Business Voice August/September 2014

Busines s voice | the CBI magazine

Taking stock Asda’s Andy Clarke on how the supermarket giant is adapting to shifting market dynamics

August/ September 2014

B u s i n e s s vo i c e | t h e C B I m ag a z i n e

August /September 2014

14 Interview:

Andy Clarke Asda’s chief executive tells us about the radical strategies designed to help the supermarket giant adapt to changes in customer behaviour.

8 infographic:

Skills for the future

The education system needs to work harder for the UK. The latest CBI/Pearson education and skills survey shows businesses ready to play their part but more urgent action is needed.

18 feature:

24 building britain:

30 Member profile:

leading ladies

Birmingham New Street

Fleximize

Stories from the First Women Awards show how far business has come in terms of gender diversity but also highlight areas of concern that remain.

The UK’s second most populous city needs a station fit for current, let alone future, demands.

A £650m project is giving it the overhaul required.

We talk to the firm providing a fresh model for SME funding – revenue-based financing, whereby the borrower pays a percentage of its revenue to the funder.

regulars 10 event focus:

Meeting the energy challenge

Energy security and affordability remain serious concerns for UK businesses. Both depend on investment in infrastructure and energy efficiency. But as delegates at the CBI’s latest Energy Conference are all too aware, exactly how the objectives can be achieved is still up for debate.

4 Cridland’s notebook:

The economy is at last picking up but, for a sustainable recovery, politicians need to make the longterm decisions that will create the right business environment.

28 international: Transatlantic links are already strong – the UK is the largest foreign investor in the US – but there is scope for further progress.

34 member news: Charting business growth across the UK. In this issue: Pinewood Studios, Remploy, Tyrrells Crisps, RSK, Ammeraal Beltech and e2v technologies.

6 guest columnist:

Our future depends on it

Our society is moving towards an “internet of things”. To research, develop and apply the algorithms involved we will require a workforce with highly specialised skills.

36 member clinic: What does it take to become an effective boss? David Sole, who founded the “School for CEOs” programme, highlights areas that candidates should focus on.

40 CBI diary: Events and photo gallery. In this issue: CBI Annual Conference priorities, leadership in education and action on cyber risk.

A return to form?

Although risks remain, the economy is finally giving us plenty to feel positive about. As the CBI prepares for the party conference season and for its own annual conference, the focus is still on getting the environment right so that business can create prosperity for all.

“As confidence rises, the recovery is now on a much more sustainable footing�

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Busines s voice | august/september 2014

Cridland’s notebook

“”

Getting the right support in place for our exporters to crack emerging markets is the main goal More comfortable reading

and public policy choices over [the

main goal for a more sustainable

The latest official GDP figures show

next] nine months, we could kill the

boost to trade.

that the UK’s output grew by a solid

goose that lays the golden egg.”

0.8 per cent in the second quarter

The rise in sterling is also high on

The global economic environment is also uneasy from political volatility:

of this year. It’s undoubtedly a

the business risk register and our

from parts of the Middle East – Gaza

symbolic waypoint in our recovery,

survey data seems to suggest that

especially; and in the Ukraine, and

and the good news is supported by

this has weighed on manufacturing

the related market access sanctions

the CBI’s own evidence gathered

export orders recently. It can be

levied on Russia by the EU and the US.

from our growth indicator.

argued that the rise is a corollary of improving growth in our

Opportunities knock

has also recently upgraded its

economy and the expectations

However, these risks must always

forecast: its prediction of 3.2 per cent

of an earlier rise in interest rates.

be balanced by opportunities. As

growth for this year outstrips that for

However, I recognise that the

we move steadily through August,

every other major advanced economy.

stronger pound is being felt

my mind will be turning to the set

differently across sectors – while

pieces of the post-summer political

to the kind of economic growth

it’s benefitting firms more reliant on

calendar.

figures we were seeing pre-crisis;

imports, it’s hitting the translated

our output is greater than it was in

earnings that some businesses take

offers the CBI the chance to work

2008 and, with growth becoming

from global operations.

with all the major parties to secure

The International Monetary Fund

We’ve finally found our way back

more broad-based as business

Yet even taking into account

The party conference season

pro-enterprise manifestos ahead of

investment gets ever stronger and

recent appreciation, the level of

next year’s General Election, and

as confidence continue to rise, the

sterling against a basket of currency

our own conference in November is

recovery is now on a much more

actually remains competitive.

always one of the best opportunities

sustainable footing.

Following a sharp fall of 31 per cent

to celebrate business success.

There are, of course, risks – both

over 2007/8, it is still now around

And I’m looking forward to the

17 per cent below its pre-crisis peak.

launch in September of the CBI’s

And because of that sharp fall in

Great Business Debate: our flagship

Beyond rhetoric

2007/8, many UK exporters chose

campaign to help build public

Nine months out from the General

to boost margins over market

confidence in business. We will be

Election, foremost in my mind is

share and not pass on that fall to

firing the starting pistol on debates

rising political uncertainty. I want

their customers.

concerning the positive contribution

at home and abroad.

politicians to concentrate on giving

Some commentators are arguing

that business makes to the economy

us long-term solutions that set the

that those wider margins should

and to our society more widely.

right environment for businesses

therefore, in theory, provide more

We’ll be talking facts and combating

to create prosperity, not policies

room to absorb a strengthening

the myths, as well as encouraging

or rhetoric with only short-term

in the pound. But getting the right

the public to give us their views on

application. As I said recently in an

kind of support in place for our

what business means to them.

interview with the Financial Times:

exporters to crack those fast-

“If we make the wrong governmental

growing emerging markets is the

There’s a lot to feel positive about and a lot to look forward to. n

Busines s voice | august/september 2014

5

Our future depends on it Sir Mark Walport is chief scientific adviser to the government and head of the Government Office for Science.

“”

We are homing in on procurement, spectrum and networks, standards, skills, data, regulation and legislation, trust and coordination

A

re genetically modified organisms a good thing? What about synthetic biology or nanotechnology or 3D printing? Each of these is a ridiculous question. We have a horrible habit of trying to judge

technologies generically, rather than recognising that every technology brings new benefits and new risks.

In the case of any new technology, the serious questions should be specific: what is the precise application? In the case of genetic modification, the questions are: what organism, with what gene and for what purpose? For 3D printing or additive manufacturing, are we talking about a gun from a design downloaded from the world wide web, or a spare part for a baby’s incubator?

These are the types of question that confront a scientific adviser to government every day. Currently, I am focusing on a specific commission from the prime minister, to advise him on a fast-growing application of IT – the “internet of things”.

What is this? Increasingly, the devices that we wear, carry and use at home, while we travel and at work, are controlled by microprocessors, are internetenabled, can communicate with each other, and can make our lives easier through the application of advanced algorithms. But the internet of things is as much about people as it is about the things in our lives – and some are starting to refer to the “internet of everything”.

Understanding and vision How should we in the Government Office for Science advise the prime minister on this important topic? The short answer is by finding the right experts, engaging widely to identify key opportunities and concerns, and – importantly

6

Busines s voice | august/september 2014

guest column: Sir Mark Walport

The internet of things will power modern society – but it will need a lot of skilled people to research, develop and apply the algorithms to make it work.

– developing an action plan that

enable services to be delivered

develop and apply algorithms for

will enable us to reap the benefits

more efficiently, and scarce resources

human benefit in areas across a

while avoiding potential harms.

to be used more effectively and

spectrum from health to wealth.

sparingly. We are homing in on

But £42m is only a beginning,

Many of the initial applications of the internet of things come from

eight areas for potential action:

and we need to catalyse a

the objects that we wear or carry

procurement, spectrum and

partnership – between our

with us – the devices that measure

networks, standards, skills, data,

universities and government, the

our exercise or our sleep, or that

regulation and legislation, trust and

philanthropic sector and industry –

tell us and others where we are.

co-ordination.

to reap the benefits of mathematics

The mobile phone is an astonishing

and computer science.

example of the power of the

Skills to succeed

internet of things. It signals to us

The subjects of skills and algorithms

of the government chief scientific

where we are, how to get to where

bring me to a letter that the Council

adviser. My job is to maximise the

we want to go, and what is there

for Science and Technology wrote

impact of science, technology,

when we arrive – and can send the

to the prime minister last year. It

engineering and social science on

same information to others.

was about the importance of

the things that government cares

algorithms for the running of

about – the health, wellbeing,

is anonymised, and warns us of

modern societies, and the need for

resilience and security of its citizens

traffic jams or locates potholes for

the UK to expand its skills and

and the economy. These, in turn,

road repairers. We are a bit choosier

research base in an area that will

depend on our infrastructure: both

when it gives away our personal

power our future economy and be

the human-engineered, built,

information and location. It may

important for maintaining our

manufactured and technological

suit us to provide this to individually

health, conserving resources and

type and the natural infrastructure

selected family members, friends

improving our transport systems.

