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The North East Growth Hub: levelling up the North East

By Colin Bell, Business and Sector Growth Director at the North East Local Enterprise Partnership


I don’t think it will surprise any individual or business who has searched for business support or funding when I say that the landscape can be confusing and difficult to navigate.

This is why the North East Growth Hub was created; to simplify the landscape through providing a single point of access to business support, and to offer specialist guidance in pinpointing how targeted interventions can help individuals and businesses make progress towards their vision and goals. 

The North East Growth Hub, which between 2018 and 2022 directly engaged with 115,134 people and businesses, also performs an important role in coordinating the business support ecosystem. It works with 75+ partners and 300+ delivery programmes to align collective activities towards the achievement of the North East Strategic Economic Plan, and the creation of more and better jobs.

Whilst not having direct control over business support funding, the North East Growth Hub has worked with the North East LEP’s Business Growth Board, and business support delivery partners, to identify gaps in businesses’ journeys from start up to scaleup. Targeted interventions have been developed to fill these gaps, which has led to the creation of a range of services including, Scaleup North East, Supply Chain North East, High Potential Startups, the Scaleup Leaders Academy, Peer Networks and Made Smarter Adoption North East – to name a few.

The approach to partnership and coordination has also enabled the region to quickly react to and deliver targeted services and funding to support businesses through seismic economic events, such as Brexit and the COVID-19 pandemic. 

It’s great therefore that the impact of the North East Growth Hub has been recognised through a recent independent evaluation, which to directly quote found that:

“Businesses that have engaged with the North East Growth Hub demonstrate tangibly higher rates of business growth than similar businesses that did not receive support, with each of employment, turnover, and labour productivity being stronger among supported beneficiaries than the control group.’’

Taking a deeper look, the study found that the 2602 business that received medium to high intensity support between 2018 and 2022 achieved higher levels of employment growth, 16% higher turnover growth, and an average £8.8k increase in turnover employee one year after engagement.

What this demonstrated is that the targeted support delivered through the North East Growth Hub works, and if scaled could have a significant impact in levelling up the region’s productivity performance.

What I’m particularly proud of is that despite facing ambiguity and cuts in funding, the team has been unwavering in their commitment to the people and businesses we serve, delivering exceptional person-centred support with passion and compassion, consistently achieving 96%+ customer satisfaction levels.

As we look to the future, it’s great that the North East has established many proven programmes and approaches – including the North East Growth Hub – that can be built on and taken to their next level.

You can access more information on the North East Growth Hub evaluation through the North East Evidence Hub.

If you’re looking for support to start, grow and improve your business then get in touch with the North East Growth Hub at www.northeastgrowthhub.co.uk.

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Supporting North East businesses through the coronavirus pandemic and EU Exit

By Helen Lee, Programme Manager – Growth Hub, at the North East Local Enterprise Partnership


Managing and running a business over the past two years has been a truly unique experience.

The combination of the coronavirus pandemic and the UK’s exit from the European Union has resulted in one of the biggest global economic shocks in our lifetime, leaving many businesses in need of support, advice and guidance to help the weather the storm.

As one of the leading business support and finance and funding platforms in the region, the North East Growth Hub has had a vital role in the North East’s economic response. To better understand the North East Growth Hub’s role in supporting businesses during COVID-19 and the UK’s departure from the EU, the North East Local Enterprise Partnership commissioned Steer Economic Development (Steer-ED) to produce a detailed case study as part of its evaluation of the North East Strategic Economic Plan. The North East Growth Hub is a key strand of activity within the Business Growth programme of delivery, which helps deliver the ambitions of the Plan. The case study is based on survey feedback from the region’s business community, and business support, finance and funding providers.

It shows the coronavirus pandemic caused a huge spike in demand for business support services as employers struggled to navigate the flurry of announcements and guidance released by government. And it was largely micro businesses – those with less than ten employees – that came to the North East Growth Hub for support and advice.

Despite the rise in demand for our services, response rates and satisfaction rates have consistently remained high, even at a time when many businesses reaching out to us were ineligible for the support they had hoped for. 73% of respondents said they were satisfied or very satisfied with the North East Growth Hub, and a third of businesses that contacted us during the pandemic received a response on the same day.

Interestingly, 69% of businesses that responded to the survey were first time users of North East Growth Hub, which demonstrates the widespread impact of COVID-19 on the region’s business community. Whilst the effects of the pandemic were the main driver for many of these businesses reaching out to us, it has allowed us to signpost other business support and finance and funding services available to them.

