Jim Duffy: The highs and lows of growing Scottish businesses

In fact, I think economists have as much credibility as Mystic Meg as they create a black art around macro and micro numbers. Also, what does “high growth” really mean? Well, many economic agencies across the globe have different metrics, but it’s safe to say it centres on firms of ten or more employees that grow their staff or turnover by an average of 20 per cent or more per year for three consecutive years. Words and phrases such as “innovation”, “research and development” and “gazelles” come into play.

So why do I feel I am qualified to comment on this subject matter? Well, my own venture – Entrepreneurial Spark – is a high growth company, albeit a social model. We have hit the high growth targets economists and enterprise agencies have created, but the interesting thing is that no-one from the Scottish economic agencies is saying “Wow! Well done you guys! Where would you like to go next?”

There are a number of reasons for that. As a social enterprise or company limited by guarantee, we somehow do not register adequately on the radar of these agencies. We are not sexy enough. Not enough innovation. No IP to sell or licence around the world. Mind you, that old chestnut is just not working anywhere properly. This week we saw another Scottish company changing hands, as tea and coffee merchant Matthew Algie was sold to its German rival. Sure, the directors will all make a few bob and hopefully the staff, but alas, it is no longer Scottish. It will become a bit like the Kennel Club members and have a Scottish parent as part of its pedigree certificate. The point to note is that a for-profit company can sell or exit, but a social enterprise cannot. For the economic agencies, it does not have the gravitas of a “real” business. Nonsense…

But maybe, just maybe, actually being a social enterprise is exactly what our economic agencies should cherish. Essentially at the heart – we are high growth! And this is where I am going to have a go at the definition of what “high growth” should mean. Entrepreneurial Spark, and many others like it, simply are in the wrong sector or “bucket”. Despite showing growth and developing tangible commercial partnerships with the likes of Royal Bank of Scotland, EMC, KPMG, Viridian Group and others, we do not tick the “right” box. Ergo, actually feel excluded from the show.

This is where the high growth equation becomes unbalanced. If I was to say that the new CEO of Entrepreneurial Spark has a vision for a £20 million pound global social enterprise within the next five years spanning the UK, India and beyond, creating hundreds of jobs, ordinarily we would be poster boys for at least one economic agency. However, I’m sure our CEO won’t hang by the phone waiting for it to ring. Nonetheless, we are high growth…

High growth in that we have vision. High growth in that we are putting in strong processes and systems. High growth in our financial metrics. But – and this is where Scotland needs to reset its definition of high growth – we are high growth in the leadership, culture and team we have and constantly develop. It’s bloody hard work; relentless, constant communications and 5am rises for planes and trains to our 12 sites across the UK.

I see so many high growth firms as the current criteria pertains, but they are stalling, not fulfilling their potential or have lost the appetite to continue to grow. Why? Well as I see it, so much of it comes down to leadership and culture. Scotland has some amazing stuff happening in its universities, but, we are not producing, as a country, enough leadership candidates. It is not up to the likes of Scottish Enterprise or Highlands and Islands Enterprise to create leaders, albeit they have had a pretty good go with the Saltire Fellowship and ScotlandCanDo Scaleup, with both Harvard and MIT providing the international content. They should be applauded for it. We have some great role models who give of their time in the likes of Willie Haughey, Anne Gloag and Tom Hunter. But there is a vital ingredient missing.

Creating entrepreneurial leaders who can start, grow and scale any venture, social or otherwise, needs a focus on leadership development. These leaders will not come from universities, but from those in their late twenties onwards, who have had some life experience and have a spark that is ignited in them. Imagine creating a school for entrepreneurial leadership in Scotland. A new kennel club, where we create and train up CEO behaviours and mindsets and a GoDo attitude. Imagine what they could accomplish when matched with the right ideas and mentors. This is what high growth is about – instilling confidence, belief, financial rigour and encouragement into those who want to run the marathon, while learning on the fly. This will see them succeed and grow the next generation of high growth firms in whatever sector they chose.

It’s an experiment that could really move the dial in economic growth in the next decade in Scotland.

l “Agitator and disrupter” Jim Duffy is Head of #GoDo at Entrepreneurial Spark