– the physical systems of the planet

We like this when this information

or colleagues, but most of us would

An important outcome of that

This brings me back to the role

and the organisms that inhabit it.

prefer it if this information was not

letter was the announcement by

available to all-comers.

the chancellor of the exchequer in

and is underpinned by infrastructure,

the 2014 budget of £42m of

and this in turn is underpinned by

held a series of expert workshops,

government funding to create the

the sciences. So the work of CBI

and key themes are starting to

Alan Turing Institute. This will be a

members is critical to our future in

emerge. First and foremost, we

world-class centre that will bring

the UK – and you need a workforce

need a clear vision – along the lines

together the best mathematicians

skilled in science. Science matters. n

that the internet of things will

and computer scientists to research,

As part of our analysis, we have

The work of business underpins

Busines s voice | august/september 2014

7

Skills for the future The UK’s workforce needs young people who are rigorous, rounded and grounded. Business has realised it has its part to play and government is making the right noises about education reform. But the latest CBI/Pearson education and skills survey shows more urgent action is needed.

Students aren’t aware of the world of work

But businesses want

80% of businesses are forging some type o least one school or college.

77% of those with links offer work

52%

80% of firms are concerned that

of businesses believe

careers advice is simply not

schools’ top priority should

good enough.

be to develop a greater awareness of working life among 14-19 year olds.

experience placements.

67% offer careers advice and talks.

Overall 66% of firms are willing to take on a larger role in the

The emphasis on STEM skills continues

48%

39%

of employers say that

of firms that say they

they prefer graduates

need those with STEM

with qualifications in

skills currently have

STEM subjects.

difficulties recruiting staff.

And 53% expect problems to get worse in the next three years.

8

Busines s voice | august/september 2014

But i achi

infographic: Skills for the future

Basic challenges remain

85% of of firms want primary schools to focus on developing literacy and numeracy skills.

As 36.4% of school leavers are not

And more than 50% of businesses are worried

achieving a grade C or above in GCSE

that these continue to be weaknesses

English; 42.4% are not reaching this

in their employees.

standard in maths. (source: Joint Council for Qualifications, 2013)

t to help

of link with at

And there is scope to scale up employer involvement in apprenticeships

There were

510,300

apprenticeship starts in 2012/13, up by more than 230,000 since 2009/10. (source: House of Commons)

44% of firms said that more relevant qualification programmes would encourage them to get involved – as would a greater control over funding (34%) and a reduction in bureaucracy around them (31%). school careers system.

it’s not just about academic ievement

85% said attitudes to work was the most

“”

The challenge is to grasp the nettle so we bring employment and education opportunities together to meet the urgent social and economic need of creating a more highlyskilled workforce.

important factor when recruiting school and college leavers, followed by their general

Rod Bristow,

aptitudes (63%).

President of Pearson Core Markets

Only 38% made formal academic results a priority.

www.cbi.org.uk/skillsreport

Meeting the energy challenge The UK is under pressure to provide a secure, affordable and de-carbonised energy supply fit for the future – but the CBI’s latest Energy Conference showed that there is still plenty of debate over how this can best be achieved.

10

Busines s voice | august/september 2014

event focus: Energy security

A

lmost three-quarters of businesses rate security of supply as a crucial

energy objective for the UK, yet more than half believe that energy security here is worse than it was five years ago.

That’s according to a new CBI poll, which set the context for its Energy Conference held, in association with Good Energy, in London on 17 July.

The challenges laid out by speakers – who came from government, industry, regulators and pressure

“”

The market should be able to send out long-term signals to increase long-term capital-intensive investments

ahead, and we can’t get there in one leap – it will take a few decades, not a few years. So fossil fuels are still necessary, through North Sea oil and gas, as well as fracking. And we must address how we can use fossil fuels better.”

He added that changing behaviour and usage patterns must also form a central part of any sustainable strategy. “Energy efficiency is one of the most cost-effective ways of running our energy policy,” he said.

“Over the period 2010-13, we have

groups – were clear. The UK needs

seen £45bn invested in electricity

Global context

to design and run a more efficient

generation and networks, plus more

However, the second keynote

energy market in the face of

investment in four years than in the

speaker, Fatih Birol, chief economist

“serious flux” in the global market;

previous 13 years,” he said.

at the International Energy Agency

it needs to de-carbonise; and it

Of that total, £16bn has been

(IEA), said: “No country is an energy

needs to balance government

invested in new distribution

island”. Energy is, perhaps more

support for long-term investment

networks and a further £3bn in gas

than any other commodity, an

with competition and innovation.

transmission, he said, adding that

international commodity. “Prices,

there had also been significant

innovation and surges in demand

of state Ed Davey told the audience

growth in capital expenditure in the

are all played out against global

that recent efforts and investment

North Sea.

backdrop, and no country can hope

Despite the poll results, secretary

had gone a long way to address

But more investment is needed,

to unilaterally run its energy policy

fears that the UK would suffer a

said Davey. “We cannot rest there.

without taking into account what’s

severe energy crunch beginning

To de-carbonise, we need more

happening elsewhere across the

around 2015.

renewable electricity in the decades

globe.”

Busines s voice | august/september 2014

11

Given this international commodity status, Birol said that

for this type of renewable being cut.

Overall, though, the cost of

the global energy market – in

renewables can’t be ignored.

terms of who produces, who

Ann Robinson, director of

consumes, where shortages exist

consumer group uSwitch, argued

and surpluses are enjoyed – is in

that affordability had to be at the

serious flux. Trends that would

centre of modern thinking on energy

have previously been unheard of

policy. “We cannot afford some of

– Middle East countries importing

the more expensive renewable forms

oil and gas, for instance – are

of energy. We should be looking at

now commonplace. The need

talking the EU into ditching their

for European legislators and

targets on renewable energy.”

businesses to keep up and adapt to the new realities are clear, he said.

Birol also said that despite the extraordinary shift towards

“”

To de-carbonise, we need more renewable electricity, and we can’t get there in one leap – it will take a few decades, not a few years

renewables, Europe still needs

involved in a simple and easy way

formed a central part of those

to invest $2.2trn to replace ageing

– it wouldn’t be overregulated, as

efforts in Europe. Indeed, Birol

infrastructure between now

it is now. I want to see consumers

reported that 60 per cent of total

and 2035.

have much more control over their

Renewable energy has so far

energy use,” she said.

investment in energy in Europe over the past decade has gone on

Consumers in control

renewables.

So what does a good energy

renewables such as solar power

She pointed to the role of

market look like? The question

in focusing users’ minds on the

renewables in the UK had reached

continues to vex most observers.

amount of energy they use. And

£8bn in 2013. “Indeed, only China

All accept that a pure free market

she wanted more consumers to

and the US have invested more

model won’t work with such a vital

care about which companies they

finance in renewable assets in that

commodity, but fostering long-term

buy their energy from and where

period,” he said.

investment and competition into

it comes from – not least, to

the trade in energy is a tough nut

encourage competition.

Davey said that investment in

The UK now generates around 15 per cent of the total UK energy mix through renewables: five per cent

to crack.

Juliet Davenport of Good Energy

Investment priorities

of its total electricity comes from

outlined several characteristics that

But injecting more competition

onshore wind, and solar power is

were necessary in a good market.

into the market can only go so

also doing well, despite subsidies

“It would allow new entrants to get

far. As one of the UK’s dominant

12

Busines s voice | august/september 2014

event focus: Energy security

energy players, EDF has a vital role

living standards. Little changes in

to play in ensuring not only that

behaviour – for example, when

the lights remain switched on, but

the Co-op fitted doors on its store

that consumers and businesses

fridges – can be cost-neutral and

have access to competitively

immediately reduce an energy

priced energy. The company’s

bill. In fact, the Co-op has saved

director of strategy, Paul Spence,

£50m on its bill by doing that.

told delegates that his view of

“Secondly, investment in low-

the perfect market was one that

carbon sources will be better, long-

combined innovation, dynamism

term, for consumers,” said Flint.

and competition.