The volume of information aimed at businesses during the pandemic has been overwhelming for many, so it’s positive to see 77% of businesses rated the quality of content on northeastgrowthhub.co.uk as good or very good. It was essential for us to make sure content from government and other partners was accessible to all businesses, and delivered in a timely and efficient manner.

I’m also very glad to see the hard work of our Growth Hub Connectors recognised in the case study. As well as providing business support and finance and funding advice, Connectors were also there to listen. At the height of the pandemic there was a lot of uncertainty, which left many business owners feeling vulnerable and anxious about the future. The Growth Hub Connect team spent time listening and talking to businesses so they could better understand their individual circumstances.

As a result, 83% of respondents said they would likely re-engage with the North East Growth Hub and refer people in their network to the service. I think that’s testament to the team’s ability to positively impact and support North East businesses at a crucial time. There were some very emotive conversations with business owners, and I’d like to personally thank the Growth Hub Connectors for the extra time they spent with clients to help understand and resolve the very difficult challenges businesses were facing.

As well as highlighting feedback from businesses that engaged with the North East Growth Hub, the case study also reflects on comments from our Provider Network, which is the collective of business support and finance and funding providers we signpost North East businesses to via the Growth Hub. All respondents said they were happy with their relationship with the North East Growth Hub. This is wonderful to see as we consider our network of business support, finance and funding providers as an extension of our team. We very much felt like we were all in this together.

To have a trusted network of partners during the pandemic was very important as that open dialogue ensured we could deliver the right support to businesses. It also helped us better understand the offer from providers.

As we begin to emerge from the coronavirus pandemic and demand for support in this area reduces, we recognise that businesses will use the North East Growth Hub in different ways. The conclusions and outcomes in the report discuss this change in behavior in more detail, and how the North East Growth Hub can continue to provide the support businesses need.

If you’d like to know more about the North East Growth Hub, please visit northeastgrowthhub.co.uk or book an appointment to speak to a Growth Hub Connector. Our team has expanded during the coronavirus pandemic and we’re here to help businesses right across the North East LEP area.

There’s a huge amount of support available in our region for people looking to start or grow a business, so please get in touch to find out how we can help you on your business journey.

North East LEP Growth Hub: Responding to COVID-19 and EU Transition Case Study is available to read on the North East LEP’s Evidence Hub.

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IN CONVERSATION WITH…Colin Bell, Business Growth Director of the North East LEP and Ammar Mirza CBE, newly appointed Chair of the North East LEP’s Business Growth Board, talk about their aspirations for the future.

Ammar, you are a North East LEP Board member and the newly appointed Chair of the Business Growth Board. What is your ambition for this role?

The LEP is made up of individuals with significant experience, expertise and endorsement, representing the public, private and academic sectors, all with a shared ambition of making the North East a better place where we create more and better jobs, which is clearly even more important now.

Being the chair of the Business Growth Board is a privilege given the other members of the Board and the enthusiasm of Colin and his team to bring our strategy to fruition.  My ambition is for our work to help our communities realise their goals and raise aspirations, ultimately making a sustainable, meaningful and measurable impact.

Colin – your Business Growth Board has had a bit of a shake up, with Ammar joining as Chair alongside five new people, and a number of long-standing board members supporting a strong executive team. How important it is to have a strong relationship between the board and executive and what are you most excited about for the future?

Having a strong and active board who keep me and my team on their toes, provide constructive challenge, are prepared to be active in supporting and promoting the North East’s business community and who bring ideas to the table is what I look for.

It’s therefore fantastic that Ammar is the new Chair of the Business Growth Board as that’s exactly what he brings. His approach is all about channelling energy, action and being a champion of the North East.

Ammar is supported by some fantastic new Business Growth Board members including Darren Laybourne , Director at Turner and Townsend who brings a wealth of experience in scaling a global business; Liz Bromley, CEO of the Newcastle College Group who runs one of the UK’s largest college businesses; Paul Butler, CEO of North East Automotive Alliance who brings an expertise in in business support and industrial clustering; Yvonne Gale, CEO, NEL Fund Managers, providing a vital insight into the investor community; and Steve Underwood, Director, Dentsu Aegis, one of the UK’s largest digital agencies. This formidable group of business leaders joins our existing board members: Toby Bridges, Chairman, NBT Group; Ryan Maughan, CEO, Avid Technology; and Kate Wickham, CEO, Gate 7.

You’re both at the forefront of the fight against COVID-19. How has this manifested into support for the North East business community? 

