access to affordable nutrition and good value for money. “Our flagship product is Huel powder. Each pouch contains approximately 17 nutritionally complete meals - you could look at this as your breakfast and lunch for nearly two weeks, therefore with very minimal packaging and its 12-month shelf life ensures no food waste. “Huel powder is 100% vegan, made from plantbased sustainable ingredients including oats, pea, rice, flaxseed, coconut, and sunflower, which further supports our mission to make food with minimal environmental impact. We have developed our range further, offering Business Leader - Inspire • Inform • Connect

THIS YEAR, WE REACHED A MILESTONE: SELLING OVER 100 MILLION MEALS SINCE LAUNCH, DISTRIBUTING TO CUSTOMERS IN 100 COUNTRIES, MAKING HUEL THE WORLD’S BEST-SELLING COMPLETE FOOD BRAND."

Huel in ready-to-drink and an on-the-go bar for a nutritionally complete snack.” How to be a ‘Hueligan’ Due to its ever-increasing and loyal fanbase, the Huel founders say the business has risen above the competition by having a relentless pursuit for customer satisfaction. So much so, that the company has a name for its users. McMaster comments: “We have a list of ‘How to be a Hueligan’ phrases to guide ourselves as a team. A top one is ‘make customers happy’. I think if you are relentless about that, you’ll push yourselves hard to give the best possible experience and be the brand that people want.” Due to being a disruptor and then the market leader of the industry, Huel has concentrated on developing their products, rather than looking at what their competitors are offering. McMaster continues: “We don’t look at what competitors do very often. Being a predominantly direct-to-consumer business means we are led by what they tell us. There is quite a special relationship we have on our forum, our social channels and on the phone. A lot of what we do is driven by this feedback and I think that is key to why Huel has grown at such a pace."

Shaking up the future of food In just five years, Huel has established itself globally, but what does the future hold for the company, and what trends will they be looking to service? McMaster explains: “Consumers are becoming increasingly conscious about the environmental impact their food choices are having, not only on their health but on the planet. People are more aware about traceability of food products, how they’re produced and what impact this is having on the environment. “The way we are eating is putting a massive strain on the environment, and consumers are realising that the way forward is to make more sustainable food choices, such as increasing plant-based food in their diet. This doesn't necessarily mean removing animal products completely, rather encouraging more people to make more conscious and ethical food choices. Recent sources show that by switching just one meal a day to plant-based, you can cut your food-related carbon emissions by up to 35%, or two meals to reduce it to almost 50%.” Huel also recently raised £20m in funding from private equity investor Highland Europe to accelerate its growth plans for the next few years.  23

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HOW IS YUSEN LOGISTICS PREPARING FOR BREXIT TRANSITION CAN YOU TELL READERS ABOUT YUSEN LOGISTICS? Yusen Logistics are a customer-centric logistics partner to global business delivering an extended integrated range of global and local services from International Freight Forwarding and Contract Logistics to End 2 End Global Supply Chain Solutions. We invest in a deep understanding of our customers' business, and most importantly their customers to enable a clear understanding of the challenges they face and the goals they want to achieve. With 24,000 employees covering 45 countries and regions and over 550 locations, we are connecting people, businesses and communities to a better future every day. In short, we create better connections for the future of business. HOW HAS YOUR BUSINESS BEEN AFFECTED BY BREXIT AND THE PROTRACTED NEGOTIATIONS? When it was announced that the UK would be leaving the EU, Yusen Logistics created a dedicated Brexit team with key personnel from each Operating Division, which provides regular updates to the business. We also held several Customer Councils at our Milton Keynes Training facilities and invited external speakers such as the Freight Transport Association and our European Opcoâ&#x20AC;&#x2122;s to present updates. We provide our customers with regular updates on Brexit and the time lines, with possible outcomes depending on what the Government has agreed with Europe.

WHEN IT WAS ANNOUNCED THAT THE UK WOULD BE LEAVING THE EU, YUSEN LOGISTICS CREATED A DEDICATED BREXIT TEAM WITH KEY PERSONNEL FROM EACH OPERATING DIVISION, WHICH PROVIDES REGULAR UPDATES TO THE BUSINESS." 24

The protracted negotiations have delivered a level of uncertainty, resulting in contingency planning such as an increase in inventory levels, which will deliver a degree of protection against the as yet unknown duty changes and possible increases in transit times. CAN YOU TALK ABOUT THE BREXIT TRANSITION PERIOD AND WHAT IT MEANS FOR THE LOGISTICS SECTOR? The Logistics sector has a vital role to play with the of movement of goods and physical storage. The requirement for temporary storage space is increasing as companies build inventory within the UK in readiness for Brexit. Many companies are seeking to mitigate potential duty charges from the 1st January 2021 if there is no trade deal with Europe. Currently the supply chain for goods to and from Europe is barrier free, however, once the transition period ends, there will be a requirement for Customs formalities, which could potentially add to transit times for the movement of goods and increase costs, from additional documentation to potential duties. We are working with our customers to ensure that we have the correct processes in place for their products both into and out of Europe in order to mitigate potential and expected changes in transit times. Clear guidance is required from the UK Government and its agencies as to how the flow of goods arriving into and out of the UK will work. The current release of the Border Operating Model is a start but there are still a lot of questions to be answered and with regular meetings with HMRC and its agencies, we are sure this will become clearer. WHAT DO YOU SEE AS THE OPPORTUNITIES AND CHALLENGES OF THE UK EXITING THE EU? Opportunities for the UK exiting the EU is that the UK can set its own tariff arrangements and trade deals, potentially being more agile in international trade. The

Sharon Murrell - Customs Manager, Yusen Logistics

supply chain itself is likely to be challenging with the potential for port congestion. However, this said, as we adapt to new ways of working, there is the potential for innovation in the current processes. A SHORT MESSAGE TO YOUR CUSTOMERS AND BUSINESSES DURING THIS PERIOD? If not already commenced, start preparing by reviewing Incoterms to ensure you know who is responsible for what in the supply chain of the goods. Understand what the impact is on your cost base. Review the UK Global tariff, not only for goods coming in from EU but also the ROW. Also taking note of the flow of goods across the Irish Sea. We are ready to help you through this transition and beyond, having invested in and creating a dedicated team to deal with European Customs processes. Yusen Logistics (UK) feel well placed to support and guide our customers through the procedures, challenges and opportunities that Brexit brings.

September 2020

SECTOR REPORT

CONSUMER DEMANDS HAVEN’T GONE AWAY, THEY HAVE PIVOTED Business Leader reports on the growth of the online retail sector

ou would have to have been on a desert island with your head stuck in the sand not to have heard about the dismantling of some of the UK’s biggest high street names over the past few months. One by one, day by day, they have fallen; the pandemic being the final nail in the coffin for many.

But as you may expect to see when a nation is put in ‘lockdown’ for weeks – retail spending online rocketed across verticals as diverse as home improvements to gym equipment. Food was also a big winner with many who pivoted online – or already had appealing online operations – experiencing strong sales. Gousto – a meal delivery service – was one such brand and its leadership team recently announced publicly a huge drive to employ 1,000 people in the coming months. This lead some to suggest that online retailers could pick up the slack of job losses from traditional retail, in what is set to be a gargantuan re-aligning of the UK economy. But what about the numbers? Interestingly, after months of growth, UK online retail sales fell 7% month-on-month in July, as the reopening of non-essential stores took effect, ONS figures published recently shown. But as James Coker reported in Essential Retail, eCommerce spend remained high, with sales on this platform still 50.4% 26

higher than in February, prior to the COVID-19 pandemic. And online as a proportion of all retail sales was 28.9% in July, still significantly higher than February levels of 20%. This was lower than in June, however, when eCommerce represented 31.9% of all retail sales. The month-on-month decline in online sales was observed across all categories, especially department stores (18.5%), household goods (17.3%), and textile, clothing and footwear (11.2%). In food, online sales fell by 6%. Encouragingly, though, says the report, overall retail sales in July were 3% higher than recorded in February and grew by 3.6% compared with June, as the sector continues to recover. This is despite the recent news that the UK has officially entered into a recession, following two consecutive quarters of GDP decline. What is it like being an online retailer at the moment? To find out what the last five months have been like for an online retailer, Business Leader caught up with David Lawson, Managing Director of online electrical retailer AO.com.

THE IMPOSED LOCKDOWN RESTRICTIONS INITIATED AN IRREVERSIBLE SHIFT TOWARDS ECOMMERCE AS HIGH STREET STORES SHUT AND PEOPLE HAD NO CHOICE BUT TO TURN TO ONLINE ORDERING." Jonathan Bellwood

On how the last five month have been, he comments: “Before the crisis started, AO was in good shape thanks to the efforts of the whole team over the last twelve months and we’d made real progress in delivering our strategic priorities. “Covid-19 has only accelerated this, and we saw a shift in customer behaviour towards online shopping overnight, which in turn led to an increased demand in our retail business. That said, the last five months has not been without its challenges. “For example, we had to re-engineer the whole of our warehouse and delivery operations to comply with social distancing guidelines and pause our installations services for a time to protect our people in front line operations and our customers too.” Jonathan Bellwood, VP at Descartes - a solutions provider to the logistics sector with a lot of eCommerce customers, – says that the lockdown restrictions have created an irreversible shift. September 2020

ONLINE RETAIL

He explains: “The imposed lockdown restrictions initiated an irreversible shift towards eCommerce, as high street stores shut and people had no choice but to turn to online ordering. Online retail was booming before the crisis, but the impact of coronavirus has caused many to change their shopping habits – probably for good. “Online grocery shopping is expected to increase by 33% during 2020. The uptake may have started with coronavirus, but one reason it will continue is that people are still risk-averse and will want and need to continue social distancing to remain as safe as possible. They see going to stores as an unnecessary risk, especially when they can easily have the items they need delivered to their home. “The experience of the high street is no longer what it once was and is certainly not what consumers are looking for anymore. Retail has become more transactional, with consumers only buying what they need, rather than spending time browsing. Business Leader - Inspire • Inform • Connect

“There’s also the added cost and inconvenience for consumers buying on the high street, such as travel and parking. But, with consumers becoming increasingly more cost-conscious – especially those that have been furloughed or made redundant – they will try to save money any way they can. And if they can purchase the same products online, at a lower cost and get them delivered cost effectively, when and where they want – why wouldn’t they shop online?”

something that is bespoke and something that consumers cannot have all the time. Gymshark, for example, is one of the UK’s modern retail success stories and a consistent performer atop the Fast Track 100, and it hit the nail on the head when it opened its first pop-up store in London’s Covent Garden earlier this year.

On what brands or sectors have been the winners and losers during the last quarter, Bellwood comments: “We’ve witnessed Victoria’s Secret going into administration, John Lewis closing some of its stores and Cath Kidston shutting all 60 of its UK stores. These are all brands that had a great emphasis on the in-store experience.

“Consumer demands haven’t gone away, they have pivoted: it is brands like Gymshark and Lounge Underwear that have reset the standard within the online only world. To keep pace, luxury brands, for example, need to ensure that the aesthetic experience isn’t lost. When the parcel arrives, the final consumer experience is unwrapping a hand tied ribbon enclosed around a scented shiny box – something that can be filmed and shared on social media.”

“In the future, post-coronavirus environment, it’s not to say that there isn’t a place for some physical stores. But, it has to offer a truly unique experience,

Cont.  27

SECTOR REPORT Bellwood continues: “Brands with physical stores have been clinging to the argument that consumers want a great customer experience, and this is what keeps the high street alive. Of course, there is a place for these types of stores, but it’s limited to areas where there is high foot traffic, places like Covent Garden, London, for example. And during the current pandemic, even the stores that used to perform well, based on the physical store experience, have taken a massive hit. “Consumer preference and priorities have now dramatically shifted and companies like Amazon have set the standard for the eCommerce experience.” Impact of technology With many arguing that the future is online or a hybrid model at least, it’s interesting to look at the role that technology will play in the consumer experience and advances in VR and AR. Lawson comments: “As we’ve seen a continued shift to online retail recently, technology like VR and AR are becoming ever popular as it helps customers decide which appliances or electricals they want to buy for their home, meaning they can get what they want quicker and more easily. “This technology offers a benefit to the retailer too, for example, at AO we see that one of the most common reasons for a product to be returned is due to the fact

ONLINE RETAIL it doesn’t fit in the space, so AR helps to alleviate the number of returns we get. We’ve also recently adopted a new AI system at AO to generate insight-led data and enhance the customer experience, helping us to harness a game-changing proposition for all of our customers. “This is one step in a range of exciting projects we have planned to look at how we can use technology to improve the customer journey. I’m confident adopting new technologies is a strategy that we will see increasingly being implemented across online retail over the next year.” Bellwood argues further that equally important to the customer experience is a warehouse and logistics operation that is first class. He explains: “For business warehouses, adopting a semi-automated process, which includes the collaboration with human workers, means that in times of peak demand, they can quickly employ more staff that can be trained up to accurately pick customer orders and send them out. “Those businesses that have an optimised Warehouse Management System (WMS) can rapidly increase usage on the system and bring in employees to operate it – humans can upscale and downscale very quickly to adapt to changing demands and economic conditions. But, you can’t just bring in more staff without a WMS in place. “Those without a WMS that are clinging on to paper pick lists, manual processes and other unscalable warehouse practices will not have benefitted from the surge in online orders so far because they weren’t in a position to cope. “In the hyper competitive online retail ecosystem, failing to meet customer expectations with slow or inaccurate order fulfilment means losing a customer for life.” It’s all about the customer Mark Hook works for Brightpearl – a software company that supports retail companies – and the business has been looking at the online shopping experience for customers for years. He says success comes from a mix of aesthetics and performance:

Mark Hook - Brightpearl

“For an online retailer the balance between the aesthetics and performance of the eCommerce store, and the power of its operations is crucial. While most brands are aware of everything they need to do on the front-end, few seek to address the operational complexities that lie beyond the buy button, and which are vital for a good online shopping experience. "Online brands that sell directly to customers are directly responsible for every single scenario in the buying journey, including pre- and post-purchase experiences, such as delivery and returns, inventory management and customer communications. "Once brands have captivated customers enough to capture a sale, this is where the real 'work' truly begins to provide a good shopping experience." On how he sees the online shopping experience evolving for consumers, Hook says: “New stores created on Shopify grew 62% between March and April this year, compared to the year prior. More competition is great for consumers but it means brands must work much harder to stand out through engineering superior shopping experiences at every touchpoint in the buying journey. “As Amazon continues to set the bar, brands will need to keep pace and for consumers the online shopping experience will evolve to be more ‘immediate’ than ever before. “With regards to shorter-term evolution in online shopping, expect to see more blended online and in-store experiences, for example, a major uptick in brands offering zero contact 'Click & Collect' services, which allow guests to order their item online before collecting it safely from outside or via car delivery." 