“We have to tackle that as soon as

“And at the same time it should

possible, as we won’t reduce carbon

be able to send out long-term

footprint without a concerted effort.

signals to increase long-term

And lastly, fossil fuels aren’t going

capital-intensive investments.

away, so they need to be greened

The set of reforms we see coming

and carbon capture and storage

in are pragmatic and should help

(CCS) developed.”

investors and customers.”

So what of the UK’s energy

more competition in the energy market is the best way to keep bills down.

Wrapping up the debate, deputy director-general of the CBI Katja

future? While Davey was proud of

Hall recognised the challenges of

the coalition’s efforts to channel

encouraging the necessary long-

both public and private investment

term investment and getting a

into UK energy infrastructure,

good deal for consumers. She

shadow energy secretary Caroline

also echoed Davey by referring to

Flint laid out the three strands of

efficiency as the “missing piece

Labour’s energy policy, should

of the puzzle”. But she argued the

this party win in next year’s

priority had to be on setting a clear

General Election.

policy that could attract consensus

“Firstly, we believe that to reduce

47% of business leaders believe

between politicians and industry.

demand is cheaper than increasing

“Our future competitiveness

supply,” she told the conference.

depends on it,” she said. n

38% of firms cited energy efficiency as the best solution to ensure energy costs remain affordable.

60% of businesses believe the low-carbon transition will lead to long-term economic opportunity.

“We could do this by one-third, and it wouldn’t mean lowering

Source: CBI

Busines s voice | august/september 2014

13

changes in store A transformation is under way at Asda, with further stores opening and more radical steps that will help the supermarket group adapt to changing consumer habits.

Chief executive Andy Clarke explains the strategy. words Pip Brooking photography Peter Searle

14

Busines s voice | august/september 2014

BIG interview: Andy Clarke

“S

truggling supermarkets”

The numbers involved are small

organisation, as we are refining the

is an all-too familiar

but, in a flat market, significant.

organisational structure in stores

alliteration for the

Clarke believes they reflect a “clear

to support the growth of our online

newspaper headlines, as month

change in form across the big four”

business.”

after month of Kantar figures have

and are a sign of Asda being

shown growth among the “big

“ahead of the curve” in its reaction

as announced by Asda’s US owner

four” at its lowest level in a decade.

to changing market dynamics,

Walmart in April, has the potential

The cause is simple enough:

compared with its competitors.

to create up to 12,000 jobs – news

changing consumer habits – driven

In fact, the new five-year strategy,

that was welcomed at the time by the

by the rise of online shopping and

The need for change

prime minister. “I am delighted that

the continued squeeze on income.

The current restructure at the

Asda is continuing to invest heavily

The solution is not so easy.

Leeds-based firm was put into

in the UK,” said David Cameron.

Pressure is mounting on those at

motion after a “rigorous strategic

The strategy will also see the

the top to deliver new strategies

review” 18 months ago, which was

company add 40 “superstores”

– particularly at Tesco and Morrisons,

followed by store trials last year to

(each spanning 25,000 square feet

where performance is hardest hit.

refine the organisational structure.

or more), 100 supermarkets

While recent press coverage of

Clarke calls it a “proactive piece of

(typically 5,000-12,000 sq ft), 150

Asda has focused on 1,360 job

change” that has been planned,

forecourt shops and 1,000 click-and-

losses among store management

trialled and communicated

collect points, and extend online

staff, the company’s chief executive,

transparently – the only way to try

penetration – it wants to triple the

Andy Clarke, seems to be weathering

to maintain morale among those

value of online business by 2018.

the storm rather better.

affected by redundancies around

Returning to the Kantar figures, you get an inkling of why. In the 12

them, he says.

The whole executive board spent

Shape shifters So Clarke, unlike some

weeks to 20 July, Asda was only

time in the stores both before and

commentators, doesn’t think that

just behind Sainsbury’s with growth

after decisions were made, and it

the end of the superstore is nigh

of 0.9 per cent (versus 1.2 per cent).

chose not to delay a grassroots

– although he says that the

In the month prior to this, Asda was

survey that gave all employees an

company is “fortunate” in having

recorded with the largest growth

opportunity to share their thoughts.

fewer large-format stores than its

among its immediate competitors,

“We’ve been careful to ensure we

competitors. “We’re all conscious of

at 3.6 per cent against Sainsbury’s

continue to listen. Even though it’s

how we’re changing shape. What is

3 per cent. And in the period to 25

difficult, when we believe this is

happening is that what goes on

May, Asda was “the only large

right for our business, we have to

within the superstore is changing.”

grocer to grow share year-on-year”,

put ourself out there and be

with 2.4 per cent sales growth

prepared to take criticisms and

to trial reduces the space given to

leading to a market share of 17.1

challenges,” says Clarke.

the white goods and electrical

per cent. In each report, Tesco and

But he adds: “The big picture is

The new format that Asda is set

items that tend to sell well online,

Morrisons fell in terms of both

that the net effect of these changes

in favour of growth categories such

sales and share.

will be more people in the

as fresh food, homeware, health

Busines s voice | august/september 2014

15

and baby products. Space is

of the imperatives facing the

long-term price promise,

important for Asda’s clothing range

supermarket giants. Another area

guaranteeing that it will be 10 per

George, which continues to make

that has seen increasingly intense

cent cheaper than its rivals, rather

the chain the UK’s largest

competition is price – and Clarke

than offering to price-match.

children’s-wear retailer by volume.

believes Asda has a significant

But the growth of click-and-collect

advantage here.

trade also means that retailers have

All of the big four are fending off

“This isn’t a price war for us,” he says. “It’s simply about executing our strategy and delivering

extra flexibility on the stock they

the relentless rise of the

something that we’ve always been

choose to carry, says Clarke.

discounters, Aldi and Lidl, which

consistent about.”

Asda has also been looking at

have posted growth of 20-30 per

He adds that discounters “aren’t

how to share excess space with

cent in successive Kantar reports –

a new concept. They’ve been in our

local community groups. Getting

and Clarke agrees that it is

market for as long as I’ve been in

closer to communities is also

“probably untenable” for his

retail”. And, he says, “we have three

driving the company’s growth in

competitors to maintain their

strong divisions in food, general

supermarkets (as opposed to the

current price gaps. But he adds that

merchandise and fashion. That

larger superstores), says Clarke.

reducing them requires

gives us the breadth that you can’t

“significantly larger investment”

get at a discounter.”

Meanwhile, one of the ways Asda is planning on expanding in the

and will lead to a correspondingly

south – where its market share is

large impact on competitors’

economic trends behind the

closer to 12 per cent, presenting “a

profitability, as their business

pressure on price. For the past six

natural opportunity” for expansion – is new forecourt shops.

Some of Clarke’s changes are

“”

But he also highlights the

years, Asda has run an incometracker survey, which has reflected

This isn’t a price war for us – it’s simply about executing our strategy and delivering something that we’ve always been consistent about

the squeeze on household incomes

Race to the bottom?

models haven’t traditionally been

emphasises Asda’s support for the

Adapting to consumers’ increasing

predicated on such a dynamic.

first “social supermarket”, which

tendency to shop online is just one

Asda, on the other hand, has had a

opened in Barnsley in December, to

more radical – and he argues that they need to be. “Click-and-collect is changing the face of retail,” he says. This trend has led Asda to launch “drive-thru” facilities – first trialled in York in spring last year and rolled into all stores by this summer. In addition, the company has also partnered with Transport for London to install collection lockers at various tube stations in the capital.

16

Busines s voice | august/september 2014

– and has predicted this squeeze will continue until at least 2018.

And as with many business executives, Clarke raises the concern of youth unemployment.

It’s an issue that is top of his agenda for his presidency of food and consumer goods industry charity IGD next year, and has been a key issue for Leeds & Partners – the inward investment body he chairs – as well as something he wants Asda to help tackle. He also

BIG interview: Andy Clarke

serve those close to food poverty. “I

and provide uniforms for 10,000

think more social supermarkets will

volunteers at Yorkshire’s Grand

emerge over the next three years,”

Départ for the Tour de France

he says, arguing that such initiatives

this summer.

can’t be about competition. “For

Meanwhile, although the UK

Asda, or any large or small business

grocery industry has its own hills to

around the country, being aware of

climb, Clarke argues that the sector

the communities you operate in

remains world-class, with

must be of great importance.”

international eyes watching how the

Such awareness has led to more

main players here respond to the

light-hearted opportunities for the

changing dynamics. He just wants

company. It helped to recruit, train

to lead the pack home. n

Mums, Asda and politicians

E

The Clarke CV 2010-present Chief executive, Asda.

