Scottish Enterprise’s policies for Leadership & Management skills in High Growth Firms_Linda Hanna.

1. December 2010
May 2013
Scottish Enterprise’s policies for
Leadership & Management
skills in High Growth Firms
Linda Hanna
Senior Director of Company Growth
Scottish Enterprise

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Presentation will share….
• Scotland’s economic context - landscape for High Growth Firms
(HGF’s)
• SE’s research on High Growth Firms
– What we found….
– How that shaped our policies….
• Actions and policies to drive change….
• Evidence gaps and future research….

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240,000
business with no employees
18,000 SMEs
100,000
businesses with employees
9,000 Growth
Companies
BusinessStart-up
15,000start-ups
11,000 VAT
registered
5,000
Exporters
340,000 Businesses in Scotland
HGF
800
Scotland’s business landscape 2012

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Data on high growth firms in Scotland
• High growth firms (HGFs) achieve 20% + employment growth for three
consecutive years (OECD definition)
• 800 HGFs in Scotland
• Disproportionate impact
– HGFs 2.5% of job creating firms…creating about 20% of jobs
• HGF characteristics
– relatively small (80% have less than 50 employees)
– relatively well established (50% are 10 yrs + old)
– not high tech (85% are in non-high tech sectors)

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SE’s HGF Research key findings….
• disproportionately contribute to the economy including job
creation, productivity, innovation and internationalisation
• more likely to be self critical with a passion for improvement
often demonstrated by a focus on operational excellence or
quality systems
• periods of episodic growth often stimulated by trigger points
• mostly service sector, with few classed as ‘high tech’
• High technology HGFs are ‘market driven’ rather than
‘technology-push’

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SE’s HGF Research key findings….
• Importance of leadership in facilitating growth in HGF’s AND
leadership skills are a core component of most of the other findings
• General characteristics of HGF leaders/management teams:
– high levels of human capital/skills;
– ‘big company’ and industry-relevant experience;
– high levels of entrepreneurial orientation and ambition;
– strong export orientation and ambition to become
internationalised
– focus on opportunity-driven motivation
– focus on market-driven innovation
– a strong sales and marketing focus with close customer end-user
engagement

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Policy Implications from HGF Research….
• Understanding key trigger points of growth - when best to
intervene
• Closeness to customers is crucial - how to support HGF’s to
innovate and build customer management skills
• Building Sales and Marketing expertise especially for
technology based firms
• Need to exploit fully Entrepreneurial talent and maximise
opportunities hidden in the corporate base
• Developing leadership and management ambition of potential
HGF’s

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Focus on SE’s Leadership and Ambition policies….
Supports achievement of sustainable transformational business growth by….
• Help companies significantly scale their operations through Leadership, Strategy
and Structure (eg Companies of Scale to £100M+)
• Address Leadership skills at all stages of growth (High growth start-ups through
to Companies of Scale)
• Making policy connections – Leadership and Innovation; … and Entrepreneurship;
… and Low Carbon etc! – it isn’t stand alone
• Collaborative Framework for Action to support step change needed
• Benchmark ‘leadership competences ’ before and after interventions to see
patterns around impact on performance

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Evidence gaps and research next steps….
• Evidence gaps – assess/measure leadership capacity, quantify links
between leadership and firm growth, measure benefits
• UK-wide research on management and leadership (due early 2014):
– measure levels leadership & management skills in UK SMEs
– assess impact of leadership and management skills on business
performance
• Scottish Enterprise ‘leadership measurement framework’
– baseline supported firm leadership performance and monitor changes
– assess impacts of leadership on firm performance
– longitudinal PhD study of supported companies (over 3 years+)

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Summary - What helps HGF’s grow?
Operational
Excellence
Innovative Deep Customer
focus
Invest in skills… ….as well as kit Global outlook
Ambitious leaders…