I had a very interesting day last week with the tech sector conference during the day and a non-exec directors event in the evening.
The content overall was celebrating the most successful privately owned (usually by management and/or private equity) companies in the UK tech sector. Across keynotes and panel discussions, topics such as reasons for success, competing against larger firms and building great business were covered. Over two blogs, I’ll cover the two areas that most resonated with me.
The People/Business Development Challenge
The first area is the challenge of recruiting and the importance of great advisors. There was, unsurprisingly, broad consensus across all areas of tech and all sizes of business (it was mainly SME and mid-market players) that recruiting, developing and retaining people is their biggest challenge.
What was particularly interesting was that so many of the folks on stage had similar experiences and made similar mistakes. Namely, they’d spent big money on hiring in people with long job titles from large corporates, thinking this was what they needed to take their business to the next level. This makes sense (heck, I’ve done it too!) but with the power of hindsight, it’s easy to see where this could go wrong (not always, of course). And when it failed, it was expensive, embarrassing and time-wasting.
I started life at a global corporate in tech and it’s a totally different world. When you move into a smaller, more regional player, a recent start-up or a scale-up, there’s no real similarity. It’s suddenly more dynamic, faster moving, more chaotic (especially with M&A involved), less formal in structure, and requires a willingness to move outside of your job description and wade in with the team. Jobs are broad and shallow, everybody is multi-tasking in a variety of roles. Contrast this with the corporate: defined job descriptions, specialist departments/people, deep but narrow roles, little room for idea generation, etc.
Where do Advisors Fit?
Across multiple companies on the conference stage, the consensus for how to avoid this was also the same, and it was threefold and linked:
- Promote from within if at all possible
- Recruit younger talent and develop it
- Bring in advisors/NEDs to help too
The last of these is key to the first two and was echoed, almost verbatim, at the non-exec event in the evening. In summary, here was the rationale for bringing in part-time help (doesn’t matter whether it’s an advisor, a consultant, a mentor or a NED, the job is broadly the same):
- An expert third-party is emotionally detached from your business and won’t try to run it
- Existing management/founders might not have the skills to develop your people
- You need “big hitter” expertise but you don’t want to pay a six-figure salary and/or there’s not a meaty full-time job there anyway
- Starting new functions needs specialist expertise but, again, not necessarily full-time
- Existing employees, especially your “HiPer/HiPo” people, will be threatened by a senior FTE coming in above them but not with a retained advisor or hands-on NED helping out
- It shows a level of maturation to potential investors and others – you know you need new and different types of help and are able to acknowledge that
There are more examples than those, but it’s a decent summary. It really resonated with me and our experiences at Sunfish. Whether we are doing strategic advisory/M&A or doing agency-side GTM execution, it’s the same story – we are independent experts, not emotionally invested but fully committed and engaged, and able to provide guidance, advice and insights that a full-time employee, even C- or D-level, cannot, as we are partly inside and partly outside-looking-in.
The other advantage of bringing in either retained advisors/consultants or adding non-exec firepower to your board is that we don’t just bring our old “day job” expertise. In 1.5 years of running Sunfish, we’ve worked with a dozen companies on either chunky projects or on an ongoing basis, all in some form of scale-up tech sector, and we’ve learned something new from each of them.
Where could you use advisors?
Here are two examples of a typical scenario. The first example is common to several of our clients: they’re looking to start an in-house marketing function. Three typical problems here. Firstly, nobody in the current management team understands marketing. Secondly, they need an expert, but a director-level marketer will expect a team, a budget, and people to be doing the “grunt work” that’s below their pay grade. Thirdly, the more junior/inexperienced potential hires haven’t got the gravitas or budget management skills needed. Most people try to solve this dichotomy by hiring a “tweener” – somebody with years of experience but still willing to roll up their sleeves and do the spadework too.
This fails for several reasons. It doesn’t solve the first problem – management/owners still don’t know if they’re doing the right things. Those hires often leave once they’ve used you as a stepping stone to somewhere else. You still need a high agency spend as one person can’t do it all. An alternative is to hire the more inexperienced person who can grow into the role and bring in a “virtual CMO” to work with the senior team on more strategic matters, oversee the department and work on mentoring and developing the growing marketing team.
A second example is more broad. We have high-growth clients facing all manner of scale-up challenges. The need for new structure, more mature processes, uprated systems, embarking on acquisition trails, developing their go-to-market sophistication, and so on. Most people don’t have the luxury of hiring three senior and expensive FTEs to come in and sit above their existing manager layer (who’d all be grumpy about it anyway). But bringing in advisor/NED people, who’ve got the scars, who’ve been through the growing pains, who’ve enjoyed the successes and dealt with the pain of the stuff that doesn’t work, can provide the best of both worlds.
So whether it’s a step-change in your business or some tactical improvements, if it’s bringing in a new department or adding firepower to an existing one, or if you’re looking at investment-fuelled growth either organically or inorganically, why not consider bringing in some independent advisors to help you navigate the journey?