2005-10 ighty per cent of the

Of course, Andy Clarke cares

18 million customers

what his shoppers think and,

who go through Asda’s

although he doesn’t want to be

Retail director, then chief operating officer, Asda.

doors each week are mums.

a political pollster, its in Asda’s

2004-05

In the run-up to next year’s

interest to help them get their

Managing director, Iceland.

election, the supermarket giant

voice heard. But asked what he

asked some of them about their

wanted from whichever party is

2002-04

everyday lives and what they

in power this time next year, his

thought that government should

thoughts turn to business rates

Chief operating officer, Matalan.

be doing to help.

and planning processes – although

In the resultant Mumdex

the latter is less of an issue than

report, 88 per cent thought that

it has been as the demand to

politicians aren’t good at

open new spaces has declined.

engaging with mums or the

1992-2002 Store manager, then regional manager, then trading and operations roles, Asda.

“We continue to stay close to

issues that matter to them, while

decision makers,” he adds, on

1982-92

two-thirds wanted to see more

topics including fuel duty and

women in power. Their top asks

alcohol and tobacco sales. And

Grocery manager, then store manager, Wm Morrison.

from government included

he highlights the continued need

imposing limits on energy

for government to focus on the

prices, raising personal tax

red tape challenge, where

allowance and improving rights

bureaucracy stands in the way

for working families.

of business growth. n

Busines s voice | august/september 2014

17

leading ladies Business has come a long way in terms of gender diversity, and the shortlist of the recent First Women Awards provides plenty of examples of strong pioneering females. However, some of their stories also highlight areas of concern that will have contributed to there still being fewer women at the top.

A

t the end of June, Glencore Xstrata appointed Patrice Merrin as non-executive director. The move means that no all-male boards remain in the FTSE 100.

But it’s taken time to get to this position, and in the FTSE 250 the challenge

persists. In addition, certain sectors – from mining to construction – have fewer women in the pipeline, so the scope for senior female appointments is limited.

A recent CBI report, Building on Progress, emphasises that many women still face obstacles at various times through their careers, from choices at school to breaking into

“”

the boardroom. It highlights the fact that both businesses and government have more to do to

Some had lacked career guidance and had been inspired by family members or fallen into their careers by chance

create an environment in which more women can succeed. The report also moves the equal pay agenda up the list of priorities.

Business Voice talked to shortlisted candidates and winners at this year’s First Women Awards – in the construction, manufacturing, engineering and science and technology sectors traditionally dominated by men – to find out more about their paths to the top. All were keen to tell their stories, to encourage more women to follow in their footsteps.

But common messages emerged. Some of those we talked to had lacked career guidance and had, instead, either been inspired by family members or fallen into their careers by chance. Many criticised their respective industries for not broadcasting the breadth of opportunities they offered. And most of them credited supportive managers for their progression.

18

Busines s voice | august/september 2014

feature: First Women

Carolyn Adams

Quality and continuous improvement manager for coffee, Mondelez In many ways, Carolyn Adams’s

“Especially within research and

are still very male – with only one

experience reflects the current drive

development, I broke through glass

female applicant out of 30 this year.

to promote more vocational routes

ceilings because (a) I didn’t have

into work. She learnt on the job,

the technical degrees the majority

in raising the profile of a career in

starting in a laboratory for General

of people had and (b) it was an

the food industry, the wide-ranging

Foods-owned instant coffee brand

organisation that was totally

opportunities it holds, and its

Maxwell House. She then progressed

male-dominated and women

potential for innovation – for both

to head all global coffee product

engineers, with degrees, had given

girls and boys. To this end, Mondelez

development for Kraft, and now has

up before me. They tended to go

is now going into schools to give

a leadership role in manufacturing

into teaching.”

talks. In addition, the company has

business development at what is now Mondelez.

“I don’t think people are

She has also had children and

She argues that the challenge lies

invited representatives from the

says that as a result it’s probably

government and shadow government

taken her longer to get to where

to visit the site in Banbury, Oxfordshire

aware how fulfilling a career in

she is, but she adds “I haven’t got

– where Adams has been responsible

manufacturing or engineering can

frustrated with that time span”.

for attracting investment back into

be,” she says. Yet before her career

Adams credits supportive

the UK – to help raise the company’s

started, she herself was “totally

managers and the fact she grasped

profile and the importance it places

unaware of industry” as an option

opportunities – she even studied for

on training. n

– she applied for the position at

an HNC in business finance on day

Maxwell House as just a summer

release, funded by Kraft. She has

job before she went off to study

seen a change in the proportion of

physiotherapy.

women engineers around her,

But Adams never left, finding she

although she’s still used to being

had a knack for understanding

the only woman in senior meetings

science and the ability to apply it to

other than someone from HR.

the consumer side of the business.

However, she says apprenticeships

23% The proportion of the manufacturing workforce who are women

Vidhyalakshmi Karthikeyan Senior researcher, BT

Vidhyalakshmi Karthikeyan is the most prolific inventor

engineering, despite pressure from plenty of people

that BT has employed over the past decade. Over the

recommending other subjects “as more suitable for a

five years she has been there, she’s filed 16 patents.

woman”. But she had been inspired by her father – a

She’s only 26.

chemical engineer. She highlights the importance of

Karthikeyan grew up in India and Malaysia, and came to London as an international student to study electronic

encouraging children from an early age: “I was determined to do this, because I was sure from when I

Busines s voice | august/september 2014

19

was young. You couldn’t shake that out of me, as much

almost a year into a part-time PhD, in which she is

doubt as you might try to install.”

prototyping one of her patents.

Nevertheless she didn’t discover the idea of a career

Keen to inspire others, Karthikeyan has given guest

in telecommunications until she was at university. The

lectures at universities, and has been involved with

subject formed part of her electronic engineering course

recruitment and career advice activities since joining BT.

– where she was one of only a handful of females. Now

She was also one of the volunteers from BT in E-skills

she talks passionately about why she made that choice –

UK’s Girls Get Coding event in July.

and what could inspire others to do the same. She is a

“People are scared of programming – or they say

firm believer in the continued freedom and fairness of

they don’t want to do maths. You need to challenge their

access to the internet for all, arguing that it opened up

preconceptions,” she says, pointing again to the

opportunities for her she wouldn’t have had otherwise.

importance of technology in everyday life and the

“I knew nothing of London before I arrived, other than

excitement of being able to shape something that affects

what I found out over the internet.”

everybody. “You just need to encourage them that they

Karthikeyan is also driven by the speed of change in technology, and by the desire to improve it. “I love the fact that [technology] is rooted in something that we now think is indispensable,” she says. “The role of an engineer is to cocoon complexity into a system that everybody can get something out of.”

Her patents are based on “machine learning”, as she helps BT move towards a long-term vision of creating an autonomous network that can work and repair itself as technology gets more and more complex. She’s now

can do it.” n

“”

People are scared of programming or say they don’t want to do maths – you need to challenge them

Louise Brooke-Smith Global president, RICS Louise Brooke-Smith was

A surveying career is incredibly

inaugurated as the first female

broad,” she says. “It’s unfortunate

president of the Royal Institution of

that there is this perception of

universities, she says she already

Chartered Surveyors in July – more

surveyors being predominantly

sees a different attitude coming

than 30 years after she joined the

male.”

through among the next generation.

organisation as a student member.

But only 14 per cent of chartered

want them to stay in the profession.”