September 2020

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FEATURE

WHAT ARE THE CHALLENGES FACING TECH BUSINESSES LOOKING TO RAISE FUNDS?

he tech sector is one of the UK’s most successful and contributes billions to the UK economy. The businesses within it also attract millions each month in funding. This feature looks at current funding levels and what the aspirations for tech companies are going forward.

ARE YOU SEEING INVESTMENT LEVELS INTO UK TECH BUSINESSES RISING OR FALLING? Konstantin Sidorov - Founder and Chief Executive Officer of the London Technology Club: "The UK remains a leading country when it comes to tech investment globally. Funding for UK’s tech firms seems to have remained robust and we are continuing to see lots of great opportunities coming through despite the crisis. 30

"According to Ascendant Corporate Finance, the number of deals in H1 2020 (>£0.5m) is down slightly on the same period last year, however the amount raised by tech firms in H1 2020 is up almost £500m on the previous year. The mega trends that were around pre-crisis are not going away, many have been accelerated by it and investors recognise that.” Roland Emmans – Head of Technology Sector at HSBC: "Loans are not being asked for in high volumes by tech firms and, broadly, firms have been able to access cash facilities to support their plans. "This has allowed velocity to remain in the sector and with high levels of funding available, it has allowed businesses to pay suppliers and keep activity in the sector. "I am hearing murmurings that from September, we will begin to see an uplift in M&A activity, but there are now different valuation methods in the tech sector. Businesses that have come through COVID-19 unscathed and have true recurring revenues - and a sticky customer

base - will be valued on a high base or the same as pre-COVID-19. "For businesses that have had a difficult time, they will be valued in a different way and you will have a repeat versus recurring revenue valuation model. "I think you will also start to see different deal structures, where acquired businesses receive half the money today when the ink is dry on the agreement and the rest in 18 months, for example, when agreed targets have been met.

FUNDING FOR UK’S TECH FIRMS SEEMS TO HAVE REMAINED ROBUST AND WE ARE CONTINUING TO SEE LOTS OF GREAT OPPORTUNITIES COMING THROUGH DESPITE THE CRISIS." Konstantin Sidorov

September 2020

FUNDING FOR TECH THE PANEL

Konstantin Sidorov - London Technology Club

"I also expect to see a flurry of M&A activity in the tech sector due to some very large corporates sitting on cash balances, of which they are looking to divest parts of to fund activity in the sector." Rosie Bennet – Investment Manager at SETsquared: "There has been consistent interest from investors for companies in the SETsquared network throughout the last five months of lockdown, and our ‘virtual’ investment events have been well attended. The change has come in what happens next. "While institutional funders are continuing to follow up with companies seeking seed or growth stage funding, there has been a marked drop off in engagement from angels and private investors who are either looking after their existing portfolio companies or suspending investment activities for a while. "This means it has become increasingly challenging for pre-seed and early-stage start-ups to attract the funding that they need to deliver an MVP, proof of concept or to support their early market traction."

Roland Emmans - HSBC

Rosie Bennet - SETsquared

WHAT WOULD YOU SAY ARE THE CHALLENGES TECH BUSINESSES SEEKING FUNDING ARE FACING? Rosie Bennett: "The companies we work with at SETsquared are led by innovation and this means they tend to be continuously fundraising for research and development as well as working hard to drive revenues. This parallel track puts a pressure on cashflow, and the challenge is to deliver on the growth milestones whilst ensuring enough runway to close the next funding round. This is challenging at the best of times, but in a global economic downturn, it will be especially tough." WHICH TECH VERTICALS ARE PARTICULARLY INTERESTING TO INVESTORS LOOKING AT UK FIRMS? Konstantin Sidorov: "It is about looking at the larger trends, seeing what technology underpins those trends and the ability of the management teams to turn the opportunity into reality. There are some obvious ones related to homeworking and eCommerce because of the crisis, such as remote working tools that are seeing major growth.

I EXPECT TO SEE A FLURRY OF M&A ACTIVITY IN THE TECH SECTOR DUE TO SOME VERY LARGE CORPORATES SITTING ON CASH BALANCES, OF WHICH THEY ARE LOOKING TO DIVEST PARTS OF TO FUND ACTIVITY IN THE SECTOR." Roland Emmans

Business Leader - Inspire • Inform • Connect

"Similarly, the mobility sector is undergoing some dramatic shifts, driven by changing consumer needs, as people limit their movement and look for more sustainable methods of travel. "We are also seeing some interesting opportunities in nutrition and FoodTech, and MedTech as people look to lead healthier, more sustainable lives." Roland Emmans: "Digital transformation, data and CRM platforms and robotics all stand out. "MedTech is also seeing huge growth and opportunity for disruption as it’s illogical to think that in the future, we will wait in a GP surgery as we have historically done. This is allowing for a rise in telemedicine, and what has been interesting is that the NHS has been given huge amounts of free software by companies looking to help during the pandemic and it will be interesting to see which ones they adopt going forward on a more commercial basis. "The growth in this sector will be around proactive treatments instead of reactive. So, how can you share your data with technology providers and apps so that when your wearable device flags up something that is irregular, it can inform your doctor and you can prevent and take action on a potential medical issue, rather than waiting for the worst case scenario."  31

REVIEW

EQUITY INVESTMENT

HOW HAS THE PANDEMIC IMPACTED EQUITY INVESTMENT INTO UK BUSINESSES? By Henry Whorwood, Head of Research & Consultancy – Beauhurst

o area of the UK’s economy has been left untouched by COVID-19 and the government’s response to it. Equity investment into the UK’s high growth start-ups and scale-ups is no exception. But – given everything that is happening – there is cause for optimism.

Nearly two-thirds of the way into the year, we now have enough data to reassess our predictions for 2020, taking the impact of coronavirus into account as far as possible. To start with, 2019 was itself a record year: £15.7bn was invested into high-growth private companies. 2020 has already seen £8.4bn invested in 3,144 deals (based on data as of August 14 2020). This figure does not include convertible rounds, which we know have been an increasing part of the equity financing market since the pandemic started. The figure therefore doesn’t include the more than £500m that has been invested as part of the Government’s Future Fund initiative. Our predictions for 2020 were that we would see more than 2019’s £15.7bn invested but fewer deals than 2019’s 6,380 (in effect we also predicted that the average 32

deal size would increase). This prediction was naturally not based on any anticipation of a global crisis, but rather on the systemic changes that were already happening in the ecosystem. Fewer new companies were raising, and investors were starting to prefer to follow their existing portfolios over investing in newer, younger companies. Some VCs even started to raise new funds to invest exclusively in their existing portfolio companies. We first wrote about this phenomenon in July last year. Much of this is natural in an entrepreneurial ecosystem. Entrepreneurial 'supply' waxes and wanes cyclically. As more and more start-ups are founded, they attract other entrepreneurial talent, eventually diminishing the number of start-ups that are founded. However, as the start-ups mature into scale-ups, they will cease to offer the culture and opportunities that otherwise entrepreneurially-minded founders are looking for. And, eventually, one should start to see an uptick in the startup founding rate. Lockdown Lockdown appears to have compounded the problem for the very earliest stage companies. Again this is natural: in a crisis, one can only expect investors to devote their energies to looking after the investments that they’ve already made.

Nonetheless, the situation is dire: since lockdown in March, there has been only £214m invested into 158 companies that have never raised equity investment before. This is compared to £943m into 225 companies in the previous year. Some of this is clearly due to coronavirus and its effects. But, is it all? Even before coronavirus and its consequences were felt at all, we saw a change in the capital requirements of the very youngest businesses. Businesses can now bootstrap for much longer than before: in particular, the technical costs of starting a business, especially a tech one, are lower thanks to the likes of Amazon Web Services. COVID-19 has only accelerated this. It is certainly true that some deals are smaller because the investors want to wait and see what happens, but it is also true that some deals are smaller because the companies plan to spend their money differently. I don’t think we will see more than £15.7bn invested this year. But I don’t think that need necessarily be a problem. If businesses redirect their office spend to hiring, the entrepreneurial ecosystem may well still flourish (notwithstanding the problems that will create for the real estate sector). Suffice to say, I am confident that the UK’s start-ups and scale-ups will raise over £10bn this year. And – against the backdrop of everything that’s happened – that will be no mean feat.  September 2020

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FEATURE

IS THIS THE LIFELINE BUSINESSES NEED OR THE BEGINNING OF ACCEPTING CORPORATE FAILURE? Business Leader looks at the Corporate Insolvency and Governance Bill

n June 25th 2020, something called the Corporate Insolvency and Governance Bill received royal assent and became an Act of Parliament. The new Act gives more protection to directors of companies that are trading as insolvent.

Since the new piece of legislation was passed, some have argued that it will encourage corporate failure and, in turn, let leaders off the hook, but others have argued that it’s a sensible measure to take, considering how tumultuous and fragile the UK economy is. To find out more about the detail, Business Leader spoke to Mark Phillips QC. He is a Barrister at South Square. 34

He comments: “CIGA 20 is the most significant piece of restructuring legislation since the Insolvency Act 1986. It is hugely significant in that it gives companies the tools necessary to rescue businesses, restructure debt and save livelihoods. “There is now huge flexibility in the approaches now available to restructuring professionals. The COVID-19 crisis has resulted in thousands of companies accumulating fixed debt during the lockdown period that now has to be dealt with. This is not a case where businesses have built up debt by choice or recklessly. “Business now need to assess that debt, look at its available funds, look at other sources of funds, including affordable bank debt, and offer its creditors a workable percentage that will enable it to put the COVID lockdown behind it and look to its future trading. Almost no business will be

able to absorb 15 weeks of fixed costs, so everyone needs to accept that they will only recover a percentage of what fell due to them during that period. If creditors are not prepared to accept a percentage, then companies have options through CVA’s, schemes or the new arrangement and reconstruction provisions.”

THE COVID-19 CRISIS HAS RESULTED IN THOUSANDS OF COMPANIES ACCUMULATING FIXED DEBT DURING THE LOCKDOWN PERIOD THAT NOW HAS TO BE DEALT WITH. THIS IS NOT A CASE WHERE BUSINESSES HAVE BUILT UP DEBT BY CHOICE OR RECKLESSLY." Mark Phillips

September 2020

CORPORATE INSOLVENCY Mark continues: “For the first time in UK law, the new arrangement and reconstruction provisions include cross class crackdown provisions. If one class approves the arrangement by a majority of 75%, dissenting classes can be bound by the arrangement provided that what they get under the arrangement is at least as good as ’the relevant alternative’, which is what would happen if the arrangement wasn’t passed. Holdout debt should become a problem of the past. “There are several key dates looming; First, at the end of September, the moratorium on enforcement of debts by winding up petition will end, as will the moratorium on landlords enforcing against tenants; in January, the deferred July tax bills become payable, and from the Spring, the CBIL's loans will either need to be repaid or refinanced. Companies that need protection have two very constructive options: first, a light touch administration which leaves the directors managing the business but the administrator managing the restructuring, and secondly, the new moratorium procedure which leaves the directors in control subject to the supervision of the monitor. The days when the directors simply handed over the business to an insolvency practitioner are over.” In regard to the bill, there have been some that have said it has been rushed through parliament.

that a director with the required skill set ought to have taken to minimise the loss to creditors. Over the COVID lockdown period, there was hardly anything directors could do.” SO HOW HAS THE NEW BILL BEEN RECEIVED BY INDUSTRY LEADERS?

Jonathan Geldart, Director General of the Insitute of Director (IoD) comments: “Directors have significant legal obligations, and this Bill provides some reassurance that those who act responsibly won’t be caught out by the insolvency system. It’s crucial that directors are able to sustain their organisations and the people who rely on them during these difficult times.”

“Third, the wrongful trading provisions that have been suspended wouldn’t have applied anyway. The Insolvency Act 1986 (section 214) requires the people to take the steps Business Leader - Inspire • Inform • Connect

Sam Talby, who is Partner at PCR LLP, argues though that there could be some negative consequences to the bill. He comments: “I believe that if we are not careful, the legislation will create a 'NonPayment Culture'. For example, where a company has entered an insolvency or restructuring procedure, or obtains a moratorium, the company’s suppliers will not be able to rely on terms and conditions to stop supplying or vary contract terms with the company. “The New Insolvency regime creates a ‘Moratorium (40 days)’ with the aim of giving a breathing space to seek a rescue plan. During moratorium, no legal action can be brought against the company without leave of the court. It is the creditors who will have to bear the loss whilst still supplying the company. It is also worth noting that this moratorium can be increased to a year with consent of the creditors.