Ammar: People are understandably confused, concerned and cynical of the future, which in turn demands a response that is relevant, responsive and regionally focused.  The support led by the LEP and supported by a whole host of partners including the SME Centre of Excellence means that SMEs can get the right support at the right time to survive.

Colin: We are speaking with businesses every day to understand the practical challenges that they are facing and feeding intelligence to Government to inform them about what’s needed in terms of support.

At a regional level we are working closely with our partners to introduce initiatives to fill the cracks, such as Crowdfunder North East and the enhanced grant funding for the supply of PPE via Supply Chain North East. We are increasingly looking to the future and are currently working with Ammar and the Business Growth Board to develop a plan of action to support businesses through the restart phase so as many as possible bounce back strongly from the current situation.

The North East Growth Hub has seen a huge increase in businesses engaging with it and is becoming the go-to hub for information relating to not just COVID-19 but all business support and access to finance in the region. What impact is this having and why is it important?

Ammar: Having a single source of credible and up to date information is critical to help individuals access the support they need, especially in challenging times. The Growth Hub has always been a rich resource to help SMEs thrive.  Given the substantial number of service providers that feed into the Growth Hub, together with the Connectors who are able to provide one-to-one support, everyone accessing the service will benefit.

Colin: Businesses want access to simple and impartial support and guidance. The Growth Hub brings all support into one place and does not have any vested interests or targets to refer businesses to particular schemes – we are 100% focused on what’s right for the businesses.

Our highly experienced Growth Hub Connectors are there to have open and honest discussions with business owners. During the crisis they’ve been able to help remove some of the anxiety by helping them to see a path through the confusion and engage them on support and funding options of which they were perhaps unaware.

The North East LEP and the North East Growth Hub have been combining forces with other organisations to deliver support. Why is that partnership approach important?

Ammar: The North East is renowned for being the friendliest place in the country, and never has friendship and partnership been more important.  The LEP has always acted as an enabler, recognising that we must create a community underpinned by a collaborative campaign to develop an effective eco-system that will help our region restart, revive and ultimately thrive.  It is this partnership approach that will help us progress to a better place.

Colin: The Growth Hub is an impartial and trusted broker and we work with businesses to understand challenges and opportunities and then connect them with the people, organisations and solutions that we believe are best for them.

The delivery of support is carried out by our partners who are national and locally based and from the public, private and education sectors. We work closely with our partners through the Business Support Provider Network, which provides a forum to align their collective efforts to the delivery of economic strategy and to inform the development of business support and finance solutions that will deliver the greatest impact to businesses.

What should businesses be thinking about now in terms of recovery and readying for a recession?

Ammar: The three biggest enablers to success for any organisation are digital transformation, innovation and new markets.  These factors are even more critical to the recovery of our economy and that is where the Business Growth Board is focusing all its attention and efforts.  This includes working with the Michigan Institute of Technology Team and key stakeholders to develop an eco-system that gives our whole region a competitive advantage and an accelerated recovery plan.

Every business should be planning and preparing for the future in an innovative, inclusive and industrious manner.  Especially as the North East started the industrial revolution.

Colin: Businesses need to consider what they have learnt through the pandemic that they can use to give their business an edge moving forward. This may be things like honing into new market opportunities, developing new ways of working, harnessing technology and unearthing new capabilities within their teams.

People are pulling together to support one another through the current situation. How can business leaders follow this through into the recovery and harness the fire in people’s bellies, their collective energy, passion and creativity to deliver a better future – it’s by no means going to be easy but it’s our fighting spirit, grit and determination that will help the North East to bounce back.

ENDS

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Regional business support platform, North East Growth Hub, welcomes new Connector

The North East’s leading online business support network, the North East Growth Hub, has strengthened its team of Connectors with the appointment of former International Trade Advisor, Craig Harrison.

Focusing on supporting the region’s creative and digital businesses to scale up through access to finance and funding and business support services, Craig brings a wealth of experience from working and supporting global Fortune 500 companies to local SMEs.

A former International Trade Advisor at Department for International Trade, Craig spent 13 years working in China and Japan for an international logistics and mobility company in a senior strategic sales and marketing role. Upon returning to the UK, he has worked within the creative and digital sector.

Craig said: “My role as a Growth Hub Connector is to provide impartial, one-on-one support to businesses working in the digital, creative and tech sectors, who are looking to grow and scale both domestically and internationally.

“As one of the fastest growing areas of industry in the North East, there are lots of businesses that need help and advice on everything from accessing finance and funding to help them expand, or business support services like mentoring, skills and apprenticeships to strengthen their teams.