As a visiting lecturer to

She’s also experienced universities

But a career in surveying was her

surveyors are female – although

wooing her own daughter, who has

plan B, after she didn’t get the

that’s improved from the two per

expressed an interest in surveying.

grades to study engineering.

cent when Brooke-Smith started

“They know that the women who

“One of my ambitions is to get

out. “We’ve got a long way to go.

go through their courses get good

the message out there that while

The good news is that there are a

qualifications and do well in the

surveying is already a career choice

lot more women joining surveying

real world, in industry,” she says.

to some, it should be to far more.

courses. But once they qualify, we

20

Busines s voice | august/september 2014

These efforts are being mirrored

feature: First Women

“”

Role models are important too, she

Eventually she did set up on her

More women are joining surveying courses but once they qualify, we want them to stay in the profession

says. “It also helps to have visible

own – a process that involved both

women up and out there.”

faith in herself and back-up from

taken, to make it from the

president gives her the credibility

by initiatives in industry, at RICS

classroom all the way through to

to speak up about the importance

and among the big construction

the boardroom,” she says.

of diversity – and not just in terms

companies – and Brooke-Smith is

After putting a call out to its

others. “You need to have a bit of

members, RICS has been inundated

confidence to be able to do it, but I

with women just getting on with

had a lot of support,” she says. Her

the job, who want to shout about it.

consultancy has recently celebrated

“It is important to highlight some

its 20th anniversary.

of the decisions that everybody has

She now believes her role of

As for Brooke-Smith, she’s grabbed

of gender. “My emphasis is that I got

also keen to look to other sectors,

opportunities as they’ve come. She

there on merit, not because I was a

such as accountancy, to see how

decided early on that she wanted to

woman, and I was adamant about

large firms have attracted and

set up her own planning consultancy,

that through the election process.

retained the female population.

but didn’t want to do it too soon. So

A couple of years back, I stood up

She emphasises the importance

first, she worked for local

and said ‘if you’re voting for me

of careers advice. “Get more of

authorities, quangos, the UN, a big

because I’m wearing a skirt, I don’t

it, and better-quality,” she says.

developer and a big agency.

want your vote.” n

Rachel Morfill

Power systems manager, National Grid As with many others in engineering, Rachel Morfill was

Morfill took on the latter responsibility partly because

inspired by her family rather than through any careers

of her passion to encourage more women into the

guidance. In fact, “there was nothing on engineering in the

profession. The two biggest challenges she faced, she

careers files” at the all-girls school her parents sent her to in

says, were the assumption that she wouldn’t return to

the belief that it would encourage her scientific leanings.

work after having her first child, 16 years ago, and lacking

When she studied for an electrical engineering degree,

a female role model to look up to. As regards role models,

she was then the only female on the course.

“I think that it’s easier now,” says Morfill. “But I was determined. I can remember leaving school and saying

she says: “It’s quite daunting that I’m one of those for other people now.”

To that end, she has been involved in setting up a

that I was going to be a chartered engineer by the age

women’s network and a mentoring scheme so that

of 30 – and I achieved that. I battled through.”

women don’t feel isolated – especially when they work

She joined National Grid straight from university – and has enjoyed a progressive career path over the past 20 years, mostly in engineering roles, but also writing the organisation’s annual report one year, and heading the inclusion and diversity department another.

Just 6% of the UK engineering workforce are women Busines s voice | august/september 2014

21

in the field, where the workforce is more disparate so

she says. “The push needs to be on encouraging

the proportion of women is lower still.

engineering as a professional job with a wide range of

Morfill says the culture within National Grid has changed significantly during her career, but admits

opportunities.”

But targeting women specifically, she emphasises that

engineering still faces the problem of being perceived as

the task of changing perceptions has a lot to do with

“oily rags and boiler suits.“

parental education – making parents understand it’s a

“That can put off the men as well as the females – and there’s the industry concern about a shortfall in skills,”

job they can be proud of their child going into. “I was lucky that I had that within my family,” she says. n

Annika Small

Chief executive, NominetTrust Annika Small is chief executive of

She adds: “This is actually the

Within schools, a change in the

NominetTrust, which supports and

arts and crafts of the 21st century in

national curriculum will introduce

invests in people who use

many ways, because it’s a creative

more coding in September, which

technology to address complex

area – but it’s not presented as such.”

again is a step in the right direction.

social challenges, from social

Some of the barriers come from

However, she references a recent

isolation among the elderly to

within the industry. When she

YouGov poll that suggests that

youth unemployment. For her, it

joined NominetTrust in 2010, Small

while 75 per cent of UK children

is the application of, and what can

remembers some people from the

aged 8-15 are interested in making

be achieved with, technology rather

technology press asking to speak to

their own projects online and 67

than the technology itself that have

her “number two” or to the head of

per cent would like to learn how to

the power to inspire and attract

research, “because a man must

programme or write code, only 3

more women into the sector.

know more than this girl who’s

per cent actually know how to do so.

“It’s my perspective on

running the thing”. Other people in

“Appetite is growing, but I don’t

engineering, science and

the industry enjoy the “anorakdom”,

think there’s enough being done in

technology in general that to

and they layer on complexity that

schools,” says Small. n

engage more women you need to

doesn’t need to be there, she says.

start in an area they’re interested in,

But she adds of such challenges:

and make it more relevant to what

“It hasn’t held me back, and I

they’re doing and what they aspire

haven’t seen many women who it

to do,” says Small. “At the moment

has held back.”

it still feels remote, and they’re

For young people, there are a

presented as technical subjects that

growing number of initiatives that

can be seen as ‘geeky’. I’ve worked

Small believes will help – ranging

a lot with teenage girls in this area

from Young Rewired State and

and you can see that they’re

Apps4Good to Code Club –

interested, but often peer pressure

although she’s worried that these

kicks in.”

aren’t accessible to large numbers.

22

Busines s voice | august/september 2014

“”

This is actually the arts and crafts of the 21st century in many ways – but it’s not presented as such

feature: First Women

helen lamb

Executive director, managed infrastructure services, Fujitsu Helen Lamb fell into ICT, as did most of her female

innovation that it can enable. It’s about bringing the

peers at Fujitsu, she says. After taking a mix of

relevance to the nerdy, technical aspect of it all.”

maths, English and economics at A-level, she got a

A big reason for Lamb’s success has been showing

degree in business studies. She didn’t know what

ambition, and two-and-a-half years ago, during a

she wanted to do. And she didn’t know what she’d

management restructure, she put herself forward

signed up for, either, when she took a role at what was

for a board role. She became executive director,

then ICL in her placement year and, at 21, was thrown

managing Fujitsu’s applications business. She has

into a relatively technical job supporting mainframes

since overseen a 13 per cent increase in revenues

in a team of men who were aged 40-plus.

and a 26 per cent rise in profit, and has moved

“Looking back, I can see the challenge I had at the time was that I struggled for role models,” she says.

Nevertheless, Lamb enjoyed the placement and joined

over to run the managed infrastructure services.

She says she’s blinkered to the fact she still works in a male-dominated environment, because

the company’s graduate training scheme, working

she’s so used to it. But she’s conscious that, in her

across different areas of the business: in finance, HR,

position, she needs to be a role model and support

designing solutions and implementing programs, as

others to be as successful as she has been, so she

well as in operational and general management.

sponsors the graduate and apprentice programme.

So why aren’t there more women in ICT? In what

“”

is becoming a familiar story, Lamb thinks the gender

Sometimes I made side movements in my career, because I wanted to expand my experience “Throughout my career, I didn’t necessarily

progress upwards each time; sometimes it was side

imbalance arises because other professions have greater recognition. “Compared with medicine or law, ICT struggles with its ‘brand’. It’s too often seen as being technical, detailed engineering. That’s part of it, and it will appeal to some people, but it doesn’t really represent the roles and the opportunity that you have within it and the difference you’re able to make toward people and businesses on a regular basis.”

But the process of attracting women into the sector

movements, because I wanted to expand my experience.

has to start earlier, she adds – schools need to make

By its nature it’s been a technical environment,

STEM subjects more accessible, relevant and exciting

but my interest is in both the technology and the

to everyone. n

Read the CBI report, Building on Progress at www.cbi.org.uk/championingdiversity The CBI has also called for action to make STEM careers more attractive.

Read the report at www.cbi.org.uk/engineeringfuture

A grand central station First impressions count when attracting visitors and investment, and no one can deny that the old Birmingham New Street station – the main transport hub for the UK’s second city – was not particularly welcoming. But it’s undergoing £650m-worth of renovations, which will create a space 3.5 times larger than the old one, with far greater accessibility and better interchanges. Its shopping centre is getting a major facelift to boot.

37 seconds

3,200

The frequency with

The number

which a train leaves

of jobs the

Birmingham New

regeneration is

Street, making it the

expected to deliver

busiest station outside London, and the

140,000

to the city centre,

busiest interchange

The number of passengers

estimates putting

station in the UK.

with initial

who use New Street

the boost in jobs

every day, more than

for the region at

double the number it was

up to 10,000.

1,000 The number of workers

T

currently on site.

con

2

de

designed to accommodate.

&

co

app

35m The height of the new atrium on top of the station.

Two holes cut out of the roof and floor of the existing shopping centre mean the station is lit by daylight for the first time in 40 years.