Mark disagrees: “CIGA 20 was not 'rushed through parliament'. The amendments to our insolvency regime were the subject matter of extensive consultation and a Green Paper. Additional temporary provisions were added to the bill and its progress was accelerated, but it was not rushed. Several people, including me, helped HMG to move it along. “The idea that it encourages corporate failure or allows failing leaders to get off the hook is nonsense. First, it encourages corporate rescue and reconstruction. Second, directors of companies that have incurred debt during lockdown have, to use Boris Johnson’s words 'done nothing wrong'. No one could have predicted or planned for this pandemic, and no company budgets on the basis that its fixed costs will continue and that it will receive little or no income.

without fear of legal repercussions. The company moratorium, filing extensions and voiding of statutory demands are particularly important for smaller businesses, it is important that these provisions continue for as long as is necessary.”

FSB National Chair Mike Cherry echoed this sentiment, saying that it would mean that many businesses survive: “The incoming Corporate Insolvency and Governance Bill will be an important step to helping many small firms during this crisis. The measures will immediately go some way to mitigate some of the problems small businesses are facing, such as the relaxation of wrongful trading rules which will allow directors of struggling companies to continue trading

“In addition to this, outstanding amounts due for past supplies are not required to be paid for whilst the company arranges its rescue plan. This is only varied if having to make a supply would cause hardship to their business. This means there is no active control of the company seeking the rescue, other than it being monitored by an insolvency practitioner. “Whilst the change is an attempt to benefit genuine attempts at restructuring, it will inevitably lead to abuses by the unscrupulous with the supply chain likely to suffer.”  35

DEBATE Sponsors of the Future of Work panel discussion Your intelligent, full-service specialist law firm E: stephen.ravenscroft@memerycrystal.com | www.memerycrystal.com

'In this market dynamic I hope that we don’t see employers taking advantage of workers'

ith many saying that the workplace has changed forever, Business Leader brought together a panel of experts to look at the current work dynamic and how it is likely to change in the future. THE PANEL Stephen Ravenscroft - Memery Crystal Nick Ulycz - Domestic and General Ben Kiziltug - Personio Dr Nicola Millard - BT Andrew Scott - Ascot Group Matthew Moore - CV Library

The debate started by looking at what leaders need to consider when they will be bringing staff back into the workplace in the coming weeks and months. Stephen Ravenscroft answered by saying: “What I’m seeing is that many employers and employees have recognised the benefits of home or blended working, and not all are in a huge rush to go back to the office. Having said that though, we will not see the end of the office as many jobs cannot be performed remotely.

“In regard to what leaders need to consider, the first thing is around making sure the premises are safe. Secondly, it is important to implement risk assessments and also consider data protection implications, if you’re asking employees medical questions on a daily basis, before they enter the office. Employees are themselves also raising concerns about getting to and from work, especially if they need to use public transport, so varying start and finish times can help with this.” September 2020

FUTURE OF WORK Sponsors of the Future of Work panel discussion Your intelligent, full-service specialist law firm E: stephen.ravenscroft@memerycrystal.com | www.memerycrystal.com

Stephen Ravenscroft Memery Crystal

Andrew Moore CV Library

Matthew Moore, who is the Managing Director of CV Library, then talked about how he has found this period and how remote working has been for a recruiter. He said: “We have a large customer service and sales team that are on the phone, and that buzz of an office is important. We were not set up as a work from home business and it was a huge change, and one we have had to embrace.

Stephen also talked about the legal implications of asking employees to return to work. He said: “If an employee is refusing to come back to work for a valid reason, then it is likely placing them on unpaid leave or keeping them furloughed would be preferable to letting them go. "Business leaders do need to be careful of discrimination, if the employee is classed as vulnerable or is living with somebody that is vulnerable.” Business Leader - Inspire • Inform • Connect

Nick Ulycz Domestic and General

management. If you would have scoped this out as a project, it would have been one that would have likely taken two years and included hundreds of risk logs and strategy meetings, but when required, we achieved it within a couple of weeks.” Andrew Scott, who is founder of the 70strong Ascot Group, then gave his views on how the work dynamic has changed at his company.

“Moving to this model has allowed us to focus more on output, though, and come up with new ways to measure that. People will enjoy coming back to the office over time, but we’ve had to adapt and look at different ways to keep people motivated and thriving.”

He said: “In our business we have seen that some people have not embraced working from home and it has negatively affected their wellbeing but others slid into it fine and feel they’re more productive at home. We’re now moving back to everybody working in the office full-time.

Nick Ulycz from Domestic and General then talked about his experiences of moving to remote working.

“What I would also say though is that many businesses can’t offer remote working and building a strong culture is important too. We have created a culture in our company out of everybody being together and like a family. If you start to break this down, then you take away the soul of the business and it becomes transactional and just a job.

He said: “It was a huge transition for us, having to move three thousand staff across nine countries to a remote working model. It has been a very successful process, though, and looking back, we were worried about productivity, but we didn’t need to be as people have been as productive or even more productive. “It’s also made us challenge everything we thought we knew about change

Cont.  37

DEBATE

FUTURE OF WORK Future of Work sponsored by Memery Crystal Your intelligent, full-service specialist law firm E: stephen.ravenscroft@memerycrystal.com | www.memerycrystal.com

Andrew Scott Ascot Group

Dr Nicola Millard BT

"It’s easier for a start-up with five people or a corporate to work remotely but for a businesses that is around 70 to 100 staff, I believe having the office environment is important.” The debate then moved on to talk about Jack Dorsey’s (who is the Founder of Twitter) comments that he would allow all his staff to work from home. But, how realistic is that for businesses in reality? Dr Nicola Millard said: “Working from home isn’t a new idea, and it’s something that we have been doing at BT since 1992, and I believe it should be a choice. There is a big gap, though, between those of us that are lucky enough to work from home and those that maybe live in shared accommodation, and I can understand the reticence from some employers to offer a fully home working model. I would say it’s important to trust people to choose the model that suits them.”

Ben Kiziltug Personio

Following this part of the debate, Ben Kiziltug then talked about the role of the HR professional going forward and how technology can support them. He said: “The role that HR plays within companies is now huge and some of the logistical feats companies achieved moving staff to remote working will have been helped enormously by HR teams. We are seeing more HR people on the board at companies now, and they are having to play a much more strategic role in companies, often becoming the heroes of these organisations. “And to help them fulfil this evolving role is where technology plays a part, as it allows them to see and interpret data and analytics much quicker, so they can make the big decisions like who should come back off furlough first.” The debate then shifted to the jobs market and what trends are being seen.

WE HAVE A LARGE CUSTOMER SERVICE AND SALES TEAM THAT ARE ON THE PHONE AND THAT BUZZ OF THE OFFICE IS IMPORTANT. WE WERE NOT SET UP AS A WORK FROM HOME BUSINESS AND IT WAS A HUGE CHANGE, AND ONE WE HAVE HAD TO EMBRACE." Matthew Moore

THE ROLE THAT HR PLAYS WITHIN COMPANIES IS NOW HUGE AND SOME OF THE LOGISTICAL ACHIEVEMENT COMPANIES ACHIEVED MOVING STAFF TO REMOTE WORKING WILL HAVE BEEN HELPED ENORMOUSLY BY HR TEAMS." Ben Kiziltug

Matthew Moore comments: “The impact of the pandemic on the jobs market has been significant, and we’re still seeing job postings below normal levels, although this is improving month on month. We are also seeing a huge increase in job seekers as expected; and we won’t know the full extent of the situation until the furlough scheme and other government support ends. “For the last two and a half years, it has been a candidate-dominated market, with the employee having the power, but this is shifting now, with employers having a choice of some very good people. I hope this doesn’t erode the progress we’ve made on things like health and wellbeing, and I’m confident it won’t as the majority of employers are responsible, but our research is showing there is already a squeeze on wages.” Nick Ulycz also tackled this point by saying: “We’re seeing huge numbers of applications which are way above normal. The area where people are divided is whether we’ll have a V shaped bounce back, or the recession will be longer term and we’ll have a more depressed labour market. This will disproportionately hurt younger people, and in a market dynamic like this, I hope you don’t see workers at the bottom, and those in the gig economy, treated badly.” 

September 2020

FEATURE

RETURN TO WORK:

WHAT DO BUSINESS LEADERS NEED TO BE PREPARED FOR?

ith COVID-19 forcing millions to work from home and isolate from colleagues, friends and family – there has been an increased focus on mental health for employees. Following the easing of lockdown restrictions, millions of people will now be heading back to the office – but what can they expect, and how can leaders ensure that mental health and wellbeing are at the forefront of the new age of working?

It is this support that will be key to preparing the workforce for the future – with many still coming to terms with the new world we live in.

Alaana Linney - Bupa UK

Business Leader investigates. The coronavirus-enforced lockdown came into effect on March 23rd 2020, forcing millions to work from home. As the government and business community felt the full force of its impact, the furlough scheme was put into place. But now, government is encouraging employees to return to work where it is safe to do so. A NEW WORKING WORLD So, how can a business owner be ready for the return to the office and continue to support their employees health and wellbeing? Alaana Linney, Health Services Commercial Director, Bupa UK, comments: “COVID-19 has fundamentally changed the way we work, and as we move into the next phase and start thinking about employees returning to the office, it’s important that businesses put procedures and policies in place to support their staff to feel safe when returning to work, reducing any anxiety or concerns that may come with it. “Our research found that 65% of us are feeling anxious about returning to the office, with commuting, overcrowded office space and unclean areas being top of their 40

concerns. Businesses need to consider this in the return to work strategies and look at individual factors as to why someone may not be able to return to the office just yet. “Employees need policies in place to support them to safely return to work. For example, flexible working policies for those who are anxious about commuting into the office can be introduced to avoid rush hour. If you didn’t have a working from home policy already, now would be a good time to introduce one, giving your employees the opportunity to work from home some of the week, as well as coming into the office if it’s safe to do so. “A key thing that has come out of the pandemic is that people are more aware of their health and wellbeing than ever before, and want services in place that support them and their family.”

Kate Cooper, Head of Research, Policy and Standards at The Institute of Leadership and Management, comments: “In an office environment, people's workspaces can, to a large extent, be controlled; for example, the size of their desk, the technology they use, the strength of the internet connection, access to refreshments, even the level of noise. The quick switch to home working meant so many aspects of the working environment became uncontrollable. These are as variable as the individual; working at home affects everybody very differently, because it’s their unique domestic circumstances that are really creating that work environment for them. We’ve been getting an insight into people's personal lives that previously they might have kept to themselves. By commuting to work, you could leave home behind you and bring just the parts of yourself to work that you wanted to. “So, employers will need to have conversations that are genuine, in order to understand the impact lockdown has had on their employees, particularly when helping to bring them back into the workplace.” IMPACT OF FURLOUGH, ISOLATION AND REMOTE WORKING Following the return to the office, many discussions will be had between employer

A KEY THING THAT HAS COME OUT OF THE PANDEMIC IS THAT PEOPLE ARE MORE AWARE OF THEIR HEALTH AND WELLBEING THAN EVER BEFORE AND WANT SERVICES IN PLACE THAT SUPPORT THEM AND THEIR FAMILY" Alaana Linney

September 2020

HEALTH & WELLBEING

and employee about how their specific career will be handled, and for those that have been on furlough or working remotely, there are mental health considerations.

Dr Nick Earley - Helix Resilience

Business Leader - Inspire • Inform • Connect

Dr Nick Earley, Head of Psychology at Helix Resilience, comments: “Lockdown has certainly taken its toll on the mental wellbeing of workers. We recently conducted a survey exploring the mental health of 2,000 white-collar employees and managers, and the research highlighted that lockdown affected 83% of respondents’ mental health in some way. The changes manifest in various forms and, whilst some can be considered normal reactions to an abnormal situation, others suggest more serious mental health difficulties – such as feeling down, depressed or hopeless, or experiencing thoughts of self-harm or suicide. “Concerningly, 32% of respondents do not believe their employer has supported their wellbeing during lockdown. It’s important for businesses to regularly keep in touch

with workers who are self-isolating, furloughed or who might be feeling isolated while working from home.” The difficulty for all business owners that have been impacted by the COVID-19 pandemic is the fact that there is almost an infinite myriad of unique and unprecedented personal circumstances that have arisen for millions of workers. Nazir Ul-Ghani, Head of Workplace, Facebook EMEA, said: “Self-isolation brought many complexities to people’s lives and these haven’t ended with the lockdown. We all have colleagues who are carers or parents, as well as those who are high-risk or have struggled this year. To truly support their employees, organisations need to be considerate of the myriad individual circumstances that the pandemic will have created or exacerbated. 41

FEATURE “Showing empathy and providing flexibility to those who need it will ensure that everyone is able to do their jobs to the best of their abilities and comfort levels. Communication and collaboration tools can help to provide this flexibility, allowing employees that aren’t able to return to the office right away to still connect with colleagues, get work done and feel part of the organisation.” A relentless focus on being as prepared as possible for both yourself as a leader of a business – and the team that make the business tick – is vitally important. When the furlough scheme was introduced as part of the government’s plans to keep the economy afloat, many saw it as a positive. And although it has, to an extent, achieved its goals – the emotional results have not been completely positive.

Nazir Ul-Ghani - Facebook EMEA

Cooper comments: “Even though on the face of it, furlough seems to be a case of being paid not to come into work, it is in fact a rejection. It’s a statement that whatever you normally do in the workplace is not required. That’s a very hard thing to deal with, even if there are some silver linings.

