All posts by Althea Taylor-Salmon

From MBA to DNA

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Chris Martin is Chief Executive of Sciona, a company at the cutting edge of business innovation and the revolution in genetics.

Chris Martin is a highly qualified chemical engineer. His MBA demystified the workings of corporate finance and enabled him to pursue his ambitions for commercialising technology. Chris, who started his career as a chemical engineer, has harnessed the knowledge he gained from an MBA at leading Swiss business school IMD (formerly IMI) to combine his natural commercial flair with his scientific know-how.

His sector is one of the freshest business areas to have opened up in the last decade – taking technology developed in academic institutions to mainstream markets.

Sciona, the latest in a string of spin-out ventures Chris has presided over, is leading the push to bring the benefits of major breakthroughs in mapping the human genome, to consumers.

His company offers a service to customers that reveals if they are genetically predisposed to illnesses affected by lifestyle factors like stress, diet and exercise. It offers consumers the opportunity to tailor their lifestyles to ensure prolonged health and well-being. Customers simply take a swab from inside their mouth that is then analysed by the company’s expert team of leading scientists to produce each individual’s unique genetic make-up. Combined with a brief lifestyle questionnaire, Sciona can advise its customers how best to make lifestyle changes to enhance their well-being.

Chris’ career started with a degree in Chemical Engineering at Aston University. He followed it with a DPhil in Engineering Science at Oxford University. It was during 18 months of post-doctoral work at the University and the Atomic Energy Research Establishment that he first started to develop his commercial instincts, starting a computer software company with his flatmates. Chris recalls, “I got a real taste for the commercial world and realised I enjoyed that side of the industry as much as the technical elements.”

He joined a small consultancy working in the offshore oil industry that then diversified into the pharmaceutical sector and other process engineering industries. “I took a diploma in management studies to try to understand more about business. From my work I thought I could see situations where large companies were making poor technology investment decisions.”

His interest in this subject grew and in 1988 he applied to Sainsbury Management Fellows for a place on the International MBA programme, opting for a one-year course at the leading Swiss business school IMI, now IMD.

Chris says, “Mine was a classic MBA, very strong on international finance and organisational development. The key thing was that the course demystified a lot of aspects of business. One of the biggest advantages my MBA gave me was a thorough understanding of corporate finance.”

After completing the course Chris used his new skills to tackle the trend of poor technology decision-making he had spotted over the previous years. He and a partner set up the consultancy as part of Marex in late 1989.

Early success, including a series of contracts from Courtaulds, was followed by Chris leading a management buy-out of the consultancy to form Paras Ltd. Growth over the ensuing years created a team of 40 professionals at offices in the UK, Holland and South Africa.

In the early 1990s Chris’ attention turned to the growing trend of companies formed around technologies from leading universities and industrial research. He joined a fellow engineer to set up an early stage feed capital company after recognising that embryonic companies founded on campus research required expert outside help.

Chris and a growing number of expert colleagues created a string of successful technology companies including Solcom, which develops web-enabled systems monitoring and management systems, Despatch Box, a data encryption and security company, and SpiroGen, a biotech spin-out developing the technology to stop cancer cells replicating by binding specific DNA strands.

But it was Sciona and its potential for putting a truly groundbreaking health product in the hands of ordinary people that really fired Chris’ imagination. “It’s a really fascinating area to be working in, with some tremendously talented people.

“I’ve never been a traditional chemical engineer but the scientific foundation combined with the skills and knowledge I gained through my MBA have enabled me to take my career forward in challenging and, I hope, innovative ways.”

He concludes, “Every day I see that there is a significant change in the UK climate for entrepreneurial innovation. There are now a lot of well-educated, ambitious young people using their technical education to launch themselves into business. When the SMF scheme started, this was almost unheard of.”

Case studies correct at the time of publication.  SMFs may have moved to new posts since publication.  For the latest career information on our Fellows visit our SMF Profile Page.

Hard Hats Give Engineers a Bad Image

Following-like-sheep counting hard hats May 2013
Sainsbury Management Fellows has launched its 2015 Hard Hat Index which shows that the engineering sector is still firmly wedded to using hard hat images to promote engineers and engineering jobs. SMF believes that the association with hard hats conjures up the wrong image and this misleading image is one of the key factors preventing young people from choosing engineering careers and parents discouraging engineering as a career choice. This contributes to the huge shortfall of engineers in the UK.

The 2015 SMF Hard Hat Index recorded a total of 257 hard hat images depicting engineering in advertising and editorials in selected engineering publications. Compared to 2013, this is a 39% increase in the total number of hard hat images used to promote engineering.

