The Future of Business Support

Well for the last blog of the year it is traditionally a time to look backwards and forwards at the same time. This usually just results in a cricked neck but today thanks to the wonders of the interweb we can do both simultaneously. Today’s subject is business support and lets start by getting the bad news out of the way.

Business Link the government supported advice and information service is to close by the end of Nov 2011. The broad brush of the decision can be found here along with an interesting set of comments which sum up rather well the issues and problems that Business Link faced over its lifetime. The main points that come out are.

  1. Business Link was constrained in terms of the balance between information and advice that it delivered
  2. There was an inconsistency in terms of delivery especially in the advisory network where the individual advisor could make all the difference.
  3. Poor marketing and awareness of the service in general
  4. A constant tension between the paid consultancy market and a free service provider
  5. A complete failure of the government to understand what the SME market actually wants and (more importantly) what it needs in terms of business support. 

This last is a critical point as the difference between what the market says it wants (money less red tape etc.) and what (in my experience) it needs (practical advice on how to run and develop a company) underpins the long term failure of the public business support landscape.

So at a time when the number of newly redundant skilled individuals is going to outnumber the number of shelf stacking jobs at Tesco’s and force more people than ever before into starting up their own business’s   how and why did the government decide to dismantle almost all elements of publically funded business support rather than reform and re-target the existing infrastructure?

Well folks look no further than this the so called Richard’s Report which seems to have found complete favour at BIS and with the likes of Mark Prisk. You can find various summaries of the report online but to my mind it is largely based around the points listed previously.

However all of this discussion misses the fundamental point which is “being good at something does not mean you have a good business” and “the art of running a successful business is almost wholly independent from the product or service you are providing” These are both phrases that I use with almost every client. It encapsulates the basic failure of many business owners to understand why they are/are not successful and why publicly funded business support has largely failed because it is unable to do this for fear of upsetting the private sector.

The sad fact is that most businesses will never ask for advice because they are unaware that they need it and even if they are aware then they will almost always be unable/unwilling to pay for it.

If we want to trade our way out of recession the success and the growth of small companies is vital and the way to ensure that is to be more not less interventionist in the way we support them and what we support them with. Almost the exact opposite of what the Government is planning…

I shall return to this again. In the meantime enjoy what remains of the holiday and I wish you all the very best of luck on the forthcoming year – I fear we are all going to need it!

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Comments from abroad (and other people)

Over the last two weeks I have been soliciting opinions on my travels about the basic thrust of this blog – partly out of vanity partly out of desperate attempts to big myself up as an “industry commenter” but also (genuinely) to see if people agree.

The following quotes are based on discussions I had with the co-owner of one of Cambridge’s fastest growing companies a senior analyst at RBS and a senior IT consultant currently working for one of the UK’s largest companies.

“Cambridge is so self-satisfied and smug “

“Overblown air of self importance..appalling intelectual snobs who value intellect over application and don’t understand business process”

“I refuse to work there now”

“No VC firm is interested in long-term company development and it could be argued that they want to see some of the firms they back fail to maintain the exclusivity and price of those few that do succeed”

“The banks are no good as a resource for developing companies – they can’t even manage their own affairs”

” They just don’t get the fact that being clever is not the same as building a business”

All in all there was universal appreciation that Cambridge has been relatively unsuccessful based on the availability of ideas and money. Opinion was divided on as to whether it was the attitude of the banks/VC market that was to blame or the people starting the businesses themselves with their lack of self-awareness and understanding of business process. What was also interesting was that when I suggested my solution to this problem – yes I know i haven’t outlined it here yet – there was universal agreement, but at the same time a strong opinion that the idea would not be accepted by the companies/individuals and was outside the terms of reference that the finanace industry sets for itself. So must be a rubbish idea then (I hear you cry). Well if you accept the current staus quo then possibly yes. But if you are prepared to look at the issue objectively and ask “under what circumstances can we ensure that we capitalise on the availability of ideas and ensure that we create sucessful fast growing companies providing employment for a wide range of staff” then you might well come up with a different scenario. Using the Kirton “adaptor/innovator approach perhaps now is a time not to repair the system but to come up with a new system altogether……

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Cambridge to save the UK ecomomy

Well hallelujah  praise the lord and pass the ammunition! Cambridge – predictably enough – is to be the site of the first of the UK governments technology innovation centres. Details of the plans can be found here and it will be one of a series of “Maxwell” centres around the UK. Herman Hauser one of the inner circle of the Cambridge Technorati is behind it and it seems churlish to criticise in anyway what will undoubtedly be an important centre. However if it follows the previous models of Cambridge innovation then it will be big on ideas but woefully short on success. In short, unless there is something different in the detail on the way the resultant start up companies will be run and managed, once again we will see a few individuals become wealthy and the ideas that could have become large locally based companies will, instead, become absorbed and developed by other companies in other countries….c’est la vie.