WE RECENTLY CONDUCTED A SURVEY EXPLORING THE MENTAL HEALTH OF 2,000 WHITE-COLLAR EMPLOYEES AND MANAGERS, AND THE RESEARCH HIGHLIGHTED THAT LOCKDOWN AFFECTED 83% OF RESPONDENTS’ MENTAL HEALTH IN SOME WAY." Dr Nick Earley

“The idea of not being wanted will, of course, give rise to such fears as, ‘Well, for how long will I not be wanted?, Will this sense of rejection be continuous?, Will furlough segue into a more permanent state of unwantedness – namely redundancy?’. As our research has repeatedly shown, people like to have control over their working day: I don’t think anyone who has contributed to our various reports over the years has ever told us that their idea of control is doing no work at all. Most people seek purpose from their work. The first step is definitely recognising that furlough is accompanied by a feeling of rejection – and that requires leaders to empathise with the affected staff.” It is these uncertainties around the negative impact of the furlough scheme that business owners will need to be prepared for.

Kate Cooper - The Institute of Leadership and Management

Phil Pinnington, Audit and Consultancy Manager, British Safety Council, explains: “Many will fear that furloughing is the first stage before redundancy and September 2020

HEALTH & WELLBEING technology has seen an unprecedented surge in usage. While it has been helpful in keeping employees happy with their mental health, after many months of usage, the danger business leaders need to consider is how much longer it can remain as useful as it has been.

THE OTHER CHALLENGE IS THAT YOU CAN’T PUT THE GENIE BACK IN THE BOTTLE. A FULL RETURN TO THE OFFICE MIGHT BE POSSIBLE, BUT EMPLOYEES HAVE COME TO VALUE THE BENEFITS OF REMOTE WORK." Nazir Ul-Ghani

Linney comments: “Video calls and instant messaging services have allowed us to keep in touch, both in a business and social capacity. And whilst we get to grips with what the new normal will look like in the working world, it’s likely that they will continue to have a big impact on how teams work.

unemployment, and that will have had a negative impact on their mental health. Furloughed workers may resent those who have continued to work, but, by the same token, those who have worked throughout the pandemic may see furlough as a better option, and this will cause tension between employees who have had a very different experience of the pandemic. The furlough scheme allows employers to bring people back to work part time, which may help the transition back to work. It is important to ensure that furloughed workers are brought up to speed and do not feel they have been ignored while not working.” HAVE VIDEO CALLS BEEN OVERUSED? One of the most iconic images associated with the coronavirus lockdown, is of a video conference call. Whether it be on national news or in the living rooms of people across the UK, this simple but effective piece of Business Leader - Inspire • Inform • Connect

“As video meetings have become the default mode of communication in many circumstances, it’s important for businesses to recognise that they can become exhausting for employees too, especially when they are back-to-back or for prolonged periods. Managers should encourage regular breaks and to consider whether a video call is truly the best form of interaction for the task at hand. Remember to still make use of regular phone calls, as well as emails, to avoid remaining seated for hours and becoming run down with the heightened awareness that can come with presenting yourself on camera.”

choose to return to the office, it won’t look or feel the same. Strict social distancing rules will impact office layouts and logistics, only a portion of employees will be able to come together at once, and there’ll be the constant threat of a return to lockdown. As a result, employers will still need to find new ways to bring everyone together, create equal experiences for those within and outside of the physical workplace, and be prepared to react quickly. “The other challenge is that you can’t put the genie back in the bottle. A full return to the office might be possible, but employees have come to value the benefits of remote work and might not want to just ‘get back to normal’. And why should they? Organisations have learnt real lessons from lockdown and it’s on leaders to think about how their businesses can evolve and improve rather than reverting to old ways.” CHANGING VIEWS ON MENTAL HEALTH COVID-19 is perhaps the most life-changing event to happen this century – and its current and after-affects will go down as a pivotal moment in human history. The business community in the UK and across the globe has, as a result, become increasingly aware of the importance of mental health and wellbeing of employees. Once considered just a ‘box ticking exercise’ for a HR manager, it is now at the forefront of future-proofing a business for a CEO. Harry Bliss, Director of Champion Health, said: “Mental health seems to be at an inflection point. Employers that previously didn't want to look at mental wellbeing are doing so now. We believe this is because COVID-19 has opened businesses' minds to the fact that we can all be vulnerable. In addition, businesses are now realising their most important asset: their people.” 

CHALLENGES Times have been challenging for everyone – and despite the best efforts of business leaders and technology – there could still be hard times ahead. As the working world moves into this next stage of the coronavirusaffected business limitations currently being experienced – there are several new challenges to tackle. The uncertainty around a potential second wave and the mixed reactions by employees provide the next daunting challenge for business leaders. Ul-Ghani explains: “The year ahead isn’t going to be easy. For organisations that

Harry Bliss - Champion Health

INTERVIEW

BRENDAN STREET

Society is opening up but are we emotionally closing off? Re-entry anxiety is a form of stress associated with the fear of being unable, or not wanting to re-adapt to previously established routines and environments – e.g. going back to ‘normal’. This can be in relation to a return to work or a return to a previous way of living. Many of us will feel relieved and excited to embrace life after COVID-19. Yet a proportion of us are feeling overwhelmed by the uncertainty of the ‘new normal’. Even though we are re-entering a previously familiar environment, it’s not simply a matter of picking up where we left off. Many people will experience a rollercoaster of emotions. There may be periods of joy, which then give way to anxiety and panic. Re-integration will lead to different experiences for all of us. SO, WHAT STEPS CAN EMPLOYERS TAKE TO HELP RELIEVE SYMPTOMS OF REENTRY ANXIETY? •

•

Environment. Employees may be worried that they’ll encounter the virus on their commute, or even in the office. Where possible, make reasonable adjustments. These may include accommodating remote working and putting unnecessary travel on hold, particularly if there are known cases in your area. This will become essential if known cases are announced in your company. Protocol. Sharing actionable steps on how employees can protect themselves will help rationalise the issue. Make sure company health protocols are clear and accessible. This means keeping staff informed on the steps you’re taking as a company, as well as giving advice. Language. Be aware of how your language can impact people’s perceptions of the situation. According to The Journal of Positive Psychology,

Brendan Street Professional Head of Emotional Wellbeing, Nuffield Health

diagnostic terms should be avoided when it comes to discussing health concerns. Staff who continue to show signs of distress should be guided towards further emotional support. It may be that anxiety around coronavirus is a noticeable sign of preexisting or wider emotional struggles. WHAT CAN EMPLOYEES DO TO HELP THE RE-ENTRY PHASE? •

Notice the emotions you are experiencing. Thoughts can have a direct and immediate impact on our feelings or emotions, and on our behaviours. Events or situations don’t cause anxiety or distress, it is our interpretation or beliefs about events/ situations that leads to an emotional response. If you can identify the ‘hot’ thought connected to the emotion then you can decide if you need to adapt or adjust.

•

Self-care. What have you started doing during the pandemic that has been of benefit? That might be going for a run at lunchtime, eating more healthily or getting a good night’s sleep. Make sure you maintain these as you return to work.

•

Pace and compassion. If you’re returning to the workplace, be sure to plan your day ahead. Test the route

in advance, talk to your manager about any concerns you have earlier rather than later. If you’re feeling overwhelmed, check to make sure that you are practicing self-kindness and compassion. •

Inside-Out. Don’t let unhelpful thoughts and ‘What-ifs’ multiply inside your head. Get thoughts out. Identify a re-entry co-pilot in the workplace – someone you can bounce thoughts off. Research has shown that we are more able to manage change if we verbalise our thoughts.

The impact of COVID-19 on all our lives should not be underestimated. It is useful to prepare for a turbulent re-entry. Expect a ‘wash cycle’ of emotions from distressed, confused, agitated, hopeful to excited and back again. The techniques above will limit the disruption of re-entry. Most importantly, remember that it’s OK not to be OK and seeking help and support is both adaptive and normal.

For more information, visit nuffieldhealth.com/emotional-wellbeing September 2020

Building a healthier nation We are the UK’s largest healthcare charity. Because we have no shareholders, we invest all our income back into our family of award-winning 31 hospitals, 113 fitness and wellbeing centres, healthcare clinics, over 200 on-site workplace wellbeing services, as well as developing flagship charitable activities supporting our communities – all to realise our vision to build a healthier nation. We understand everyone needs a little help sometimes. Changes, situations and challenges in life can leave us emotionally drained. We offer a range of flexible, effective psychological therapies that can help you improve and maintain your mental health and any therapy we offer you will be tailored to your unique needs. For more information about our Emotional Wellbeing services visit: nuffieldhealth.com/emotional-wellbeing

Nuffield Health is a Registered Charity. Our objective is to advance, promote and maintain health and healthcare of all descriptions and to prevent, relieve and cure sickness and ill health of any kind, all for the public benefit. Registered Charity Numbers 205533 (England and Wales) and SC041793 (Scotland).

Business Leader - Inspire • Inform • Connect

September 2020

Business Leader - Inspire • Inform • Connect

FEATURE

September 2020

OUTSOURCING

BUSINESS LEADER GUIDE TO OUTSOURCING

he COVID-19 crisis has turned the employment market completely upside down across the UK – and in almost every sector. With companies and business owners looking for a way to stay afloat or even grow during these troubling times – many have looked at outsourcing part of their operations to cut costs. To find out more about the benefits of outsourcing, Business Leader Magazine investigates.

Outsourcing is the business practice of hiring someone or another firm, outside of the company, to perform tasks, functions and services that would traditionally be performed within the structure of the business. From hiring freelancers to utilising mass outsourcing (such as call centres and international manufacturing), there are many factors a business leader must consider before proceeding with it.

at a considerably lower cost than employing people in-house. Because you only pay for the resource you need at each level, without incurring any employment, HR or training costs, you effectively get the ultimate accountant for the perfect blended rate. “By outsourcing back office functions to us, business leaders are free to focus on their core business activity. We also often find that businesses ask us to measure a wider range of business areas than they would otherwise be measuring. So, they get a better view of how the different areas interrelate and, coupled with more accurate, up-to-date management information, ultimately make better management decisions. “Outsourcing causes greater productivity because more employees are working to generate profit for the business rather than supporting it. Over the years, we have seen a shift in businesses outsourcing noncore activities so they can focus on what they are really good at. There’s also more accountability in teams and departments, as there is an independent, external organisation reporting to the management team on their performance.”

Whether a business has been outsourcing some of its functions prior to the outbreak, or are just looking into it now, there are some commonalities across the wide reach of outsourcing you should be aware of. What are the benefits? Business owners across the world have had to adapt to survive over the last few months, and many have looked at cost-cutting measures – and this is just one of the advantages that can be seen in companies that use outsourcing. Jon Dawson is a Partner at law firm Moore Kingston Smith, and also the Head of Outsourcing. He said: “Outsourcing offers valuable flexibility to businesses, enabling them to access the right level of expertise across a wide range of accounting services

Business Leader - Inspire • Inform • Connect

Louise Deverell-Smith – Daisy Chain

Louise Deverell-Smith, Founder of Daisy Chain, a recruitment platform that helps connect employers and highly-experienced candidates seeking flexible work, shares many of Dawson’s observations; and with the struggles facing the economy at the moment – outsourcing could help revive the fortunes of many industries. She said: “The benefits of outsourcing can be significant: from cost savings to gaining a competitive advantage. When you outsource a role, you can pay the individual as a contractor. This will not only reduce the number of employees you have to manage on the payroll, but it can also lead to cost savings with regards to reduced infrastructure overheads. “Outsourcing can also help to make your business more flexible and efficient, whilst also providing service level improvements. For example, you can hire an external company to manage a particular function that you do not currently offer or have the capacity to manage in-house. This will enable you to extend your product offerings and can help you provide a more productive and efficient service with specialised experts on hand to support.

Jon Dawson – Moore Kingston Smith

Cont. 

FEATURE “Outsourcing can also help free up employees to focus on core tasks that play to their professional strengths, rather than trying to cover extra roles or provide additional services. This not only helps to alleviate additional pressures on your employees, and therefore makes for a better working environment, but it also helps ensure that employees have the space to develop in their own roles and pursue new strands of activity.” Potential problems Although outsourcing has long been utilised, the current coronavirus crisis and the subsequent impact on the levels of employment in the UK has increased the need for what the function can offer businesses across a wide range of sectors. UK firms are increasingly dependent on third party providers for business functions, including IT, logistics, human resources, sales and marketing, and accounting. But what impact does outsourcing have on businesses’ risk profiles and how could it impact their insurance? Gary Fletcher, Managing Director – South, for Gallagher, explores the risks associated with outsourcing for businesses, and how they can be best managed. He said: “For UK businesses, the benefits of outsourcing can be substantial – for reasons including cost-savings, freeing up internal resources to focus on core business activities, or improving the efficiency of timeconsuming processes. “However, one of the pitfalls of outsourcing is that businesses can be held liable for failings in the provision of services – or failure to provide services – to their clients, over which they do not have full control. This includes operational risks associated with underperformance, unethical conduct, theft of intellectual property, or security breaches due to the transfer of data between firms, for which penalties can be severe.

THE BENEFITS OF OUTSOURCING CAN BE SUBSTANTIAL – FOR REASONS INCLUDING COSTSAVINGS, FREEING UP INTERNAL RESOURCES TO FOCUS ON CORE BUSINESS ACTIVITIES, OR IMPROVING THE EFFICIENCY OF TIME-CONSUMING PROCESSES." Gary Fletcher

“As well as financial loss, these risks can result in operational disruption, reputational damage and regulatory or legal action, as well as loss of confidence amongst partners and stakeholders. It is therefore vital that firms can demonstrate that they have a framework in place to control and minimise risks resulting from third-party relationships. “To effectively monitor contractual requirements, organisations should establish controls and performance metrics. A service-level agreement (SLA) defines the level of service expected from a provider, outlining key performance indicators (KPIs) by which service is measured, as well as any financial penalties that are applicable, should the required service standards fail to be achieved.”