Sainsbury Management Fellows 2015 Hard Hat Index Trade Media Monitoring ChartsHowever, there are tentative signs of a breakthrough on the advertising front. There were 107 such images in adverts compared to 150 in articles. But things are not looking promising on the editorial front. Comparing the 2013 report to the latest Index, there has been a staggering 123% increase in the use of hard hats in editorial, compared with a 9.32% decrease in adverts. The latter may be an indication that companies are starting to use more inspiring and thought-provoking images in their advertising campaigns.

A YouGov survey conducted for SMF when it launched the Hard Hat Service back in 2012 revealed that just 19% of people polled think of engineers having exciting careers and only 36% see them as people who change our lives, even though they are the heart of innovation across all industries.

Although the SMF Hard Hat Index is a whimsical study akin to the Economist’s Big Max Index, it allows SMF to raise awareness of the problem of the visual representation of engineers is the media.

SMF President David Falzani said, “Engineers change every aspect of our lives, from medicine to social media. Yet, the hard hat has become synonymous with engineering jobs, limiting the perception of our diverse profession. This has a real impact on young people choosing not to go into engineering and employers’ ability to recruit engineering graduates who don’t relate to hard hat jobs.

The Hard Hat Index helps to stimulate discussion and we have seen a higher profile debate on the engineering brand in the media. Recently Professor Dame Ann Dowling,  President, Royal Academy of Engineering, stated in a BBC Radio 4 interview that when you Google the word engineer, many hard hat images appear and we need a change.”

We will continue to highlight the unhelpfulness of using hard hats to brand engineers to continue to raise awareness of the problem and hopefully change. The fall in the use of hard hats in adverts is a start but we have a long way to go.”

Embracing, not Evading, Innovation in Clean Technology

sam-cockerillOver-used, over-hyped, misunderstood, and much maligned – the word ‘innovation’ often gets a bit of a rough ride in the media. Part of the problem is that the word’s literal meaning ‘to bring in a new idea’ is very broad, and depends very much on the context into which a new idea is brought. The conceptual novelty of innovation differentiates it from the mere renewal of old stuff or ‘renovation’. And as I am often reminded by my patent attorney, innovation or novelty alone is not the same as invention which requires a non-obvious connection, an inventive step. If I repaint my front room, I am renovating. If I use a robot to repaint my front room I am innovating. If I design the first robot that can paint rooms, I am inventing.

Of course, technology innovation is only one type of innovation. Innovation in the arts, in fashion, in media, in politics, and even in religion is possible – any field of human activity or thought in which an old idea can be displaced by, or incorporated into, a new one has the capacity for innovation (Whether there is an appetite for such innovation is another story).

But technology innovation is different, because both supply and demand for this type of innovation are accelerating. Population and economic growth, demographic change, resource scarcity and climate change each present major challenges, and create the demand for new approaches and ideas that technology innovators are racing to come up with. On the supply side, rapid progress across many disparate fields of science and engineering in the past few decades has created and proven a vast array of new materials, equipment, information and method/process technologies. Technology innovators can pick and chose from this body of ideas to create valuable new products and services, and as the library of proven technology inventions generated by research and development expands, the potential for technology innovation grows exponentially. For the technology innovator, this poses a number of key questions, for example:

  • Is there a way to combine a selection of these technologies to meet an unmet market need?
  • How do I discover and select the best of each of the technology elements I need?
  • Are the technology elements all proven, are some still in their infancy?
  • Are there any gaps where I need to invent something myself?
  • Will anything unexpectedly bad (or good) happen when I combine these?
  • Do the benefits outweigh the costs and risks, i.e. does this solution create value?

The connectivity and reach provided by the internet has slashed the information costs of answering these questions. It has helped researchers disseminate information about their technology’s progress and performance in current applications, and has helped innovators reach out beyond their own industries for the technology elements they need to create the products and services of the future.

For clean technology entrepreneurs, there has never been a better time to innovate.

Sam Cockerill is CEO of Libertine FPE Limited, developing “Linear Power System” technologies that will make decentralised power generation the norm – bringing clean, reliable and affordable power to wherever it is needed.  Sam is currently in San Francisco along with fourteen other UK cleantech start-ups as part of the Clean and Cool Mission 2015. This week-long trip is an opportunity for the entrepreneurs to hone their business pitches, learn from leaders in the field, and talk about their amazing products to potential investors and partners. Clean and Cool 2015 is organised by Innovate UK, together with The Long Run Venture, UK Trade and Investment (UKTI) and CoSpA (the Co-Sponsorship Agency).  You can follow the progress of the Mission on Twitter@innovateukmedia,@CleanandCool and #cleansf.