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Cambridge – not as clever as it thinks it is

But it is I hear you cry. Silicon Fen is one of the most successful business stories the UK’s recent industrial past. To criticise Cambridge is tantamount to claiming that Michael McIntyre is funny ….I know unbelievable. However compared with its US namesake Silicon Valley  any claims of success must be taken with a large pinch of salt.

To put it bluntly even allowing for the fact that Silicon Valley has been going longer the Fen has been an abject failure in comparison. Yes in its own terms of generating significant individual wealth and in terms of start up activity one could argue that it is successful. But that is the point, to judge it successful one has to ignore other places with access to similar intellectual capital. Money has not been the issue, a recent report highlighted the availability of Angel and VC funding in the area and there have been notable successes. ARM , Autonomy and Cambridge Consultants are all world class companies and innovation centres like St Johns have international reputations.

But having spent the last four years talking to and advising companies in the hi and biotech sectors something is missing. The developmental track record is poor, the number of companies that last prosper and develop in the Cambridge area is disappointing. A recent County  Council  report provided the depressing statistic that in Cambridgeshire as a whole 96% of all businesses employ less than 50 people and 83% less than 10. In Cambridge itself it is woefully similar with 94% less than 50 and 76% less than 10. So as an engine for both local and national GDP growth generation the “Cambridge Effect” is a bit of a myth and any objective assessment of why it’s not working is obscured by the hype and froth and level of heavily trumpeted start ups who then largely fail to deliver in terms of wider economic growth and employment.

Why is this? What is going wrong? And what can be done to put it right? Well just stay tuned folks as we try to un pick the issues and factors that play a part and suggest some alternative models for business development that are relevant not just to Cambridge but to local and national economies anywhere.

See you out there.

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Key Themes and Topics

Ok, so at this point I need to outline some of the key issues that I will talk/expand/elaborate/go on ad nauseam about during the course of this blog.

The aim is not to dispense sage words and bona fide truisms but rather to outline and illustrate areas that have, to me, become self-evident when dealing with organisations and their leaders. Examples (anonymous) from my time as an advisor will be used to validate my point of view and any contrary opinions will be summarily dismissed :)

So what are the burning issues? Ladies and gentlemen drum roll please……..

1. Cambridge is not as successful as it thinks it is and has been no way as successful as it should have been.

2. The level of self-awareness of many of the Technorati involved in the innovation market is breathtakingly rubbish.

3.The funding and support models for young companies is woefully inadequate in preparing those companies for growth and development  (please note this has nothing to do with the availability of money)

4.in general the UK’s entrepreneur’s attitude to business development sucks big time compared to his/her’s US compadre.

If all this sounds a bit negative and/or contentious then so be it. The time has come to state where when how and why the emperor has no clothes and that lots of activity in the start-up market should not be confused with success.

Subsequent postings will focus and develop these areas and also (should I be accused of being negative) potential solutions to these issues.

See you out there

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Hello world!

Welcome to Lighthouseindesert. The title of the blog refers to a phrase I often find myself using when trying to explain the nature of businesses and in particular the business owners and leaders I encounter as a consultant in and around Cambridge the so-called entrepreneurial capital of the UK  and home of “Silicon Fen”. It is based on a comment I heard many years ago about a colleague who was described as “like a lighthouse in the desert – brilliant but useless”.

Why use it for the blog? Well having advised consulted and mentored hundreds of companies over the last four years I have come to the conclusion that Cambridge isn’t quite as clever as it thinks it is and as an example of a “growth hub” that the current government thinks is going to herald a rebirth of British industry it still has a lot to learn in terms of the key issues that enable young companies to grow and develop into large organisations that contribute significantly to both the regional and national GDP.

Future posts will deal with specific areas and individual examples and at no time will the I let the facts get in the way of a good rant. Please feel free to comment  – the more debate the better because at the moment I see too much self-satisfied smugness when looking at the local economy, The amount of intellectual property and ability that has been squandered over the last 30 years compared to Silicon Valley is nothing short of scandalous – and nobody seems to want to do anything about it!

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