Gary Fletcher – Gallagher

Losing control Away from any potential problem caused by the risks and insurance associated with outsourcing, one of the most negative characteristics linked with it is the perceived level of control a business owner has over the function that has been outsourced. This is why an SLA is the first step in setting up a successful outsourced function. Dawson comments: “Inevitably, change can bring challenges, so consideration should be given to change management. It’s important to make sure that those within the business and at the outsourcer firm understand their roles. There can also be certain perceptions of having a call centre provide services, and the turnaround times are not the same as asking across a desk. But you can help overcome this with an appropriate SLA and greater visibility on self-service options. An SLA is crucial, so that everyone is clear on their responsibilities and what’s expected of them.” However, even when appropriate legal paperwork is in place, there are still times where an outsourced function might not be achieving what it needs to. Deverell-Smith explains: “When it comes to outsourcing a service or role, you can lose some of the control within your business, as you are effectively handing over the reins of a particular business function or process to the third party. Whilst contracts will be in place, this process can sometimes result in challenges: for example, with service delivery issues or quality disputes. It can also be hard to create a strong company culture if you are outsourcing different functions of your business.

Stacey Mead – HR Dept

“If hurdles such as these start proving a detriment to your business, it may be worth considering if a more flexible approach could work better. For example, rather than outsourcing roles entirely, could you hire staff on a part-time or project basis instead? Both these options will give you more control and input as an employer, whilst enabling all employees to become engaged with the company and its values.” Impact of COVID-19 It is no secret that almost every sector across the world has been deeply affected by the coronavirus pandemic; with many countries falling intro recessions, meaning mass unemployment. This has led to government’s trying to kickstart economies and job markets by introducing unprecedented support. Deverell-Smith comments: “The pandemic has taken its toll on the economy and, unfortunately, the jobs market often carries much of the burden during a decline. In September 2020

OUTSOURCING

fact, the Office of National Statistics (ONS) recorded a 730,000 drop in workers on payroll from March to July this year.

Today, it has 78 licensees operating in the UK, Ireland and Australia, serving well over 6,500 SMEs globally.

“Whilst many companies had no choice but to cut jobs in order to stay afloat, this process has undoubtedly left a gap in the market for roles that still need to be fulfilled. At the same time, employers have been extremely conscious that re-routing additional work to retained employees is not a viable solution. As a result, we are seeing more and more companies outsourcing certain roles. For example, when the furlough scheme was announced, there was a spike in demand for external HR services to help provide advice and guidance on the scheme.”

Stacey Mead, HR Director, comments: “From our own HR perspective, we have seen a dramatic increase in new clients since COVID-19 broke. People are understandably nervous about managing their staff, and recognise the importance of getting the complex furlough rules right.

The HR Dept is a UK-wide network of HR licensees, with independent business owners providing high quality, bespoke HR advice and support on an outsourced, personal basis. The company was set up in 2003 and started franchising two years later. Business Leader - Inspire • Inform • Connect

“There will be many businesses that have to make difficult changes over the coming months; it’s a situation which is alien to many employers. They want to know that they can limit the pain and risk of any costly tribunal claims, and therefore, they understand the value of getting expert advice. This pandemic has accelerated change in many aspects of our working lives, and I believe outsourcing will become more popular as business owners recognise that effective, expert work can be done remotely.”

Is outsourcing the future for businesses? With an ever-increasing number of people losing their jobs, businesses struggling to cope with the current economic climate, and seemingly no end in sight regarding COVID-19, many business owners will be looking for some respite from the storm. So, is now the time for you to start or increase the levels of outsourcing in your business? Deverell-Smith: “The UK job market is going to look very different in twelve months’ time, and in order to weather the current economic crisis, I think businesses will need to continue to embrace a more flexible model that opens up alternative opportunities for all prospective employees. Ultimately, it is down to the individual business. However, I think outsourcing certain roles and moving away from the rigid 9-5 working day can open up great opportunities for employers to develop their company’s expertise, reduce costs and help plug the growing unemployment gap in the UK labour market. "Many businesses in the UK have already shown great creativity and flexibility to overcome the past turbulent months, and I think it will be hard to go back to the ‘old way’ of doing things now that companies and clients have seen the benefits of adopting alternative working models.”  51

OUTSOURCING

EY Absolute - the alternative to outsourcing More time to focus on growth and critical tasks that enhance finance productivity and deliver increased value.

Tina Gill EY Absolute Partner T: +44 (0)7796 268 292 E: tgill@uk.ey.com CAN YOU TELL US ABOUT YOUR ROLE AT EY? I am a partner at EY and co-founder of EY Absolute our fully managed finance operations service for private and midmarket companies. HOW DO YOU AND YOUR TEAM SUPPORT HIGH-GROWTH BUSINESSES? We work with companies who have ambitious growth targets helping them to free up time and resources by driving greater efficiency in their finance operations. The service areas we cover include bookkeeping; management reporting, statutory reporting, payroll and tax compliance. And our clients have access to the cloud-based Microsoft accounting system we use to deliver this service. WHY DID YOU SET UP EY ABSOLUTE? A few years ago we were starting to hear that CFOs in the mid-market needed smarter systems, processes and data to inform strategic decision making but did not know where to go for a comprehensive solution. 52

Streamline and improve processes, saving time and money.

Upgrade and replace multiple accounting systems with a single one without significant upfront investment.

EY Absolute

Realise increased value from data.

Deliver reliable, real-time MI and bespoke reporting for stakeholders.

Address resource challenges or capability gaps.

Access EY accounting, tax and payroll experts and leading Microsoft cloud-based accounting technology to help deliver increased value and growth to your business Todayâ&#x20AC;&#x2122;s senior finance executives are expected to help their companies to do a wide range of things - focus on growth while managing costs; keeping up with change while delivering value; operating effectively in an environment that expects greater transparency; and demands increased compliance reporting all while driving continuous improvement. In response, some multinationals have implemented large projects, which may include setting up their own offshore service centres, and investing significantly in technology and building in their in-house expertise.

but do not have the same options to address them. We knew that our team - which included qualified accountants, experts in process efficiency and finance transformation, technical accounting experts, tax and payroll specialists and data analysts - could provide the services required, but we needed to bring them together in a way that best helped mid-market businesses. So EY Absolute was designed to help these companies to benefit from the advantages of efficient processes, have access to experts and use leading technology in a way that was previously unavailable to them.

Smaller companies face similar challenges, September 2020

ADVERTORIAL

What do you think are the key elements to ensuring you have a successful finance function in your business?

SO YOU CREATED AN OUTSOURCING OFFERING? No. We learned pretty quickly that while some CFOs are open to the idea of traditional outsourcing – and may already outsource the compliance and external filing aspects of their finance function (such as statutory reporting and tax returns) – there remained some doubt about whether the core finance and accounting operations of their business could be outsourced in the same way. We heard that CFOs think they and their teams are spending too much time getting the reporting right, for example, dealing with too many manual journals at month end. This can lead to large teams being involved in time consuming activities such as completing monthly management accounts. But CFOs also say this type of reporting is critical to drive decision making and that they need to maintain control and visibility of their data… they need to be able to answer the questions that crop up in the business and their concern was that the accounting outsourcing options available to them did not allow them to be sufficiently connected with their data. Before launching EY Absolute we spent a year listening to our target market to ensure that the service we designed provided the efficiency, improvements and high quality financial analysis they sought whilst ensuring visibility of and access to data was not lost. The result? Our focus became ‘supersourcing’ – delivering efficient finance function processes, enabled by leading technology in a way that builds value, while ensuring our clients, and especially their CFOs, retained access to and visibility of their financial data 24-7.

Business Leader - Inspire • Inform • Connect

1. Put the same level of focus into your plan for your finance function as to the plan for the rest of the business

will still be on measuring and reporting, rather than value added activities. The technology, however good, is not magic!

We often speak to companies whose plans for transformation of the finance function are not yet fully aligned with the overall much larger growth ambition of the business. Without this alignment companies risk taking a piecemeal approach, which often does not provide the longer-term benefits they had hoped for because it does not provide them with the data they need to support strategic decision making to drive growth.

And while you are fixing the processes, ensure they are fully documented to avoid the issue we often come across where a key staff member is leaving an organisation. Typically, this is someone who has been with the company for years, knows how everything works, is able to do all the off-system reconciliations, but is now moving on and no one else knows how the processes work.

Successful businesses have well thought through plans for their finance function with clear targets and measures for success. They are realistic about what needs to change and plan to deliver this change with an optimum combination of in-house expertise and third-party specialists 2. Review your legacy systems to identify where issues are arising The advantages of linking data sources to ensure that there is only one version of the truth are significant. Many companies know this but do not have the time or resources to choose, implement and maintain new accounting technology. Keeping up with fast moving developments in accounting technology may be an unrealistic investment of time and money for some mid-market companies. For these companies, by working with service providers such as EY Absolute, they can leverage the investment we have made ourselves. Our clients include both companies who do not want to invest in an accounting system and choose to make use of access to our Microsoft finance system and companies who have implemented their own accounting technology.

4. Have access to a team with the right skills Today’s finance function needs access to a wide range of skills; obviously accountants, tax specialists and payroll experts, but also, data analysts. Systems can provide data, but people need to bring ideas as to how to use that data. It is this team who can deliver the financial insight and management information to support strategic decision making. Decision making, judgements and value add business partnering will always be retained in-house. But by working with a service provider, whose team includes all of these specialists, you can receive the right data and high-quality management information to help make more-informed business decisions. 5. And finally – work out how to do all of this whilst still controlling costs Understand the true cost of your finance function, consider if it is delivering all the things we have talked about and, if not, look into the options to do something about this; the benefits for your business could be significant.

3. Develop and implement consistent, reliable processes and controls Having the right technology means time-consuming activities can be completed more quickly and, arguably, more accurately. However, without strong processes and controls, the focus of effort

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ADVERTORIAL

CAN YOU TELL US ABOUT HOW YOU CAN SUPPORT BUSINESSES? BDO’s Business Services & Outsourcing team supports businesses through every stage of their lifecycle. We provide backoffice finance, accounting, compliance and IT consulting services - freeing up leadership teams time to focus on the strategic direction of their business. Deciding to outsource is never easy – you have to have faith in your outsourcing partner to consistently deliver a smooth finance and payroll function. We develop an in-depth understanding of how our clients work, so they can trust us to provide a seamless, technology-enabled outsourcing experience for the business, their staff, suppliers and other stakeholders. WHAT AREAS OR SECTORS DO YOU SPECIALISE IN? As a leading UK and global practice – we have a strong sector focus, meaning our clients have access to outsourcing teams who live and breathe their sector and act as strategic advisers. It’s this in-depth industry knowledge that has led businesses from across the technology and media, manufacturing and real estate sectors, to name a few, to choose BDO as their outsourcing partner. As businesses expand overseas they can tap into BDO’s global network of 1,809 offices in 167 countries. We ensure they are prepared and have the best chance of a soft landing into international markets. WHAT PROFILE OF BUSINESS OR ENTREPRENEUR DO YOU PREFER TO WORK WITH? Our heartland is in the ambitious, entrepreneurial mid-sized businesses that we call the UK’s ‘Economic Engine’ – including owner-managed, Private Equity or Venture Capital-backed companies. Many of these companies are rethinking their business models and evaluating outsourcing as a means of building flexibility

Jeremy Hayllar Head of Business Advisory Business Services & Outsourcing jeremy.hayllar@bdo.co.uk

and responsiveness to further economic shocks. We want to see a balanced recovery from the COVID-19 pandemic that is not overreliant on any one sector or region but which makes the most of Britain’s skills and entrepreneurialism; a national economy which is outward-looking and helps homegrown businesses expand abroad. Our focus is to help these businesses succeed. CAN YOU GIVE ANY EXAMPLES OF HOW YOU HAVE HELPED BUSINESSES? Our ambition is to help companies to manage the incremental cost of their finance function as they grow, drawing on the wider expertise of BDO to alleviate any pain points that might arise. PROPERTY MANAGEMENT COMPANY We support a property company to improve management reporting and report on performance by property in real time. Bank feeds and invoice scanning provide an up-todate picture on the state of finances for the company. TECHNOLOGY We provide a high growth UK business, headquartered in Japan, with a full

outsourced finance function - delivering management reporting, technical accounting advice and statutory accounts - as they seek to use the UK as a launch pad for future expansion into Europe. As their trusted advisor, we’ve been able provide fully grantfunded training on customs and duty, as well as identifying VAT risks and opportunities. LEGAL PARTNERSHIP A UK partnership with 15 offices and six divisions was advised on the migration to a unified accounting system and processes, where the previous supplier had difficulty understanding the businesses requirements. We developed a system migration plan, oversaw the tender process for IT suppliers and negotiated terms and conditions – leading to a successful system implementation. MIDLANDS MANUFACTURER We provide a full finance function including payroll, bookkeeping, tax advisory and annual reporting to an owner-managed, Midlands-based manufacturer – allowing the business to focus on building their business in the UK, Europe and the US market.

September 2020

BORDER COLLIE SUPER FAN BOOKCLUB MEMBER

MORE THAN A BUSINESS ADVISOR

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As businesses seek to navigate the challenges presented by COVID-19, an increasing number will need to rethink their finance and back office function through the lens of achieving productivity and efficiency gains. Businesses will be looking to partner with advisors who can reduce their compliance burden and add value through a range of accounting, advisory and compliance services, across the UK and around the globe. Our aim is to support ambitious and entrepreneurially-spirited businesses like yours to react, build resilience and realise your strategic goals. bdo.co.uk/rethink

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OUTSOURCING ADVERTORIAL BUSINESS LEADER RECOMMENDS

Dhruv Doshi, Sales Director Tel: 020 8239 4999 Email: Dhruv@doshioutsourcing.com

WWW.DOSHIOUTSOURCING.COM

CAN YOU TELL US ABOUT HOW YOU CAN SUPPORT BUSINESSES? Doshi Outsourcing can help support businesses by offering back office, non-client facing solutions which all businesses face. From basic data entry to preparing management reports or anti money laundering checks. We take the headache away from hiring staff, which saves our clients time and money on constant recruitment and training. This allows our clients to spend more time on the more profitable part of their business or allow them to free up some personal time. Our team have the ability to grow, to allow our clients to get them to do more complicated tasks. Of course, another benefit is the cost!

