Twelve months and seventy-seven business later and the Scaleup North East programme continues to excite and frustrate in equal measure. I’m excited by the massive potential and uncapped opportunity these Scaleup businesses face but equally frustrated at some of the barriers needed to be overcome in order to realise their world beating potential. 

Accessing the appropriate finance in order to scale an already successful business remains a key barrier and whilst there is some interesting noise coming from several banks, the reality remains very disappointing. Taking eight to twelve weeks to turn down a funding proposal from a good business with a strong management team and a proven formula really isn’t helpful and is incredibly frustrating. Unfortunately, this isn’t a one-off and instead very common across a decent proportion of the businesses we work with. At a time when most smaller businesses (73% in 2018, 70% in 2017) would rather forgo growth than use external finance, an innovative solution is required to ensure that the engine room of the UK economy isn’t beaten into submission and given every opportunity to unlock the huge potential we see every day.

Conversely, one of the barriers to scale that I am finding much easier to address is around the mindset of owner managers, specifically, developing the ability to step back from the coalface and operate at a more strategic level as the business grows. Through Scaleup North East Insight Workshops, referrals to Solution Providers and direct mentoring, many the owners I have met benefit hugely from working on, not in, their business. A key requirement of this shift is the ability to delegate - but delegating economically and effectively can be a challenge requiring owner managers to resist, what in many cases, is deeply ingrained, habitual behaviour.

Poor delegation can take many forms but the simplest and most efficient way of improving this skill is by focussing on the delegation of responsibilities, not tasks. If done well, this technique can be, and should be, a game changer for most owner managers.

I often observe managers handing out long lists of tasks to be completed by their teams. These are often very specific, targeted, focussed and leave little room for mis-understanding or mis-interpretation. Teams then diligently set about ticking items off the list, happy in the knowledge that they are contributing to the commercial success or operational efficiency of the business. This is rarely the case and a good example of delegating tasks not responsibilities.

The delegation of responsibility requires trust, patience and very often a change in the language used. I have worked with many mangers who continually instruct staff to carry out the same task on a repetitive basis rather than simply delegate the responsibility and then manage by exception. I recall an Area Manager who used to start every visit to a store with a walkaround where he would point out to the store manager every price card that was missing. On the next visit each missing price card will have been diligently replaced but the Area Manager would still need to walk the store again pointing out a new raft of missing price cards. Many months later, the Area Manager, mainly borne out of frustration, instructed the store manager to, ‘make sure all products have a price card’.

A subtle change but what had happened is that they had now delegated a responsibility not a task. In practice they no longer need to point out a long list of issues on repeat, instead they can manage by exception. If on future visits a missing price card is identified, this would be a failure on the Store Managers part and something that could be tackled on a different level, understanding why he had failed and then providing guidance and support to enable them to carry out all duties as required.

The challenge of course is to remain ‘hands-off’. There is significant temptation to jump back in and get stuff done when there are obvious failings. This requires self-control and patience BUT once instilled, provides a much more efficient working relationship and provides the leader with more time to focus on strategic issues that can shape the business as it continues to grow.

Leaders often feel that they need to tell teams what to do. This is highly inefficient at best and egotistic at worse. Delegating responsibility (and letting teams/individuals work out the tasks necessary to deliver within this) is, in my opinion, one of the biggest gains many owner managers of SME’s can achieve with a relatively simple but often unnatural shift in mindset.