On Thursday 15 October the Bettany Centre hosted the half-day Owning the Winter Conference. Around 80 virtual attendees – mostly business founders and owners – joined fifteen experts and leaders in their field to trade insights and experience in this latest instalment of Cranfield’s Covid Response Programme.
The underlying message was that, while times are tough and will remain so for some while to come, there are grounds for optimism. Business founders and their teams enjoy advantages of agility and a great capacity for adaptation. These will prove major assets in the approaching winter.
Leading the conversation was our first Keynote Speaker, Cranfield Professor of Global Economy, Joe Nellis. He started by giving us reasons to be cheerful. While the UK economy has been plunged into its deepest recession since the 1930s, it has grown in all three quarters of 2020, defying predictions. Government intervention has been a major factor in supporting that bounce-back, supported by consumer spending and a revival in the housing sector. We still face major challenges in the shape of rising unemployment, under-investment and closing a deal with the EU, but in the medium term there is good reason to think that the economy will resume a pattern of steady growth. Although government borrowing is at a record high, the fact that a large proportion of the debt is held by overseas investors demonstrates international confidence in the UK to weather the Covid storm.
There was further good reason for qualified optimism: the export of goods and services outside the EU – already the lion’s share of our exports – has grown by 9.3% during 2019-20. Thom Webb and Alan Pain from the Department for International Trade (DIT) continued this theme. In this period UK exports hit almost £700 bn, of which nearly £400 bn was to non-EU member states. UK businesses do not always appreciate how highly valued our goods and services are to overseas buyers. British quality and innovation are at a premium and the role of the DIT is to support exporters through their extensive network of advisers and sector experts. That assistance translates also into money: in the last five years the DIT has provided £14 bn of support for exporters, much of it through UK Export Finance. The portal to this wide range of services is great.gov.uk.
So much, and so encouraging, for the macro picture. Much of the conference was devoted to the practical actions which business founders can take to improve today’s business, and to create a better business for tomorrow. Our second Keynote Speaker, Caroline Southgate, is a BGP alumna and owner of Doris Jones Ltd. Throughout the pandemic she and her team have overseen some 40,000 home visits to the vulnerable elderly, without a single Covid incident resulting. Her central theme was the importance of leadership as the business owner. The onset of Covid created huge uncertainty for her business and she described the way in which she created a “virtual umbrella” to shelter her staff. A contingency plan already existed in the form of the “Snowplan”, the company’s response to severe winter conditions. At the operational level her staff knew what to do and Caroline focused on the wellbeing of her employees and the wider concerns of their families. She created a video to explain to the families concerned exactly how Doris Jones was protecting their loved ones from the risk of infection. She also spoke about a mentoring scheme provided by the British Army for senior leaders in the care industry. Her mentor helped her to carry out scenario planning and create procedures to cover the worst case. As a result she restructured her staff into teams, each with a very clear focus, and formed buddy groups to provide mutual support and regular check-ins. For the worst eventualities Standard Operating Procedures were created, so that everyone was fully prepared for both the expected and the unexpected.
Simon Hammett of Simon Hammett Consulting picked up the topic of leadership from the perspective of a board adviser, leadership coach and organisational psychologist. His theme was agility and the competitive advantage this conveyed on businesses that were able to adapt to rapidly changing circumstances.
The principles of agility are:
- Small, cross-functional and self-directing teams, with team roles defined by competency and expertise
- Structured team processes including monthly sprints, timeboxed daily “scrums”, and sprint retrospectives aimed at continuous improvement
- Short cycles of product development guided by high levels of customer collaboration and regular feedback
- Transparency and accountability, with critical issues resolved at the team level
Ironically, much of this disciplined approach has been purposely introduced in large organisations to recreate the flexibility and adaptability that come naturally to many smaller independent businesses.