Ken Montgomery

WHAT AREAS OR SECTORS DO YOU SPECIALISE IN? As an outsourcing provider, our role is to provide good staff members, so we can cater for all industries, when it comes to back office functions. We originated the businesses in the accounting world,

AMP House, Dingwall Road, Croydon CR0 2LX

so anything from book keeping, VAT, payroll, draft accounts is our bread and butter. However, we have also transferred these skills to other business sectors, such as insolvency practitioners, solicitors, conveyancers and even telemarketing departments to organisations in varying sectors. WHAT PROFILE OF BUSINESS OR ENTREPRENEUR DO YOU PREFER TO WORK WITH? We are very flexible. We take on small and large clients. We can work on a pay as you go model, where clients give us a few hours, worth of work a month to providing 10-plus full time staff members. Our clients must be willing to work with us to get the desired results, it is certainly a two-way relationship to make the most of outsourcing. CAN YOU GIVE ANY EXAMPLES OF HOW YOU HAVE HELPED BUSINESSES? We have a service driven client, whose turnover has grown from £30,000 to £600,000 since joining us and has taken on no additional staff, not only is it very profitable for the client, but the free time allowed the client to go out and get new business, something the client really enjoys. We have another where he is now semi retired and spends half the year abroad with his family but his profits and turnover has maintained. You can really use Outsourcing to benefit your goals, whether it is less time in the office, more time at home, growing the business or even slowly winding down.

Quality services Whatever services you are offering your clients, we can do these for you to release you and your teams time to focus on more lucrative work.

ACCOUNTS & PAYROLL OUTSOURCING TRUSTED ACCOUNTING SINCE 1999 TAILORED OUTSOURCING SERVICES 100% HMRC COMPLIANT SAVE YOUR TIME & MONEY

For more information, Call: 020 8239 4999 www.doshioutsourcing.com 56

September 2020

OUTSOURCING ADVERTORIAL TECHNOLOGY

MANUFACTURING

INSURANCE

Tel: 0118 2072 830

Email: ZensarEu@zensar.com

WWW.ZENSAR.COM FINANCIAL SERVICES RETAIL

CAN YOU TELL US ABOUT HOW YOU CAN SUPPORT BUSINESSES? Zensar is a leading digital solutions and technology services company who partners with global organisations on their digital transformation journey. With 10,000+ associates in 24 locations across the UK, Europe, US, South Africa and India – we deliver digital change at scale. Our clientcentric, people-first approach ensures we are “large enough to deliver, but small enough to care”. We work with our clients on experience-led digital transformation initiatives. Through our experience design studio, Foolproof, we bring in product and service design thinking to provide human-centred, domain specific solutions built on cloud first digital foundations. Most recently, our focus has been on helping our clients through COVID-19 by enabling secure 100% work from home, offering cost take-out solutions, optimising digital sales channels, and introducing a digital experience offering to help our clients and their customers stay connected.

distinctive visual brand identities and improving user experience whilst enhancing our clients’ technology stack. • Insurance – Our major projects with Fortune 50 insurers involve core modernisation, introducing AI/ML into analytics, customer journey mapping and world-class technical innovation in the Guidewire space. • Retail and Consumer Services – With more people shopping online we are working with leading retailers to improve their digital channels to enhance customer experience and engagement to boost revenue. We also regularly implement connected supply chain and omnichannel hyper-personalisation. • Hi-Tech and Manufacturing – With over 20 years of domain expertise we provide solutions to enable smart manufacturing which includes AI/ML, IoT integrations and customer experience considerations from procurement to after sales service.

WHAT AREAS OR SECTORS DO YOU SPECIALISE IN? Zensar partners with some of the world’s leading brands across industry verticals. Our work creates impact throughout the business value chain by creating measurable human outcomes. We specialise in:

WHAT PROFILE OF BUSINESS OR ENTREPRENEUR DO YOU PREFER TO WORK WITH? Our aim is to work with organisations who are looking for proven partners on their digital transformation journey. Our clients value our consulting led approach which helps us to create customised digital transformation roadmaps for their specific use-cases and unique challenges.

• Banking and Financial Services – We help our clients stand out by creating

One of the more important values we look for in our clients is customer centricity. This

Business Leader - Inspire • Inform • Connect

means we can work with them on initiatives with a focus on human experience-led digital transformations. We have offices in Reading, London and Norwich in the UK, providing the full range of experience-led Digital Transformation services to UK based clients. CAN YOU GIVE ANY EXAMPLES OF HOW YOU HAVE HELPED BUSINESSES? Zensar have been a trusted partner to 70% of our customers for over ten years. We pride ourselves on the effectiveness of our work and the outcomes it delivers - some of our successes include: • Our expertise in experience design has helped a leading technology company boost its sales by 32%. • We implemented AI-led solutions for a global insurance leader to improve their customer acquisition by 40%. • Our work in Advanced Analytics, Blockchain and SaaS platforms meant a $50 Bn Hi-Tech Manufacturer transformed their Marketing, Supply Chain and Sales functions. • Our automation-led solution helped a leading Real Estate provider reduce its time to market by 71%. • Our solution to implement AI driven Realtime driving patterns enabled a leading transportation company to devise behaviour centric policies to reduce vehicle maintenance costs by 38%.

LEADERSHIP

CEO IN FOCUS:

CBE

DAVID DARLING

avid Darling CBE is one of the key faces in the UK gaming industry, having co-founded Codemasters with his brother, spawning some of the most memorable British games in the process. He is now CEO and Founder of Kwalee, the country’s leading hyper-casual game publisher. David’s work in the industry spans decades, and with Kwalee growing rapidly, he is still helping to create titles that are played by millions of gamers around the world.

CAN YOU TELL ME ABOUT YOUR HISTORY WITHIN THE INDUSTRY PRIOR TO KWALEE? I’ve had a long history in the games industry, which started in the 1980s, when myself and my brother started coding games in Vancouver, Canada, where we lived. Then, upon returning to England, we launched Galactic Software when I was just 16. Our games were sold via black and white adverts we placed in Popular Computing Weekly for around £70 each, before things started to grow and they were being sold through shops such as WH Smith. 58

After developing games such as Galactic Software for companies including Commodore, Mirrorsoft, ACE and Mastertronic, we took things a step further in what turned out to be a big moment for the UK games industry, and launched Codemasters in 1986. This presented a change in strategy for us, and was a real catalyst for our success. With Galactic Software we were creating games that we or other game developers wanted to play: games that were themed around space, that didn’t have mass appeal. With Codemasters, we flipped this on its head and focused on making

games that people outside of the game development community were interested in, with pre-existing popular themes, such as sports and driving games. This really helped to take our work within the industry, and gaming in general, to new heights. Now, some 30-plus years after starting out, Kwalee is nearing its 10-year anniversary, and the company is going from strengthto-strength, as we’re still growing, even in these uncertain times. I set up Kwalee as it presents a logical next step for those thoughts around ‘what would a wider audience want?’. The advent of smartphones has meant that September 2020

CEO IN FOCUS genre can take in sports, driving, puzzle, arcade, drawing, or almost any subject, but distil it down to one core mechanic that the player wants to keep playing. These are games that fit in with our busy lives and provide the player some fun, whether they’re sitting at the bus stop, waiting for a plane at the airport, or during the few minutes while their coffee is being made! They promise lots of fun in a short time slot, but in the end, you may play them for longer. We’re a key player in this space, having to date released 19 number one titles, and games that together have amounted to over 400 million downloads worldwide. This has come from games we develop in-house and games developed by external developers, that we take on and publish for them, with the genre requiring big budgets in terms of ad spend, marketing and monetisation.

I WAS INSPIRED BY THE FACT THAT IT WAS A GLOBAL, DIGITAL MARKET AND SMARTPHONES HAD THE POTENTIAL TO COMPLETELY CHANGE THE GAMING WORLD, AND THAT MADE GAMING MORE ACCESSIBLE TO EVERYONE." WHAT PRODUCTS AND SERVICES DO YOU OFFER? Our key product is, of course, our games, which range from the likes of Draw It, a fast paced game where you’re up against the clock and others to draw an object first, to Jetpack Jump, a rocket-fuelled version of triple jump where the player is aiming to send the character far across the horizon. the ‘gamer’ has completely changed. People of all ages, genders and cultures download and play games, with many desiring fun, bite-sized experiences. Kwalee is aimed at this huge and ever-growing global games market, using digital distribution and digital performance marketing. CAN YOU GIVE AN OVERVIEW OF KWALEE? Kwalee is a publisher of mobile games, with a focus on the ‘hyper-casual’ market. Hyper-casual means games that give fun, free bitesize experiences that are easy for anyone to pick up and play, but challenging enough that they are hard to master. The Business Leader - Inspire • Inform • Connect

Beyond our games though, an extremely key service we offer comes in the form of the publishing side of the business. As developing these fun, quickfire gaming experiences has become easier, there are a lot of one man developers or small teams that are creating some incredible games, but aren’t able to get them seen by a mass audience, and therefore profit from what they have made. We work with developers like this to publish their games and help them receive what can become an extremely healthy return for their efforts. Our team helps with everything from expert game design tweaks to the

all-important marketing, user acquisition and monetisation, that a small dev team would never be able to replicate. This side of the business has gone from strength-tostrength in the past year, and we’re working with some amazing developers. WHAT WAS THE INSPIRATION BEHIND IT AND WHY IS IT DIFFERENT TO PREVIOUS COMPANIES YOU WERE INVOLVED IN? I was inspired by the fact that it was a global, digital market and smartphones had the potential to completely change the gaming world, and that made gaming more accessible to everyone. While my previous companies made particular types of games and focused on certain genres, Kwalee has enabled us to come up with all sorts of ideas, whether it's a fishing game, a drawing game or a shooting game. I was inspired by the huge opportunity in this space and it's something that still inspires me nine years on. HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? I’ve learnt through my time in the industry that great ideas can come from anywhere, so made this a core aspect of what Kwalee is about. Each Wednesday, we stage what is called ‘Creative Wednesdays’, where anyone from the company, no matter the role, can pitch an idea for a game, and if the rest of the company likes it, get it made. If the game goes on to success, they will profit from this, as a part of our profit-sharing scheme. I know that anyone can have an amazing idea, and have made sure to hire creative, likeminded people so that this happens. This also means that I fully trust the team. A company is only as good as its people, that’s all it is really. WHAT FUTURE TRENDS DO YOU SEE HAPPENING WITHIN THE GAMING SECTOR? I feel the COVID-19 pandemic will have a knock-on effect in the gaming industry, as it has with many others, in the form of where we’re all working. I’d always been a great believer that a team’s best work is done when all together in one studio, and many other games companies held this belief too.

Cont.  59

INTERVIEW

CEO IN FOCUS

However, being forced into a remote setting has definitely changed my perspective, especially as while in lockdown, we have developed and released a new game, Bake It, that has already been downloaded over 10 million times. With this in mind, we have already changed our stance on remote work, and are offering multiple positions on a permanent, remoteworking basis. So, long after the pandemic comes to a close, which will hopefully be as soon as possible, remote-working will now be a part of Kwalee, and I can see many other gaming companies following suit. WHAT ARE THE FUTURE PLANS FOR KWALEE? Our aim is to continue to grow and make great games for our players. We are currently in the process of opening our second studio in Bengaluru, sometimes called the ‘Silicon Valley’ of India, that will work extremely closely with our headquarters in Leamington Spa, so it's a really exciting time for Kwalee.

THE ADVENT OF SMARTPHONES HAS MEANT THAT THE ‘GAMER’ HAS COMPLETELY CHANGED. PEOPLE OF ALL AGES, GENDERS AND CULTURES DOWNLOAD AND PLAY GAMES, WITH MANY DESIRING FUN, BITE-SIZED EXPERIENCES."

In short, our plans are to continue our amazing rate of growth and to release even more games than we currently are, from both our internal teams and the publishing side of the business.

UK Fintech R8 relaunches as Mode and appoints ex Alipay executive Rita Liu UK fintech R8 is rebranding as Mode in order to bring together the Group’s separate businesses under one common identity. Mode has also announced the appointment of ex-Alipay executive, Rita Liu, to the leadership team. R8 previously operated several ventures including the Mode app – a digital banking app that enables users to manage their Sterling, Euro and Bitcoin from a single platform, as well as next-generation payments and marketing provider, JGOO.

Rita Liu

The group-wide rebrand will create a common identity and unifying corporate brand for all of the

companies in the group, highlighting the synergies they offer for consumers and merchants alike. Mode Chairman, Jonathan Rowland, comments: “Our rebrand signals the evolution of the Group, which will deliver enhanced financial services tailored to a new postCOVID norm where the transition to online and mobile interactions is accelerating. “We have ambitious plans for Mode as we seek to leverage the opportunities that faster digitalisation will bring for society and our economy, and today’s relaunch will help us meet our objectives.” September 2020

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TECHNOLOGY

TOP 32

R MAGAZINE E D A E L S S E BY BUSIN The UK tech sector is in the midst of unparalleled innovation and ingenuity compared to any time in history. New industries and technologies are being introduced or improved every week, and many of the leading firms and entrepreneurs within the sector are driving the change which we are seeing in our everyday lives. In each edition of Business Leader Magazine, we feature a ‘Top 32’ list, and this time we are focusing on one of the most established sub-sectors – fintech – and the entrepreneurs that lead the companies within it. We are aware that there are thousands of examples of great fintech innovators across the UK, and this list includes ones that have been serial award winners, reached ‘unicorn’ status, or have lead the disruption of industry. If you have any suggestions to add to the online version of this list – to appear at businessleader.co.uk – then please email editor@businessleader.co.uk. This list is in no particular order.