“I’m able to help them navigate the wealth of support available in the region and find the right solutions for their business.”

Craig joins two other Growth Hub Connectors who provide a personal service from the online North East Growth Hub. The Growth Hub Connectors offer free support and guidance to businesses of any size and at any stage of growth.

Colin Bell, Business Growth Director at the North East LEP, said: “We’re delighted to welcome Craig to the team and benefit from his many years’ experience supporting and working with businesses, which more recently have been focused in the creative and digital sector. 

“More and more businesses in the North East are turning to the North East Growth Hub for advice on topics including exporting, procurement and Brexit. Craig’s experience of working internationally and helping companies to export will be vital as we prepare to the leave the European Union.”

For more information about Growth Hub Connect and to speak to one of the Growth Hub Connectors, visit www.northeastgrowthhub.co.uk or call 0191 561 5468.

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North East LEP appoints Growth Hub Connectors to help region’s businesses grow

Businesses in the North East will benefit from expert advice and guidance on how to access support to grow their company following the appointment of two Growth Hub Connectors at the North East Local Enterprise Partnership.

Ken Arnold and Karl McCracken will connect business support, and finance and funding providers with businesses in the region in a bid to boost the local economy and create more and better jobs.

This enhances the North East Growth Hub – the region’s online business support platform, by adding experienced, hands on support.

Ken Arnold, Growth Hub Connector at the North East Local Enterprise Partnership, said: “The North East Growth Hub is a fantastic place for businesses to access information, advice and guidance on how to grow their business.

“As Growth Hub Connectors, it will be our job to identify the help firms really need, and connect them to the business support providers, initiatives and resources that can help them on their journey.

“What form that help takes will be unique for each business; from access to finance and funding, to recruitment and training. By understanding the business needs, we can match companies with providers or recommend programmes delivered by the North East LEP that can help them grow.”

The North East Growth Hub has successfully helped thousands of businesses to get business support advice and access vital finance and funding, both through the growth hub portal itself and the associated helpline, web chat and e-mail facilities

Part of the North East LEP’s business growth strategy to make the region a place where businesses invest, grow and prosper to create more and better jobs. The introduction of new Growth Hub Connectors aims to build more direct engagement between businesses and support providers.

Karl McCracken, Growth Hub Connector at the North East Local Enterprise Company, said: “Both Ken and I have experience of running businesses and understanding the links between different areas of a business. So we can help owners and senior managers identify their business needs and make sure they access the right kind of support.

“It’s our job to really get under the skin of a company and understand what help they need to grow. There’s so much support available to businesses in the region but that can make it hard for business owners to find the support that’s right for them. We’ll be helping bridge that gap, with impartial and transparent advice to bring businesses and providers together.”

Prior to joining the North East LEP, Ken worked as a Senior Knowledge Manager at the Business and Enterprise Group supporting the work of the Business Support Helpline and Growth Hubs across the North of England. He has also provided freelance management and business support advice to organisations including the North East Business and Innovation Centre and Raytec.

Karl has run a number of businesses including a manufacturing consultancy and copywriting business. An experienced business coach, Karl worked for Enterprise Agency, Go Wansbeck, before joining the third sector where he worked for sustainable transport charity Sustrans and North East charity, Recyke y’bike.

To speak to the Connectors, call 0191 338 7468 or visit the North East Growth Hub at northeastgrowth.co.uk

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In conversation with Business Growth Director, Colin Bell

In May 2018 Government launched a Business Productivity Review. The review considered the ‘firm-level’’ factors that impact productivity and how firm level interventions by the public and private sector can support business growth and productivity improvement.

Here the North East LEP’s Business Growth Director, Colin Bell, explains why this is a critical piece of work and how a collaborative approach has led the response.

Why is this review important to the North East?

The economy has been great at creating jobs, but what we are not seeing is such vibrancy in the jobs market being reflected in people’s living standards and pay packets. Central to the North East’s vision of creating More and Better Jobs is making people’s lives better. Tackling the underlying causes of low levels of productivity is therefore an essential focus for the Government and the North East LEP.

Finding the solution together

In the North East we have been working with a range of partners including the business community, academia and third sector to develop a depth of insight and evidence as to what drives firm level productivity and the approaches to business support that have generated the best results.

Our joint evidence supports the notion that higher levels of leadership skills and the adoption of technology are key drivers of productivity improvement. One of our most powerful findings is that the biggest influence on businesses is exposure to and connectivity with peers who have undergone leadership development, invested in new technology and are now realising the benefits.