Clean and Cool Mission at the Long Now Foundation

sam-cockerillBehind a smallish shop front on Marina Boulevard, the Long Now Foundation resembles something between a trendy coffee shop, second hand bookstore, art gallery and museum of mechanical computers.  This was to be the culmination of a morning’s tour of downtown San Francisco for the Clean and Cool Mission, providing the group with a cultural, geographic and historical orientation to help frame the coming week.

Long Now Foundation Shop Front
I had previously come across The Long Now Foundation in articles written about its most famous project, a mountain-scale clock designed to keep time for the next 10,000 years.

Planet earth on the inner solar system position indicator mechanism of the 10,000 year clock

Planet earth on the inner solar system position indicator mechanism of the 10,000 year clock whole indicator mechanism

This design brief is both breathtakingly audacious and utterly perplexing.  And for good reason, because the questions posed by this project run to the heart of what the Long Now Foundation is about.  How do you design a clock that must outlast not only its designer but perhaps even its designer’s language and civilisation? What will power it? What events could occur in the next ten thousand years that might stop the clock or break it?  How will the next five hundred generations maintain and repair it?  And then there’s the small matter of ten millennia of weathering and climate change to deal with.

These questions and many more have been addressed in a beautifully conceived mechanical design which is now being installed in a man-made cavern in Texas, and a scale model of part of the mechanism stands in the Foundation’s entrance.

The Long Now Foundation is the brainchild of Danny Hills, Stewart Brand and Brian Eno ‘to creatively foster long-term thinking and responsibility in the framework of the next 10,000 years’. It provides thought leadership and inspiration through a wide range of activities that span cultural, linguistic and genomic archives as well as digital information, software and computing projects. The Foundation also provides a forum for debate and idea sharing both through an active online community and a series of seminars hosted by co-founder Stewart Brand at the Foundation’s headquarters.

Originally a museum for the Foundation’s work, the building has recently been developed to include ‘The Interval’ –  a meeting place and café – and hosts a crowd-curated ‘Manual for Civilization’, a collection of around 3,500 books considered most essential to sustain or rebuild civilization. One striking feature of this library is the prominence of science fiction which sits side-by-side alongside more practical manuals on how to build and understand things. One of the four basic categories which the library is composed of is “Long-term Thinking, Futurism, and relevant history”. In this category, well known history, anthropology and socio-political titles jostle for position with futurology and science fiction works. What many of these have in common is the contemplation of real or imagined changes in human society across millennial spans of time. This vision stands in stark contrast to the ‘short now’ of daily life, with an urgency driven by the exponential pace of change in technology, information, resource consumption and economics.

As the morning’s fog lifted, the relevance to our Clean and Cool Mission became clear. Every one of the cleantech businesses here understands the role that new technology can play to help address global sustainability challenges in the coming decades. The Long Now Foundation has taken this idea and, by looking out across millennia rather than decades, has made it much, much bigger.

Sam Cockerill is CEO of Libertine FPE Limited, developing “Linear Power System” technologies that will make decentralised power generation the norm – bringing clean, reliable and affordable power to wherever it is needed.  Sam is currently in San Francisco along with fourteen other UK cleantech start-ups as part of the Clean and Cool Mission 2015. This week-long trip is an opportunity for the entrepreneurs to hone their business pitches, learn from leaders in the field, and talk about their amazing products to potential investors and partners. Clean and Cool 2015 is organised by Innovate UK, together with The Long Run Venture, UK Trade and Investment (UKTI) and CoSpA (the Co-Sponsorship Agency).  You can follow the progress of the Mission on Twitter@innovateukmedia,@CleanandCool and #cleansf. Follow the author @LibertineFPE.

An Entrepreneurial Christmas List

EDITED Christmas stockings DSCN8428

Most of us are reaching the end of our working year in the run-up to Christmas. With the economy finally on the rise, 2014 has been an exciting and productive year for entrepreneurs and start-ups.  As we’re looking forward to an even brighter 2015, we asked four of our entrepreneurial SMFs what’s on their Christmas business wish list.  Here they share their Christmas wishes, which range from financial investment for faster growth to a 3D chocolate printer!

James Harding, Co-Founder of Natural Juice Company

Gemma Harding launches Natural Juicing Company photo
Delicious range of natural juices

Specialising in dairy and gluten-free juices the Natural Juicing Company was recently launched by James Harding and his wife Gemma, and they are looking for venture capital financing, and marketing and communications experts to help them speed up growth and development in their new business. The company launched in November this year and is already causing a stir, having been invited to supply the juices for a leading UK premiere in 2015.

James said, “Like any start-up, we need help, particularly in the areas of marketing and business development. We have two Christmas wishes – the first is to find a communications expert who believes in our vision and is able to provide some advice pro bono to help us build brand awareness, secure trials and endorsements from health professionals and celebrities, and give us tips on getting into the media.