Andrew Bud CBE iProov

ANDREW BUD CBE IPROOV As the founder and CEO of the Londonbased firm, Bud has pioneered new methods in biometric and facial authentication to help establish trust online within the banking sector. iProov technologies have also been used by governments and other enterprises across the world for the same reason. iProov

Franz Doerr & Daniel Jeczmien Flatfair

authenticates users on smartphones, tablets and laptops with a front-facing camera and a network connection, utilising the very latest in machine learning technology.

FRANZ DOERR & DANIEL JECZMIEN FLATFAIR Founded in 2016 by Franz Doerr and Daniel Jeczmien after the much-publicised struggles renters and landlords had when September 2020

FINTECH LEADERS dealing with the financial aspect of their transactions. Plus, with the government deposit schemes and insurance policies of the time not benefiting either party, Flatfair was born. The founders, inspired by the success of deposit alternatives in Germany and Switzerland, combined the most effective government deposit schemes with smart technology to make renting more affordable for tenants, more secure for landlords and more efficient for agents and institutions.

KERIM DERHALLI INVSTR This investment app was created by the former Deutsche Bank Managing Director and has now amassed hundreds of thousands of users. The fintech firm’s investment platform allows anyone become an investor for as little as $1. With the strapline of ‘Investing for Everyone’, Invstr allows its users to learn how to play the markets and build confidence in how the process works. By breaking down the financial and educational barriers to investing, the app has allowed a new generation of investors to start their journey.

Kristo Käärmann and Taavet Hinrikus Transferwise

Rishi Khosla Oaknorth Bank

RISHI KHOSLA OBE OAKNORTH BANK

Guillaume Pousaz Checkout.com

GUILLAUME POUSAZ CHECKOUT.COM Pousaz founded checkout.com, an all-inone payment technology solution that has eliminated the need for intermediaries on digital platforms, in 2012. The company specialises in processing international payments for online retailers at the ‘shopping cart’ stage of the transaction. The firm helps start-ups and global brands process payments in over 150 currencies around the world through its unique end-toend platform. Business Leader - Inspire • Inform • Connect

The British-Indian serial entrepreneur is the co-founder of the fintech firm that focuses on enabling entrepreneurs across the world to get access to loans up to £25m. OakNorth has reported pre-tax profits last year of £65.9m, and is now ranked in the top 1% of banks globally in terms of performance, after profitably lending more than £4bn to British businesses since its launch in 2015. It now has around 144,000 savers, up from 28,000 as recently as 2018. Its loans have enabled borrowers to create almost 12,000 new affordable homes and 17,000 new jobs.

NIKOLAY STORONSKY REVOLUT After just five years in business, Revolut has reached the $1bn unicorn status (currently valued at around $1.7bn) and employs more than 1500 people across the world. Revolut has risen to prominence as an alternative bank through its mobile app platform, which offers bank accounts, debit cards, currency exchange, stock trading,

Nikolay Storonsky Revolut

cryptocurrency exchange and peer-to-peer payments. The company has also had a series of £100m-plus raises on its growth journey.

KRISTO KÄÄRMANN AND TAAVET HINRIKUS TRANSFERWISE The pair revealed that the company was ‘born of frustration’. Hinrikus had worked for Skype in Estonia, so was paid in Euros, but lived in London. Kristo worked in London, but had a mortgage in Euros back in Estonia. They devised a simple scheme. Each month, the pair checked that day’s mid-market rate on Reuters to find a fair exchange rate. Kristo put pounds into Taavet’s UK bank account, and Taavet topped up his friend’s euro account with euros. Both got the currency they needed, and neither paid a cent in hidden bank charges, and that was how the firm was born. It has now reached the unicorn status and is used across the world.

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TOP 32

Anne Boden MBE Starling Bank

Samir Desai CBE Funding Circle

SAMIR DESAI CBE FUNDING CIRCLE Desai is the founder and CEO of Funding Circle, which launched in 2010, and is now a global lending platform where investors lend directly to small businesses in the UK, US, Germany and the Netherlands. Funding Circle has originated £8.7bn of loans to more than 81,000 businesses, creating an estimated 115,000 jobs. Investors on the platform include 100,000 individuals, institutional investors, local councils, universities, and government organisations, including the British Business Bank. Since 2010, Funding Circle has raised £550m from some of the world’s largest investors.

ANNE BODEN MBE STARLING BANK The Welsh tech entrepreneur founded the revolutionary mobile-only bank in 2014. Since its founding, it has received over £230m of funding and the company received its banking licence from July 2016. With four different account types – personal, business, joint and euro – and a pioneering payment services proposition for businesses, Starling’s world-class tech reimagines banking for life today, putting the tools people need to feel good about money in the palm of their hand. Boden 64

Anil Stocker MarketFinance

received her MBE for services to financial technology.

ANIL STOCKER MARKETFINANCE Whilst working in financial services in his early twenties and spending time with many company CFOs, Stocker realised how difficult it was for small businesses to raise the funding they needed to drive their business forward. His ambition was to use technology and data to completely reinvent how businesses go about financing their growth, and breathe fresh life into outdated financial products. The company has processed over £3bn worth of invoices and business loans, and over £160m has been funded to 1,200 UK companies.

RICKY KNOX TANDEM MONEY The British challenger bank , founded in 2013 by Matt Cooper, Michael Kent and COE Knox, offers fully-fledged digital bank accounts and has grown to become a leading business within the fintech sector. In a similar way to how Monzo and Starling have revolutionised the industry, to join Tandem, all that is needed is to download the app and follow the simple procedures. Some of Tandem’s unique features include

Rob Straathof Liberis

the ability to save up spare change by rounding your spending to the nearest pound and then analysing your spending to suggest what savings you should consider.

OLIVER PRILL TIDE Established in 2015, Tide is one of the first digital-only finance platforms in the UK to provide current accounts for businesses, and promises to do so in less than five minutes. Tide is a fintech firm providing mobile-first banking services for SMEs. It enables businesses to set up a current account and get instant access to various financial services, including automated book-keeping and integrated invoicing. The challenger bank has now expanded into a 250-strong team in London, and also has offices in Bulgaria and India.

ROB STRAATHOF LIBERIS Straathof leads Liberis, an alternative finance provider founded in 2007, which has since helped more than 15,000 small businesses across the UK gain access to more than £500m in funding, to help accelerate their growth. Liberis develops technology and builds key partnerships to improve small businesses’ access to September 2020

FINTECH LEADERS Mark Mullen Atom Bank

Jonathan Lister & Romi Savova PensionBee

funding. Through Liberis Finance, the firm also has a scalable, finance platform for partners to help them build more valuable relationships with their small business customers.

NORRIS KOPPEL MONESE When founder and CEO Koppel first moved to the UK, he faced a frustrating experience; With no UK credit history or utility bills proving his address, he struggled to open a bank account. From his painful experience, he came up with the idea for Monese: a mobile money account that's inclusive, instant and on-demand. Today, people from all over Europe can open an account in minutes, without any of the hidden fees and restrictions that legacy banks often impose. Around 3,000 people sign up to Moneses daily and customers are moving over $3bn each year through their accounts. Monese employs over 200 people across its offices in London, Tallinn, Lisbon and Berlin.

DEREK O’CARROLL BRIGHTPEARL Bristol-based Brightpearl is a multichannel retail operations platform for large wholesalers and brands, whether they are online, instore, or both. Brightpearl’s Business Leader - Inspire • Inform • Connect

Norris Koppel Monese

tech platform offers a wide array of useful tools to help retailers manage their stock and orders, and help facilitate growth. The company is a trusted and established partner within the retail sector’s small and medium sized merchants to help them deal with the essential but repeatable operations that merchants have to do across today’s omnichannel retail sector. Order values on the Brightpearl platform have increased by over 700% when compared to four years ago.

a mission to give the UK users complete control and clarity over their retirement. That's why the firm created a simple online pension portal that you can manage in a few clicks from the palm of your hand. With more than £800m of direct contribution pension assets in the UK, PensionBee’s aim is to help people who often move jobs to bring their pensions together into a single online platform. Over the last six years, PensionBee now has more than 319,000 customers.

JUSTIN BASINI

NIGEL VERDON

CLEARSCORE

RAILSBANK

Based in London, ClearScore are a rapidly growing firm, aiming to change the way people manage their finances – starting with their credit score and report. ClearScore's vision is to help everyone, no matter what their circumstances, achieve greater financial wellbeing by giving everybody access to their credit score and report for free, forever. The company has over 12 million users worldwide and has been recognised as one of the UK's best workplaces.

London-based Railsbank’s mission is to enable any business to be a fintech company. They achieve this within the banking industry by being a platform that has all the technology, operational and licensing capabilities to make this possible. The ‘Banking as a Service’ company provides companies with access to a complete set of banking, cards, payments and compliance capabilities through one API. The company has expanded across the world and has a particular focus on Asia and continental Europe.

ROMI SAVOVA & JONATHAN LISTER PENSIONBEE Established in 2014, PensionBee is on

Cont.  65

TOP 32 MARK MULLEN ATOM BANK The Durham-headquartered bank was founded in 2014, and is now led by former HSBC Bank and First Direct CEO Mullen. Atom was the UK’s first smartphone or tablet app-based bank and has now grown to have more than 350 employees. Atom’s tech means their customers across the UK are able to benefit from the company’s revolutionary low-cost business model. The company has now adapted its business offerings to include extra banking services, such as mortgages, and has been praised for being one of the few leading fintechs outside of the South East.

GEORGE KARIBIAN PAYMENTSENSE For Paymentsense it all started on a bench in Las Vegas. Two friends, Karibian and Jan Farrarons, had a eureka moment outside the Venetian Hotel. They realised the card payments industry was broken and in desperate need of fixing. They then created Europe's largest merchant services provider, which offers face-to-face and online payment technology for more than 80,000 businesses, and they help process more than £10bn worth of payments every year.

ISMAIL AHMED WORLDREMIT From a refugee who escaped war torn Somalia, to one of the UK’s leading fintech

Ismail Ahmed WorldRemit

Richard Prime Sonovate

Charles McManus ClearBank

figures. The company was established in 2010 and is an online money transfer business, which is used in more than 50 countries around the world. The inspiration for the firm started after Ahmed’s own struggles when trying to send money to relatives in Somaliland. As one of the primary competitors to TransferWise, WorldRemit now has more than 1,000 employees and over three million active users.

sector. What started as a business to make finance and back-office better for recruitment agencies is now changing how businesses of all shapes and sizes access finance and support to manage their freelance workforce. They have now funded more than £1.5bn to businesses in over 40 countries, from recruitment start-ups to large-scale organisations, through its invoice finance technology.

RICHARD PRIME & DAMON CHAPPLE

CLEARBANK

SONOVATE Cardiff and London-based Sonovate was founded in 2012, and is a specialist invoice finance platform aimed at the recruitment

CHARLES MCMANUS Based in the City of London, ClearBank became the UK’s first clearing bank in more than 250 years when it was founded by serial entrepreneur Nick Ogden six years ago. Now with McManus at the helm, ClearBank’s cutting-edge technology is transforming the clearing and agency banking experience, making transactions as efficient, fast and cost-effective as they can be. ClearBank offers banking services to financial service providers, FCA-regulated businesses and fintech firms.

ARIK SHTILMAN RAPYD Rapyd started as a mobile payments company, but soon realised that a much bigger problem existed that needed to be solved. In 2016, they built an e-wallet product that would allow a consumer to withdraw cash from an ATM in any country, without a bank account. Today, Rapyd helps businesses create great local commerce experiences anywhere through its technology that removes the back-end complexities of cross-border commerce, while providing local payments expertise. 66

September 2020

FINTECH LEADERS Reshma Sohoni Seedcamp

ALASTAIR JOHNSON & SEEMA KHINDA JOHNSON NUGGETS The firm was founded by Alastair and Seema, who together have decades of experience in technology and commercialising products. Nuggets is an e-commerce payments and ID platform. It stores your personal and payment data securely in the blockchain, so you never have to share it with anyone – not even 'Nuggets'. That means no more data breaches, because companies don’t have to store your data.

DEVIE MOHAN BURNMARK

Susanne Chishti FINTECH Circle

MIKE LAVEN CURRENCYCLOUD

Charlotte Crosswell Innovate Finance

businesses and 50,000 accountancy firms use the company.

Burnmark offers fintech data and research for better collaboration between banks, start-ups, regulators and investors. The company's unique collection of start-up data, market data and use-cases on the fintech ecosystem, are used to deliver insights through a wide variety of offerings, such as reports, monthly research updates and custom research data. Burnmark publish reports that are used by network banks, investment and M&A firms, innovation hubs, governments and academics.

Emerging from FX Capital Group, the business secured a c.£6M Series A funding round and began its journey with a team of 20 employees based in London in 2012. The company is now a global, multi-currency account infrastructure provider that allows business to scale. Using Currencycloud, companies can access virtual-named accounts for customers, with the ability to collect, convert, pay and manage multiple currencies simultaneously, wherever they are in the world. The company has processed more than £50bn in over 180 countries and has additional offices in New York, Amsterdam and Cardiff.