How to build a more engaged workforce was addressed by Richard White, Founder and CEO of Incentivesmart. He demolished a number of myths about motivation, chiefly that it’s all about the money. People seek recognition and purpose in their work and the job of the founder is to provide the environment in which their staff can flourish. That means striking a balance between challenge and support. He advised founders to spend 10 – 15 minutes each week on recognition, to thank employees for their contribution. But the recognition must be real, and the employee must feel the praise is genuine and not just said for the sake of it.
That fits well with the results of our joint research from Cranfield and Warwick; this study shows that staff expect five key things from their firm’s leadership:
Staff who are engaged and aligned with your organisation’s values and purpose are also more likely to be your advocates. This was a point emphasised by Dan Gerrella, Associate Director of Liz Male Consulting, who specialises in Crisis and Reputation Management. If business founders are alert, many issues can be foreseen and prevented from developing into full-blow crises. In the modern world there is no hiding place from media scrutiny and firms that are faced with adverse publicity are best advised to acknowledge the issue and to propose practical solutions for tackling it. Reputational damage will be caused if the organisation handles it badly, and it can take years to recover that trust. Those with a stake in the business will expect the management to supply leadership and to take responsibility for the welfare and safety of those they employ.
The challenge of employee engagement has been made all the more difficult by the move to working from home. Natalie Ellis and Nicky Buckley spoke as representatives of the CIPD (Chartered Institute of Personnel & Development) and gave some fascinating insights into employee relations now and in the future.
Natalie focused on the central question of “How can we keep people happy right now, when they are working from home?” A company’s culture isn’t all about business. Founders need to find ways to recreate the conversations around the water-cooler, hosting regular team meeting and even virtual lunches where people can exchange experience and bounce ideas off each other.
Nicky looked to a world after Covid and to the employee talent that will grow your business. Although unemployment levels will rise and new people will come onto the market, she advised business owners to look first to the development of their own workforce. The Cranfield view has always been the best people to attract and retain are those who are looking for a career, not just a job, and it us up to us as leaders and managers to create those opportunities through workforce planning. Now is a great time to review the skills and competencies that are needed for the business of tomorrow.
Two of the most important sets of skills and competencies are likely to be in procurement and the wider supply chain. Mike Lander, Founder of Piscari, has spent many years in procurement, initially in the buying function of large businesses and latterly as adviser to suppliers dealing with procurement professionals. He was also keen to bust a few myths. The buyers that independent business owners often have to deal with are not focused solely on price. They will also consider five other factors: savings, innovation, quality, reliability and sustainability. Depending on the individual contract, each factor is weighted differently and if a supplier is able to demonstrate their capability and track record in these areas this will provide a competitive edge that pushes back on price pressures. That said, business owners can expect tough conversations with corporate buyers in the foreseeable future. Best to form relationships with buyers early and to assemble the data that will put you on the short list.
The most pressing issue for exporters is the UK’s final departure from the EU at the end of this year, and how best to prepare in the face of uncertainty. While this is not directly affecting all SMEs it probably is impacting their suppliers, their customers or both. Professor Emel Aktas from Cranfield’s Centre for Logistics, Procurement and Supply Chain Management shared the findings of her recent research into such preparations, comparing the actions of smaller businesses with larger firms. She and colleagues focused on the pharmaceutical industry. Professor Aktas’s contribution emphasised the importance of the difference between situations of uncertainty, where all possibilities are equally likely, and situations where probabilities can be assigned to different outcomes. As we get closer to departure, we should transition from uncertainty into a scenario where risks can be identified and quantified.
Unsurprisingly, a number of different approaches emerged from the study, conducted over two years from mid 2017 to mid 2019. You might expect differences between small firms, which have fewer resources and less slack, and their larger peers. At the start of the study the small firms tended to carry on with business as usual. Even as the date of exit drew closer, they only changed their strategy to “wait and see”. The larger firms, on the other hand pursued strategies ranging from “wait and see” to proactive and reactive approaches as time wore on: one company reported that £50 million was set aside for EU exit contingences in the event of no deal. Out of her research Professor Aktas has produced an analytical framework mapping firms’ intentions towards EU exit which will certainly interest independent businesses that service large clients.