“Our second Christmas wish is to find a mentor/non-executive director who can provide ongoing marketing advice and introduce us to people who can help grow the business. We’re feeling optimistic as we set out on a round of meetings with venture capitalists over the next couple of weeks with a view to raising funds in early 2015.”

As we’ve discussed in the blog Raising money for your business venture, venture capital is often hard to acquire as you must demonstrate a high potential for growth. However, once secured, it is perhaps one of the best forms of start-up funding. Recruiting the sort of marketing and communications expertise Natural Juicing Company is looking for is equally challenging, but we are confident that we can connect them with Fellows within the SMF network who can give them advice and support.

Likewise, there are many non-executive directors who mentor new enterprises and by researching the processes NEDs go through as portfolio entrepreneurs, James and Gemma can gain the knowledge to find the right mentor.  Either way, they have made an important first step in identifying what they need to do to make their wishes come true. Do get in touch with us if you think you can help James and Gemma.

Mark Spence, CEO of Rheolab

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Rheolab has a long tradition of hiring and training ambitious young people

Entrepreneur Mark Spence is the CEO of Rheolab, a world class business that sells polymers as cosmetic ingredients. Mark’s business is a great model of a dynamic, transnational company, and his wish highlights the challenge of finding the right people to expand the business across different national markets.

Mark explained, “We have 13 employees split between Chicago and Leeds. The US is the largest market and within the US the North East is the largest region. We have tried for several years to get penetration in this market using distributors, but our results have been mixed. English people go down well in sales roles when visiting large US cosmetic companies. As a Christmas present for Rheolab, I would like to recruit a smart outgoing UK chemistry or chemical engineering graduate who has the confidence and resilience to succeed for us in the North Eastern US market.”

If you’re a talented engineer with the skills Mark is seeking, don’t hesitate to contact us – you could be that illusive person who can help Rheolab penetrate the highly competitive US market by bringing uniquely British business and sales sensibilities to the table.

Serge Taborin, CEO at Q App

 Serge Taborin at  Q App voted Best Mobile Payment Service

Serge Taborin awarded Best Mobile Payment Service trophy by Mobile Entertainment Magazine

Q App is a leading mobile ordering platform that enables users to browse the menu and select and pay for their order at participating venues – all from their smartphone.  It also allows users to specify their collection time-slot, making it ideal for takeaway outlets, coffee shops, and theatre intervals. It is therefore revolutionising the hospitality sector by removing one of the biggest end-user pain points in the industry; queuing.

The company is now entering its next stage of development, which involves expanding the number of high quality venues using the app whilst simultaneously driving up the number of end-users. Serge Taborin’s wish is to secure the necessary venture capital funding to take the business to the next level.

Serge said, “It’s been a very exciting year, winning new contracts with big brands including the Royal Albert Hall, Southbank Centre and Premier League grounds, as well as theatres, bars, pubs, coffee shops and fast food outlets.  Now we need to raise our next wave of funding which will allow us to make a step change in the number of venues using Q App, taking it into the high hundreds over the next 18 months. We will be able to expand our team to support the increasing number of venues coming on board, boost marketing to ensure more people are aware of the service and invest in development so that the product continues to evolve.”

Nimesh Thakrar, Founder of Banneya.com

personalised rose gold ring
Beautiful jewellery created with a 3D printer

Banneya.com offers CAD-proficient jewellery designers access to the latest additive manufacture technology to create their designs in precious metals. This is in line with brand new technological developments in 3D printed metal. Each piece of precious jewellery is hand-finished to the highest standard, and Banneya offers a curated marketplace on which to trade. Banneya also offers a forum for building mutually beneficial business partnerships with all parties benefiting from the income collectively generated by the platform. Nimesh Thakrar, hopes to see new developments in 3D printing technology to bring new and exciting products to this blossoming market.

Asked for his Christmas wish he jokingly said, “We’re creating some stunning 3d printed gold jewellery – that doesn’t exactly help with treats in the office, so how fitting would it be to be gifted a chocolate 3D printer this Christmas? Yes, they do exist now!”

The business ‘birth rate’ has reached a 10-year high, with the number of new firms up by 28.5% last year.  More than ever, new businesses are looking for ways to get a foothold in their respective markets. By setting your wishes (aka goals) and timeframes, entrepreneurs, like our SMFs are well on their way to success. We hope all their wishes come true and that they have some real down time at Christmas in readiness for a sparkling start to the New Year.