CAMERON STEVENS

MICHAEL WOOD & ADRIAN BLAIR

FINTECH CIRCLE

CHARLOTTE CROSSWELL

Chishti is the CEO of FINTECH Circle, Europe’s first Angel Network focused on fintech opportunities and Founder of the FINTECH Circle Institute, a fintech learning platform offering innovation workshops and online courses to C-level executives. FINTECH Circle is a global platform of more than 130,000 fintech entrepreneurs, investors and finance professionals. Through the platform, firms can add strategic value through investors and/ or Non-Executive Directors to help them advance and disrupt the sector.

Innovate Finance is the independent industry body that represents and advances the global fintech community in the UK. Their mission is to accelerate the UK’s role in the financial services sector by directly supporting the next generation of technology-led innovators. Innovate Finance’s membership ranges from seed stage start-ups and global financial institutions to investors, professional service firms, and global fintech hubs. 

RECEIPT BANK Founded in 2010 out of frustration from the amount of time and money lost in forgotten expenses, lost receipts and weekends spent sorting through paperwork, Receipt Bank's founders decided there must be a better way to track business expenses and share them with a company's accountant. 250 million receipts, bills and bank statements later, Receipt Bank now connects accountants, bookkeepers and businesses to unlock the value of accounting data. More than 300,000 Business Leader - Inspire • Inform • Connect

PRODIGY FINANCE In 2007, Prodigy Finance was founded on the philosophy that funding shouldn’t be a barrier to education. Stevens and two fellow MBA students recognised that traditional banks don’t serve the needs of international borrowers: requiring collateral, co-signers, guarantors or documentation that students simply don’t have. They made it their mission to make quality education accessible, using fintech to redefine the student loan market. More than 19,000 students have utilised the platform.

SUSANNE CHISHTI

RESHMA SOHONI SEEDCAMP Sohoni founded Seedcamp, a European seed fund, in 2007, and it has become known as an early investor in world-class founders attacking large, global markets and solving real problems, using technology in the financial sector and beyond. They have become known for backing entrepreneurs before their success is known to others. The ‘Seedcamp Nation’ includes businesses such as TransferWise and Revolut. INNOVATE FINANCE

REGIONAL REVIEW

Is London a ‘sustainable’ city?

ith the relentless pursuit from companies, government and public alike to look for greener and sustainable alternatives in all facets of daily life, can the capital truly call itself a ‘sustainable’ city?

Business Leader Magazine has brought together a group of experts within the London business community to discuss what steps have been made so far, the targets it needs to hit and what areas of the capital have adapted to a modern way of working.

IS LONDON A SUSTAINABLE CITY? WHY? Demets: “In 2018, London took the top spot as the world’s most sustainability city, topping the ‘Arcadis Sustainability Cities Index’. The Mayor of London, Sadiq Khan, is committed to making the UK capital one of the greenest and healthiest cities in the world and the coronavirus pandemic has accelerated a focus on sustainability, with a particular focus on building back better and reshaping London to be fairer, more equal, greener and more resilient than it was before the crisis. 68

“The Mayor’s London Environment Strategy 2018 set out to improve London’s environment for the benefit of all Londoners across seven key areas: air quality, green infrastructure, climate change, waste, adapting to climate change, ambient noise, and circular economy. The ambition is for London to be zero carbon by 2050, alongside a transport strategy to achieve 80% of journeys to be walking, cycling or public transport by 2041. “London has a diverse range of sustainable options for travelling, including a growing

bike scheme with more than 750 docking stations. All of London’s double decker buses are now hybrid and the UK capital is home to eight of the world’s first hydrogen buses. "In July 2020, the Mayor of London set out plans to power the TfL Tube network with renewable energy, by launching a market test for TfL to be supplied with renewable power direct from generators. TfL is London’s single largest consumer of electricity and the ambition is for a zerocarbon railway by 2030. September 2020

LONDON

Lucette Demets Head of Urban, London & Partners

modelling and emissions forecasting.” Matson: “Neighbourhoods across London are being transformed into low traffic zones by eliminating rat runs for cars and reducing motor traffic on local streets. In all, we’ve awarded £30m to boroughs for more than 800 projects which will transform the way people in every part of the capital. Projects like delivering new walking and cycling schemes across the city don’t just benefit London, but support the wider UK economy through TfL’s wider supply chain.” Rob Whitehead – Director of Strategic Projects, Centre for London: “London isn’t sustainable yet, despite some good progress. Carbon emissions remain far too high, and the trajectory is still way short of meeting the UK’s legal obligations of net zero by 2050, let alone the Mayor’s far more ambitious net zero by 2030 target. Up to 10,000 people a year are estimated to die from London’s filthy air, so much more must be done to tackle vehicle emissions.” “In order to achieve the 2050 ambition, a number of programmes are in place like the Mayor’s Healthy Streets Initiative which has seen a record £2.2bn investment in streets across London to make them better for walking and cycling, and improve air quality, and the Mayor and TfL’s Liveable Neighbourhoods programme, which is funding transformational reductions in car use and improvements for London’s environment. "London also has the largest network of air quality monitors of any city, with world-class Business Leader - Inspire • Inform • Connect

HAS THE BUSINESS COMMUNITY ADAPTED THIS APPROACH TO BEING A PART OF THE CITY? Demets: “Experts in technology, engineering, energy, finance, legal and environmental research converge in London, making it a hotspot for urban innovation and collaboration. The UK capital is a global leader in cleantech innovation and sustainable solutions, embracing and testing new ways to reduce carbon emissions and helping to shape the low carbon economy.

Lilli Matson Chief Safety, Health and Environment Officer, Transport for London (TfL)

“More than 246,000 people work in companies that have solutions to the climate change challenge and their businesses generate nearly £40bn annually. The city is home to the greatest concentration of green businesses in the UK, accounting for 25% of the UK’s activity. Accelerators and incubators focused on cleantech have also sprung up, including Advance London Accelerator; Europe’s first ‘tech for good’ accelerator Bethnal Green Ventures, Climate-KIC Accelerator, Nitrous London and Sustainable Ventures. “London has also emerged as a global leader in green finance, from green bonds and carbon trading to VC investment and cleantech IPOs. With the second biggest source of capital for cleantech in the world, after Silicon Valley, between Jan-July 2020 there has been £357.2m of VC investment into ‘clean energy’ companies.” Matson: “TfL is also asking businesses to play their part in London’s Healthy Streets revolution by carefully considering how they move goods and services on our streets. TfL continues to support firms looking to try new ways of doing this, including through our funding of cycle freight projects and by building new distribution centres on TfL land. TfL is determined to cut the number of vans and lorries entering central London by 10% over the next four years, despite the astronomic rise of online shopping and deliveries, which will play a big part

Cont.  69

REGIONAL REVIEW

LONDON

in improving air quality and reducing road danger.” Whitehead: “Many businesses have made excellent changes to their practices, by focussing on reducing their carbon footprints, and new sustainable businesses have sprung up. But it’s still too little. Too many firms are still wedded to their old carbon-intensive business models. Bluntly, if a business is still planning to burn fossil fuels in 2030 then it’s not moving fast enough.” HOW HAS THE CITY EVOLVED IN RECENT YEARS TO BECOME MORE SOCIAL/ ENVIRONMENTALLY FRIENDLY?

THE CITY IS HOME TO THE GREATEST CONCENTRATION OF GREEN BUSINESSES IN THE UK, ACCOUNTING FOR 25% OF THE UK’S ACTIVITY.”

Demets: “The London Sustainable Development Commission was established in 2002 to advise the Mayor of London on making London a sustainable world city. The Commission has advised on a number of issues including putting sustainability at the heart of London 2021 Olympic Games, carrying out research into carbon emissions and nurturing over 80 new leaders in sustainable business and communities. “The Mayor has made huge strides in cleaning up London’s air, including introducing the world’s first Ultra-Low Emission Zone (ULEZ) in Central London last year, resulting in 13,500 fewer polluting vehicles driving in the zone every day and toxic NO2 levels falling by 44% in the zone. In October 2021 the ULEZ will be expanded.” Matson: “Walking and cycling have huge potential to transform people’s lives in our city, by boosting health and mood, cleaning up our toxic air and cutting congestion and road danger for everybody. This is why TfL is determined to make London the world’s most walkable city and to make it the world’s best big city for cycling, with our

Lucette Denets

Streetspace programme leading the way in revolutionising how people get around the capital. “Already before the pandemic struck, TfL had tripled the amount of protected space for cycling, with enough segregated lanes to stretch from Leicester Square to Birmingham’s New Street station. Now, TfL is working together with all of London’s boroughs on the Mayor’s bold Streetspace plans, to create the extra space needed for people to walk and cycle and avoid a car-based recovery from coronavirus. TfL has created landmark new temporary cycle lanes on some of the capital’s major thoroughfares, including Park Lane and Euston Road, part of 44km of new and

upgraded lanes that have been built or are under construction since the pandemic started. TfL is establishing walking, cycling and bus priority zones on major corridors in central London, with the first set to open connecting Shoreditch and London Bridge.” Whitehead: “London has made good progress in a few areas. Cycling has grown rapidly over the last five years, and been further boosted during the lockdown. “The Mayor deserves plaudits too for action on poor air quality: the ULEZ and its proposed extension next year is a remarkable and a very positive step forward, though risks being both politically unpopular, and not radical enough, at the same time!” WHAT MORE NEEDS TO BE DONE?

THE MAYOR HAS MADE HUGE STRIDES IN CLEANING UP LONDON’S AIR, INCLUDINGINTRODUCING THE WORLD’S FIRST ULTRA-LOW EMISSION ZONE (ULEZ) IN CENTRAL LONDON LAST YEAR, RESULTING IN 13,500 FEWER POLLUTING VEHICLES DRIVING IN THE ZONE EVERY DAY AND TOXIC NO2 LEVELS FALLING BY 44% IN THE ZONE.”

Demets: “As set out in the Mayor’s London Environment Strategy, there needs to be a continued collaborative effort between national government, City Hall, local

Lucette Denets Cont.  70

September 2020

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Parc Central, Guangzhou, China

REGIONAL REVIEW

boroughs, London’s businesses, NGOs, European neighbours and individual Londoners.” Whitehead: “London needs a new plan that makes the city take rapid bold steps to decarbonise the thorniest areas of carbon emissions. Transport should be number one priority. Here, the rapidly decarbonising energy grid points to the answers. Electric buses, e-bikes, e-scooters, and a ban on petrol and diesel cars are a must. Vehicles need attention, with new approaches to replaces the heavily polluting lorries and vans that clog London’s streets. Second priority should be switching away from gas-heated homes, offices and business premises. Electric heating is the answer, and the technology is there with air source heat pumps, etc. However, we need the right incentives to invest in the change.” HOW CAN LOCAL AND NATIONAL GOVERNMENT MAKE A DIFFERENCE? Demets: “The UK government and the Mayor of London have introduced new initiatives to increase green transport options in response to the coronavirus crisis, and to ensure sustainability takes centre stage as we look towards recovery. The Streetspace for London initiative was launched by TfL to free up more road space for active travel as the city recovers from the pandemic including adding a wider cycle network, widening pavements and creating low-traffic corridors.

LONDON HAS MADE GOOD PROGRESS IN A FEW AREAS. CYCLING HAS GROWN RAPIDLY OVER THE LAST FIVE YEARS, AND BEEN FURTHER BOOSTED DURING THE LOCKDOWN.” Rob Whitehead

“In May 2020 the government announced the launch of a new £40m Clean Growth Fund to supercharge green start-ups. The venture capital vehicle will accelerate earlystage green businesses and contribute towards the UK’s plans to reach Net Zero by 2050. In June, the government unveiled a £200m Sustainable Innovation Fund, that will help companies recovering from the impact of COVID-19 keep their cutting-edge projects and ideas alive. "In July, the Chancellor announced a £3bn green package with grants for homeowners and public buildings to improve energy efficiency. This includes a £2bn Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. “The GLA Retrofit Accelerator-Workplaces is part of the Mayor’s £34m Energy for Londoners programme, which aims to make London’s homes warm, healthy and affordable, its workplaces more energy efficient, and to supply the capital with more local clean energy.” Matson: “In October 2021, the Ultra Low Emission Zone, which currently covers the same area as the Congestion Charge Zone, will expand to cover all areas within the North and South Circular roads. TfL has installed the first new cameras in preparation for this. "With thousands of deaths in the capital each year attributed to poor air quality, the expanded ULEZ will improve air quality and ensure that as London recovers from the coronavirus pandemic, one public health crisis is not replaced with another.

LONDON

a number of wider schemes across the city. The Mayor has recently pledged to make London carbon neutral by 2030, which is 20 years earlier than government targets.” WHAT AREAS OF THE CITY HAVE TRULY EMBRACED THIS MODERN WAY OF RUNNING THE CITY? Demets: “The Queen Elizabeth Olympic Park is home to a growing cluster of clean technology and mobility innovators, and the £13.4m Smart Mobility Living Lab is developing future transport technologies, services and business models, including testing for Connected and Autonomous Vehicles. The vast public space has contributed 560 acres of park space to the city, a new green lung for London’s east side. “Southwark invested more on its green initiatives last year than any other council and aims to halve its harmful emissions by 2022. The borough has also moved pension investments away from companies that damage the planet and is phasing out single-use plastic from its operations. “Ealing is working hard to increase its biodiversity through £1m council-led Greenford-Gurnell Greenway project to improve 44 acres of parkland which will naturally filter air, reduce flood risk and improve water quality. “Greenwich is implementing the Sharing Cities programme in London, recognised as the leading local council in the Smart City field and the first London Borough to introduce the Smart City Strategy. In August, the borough announced it would deliver up to 750 green, affordable, ‘carbon positive’ modular council homes.”

“TfL is also looking to help reduce carbon emissions and improve air quality through

September 2020

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