Sales, Marketing and Customer Behaviour were also widely covered as it is the No 1 challenge for businesses at the moment. Contributors included Howard Flint of HG Solutions, Kevin Yuen of Spotless Interactive and Adam Gray of DLA ignite.
In a challenging market, Howard argued, to accelerate growth businesses need to look to three guiding principles:
- First, solve customers’ problems – and ideally critical problems - rather than push products at them. You are likely to have more satisfied customers, better margins and improved retention and upselling opportunities.
- Second, be highly selective in the market you target – possibly a niche within a niche, where you can really differentiate yourself. It’s better to be a big fish in a small pond than vice versa.
- Third, be the experts, which is again something we have stressed over the years at Cranfield. Use all means at your disposal to demonstrate your authority in your field, publicise this through low-cost channels such as social media, and get ready for enquiries.
Kevin Yuen is an expert in human-centred design and using insights into customer behaviour to design a company’s services. He walked us through a fascinating case study of what is involved in the customer journey of purchasing an electric vehicle.
When buying an “old-fashioned” petrol car, people are confident they know how to evaluate the features. But how do you make this buying decision during times of uncertainty – in this case, not knowing how to evaluate the features of an electric vehicle. Can I leave my children in the car alone, or are the batteries a risk? What happens if I run out of “fuel” on the motorway?
An important insight Kevin was able to provide was that customer behaviour affects a buying decision much more than the standard demographic customer segmentation. Whereas two people might be of the same sex, age and have similar disposable incomes, their buying journey is very much dependent on their behaviour and internal values.
When you are seeking to encourage people to make decisions during uncertainty, you have to provide them with insights that allow them to feel more certain. Kevin spoke about creating a “Myth Busting” page on your website and then training your workforce to be able to give the customer greater certainty. While you might not be an electric car manufacturer, the same concepts hold true during the current uncertainty resulting from Covid. The message is clear: help your customers find certainty why they need your product and services.
Adam's tour of the digital world was no less impressive. Within the 60 seconds of an “Internet minute” there are literally millions of interactions and transactions: 190 million emails alone are sent and received. Yet despite all the billions of pounds spent annually on web-based marketing, levels of response and engagement are frighteningly low. Even on Google, the world’s most popular search engine, response rates to advertising are less than 2%. On the other hand, if used effectively digital sales and marketing can be a powerful tool for raising awareness and achieving influence. The average Linkedin member has 900 contacts. Multiply each of those by 900, and pretty soon you have a potential reach of over one million contacts. But very few users approach such networks with the same degree of professionalism as they would, say, their advertising. The clear message from Adam’s session was to clarify your social marketing strategy and update your and your company’s profile immediately!
Space has compelled us to feature only a selection of the nuggets of wisdom that delegates to Owning the Winter took away with them. Among the many pieces of feedback we received was this: “In every session, I wrote down something I’m going to do, which is unusual for a conference.” As organisers, we were delighted. Many others expressed the same intentions, to put what they had learned into action.
Recent articles in the media suggest that we are not alone in seeing a silver lining in the clouds overhead. Data from Companies House show that between April and June this year 162,479 businesses were registered, more than three times the average number of start-ups within this period over the preceding decade. Just this week research from Direct Line indicates that nearly one in five Britons (19 percent) has either started a business since March or is actively planning to do so. And in the US government figures recently released show that the highest number of people EVER are seriously planning to start a business.
There are a number of things that will get us through the current crisis. We believe that the support of your peers who face similar challenges as owners, managers and leaders, is among the most important. For a better and brighter future, stay part of our vibrant Cranfield peer-to-peer network!
Get in touch with us if you have questions, comments and want to know more about our offering for SMEs.
Our huge thanks to our Owning the Winter contributors for sharing their insights and wisdom.