Grooming your Business for Sale: Appointing a Corporate Finance Advisor

Deal Image for SMF Blog on Selling Your Company dreamstime_m_3095784

Preparing a business for an eventual sale is usually a long, arduous process made up of many different steps and unseen complications. Selling a business is nothing like selling a house or private property: it involves negotiations over every minute detail of the company’s infrastructure, as well as its day-to-day functioning. The larger your company is, the more complex this process will be. However, regardless of size, if you’re thinking of selling your company, you need to appoint a corporate finance advisor as soon as possible.  A business sale is fundamentally a results-driven process, and the results you reap will be largely contingent on who is involved in that process.

A sale: more than just a transaction
The first person you may think of consulting is your company accountant. Now, whilst accountants can offer some sage advice about selling the company (pun intended!) – and even nudge you in the right direction when it comes to finances – their role can ultimately be very limited.  The kind of advisor you are looking for is someone that understands the sale as more than just a transaction. This is where corporate finance advisor come in.

A corporate finance adviser acts as counsel on the different types of transactions that involve a degree of change of ownership within a business. Because they will be accompanying you through the entire sale process, the success of a future sale banks heavily on their abilities and experience as advisers. You therefore need to establish what qualities, skills and prestige you need to look for in a corporate finance advisor, and bear these in mind as you begin your search.

What to look for
You might already have an idea of what to look for in a corporate finance adviser. One of the most obvious credentials might include an adviser’s track record in your sector.  Taking this at face-value is not enough; you should try to break down that track record into its composite parts. What sort of results have they achieved in the past, and in what way? What returns did their past clients see from their work?  Do they have a history of strong successes, or just a few one-offs? Look at testimonials and referrals from past clients. It’s also worth looking into any public history of recent transactions they’ve been involved in.  The more you research, the better-informed your decision whether to hire them or not will be. If their track record is consistently successful, then it should tell you what you need to know about their knowledge of the industry and their contacts within it.

It’s worth asking how many projects an adviser is currently involved in. With bigger companies, there’s a chance that they will be working on up to 20 projects at any one time. As well as this, larger advisories may start you off with their more experienced staff, but by the end of the sale’s timeline, there’s a chance they will have handed your sale to some of their less-experienced staff lower down in the company hierarchy.  This will obviously damage the ‘grooming’ process, as, ideally, you want the same advisers to work with you from beginning to end. In this case, it might be better to look at smaller corporate advisories who work with less clients at any one time. These will also tend to have smaller but more focused and targeted teams, which will be able to work much closer with you.  The downside of this is that smaller companies may not have quite the same level of prestige as larger advisories, which could make things slightly more difficult when it comes to dealing with aspects of the sale that rely heavily on an adviser’s reputation.

If looking at a smaller firm, it’s worth checking to see if they have won any awards, or examining evidence of collaboration with other professionals (such as reputable private equity firms or large law firms).  You want an adviser to ideally have quick, direct, and most importantly, confidential access to, and contact with, the different potential interlocutors involved in the sale. This should also reinforce their record of market knowledge, and tell you more about their track record generally.

Another factor of consideration is adviser fees. In this interview, Chris Hale of Travers Smith says:

“If you are looking at a deal with an enterprise value of more than £100m, you would expect the corporate finance adviser to be charging a 1% fee if they are on the sales side, and perhaps ratcheting up to encourage a higher price to a number larger than that, [above £120m] if the target was say £110m they might be getting another 0.5% and then ratchet up even higher than that once you get into the really deal glory territory.  Once you are below £100m the percentages become much more variable. The smaller the deal the less relevant the percentage is. It’s the absolute number that you need to be looking at. So if you are dealing with a deal below £10m the percentage fee might be 5% but what you actually want to look at is the £ number and whether that’s what you think is good value for what you are buying from the advisory firm that you are appointing.”

However, Bob McNaughton (in the same interview), reminds us:

I don’t think I have ever chosen an adviser for their fees. I have chosen them for their capability to do the job. What I would add on fees is [that] I definitely agree they should be incentivised to maximise performance.”

So, while fees are an important consideration when selecting an adviser, they are not the defining factor.  At the front of your mind should be their reputation and know-how; what kind of results they are likely to bring to the table; and, most importantly, their capability, knowledge, and experience in your industry.  A corporate finance adviser is a vital component in preparing your business for sale, and it’s on the basis of these sorts of criteria that you should consider them before hiring anyone.

SMFs Connect in New York

SMF New York Networking Event October 2014

British Engineers are renowned for their railway building skills the world over and for 100 years 42nd and Park has been the temple to railway engineering, the site of Grand Central Station.  So this was more than a fitting location for a group of British engineers to meet up on the 30 September at The Campbell Apartment Terrace in in New York City.  This event was organised and hosted by Laurence Knight, who together with Alpesh Amin on the West Coast, have set out to foster networking amongst the SMF community living in the USA.