24

Busines s voice | august/september 2014

10,000

The numb

duration o

building britain: Birmingham New Street

7,500 tonnes The amount of concrete removed

100

from a disused car

The 100th apprentice,

park adjacent to

James Skyrme, was

the old station to

£35m

brought onto the

nstruction site in March

2014, working for local

emolition firm Coleman

The investment made by John Lewis

create the new concourse.

36 The number of new escalators. Together with 15 new lifts, they

in a new 250,000 sq ft shop, the

offer improved access

flagship store for the Grand Central

to every platform.

& Company. The main

retail development above the station.

ontractor, Mace, has 12

It will be one of the chain’s largest

prentices working on site.

stores outside London.

ber of lorries kept off the road over the

of the project by using the railway beneath.

60% The proportion of the rainwater harvested from the stainless steel facade to flush all the stations toilets.

Busines s voice | august/september 2014

25

John Lewis | Entrance

THEN

John Lewis | Store

650

1854 – the original New Street station – the in the country – opened to the public.

The number of new jobs created directly

NOW

by the retailer.

John Lewis | Atrium

40 The number of retail

September 2009 – preparatory work

stores that will sit

commenced on site.

alongside John Lewis, as well as 20 cafes and restaurants.

John Lewis | Bullring link bridge

April 2013 – the first half of the new concourse was opened and work switched over to transforming the existing station and develop Grand Central.

26

Busines s voice | august/september 2014

building britain: Birmingham New Street

e largest station

1967 – the first redevelopment took place giving New Street its familiar concrete facade.

Summer 2011 – work to clad the station in its reflective steel facade began.

Mick Miller, senior sponsor for the project from Network Rail, has said this scheme is "one of the most complex construction projects over a live railway in Europe". Platforms have been refurbished one at a time to minimise disruption to travellers.

September 2015 – station to fully open.

As well as Mace and Coleman & Company, other firms involved in the project include Atkins, Cannock Group and NG Bailey.

Busines s voice | august/september 2014

27

The British mean business in the US The UK is the largest foreign investor in the US, supporting jobs across every industry and state. However we want to build on that, not just settle for it. The sixth edition of the CBI’s Sterling Assets report analyses the current scale of the bilateral relationship and explores the potential of a comprehensive transatlantic trade and investment partnership.

28

Busines s voice | august/september 2014

International: The UK-US relationship

T

oday’s international economic environment

language, as well as similar legal systems and cultural

differs vastly from that facing the UK and the

norms, make it easy for Brits and Americans to

US 100 years ago at the start of the First World

work together.

War. But although much may have changed, one thing

UK businesses not only support jobs, but also pay

endures as a lasting legacy of the Great War: the

more on average than the US national norm. The wages

resounding partnership between our two nations.

and benefits of an American worker employed by a

This decade was supposed to mark the start of the

British firm averaged $74,500 in 2011 – significantly

US’s economic pivot towards the East. But as we move

higher than the average $58,000 the same year for US

towards the decade’s mid-point, once again Europe has

private sector workers.

– perhaps surprisingly – taken centre stage when it

And the UK is, of course, a major destination for US

comes to investment and exports. This shift can be seen

goods and services exports; today Britain ranks as the

clearly in the current negotiations for a transatlantic

US’s fifth largest export market for goods and services,

trade and investment partnership between the European

behind Canada, Mexico, China and Japan. It’s the second

Union and the US.

largest market for US exports of services specifically,

At the heart of these trade discussions lies the evervibrant bilateral economic and investment relationship between the UK and the US. Britain is already the largest

and the leading purchaser by far of services sold through US affiliates abroad.

The figures in this year’s CBI Sterling Assets report

foreign investor in the US. As of year-end 2012, the UK

demonstrate that the relationship that exists between

had invested $487bn there, representing 18 per cent of

our two countries is already significant. But at a time

the $2.7trn of total foreign direct investment in the US,

when sustained global economic growth seems tangibly

and substantially higher than that of Japan, the

close, the US represents a growing opportunity for

Netherlands, Canada and France.

British businesses – an opportunity that we hope to work with you to realise over the coming year. n

Fostering innovation British companies are attracted to the US for several

Sarah Knaus is the CBI’s policy and government affairs

reasons. They appreciate the size of the market, a culture

manager in Washington. sarah.knaus@cbi.org.uk

that fosters innovation and risk-taking, the deep capital markets and the pool of talented workers. A common

www.cbi.org.uk/sterlingassets

“”

A common language, as well as similar legal systems and cultural norms, make it easy for Brits and Americans to work together Busines s voice | june/july 2014

29

Adding to the alternatives

30

Busines s voice | august/september 2014

member profile: Fleximize

Peer-to-peer lending and crowdfunding are well known as ways for SMEs to access alternative finance but now there’s another model, whereby the borrower pays a percentage of its revenue to the funder. We talk to revenue-based financing company Fleximize to find out how it works.

A

s bank lending to

transaction is made – although

successful, or it being a bad season,

SMEs continues to

his customers already come from

because you’ll pay at the speed

fall – dropping a further

a broader background than retail.

of your business [performance]. If

£700m in the first quarter of

In the entertainment sector, the

you sell this stuff four months later

this year – alternative finance

model is better known as royalty-

it’s still OK – we don’t topple your

providers are stepping in to fill

based financing. And in the past

business.”

the void. The headlines tend to be

it has also been used in the oil

dominated by peer-to-peer lending

and mining sectors, and for

finance as a third option sitting

and crowdfunding platforms, but

biotechnology and some medical

between equity and debt – offering

meanwhile other financial models

applications in the 2000s when

the flexibility of the first and lower

are breaking through.

venture capital dried up because of

risk than the fixed payments of the

the dot-com bust. “Then someone

second, without diluting ownership.

In January, former Citi banker Max Chmyshuk launched Fleximize,

in the US had the brilliant idea to

offering revenue-based financing

apply the model to small business

to small businesses. Its revenue

financing,” he says.

advance is similar to a loan, with

He adds that the model hasn’t

Chmyshuk sees revenue-based

Fleximize stats

a pre-agreed amount to repay. But

been popular historically because

instead of paying fixed instalments

it’s not the most straightforward

every month, the borrower pays

concept to grasp. But he tries to

January 2014

a percentage of its revenue –

make it simple: “Say, for example,

Employees:

with payments rising or falling

you’re in ecommerce and you want

depending on the company’s

to buy three months’ inventory

performance. Fleximize takes a

from China instead of one, in order

10-15, including developers

fixed percentage as a fee.

to get a discount. If you borrow

Customer base:

a revenue advance instead of a

100+ small businesses

Chmyshuk compares the system to a merchant cash advance,

loan, you’re not so worried about

where retailers repay the advance

the shipment being delayed by

directly through their card

a couple of weeks, or your initial

payment terminals each time a

marketing effort not being so

Founded:

Loan book:

Around £2m

Busines s voice | june/july 2014

31

And he believes it’s more suited to

at. Maybe we’ll never achieve 80

will move. “In the next 24 months,

online businesses, such as those

per cent alternative, but we could

there will probably be a lot of

in ecommerce, which don’t have

definitely grow that share quite

changes,” he says.

many assets to secure traditional

substantially,” he says.

Fleximize has a consumer credit

loans. “They have good cash flows

“There is a perfect storm for this

and good prospects; they just need

business right now. There’s a lot of

Fair Trading, in order to fund sole

that little boost to get them to the

political will to increase financing to

traders. In April, OFT’s regulatory

next level.”

small businesses but, at the same

power was transferred to the new

time, banks are either unwilling or

Financial Conduct Authority (FCA),

Fleximize had handed over funds

unable for whatever reason to fill

alongside that of the Financial

worth almost £2m – from Chmyshuk’s

those gaps.”

Services Authority (FSA), and

In its first six months of operating,

licence, granted by the Office of

lifetime savings as well as from

Nevertheless, the environment is

outside investors – to more than

a challenging one for financial start-

100 businesses. The average loan

ups. It took Chmyshuk six months

“But in my banking life, I was

has settled at between £15,000 and

to set up the platform and get the

an approved FSA individual. I was

£20,000, with the largest at £75,000.

necessary licences. He credits the

always regulated. So, for me, it’s

government’s GrowthAccelerator

nothing new,” he adds. “I see it as

Growth ambitions

programme, run by Grant Thornton,

a positive because there is a void

Although he says this year is about

for its support and its access

in this industry and people can

“taking it one step at a time” to

to mentors and other growing

come from anywhere to fill it. I’d

firmly establish the company and

businesses. And, as well as joining

rather that the industry has some

build the portfolio to around £5m,

the CBI, Fleximize is looking to

regulation to make sure those with

Chmyshuk would like his company

collaborate with others in the

similar offerings are compliant,

to be a £100m business in four or

alternative finance sector, through

ethical and so on.”

five years’ time. He believes this

organisations such as Alternative

goal is achievable, with the rise in

Business Funding and FinTech UK.

acceptance of alternative finance.

“The UK banks still control about

“There is a growing [alternative

Chmyshuk believes the new body is likely to tighten up the regime.

New competitors will enter the space, adds Chmyshuk.

However, he is not only adamant

finance] community,” he says. “And

that Fleximize will comply with

80 per cent of the market. In the

the government is taking steps

“whatever comes our way”, but also

US, it’s reversed – ‘new age finance’

to help us – it’s just a question of

he doesn’t think that the challenges

alternative lenders take around 80

execution. It takes time and effort,

will get in the way of rapid – and

per cent of the market. Obviously

but we hope we’ll all get there.”

perhaps international – growth.

the US is a slightly different beast,

But Chmyshuk is also all too

but it’s a good benchmark to look

32

Busines s voice | august/september 2014

aware that the regulatory goalposts

The company already offers successful applicants the choice

member profile: Fleximize

of taking out a standard “flexiloan”

bank, he says. “Such personal

instead of the revenue advance,

experience in a typical bank is

and Chmyshuk is now looking at

reserved for large corporate clients,

adding other products, including

whereas SMEs are forced to speak

merchant finance and commercial

to the bank via a call centre.”

cash advances.

With the company facing many of

He is also proud of the “relationship

the same challenges as the SMEs

lending” model that Fleximize uses,

it serves, Chmyshuk is enthusiastic

which gives the applicant a single

about supporting their growth. “Our

point of contact throughout the

aim is to find – and fund – as many

process. This makes the company

businesses with growth ambition as

very different from a conventional

possible,” he says. n

Market stats

80% of SME loans

44% of SMEs – up

£840m is

14% the decrease in

are the responsibility of

from 26% six months ago –

expected to be lent by

lending to non-financial

the 10 largest banks – but

are using savings

peer-to-peer lending and

corporate borrowers from

Bank of England figures

or borrowing from

crowdfunding platforms

its pre-crisis peak. (source: Bank of England)

show that bank lending to

friends or family to fund

between them in 2014.

businesses as a whole has

their firms. (source: Bibby

(source: Nesta)

fallen every year

Financial Services)

since 2009.

Busines s voice | june/july 2014

33

Charting business growth & investment around the UK Remploy Employment Services is going private. The government is set to launch a commercial process to create a joint venture between a partner or investor and Remploy, which by March next year is expected to have helped more than 100,000 disabled and disadvantaged people into work since 2010. Esther McVey, minister for employment said: “Remploy has already been successful in helping disabled people into jobs, and the opportunity for new investment will help take it to the next level.” Beth Carruthers,

Pinewood Studios

Remploy chief executive, added:

has been granted planning permission for a scheme that will double the

“The announcement provides us

existing site, adding 100,000 sq m of new facilities, including studios and

with an opportunity to expand and

stages, workshops and production offices. The £200m long-term scheme has

support many more disabled people.

been designed to address increasing global demand for production facilities

Moving out of the public sector

in the UK and deliver growth for the next 15 years. It is expected to create

will give us the freedom to raise

3,100 jobs, produce an additional £149m in gross value added, provide an

funding to operate in a much more

additional £36m a year to the Exchequer and generate an extra £37m in UK

competitive way.”

exports. Ivan Dunleavy, chief executive of Pinewood Shepperton, said: “Our project builds on the success of the government’s policy for the creative industries and addresses the shortage of stage space in the UK.”

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Busines s voice | august/september 2014

cbi members: News in brief

Tyrrells Crisps and Brompton Bikes are just two of Britain’s fastest-growing private companies that made it onto the annual Sunday Times HSBC International Track 200 in July. This year, the 200 companies increased their overseas sales by an average of 36 per cent a year over the past two years, to a total of £8.5bn. Together, they employ more than 191,000 staff, having added more than 34,000 jobs during this time. There are 82 manufacturers on the list, 70 of which make products in the UK. A separate list, the Global Growth 50, by North West Business Insider magazine, included environmental consultancy RSK, which has posted an average of more than 18 per cent growth over the past three years. The company has also just opened an office near Southampton, from which its geosciences team can better service its increasing workload along the south coast in Dorset, Hampshire and Sussex.

Ammeraal Beltech

NG Bailey

has opened a manufacturing

has ranked alongside Jaguar Land Rover, Boots and Fujitsu as one of

facility in China. The plant will

the top employers in the country for its apprenticeship programme in

increase the belting manufacturer’s

AllAboutSchoolLeavers’ Top Employers for School & College Leavers

production capabilities and help

Awards for 2014-15. The awards are based on a survey in which apprentices

it to better serve markets in

rate their experience based on 12 criteria, including work-life balance,

Asia Pacific and the Americas.

opportunities for progression and training. Frank Clayton, group head of

The 20,000m facility is located

learning and development at the engineering, IT and facilities services

in the new Fenhu economic and

business, said: “This is a testament to our long-standing and high-quality

technical development zone, with

training, and to the support that the business offers to our apprentices.”

2

fast connections to Shanghai, Suzhou and Hangzhou. Provisions have been made to enable future

E2v technologies

enhancements so the factory

is set to acquire AnaFocus, a Spanish designer and developer of imaging

can support and drive growth

sensors and vision-systems for the industrial, professional, scientific,

for the Hertford-based firm.

medical and high-end surveillance markets, for up to €34.2m. The firm will

Ammeraal Beltech’s products are

be integrated with the e2v’s high-performance imaging division, which grew

used in industries including food

by 26 per cent last year. e2v technologies’ group chief executive, Steve Blair,

processing, automotive, textiles,

said: “AnaFocus strengthens our position in the market, bringing to e2v a

paper and print, airports, logistics,

successful management team with deep technology capabilities and close

wood and tobacco.

relationships with customers that complement e2v’s relationships.”

Let us know your news at edit@businessvoice.co.uk

Busines s voice | august/september 2014

35

Train for the top The “School for CEOs� programme was launched in 2012 to fill a perceived gap in the executive training market and prepare those destined for the role of chief executive. After running four training cycles and conducting research among established FTSE 100 leaders, founder David Sole tells us what it takes to be an effective boss.

36

Busines s voice | august/september 2014

Member clinic: How to be a CEO

“”

It’s one thing to manage shareholders; but these stakeholders all want a piece of you – they will form an opinion of you and will broadcast that opinion

Q. Some individuals are born leaders, but most are made. So what makes a good candidate for a chief executive?

A. Often, people think the most likely candidate to step into the CEO’s shoes is the chief financial officer. They have distinct advantages – in a listed business, they already have a relationship with the City. But they still need to have had experience of running a profit-and-loss centre, and our research shows there is no single route to the top. The CEOs we talked to were from diverse backgrounds. Some had MBAs, some didn’t. It’s about experience, intellect and, above all, leadership capability.

but these stakeholders all want a piece of you – they will form an opinion of you and will broadcast that opinion.

You have to go out and manage them actively.

Q. Trust in business is obviously a massive issue at the moment. The CEO has, arguably, the most important role in terms of guiding the company culture and external relationships. How can a CEO prepare for that?

A. The CEO needs to have a clear sense of purpose.

Why are they there? Who are they there to serve? What is it that they’re trying to achieve? Ultimately, the shareholders will benefit if they get that right. The CEO’s

Q. What about personality traits?

A. To become a CEO, you’ve really got to want the job.

sense of purpose needs to match that of the organisation,

Some of the people we’ve had on programmes – either thinking about making the move up or having been

Q. What do you think a new CEO should expect of

identified as potential CEO successors – have had a

their first six months in the role?

reality check and realised that the exposure they’d get is not for them.

Q. Another major source of applicants for CEOs is

and it needs to be communicated throughout the company. A lack of such clarity can have a destabilising effect, leaving a rocky road for the CEO to navigate.