Together with Laurence were Evaristus Mainsah, coming down from IBM in Armonk New York, Gavin Mc Mahon, from Connecticut and David Crosbie who arranged for a NY speaking engagement on that day, coming from Massachusetts.  Two others who didn’t quite make it were Phil Strong, hoping to fly through New York from London on his way home to California and Aidan McGilly, who resides in New York City.

Coincidentally I was on holiday in New York City and staying just a few short blocks away, so was able to attend as well.

It was a lively event – David, Laurence and Gavin talked about running their own businesses and Evaristus talked about life in New York and IBM.

All felt that there was real value in connecting  with other SMFs  in the USA.  Over the next few months, Laurence and will be reaching out to all SMFs in the States to find out what sort of activities and events  would be of  interest.

Sky’s the Limit for Careers in Africa

Ernie Edited

“The opportunities to go all the way to the top of your career in Africa are unlimited, but if you want to be successful two things are essential; go with an open mind and try to understand the cultural context in which you are working.  Second, if you are going independently rather than being posted by a UK parent company, you must have sufficient resources to cover your social needs, especially housing and healthcare. Preparation will ensure that your dreams are fulfilled,” said Ernest Poku, Asset Manager at Ophir Energy, who has held two senior roles in Ghana.

Ernest graduated from Bristol University with a degree in Mechanical Engineering and initially worked as a drilling engineer for British Gas Exploration and Production. He then formed a consultancy offering technical and commercial services to oil exploration companies Shell and BP.  In 2001 he won a Sainsbury Management Fellows MBA scholarship and took his MBA at Erasmus. This gave him the business skills to become an entrepreneur and set to up Crescent Diagnostics, a medical diagnostic company that invented award winning devices that predict fracture risk.

The chance to work in Africa came via Ernest’s connections on LinkedIn. “I was considering my career options when a headhunter contacted me through a group focusing on Africa.   The headhunter thought my background was a good fit to run a subsidiary of a British-owned engineering company based in Ghana.  After extensive interviews in the UK, and a visit to Ghana to meet customers, I was delighted to be hired – it had never occurred to me that I could work in a senior post in Ghana in my chosen field.  Apart from the attraction of working in a fast-growing economy, having Ghanaian parents meant there was a strong pull towards the country.

“I worked for the Ghana-based engineering firm for one year where I managed 25 staff.  We supplied mechanical engineering products to the upstream oil and gas industry and I regularly travelled to Ivory Coast, Togo and Nigeria to meet customers and discuss their needs.  I didn’t realise just how much I would have to travel by plane to visit different cities – the road network is poor in West Africa; motorways between cities are rare.  A key part of my job was demonstrating to customers that the products and services they required could be sourced in the region rather than ordering from the EU or USA.  When that contract ended, my original headhunter helped me secure the role of Country General Manager at Ophir Energy, an oil exploration company based in Accra, the capital of Ghana.

“My transition from the UK to Ghana was very smooth because I, my wife and baby son went on a full expatriate package which covered everything from flights to housing and healthcare.  If you’re going it alone, it’s vital to have a long-term plan, to research the job market, cost of living and accommodation because western-style accommodation in Ghana is as expensive as living in London, and there is no free healthcare or free schooling.  I met expats who were trying to establish themselves independently and they found it difficult, especially competing in the local job market.

“It’s better to get a placement via a UK-based company with interests in Africa.  Even at graduate level this is do-able. While I was in Ghana a number of UK financial services companies sent graduates to set up local offices and provided them with expat packages.

“Working in West Africa has its pleasures and issues.  Operating a company in Ghana requires a more vertically integrated approach than in Europe.  We had to develop our own water and electricity supply, construct buildings and develop good logistics infrastructure to secure the materials we needed to run the facility.

“I was surprised by the large number of local university graduates and the relative lack of skilled technicians.  We found it challenging to recruit high quality skilled builders, masons, carpenters, machinists and mechanics and implemented our own in-house training programmes.  The Ghanaian government is keen to encourage local involvement to ensure that the oil companies operating in Ghana do not solely use expatriate labour. Landmark legislation aims to have 90% local participation in the oil industry within a decade.

“In terms of acclimatising to the new business culture, I encountered two other key differences.  Running a highly unionised company was testing, with tense industrial relations and negotiations, especially on pay.  The other revelation was that a strong focus on team building and collaborative approaches is necessary to ensure everyone works towards a common goal.

“Although there are challenges, if you have a passion to work in Africa, I’d say do it. It is well worth any trade off you might make and I have gained a great deal from the experience, both personally; getting closer to my heritage, and acquiring new professional skills. The quality of life is great; locals and the expat community are welcoming so you soon make friends.  Social life is great, with lots of outdoor leisure pursuits and the weather is warm all year round.”

Ernest has since relocated to Ophir Energy UK HQ where he is Asset Manager in charge of all operations in Gabon, Central Africa.  He spends three weeks per month in the UK, working with a team of finance, legal and commercial staff to manage assets, and one week per month in Gabon working alongside his European manager (an expat) and local staff.  The experience in Ghana equipped Ernest with a range of skills that enables him to deal effectively and efficiently with complex government bureaucracies, a task he believes would be a struggle had he not gained invaluable experience in Ghana.

Ernest is featured in a new careers case study book, Engineering New Horizons, which is free to careers advisors and job seekers – to obtain a copy email cathy.breeze@smf.org.uk

 

The Power of Networking

Throughout the early stages of your career, you will doubtless have been told many times about the importance of networking. Instructive slogans are constantly thrown around: make contacts; follow up; share ideas.  The impact of networking upon the business world is also clear.  Many local business communities are now often structured around weekly or monthly meetings, and it’s likely you are already involved in such a network yourself. The power of networking is reflected in business education and discourse: large sections of MBA curricula are now dedicated to teaching networking skills.  The topic practically saturates business magazines and discussions, and it might feel like there isn’t much more to learn.

However, once you understand where it is networking draws its potency from, you can take your networking skills to the next level.

We can see the power of networking originates in the social makeup of humanity itself. The 19thcentury evolutionary scientist Peter Kropotkin argues that the ‘mutual-aid’ principle of co-operation has long been integral to industrial development and the success of human societies – a conclusion that was supported by Darwin.

As to the sudden industrial progress which has been achieved during our own century, and which is usually ascribed to the triumph of individualism and competition, it certainly has a much deeper origin than that. …For industrial progress, as for each other conquest over nature, mutual aid and close intercourse certainly are, as they have been, much more advantageous than mutual struggle. – Peter Kropotkin, Mutual Aid: A Factor of Evolution.

Although it might seem convenient to portray all business crudely as ‘dog-eat-dog’, a successful businessperson is someone who does not dismiss the importance of ‘mutual aid’.  It’s true, of course, that business is usually on a competitive level.  But that competition usually takes place between groups of people, rather than individuals. Therefore cooperation is required in order to realise our greater individual end-goals.  It is precisely this principle from which networking draws its potency, with voluntary, cooperative collaboration between individuals being the foundation of success.  A business network can then be understood as a more formal realisation of the fundamental social groups humans naturally gravitate towards.

Practically speaking, it is useful to trace the genealogy of contact building in order to understand further how to develop networking.  Many argue that the professional networking process starts on MBA courses and other forms of business education, which would make networking a near-constant facet of successful career development. Indeed, MBA courses are often sold as strong networking opportunities.  Many people do build strong contacts while in education, and these can often lead to positive outcomes in the future.

Such a view is productive to an extent – yes, you will make good contacts on your MBA course but it would be wrong to view an MBA largely as a networking opportunity.  MBAs are great for networking because they teach you networking skills rather than merely bringing you into contact with other businesspeople.  They should, then, be valued on that basis and, more importantly, they teach us to focus on universal, transferable skills ahead of sporadic, singular opportunities.  It’s therefore important to remember the power of networking skills – they will carry you much further through long-term career development than a one-off chance meeting, and bring you the opportunities you are looking for.

Looking at statistical evidence, we can understand the importance, place and power of networking even further. A Right Management survey analysed data from 59,133 clients they had advised over the previous three years – in 2010, 41% said they landed a job through networking, compared to the next most successful result – using an internet job board (25%).  Face-to-face networking was therefore nearly twice as effective in furthering careers than the newer means of career advancement many see as having overtaken traditional networking.

Furthermore, the Job Openings and Labor Turnover survey, found that 70-80% of job postings were not published.  By looking at the number of hires in the previous 30 days and comparing those with the number of actively recruited open positions and the number of open positions filled by someone employers knew through networking, the researchers found that new hires exceeded the number of positions advertised.  This means that many of the people who were hired filled positions never advertised to the public.

What we can take from these statistics is not just the fact that face-to-face networking is still the most powerful business tool in your career’s toolkit, but that it is also utterly necessary to furthering your career and your business. We can now start to think about structuring our networking approach in a specific way.  If you place face-to-face, mutual-aid type networking at the core of your contact-building approach, you can then utilise other methods (such as online communities like LinkedIn or other social networks) to hone your efficiency and maximise your professional reach.  If, as the statistics show, many employers do not even advertise the majority of job positions, it’s clearly vital to triangulate your networking methods rather than relying on one at the expense of another.