A. The moment you park your car, people are going to

be making a judgement on you. They’ll pick up on where you park, the sort of car that you’re driving, what you’re

divisional directors. Why would the step be very

wearing. They will also expect some sort of change from

different for them?

a new leader.

that you have with the City is something you don’t have

too much time and you’re seen as being indecisive;

as a divisional CEO. My business partner, Patrick

jump to conclusions too early and you’re seen as being

Macdonald, came out of running a division at GE to

too impulsive. And how consensual is your decision-

become CEO of John Menzies. And he said that nothing

making? If you’re too collaborative, you can be seen as

– none of his experience at GE, or the knowledge he

prevaricating; if you’re too decisive, you can be seen as

gained with his MBA from [business school] INSEAD

being autocratic. CEOs have to exercise their judgement

– could have prepared him for that particular job.

and it’s fraught with many potential bear pits along

A. In a listed business, the kind of external interaction

The external landscape has also changed massively, in terms of interactions with government and regulators and the media. It’s one thing to manage shareholders;

So the question is: how quickly do you make it? Take

the way.

They can also become consumed by the organisation and forget that actually, they are a mother, a father,

Busines s voice | august/september 2014

37

a husband or a wife. Getting that balance, and retaining a sense of perspective, is important. And if the CEO is going to go home and bath his children and read them a

Q. What do you think companies can be doing to better develop their future leadership?

bedtime story, it sends a positive message to the rest of

A. Many organisations invest a lot in leadership

the organisation as well.

development programmes – for those lower down in the

Q. How important is it to have a mentor, to whom you can talk about some of the decisions you’re making?

A. Lots of people we talked to have had coaching or

mentoring. Everybody also recognised the importance

organisation. When they get to a senior level – those sitting on the board, or just below it – there isn’t as much focus on their development. The organisation assumes that they’ve made it and learnt as much as they’re going to learn. But this isn’t the case.

At this stage, the individual needs to drive their

of building a strong relationship with their chairman –

development, if they have that appetite to continually

they should be the first port of call in a crisis, or when

stretch themselves.

people are unsure about certain things. But equally, you have to appreciate that the chairman of the board can fire you, too. Building a strong relationship with the CFO is as important as building that sort of relationship with the chairman.

Q. Is there value in a CEO taking up a non-executive director position elsewhere?

A. Dealing with the board can be

frustrating for CEOs. Non-executive directors get a snapshot of the organisation roughly once every six weeks or so, and on these occasions they try to ask sensible, challenging or supportive questions.

Meanwhile, the executives are living and breathing it day in and day out. They think they have everything under control, so they don’t understand why the NEDs are asking those questions.

When CEOs go over to the other side of the fence as a NED, it makes them view their own boards through a completely different lens, because they appreciate how different – and, in some respects, how difficult – it is, to ask the sensible questions, when clearly you don’t know the detail. There is a huge amount to learn from being able to sit on both sides of the table, and around 75 per cent of the people that we interviewed had experience of being a NED.

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Busines s voice | august/september 2014

Q. How do those who want to become CEO in the

future improve their chance of getting there?

A. It’s all about how you manage your career. A lot of senior people rely on the organisation operating on the basis of a meritocracy, promoting them if they do a good job. That works, up to a point. But there comes a time when you have to be more systematic about how you approach your career and the sort of jobs you want to do. You have to think about putting yourself in a different and challenging environment, so you can demonstrate you’ve got great learning agility, and can get up the performance curve quickly.

International experience has become important –

particularly in environments, that are either linguistically or culturally challenging. If you’ve learnt how business works in somewhere you’re unfamiliar with, and you can be successful in those environments, it’s a good indicator that you’re capable of taking on the top job.

And sometimes you have to accept that it’s OK to take a sideways step before taking the next step upwards – and that it’s always good to think about what job might follow your immediate move. n

www.schoolforceos.com

AnnuAl conference Grosvenor house, london 10 november 2014

Only business can drive the economic recovery, creating the growth, jobs and opportunities that will help deliver higher living standards for all.

And we need politicians of all parties to help create the framework and set a tone which enables businesses to innovate and create the prosperity we all want to see.

Join the debate with business peers and political leaders and ensure your business is on the inside track.

For booking information visit: cbi.org.uk/ac14

Upcoming events

Growth for all

Back to school

The UK’s economy has become more stable and recovery is advancing but with the general election less than a year away, political uncertainty must not jeopardise this process. This year’s CBI Annual Conference, to be held on Monday 10 November, will highlight how politicians of all parties need to ensure their policies enable businesses to innovate and create the shared prosperity that we all want to see. Leading business and political speakers will debate the UK’s most pressing challenges and share their ideas for future success, ensuring your business has the inside track.

The CBI’s conference on leadership in education will be held on Tuesday 9 September in London. Chaired

by Greg Hurst, education editor at The Times, the morning event will look at what business and schools can learn from one another; discuss further reforms to the inspection and accountability frameworks that will foster great schools; and highlight innovative examples from major businesses on how engagement can support current and future leaders.

Sharing experiences About 15 per cent of the workforce in Northern Ireland is employed by medium-sized businesses (MSBs), which generate 30 per cent of private sector revenue. On 9-10 October, CBI Northern Ireland is hosting a 24-hour MSB Conference in partnership with the Bank of Ireland. Local chief executives and “rising stars” within the civil service will share their experiences, lessons and perspectives in a range of interactive sessions, focusing on the future economy, leadership and talent development, and growth strategies.

Manufacturing our future

Action on cyber security

Guest speakers from JCB, Toyota, Mondelez, Jaguar

Cyber security is an increasingly high-profile issue

Land Rover, Coventry University and AgustaWestland

and now, more than ever, a breach to your business not

will be taking to the stage at a manufacturing conference

only poses a major financial, intellectual property, and

held at JCB headquarters in Staffordshire. The event, to

data privacy risk but also affects your brand reputation

be held on 9 October and sponsored by BDO, will focus

and customer trust. While awareness is increasing,

on solutions for success. Topics include the importance

there is a continued disconnect between awareness and

of strengthening the UK supply chains; driving

action. CBI London is hosting a panel discussion and

innovation in manufacturing; and the skills shortage.

interactive question-and-answer session on this topic at its autumn lunch.

For more information, go to www.cbi.org.uk/events

40

Busines s voice | august/september 2014

cbi diary: August/September 2014 regional events

Yorkshire & Humber Annual dinner with television producer John Lloyd Date: Wednesday 8 October Venue: University of Leeds Contact: angela.gault@cbi.org.uk

scotland Westminster Parliamentary Reception Date: Tuesday 28 October Venue: Scotland Office, Whitehall, London Contact: colette.cunningham@cbi.org.uk

East of England Annual dinner with CBI president Sir Mike Rake Date: Wednesday 1 October Venue: Duxford AirSpace, Cambridge Contact: anne.cullom@cbi.org.uk

northern Ireland Global Role breakfast briefing with Northern Ireland’s new MEPs Date: Friday 5 September Venue: Belfast Met, Titanic Quarter Campus Senior executives networking dinner Date: Monday 15 September Venue: Ulster Bank headquarters, Belfast Annual lunch Date: Thursday 25 September Venue: Titanic Belfast 24hr MSB Conference in partnership with Bank of Ireland Date: Thursday 9 & Friday 10 October Venue: Slieve Donard Spa & Hotel, Newcastle, Co. Down Contact: anthea.savage@cbi.org.uk

north east

East Midlands Annual dinner Date: Thursday 16 October Venue: Athena, Leicester Contact: anne.cullom@cbi.org.uk

West Midlands What the new European Parliament means for business Date: Friday 5 September Venue: Warwickshire College, Leamington Spa Contact: julia.fox@cbi.org.uk Manufacturing our future – solutions for success Date: Thursday 9 October Venue: JCB, Rocester, Staffs Contact: anne.cullom@cbi.org.uk

thames valley

Annual dinner with Andy Palmer, Nissan Motor Corporation Date: Wednesday 1 October Venue: Hilton, Newcastle

Annual dinner with Vivian Hunt, McKinsey and Company, and MP for Beaconsfield Dominic Grieve Date: Thursday 2 October Venue: Hilton Hotel, Reading

Contact: angela.gault@cbi.org.uk

Contact: rebecca.clark@cbi.org.uk

Busines s voice | august/september 2014

41

CBI london autumn lunCh 7 October 2014

Central London

Join over 150 senior business professionals from the London region for an exclusive networking lunch.

Make new contacts, entertain your clients and hear a topical panel discussion on cyber security – a key issue for London businesses.

More information or to book your place: www.cbi.org.uk/london-autumn-lunch

Strategic partner

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Editorial and production 020 7045 7585 edit@businessvoice.co.uk

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Contact the CBI 020 7379 7400 www.cbi.org.uk

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