Networking is ultimately so powerful because it plays on a natural human tendency towards co-operation.  Far beyond being merely a business tool, networking is an important social strategy and interaction.  Organising yourself based on your strengths and social skills may well get you further than any traditional business textbook could and propel you even faster to success.

 

 

Exit Strategies for Leaving your Business

businessman looking
Leaving a business you’ve built from the ground up can be difficult, not just practically but psychologically: it’s likely you will have developed a deep emotional attachment to your business. This emotional investment might be an early brick wall in your exit, but it’s more important to think rationally and make the right financial and business decisions for you and your business.

You may have started the business with an eventual ‘cash out’ in mind, or you might just have reached the conclusion over the course of your career.  There is an array of reasons for people choosing to leave the businesses they started.  Once the business has matured, many owners look to take a back seat or leave altogether.  You might want to sell the business to pursue other ventures as part of a wider entrepreneurial career, or you might be looking to retire altogether.  Whatever the reason, for a smooth exit to take place, it’s vital to develop an ‘exit strategy’. You need to plan for this future for the sake of both your own career and the success of the business once you leave it. The purpose of an exit strategy is therefore to enable you to leave your business on your own terms.

Building a time scale and setting objectives
Establish a time-scale: think about how much longer you want to run the business day-to-day before moving on. This provides the foundations for the rest of your strategy, enabling you to set an exit date, allowing you to specify and sharpen your other plans. It will allow you to strategise on key exit points. These could include how long you need to prepare the business for sale, to set yourself up for the future through pensions, to establish an annual income or seed money for your next venture.

Returning to your timescale, you need to think about where the market could be in a few years. This highlights the importance of a contingency plan: be prepared for the possibility that your exit strategy may not go as smoothly as you’d hoped due to factors outside of your control, and develop a plan B appropriately with alternatives. You’ll thank yourself for keeping your options open if your first exit plan goes awry.

Set objectives. Where do you want your business to be after your exit? More importantly, where do you want to be after your exit? Firstly, you should decide who is going to take over the business from you.  Are you going to sell the business to a third party?  If so, do you need to put in extra work to increase the business’ value and make it more attractive to external investors?  Alternatively, would a management buy-out work better, or simply hiring a visionary and trustworthy managing director to replace you?

These decisions will be heavily influenced by the type of business you own, but more importantly where you see yourself after the exit: are you going to set up another business, or retire? If it’s the latter, it’s worth discussing with a financial adviser to work out how much you will need to make from selling the company in order to secure an annual income, and plan accordingly.  If you plan on starting a new venture, you can use personal profit from the sale to secure seed money and a provisional income to carry you through to your new start-up. (For more information on raising money for a new venture, read here.)

Preparing and managing the change in ownership and management
“These days, companies tend to be valued at four to six times EBITDA (earnings before interest, taxes, depreciation, and amortisation). In order to get the higher multiple, you need to show a history of steady growth.” – Norm Brodsky

Create Value: Managing a change in ownership can be difficult, and it doesn’t begin and end with the sale of the company.  You need to prepare the company for a change in leadership before your exit, in a way that ensures a smooth transition after your departure.

If you’re aiming to sell the company to a third party, you obviously need to be able to attract potential buyers.  It is therefore vital to demonstrate consistent profitability, with a steady cash flow, in order to build business value. A positive side-effect of this is that it hints at future earning potential for any buyer who wishes to scale the business further. This is something you should work into your timescale estimate: how long is it feasibly going to take to build a decent record of steady growth if the company is not already there? In your exit strategy, therefore, you aren’t necessarily looking to expand and scale more of your business, but you are looking to stabilise its profitability and make it more attractive to investors. This will, of course, require an assessment of market conditions. Assess different potential investors and see what it is they are most interested in. This should form the groundwork of how you prepare your company for sale.

You should also be prepared to manage any buy-in further down the line. A management buy-in can severely disrupt day-to-day operations of the business if poorly planned. Consider the different steps of a buy-in and management transition, and plan accordingly. This is a helpful flowchart outlining the steps of a generic management buy-in. You need to put procedures in place prior to your exit that will prepare your employees for the change, such as clearly outlining to the new management the specifics of your current day-to-day operations.

Adaptability
There are many different exit strategies, and only you can know which is right for you and your company. Ultimately, the most important aspect of an exit strategy is adaptability.  By preparing for many different factors that could affect or even initiate your exit, you’re ensuring that you will come out on top.  Preparing not only yourself, but your business as a whole for your eventual exit is what will enable your continued success, and that of the business you leave behind.