This is an important review and we now look forward to working with Government and partners to mobilise our ideas through the creation of the North East’s Local Industrial Strategy.

Access the Business Productivity Review call for evidence here

Access the North East LEP’s response here

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In conversation with Andrew Hodgson: Even a small rise in productivity has a big economic impact

Boosting productivity is one of the key economic challenges of our age and is an issue the North East Local Enterprise Partnership is setting out to help tackle through the launch of a new pilot programme.

Growth Hub High Performance collaborates with senior business leaders to develop and deliver strategy and business models that drive higher levels of performance, profitability and competitiveness.

Delivered through the North East Growth Hub, the scheme will help companies learn from senior business leaders through specialist performance coaching, peer driven workshops and best practice visits.

The pilot programme supports the LEP’s pledge to create more and better jobs for the regional economy – better quality jobs being driven by better productivity.

If all businesses raise their productivity performance, even by only a little, the economic impact will be significant.

Poor productivity is holding back the growth of the UK economy as a whole and is the subject of much debate amongst business leaders, Government ministers and economic analysts.

A landmark recent report by Sage and Nesta into small and medium-sized businesses in the UK, mapped entrepreneurs at a local authority level for the first time.

‘The State of Small Business’ showed a postcode lottery in productivity levels – with SMEs in the most productive local authority in the UK 26 times more productive than those in the least.

Such a patchwork of performance is not good news for a national economy ranked the least productive of the G7 nations.

If businesses are not helped to be more productive then their profit margins will be squeezed, they therefore can’t pay people more and living standards will fall.

Companies become less competitive and less profitable which ultimately slows both business and economic growth.

Greater productivity is a challenge set down in the region’s Strategic Economic Plan as one that the North East must meet as a priority to bridge the widening gap we have with the UK’s productivity level as a whole.

Helping companies to become more productive is widely recognised as being a catalyst for economic growth, higher wages and greater competitiveness.

To tackle this challenge, the North East LEP is working with the industry lead Productivity Leadership Council, chaired and formed by Sir Charlie Mayfield in 2015.

Businesses learn best from other businesses so our approach in the new Growth Hub High Performance programme is structured around best practice sharing between peers.

It will introduce participants to exemplar firms from across the region, as well as providing access to the practical tools and techniques that can be used to implement improvements.

The programme is structured around the key drivers of high performance such as future planning, leadership, talent development and the adoption of digital technology.

The High Performance programme isn’t for everyone; it’s specifically aimed at senior leaders from businesses with between ten and 50 employees. Critically, participants must have a strong desire to transform their company’s performance and be prepared to dig deep and fully participate in this short yet challenging programme.

It is structured around four, full day, peer driven workshops which begin next month.

For more details go to www.northeastgrowthhub.co.uk

 

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In conversation with Colin Bell, Business Growth Director: Leading your business through the different phases of growth

Colin Bell, Business Growth Director, discusses how to lead your business through different phases of growth.

At the North East LEP, our business growth programme exists to make sure that people have access to the support and finance required to start and grow a business. It’s therefore important that support is targeted at the common challenges faced when transitioning from one stage of growth to the next. Each transition tends to change the businesses structure, complexity, and what’s required from leaders as well as throwing up a multitude of challenges that risk destabilising the business and stalling growth.

So what are the main phases of growth and associated challenges?

Phase 1: Birth – the owner does everything!

You are the leader, you are the sales person, the receptionist, the technical specialist, the operations manager…..you are the business, it’s an extension of you! As the business’s major resource, you are working incredibly long hours, and family and hobbies feel like a distant memory. Generating a predictable cash flow to recruit additional resources is the short-term issue.

The major challenges include:

  • Defining your market and ideal customers
  • Generating enough cash to feed and develop the business
  • Coping with operational disorder and chaos
  • Maintaining the required levels of energy and tenacity
  • Attracting talent with limited resources.

Phase 2: Development – making the shift from manager to leader

Your business is in lift off; the orders are rolling in, you markets and customers are more defined, you’re utilising 110% of your resources but cash is beginning to build and a management team has begun to form. The business’s operations have become less reliant on your day to day involvement.
The major challenges include:

  • Maintaining the levels of energy required to grow the business
  • Motivating and aligning people’s efforts on the vital few things that will achieve the business’ goals
  • Developing the systems and processes required to consistently deliver your value proposition and control growth
  • Generating or raising enough cash to invest in the businesses development.
  • Identifying, attracting, recruiting and developing talent
  • Developing the trust, capability and confidence in people to empower them to own and take account for parts of the business
  • Developing the competence in others to sell – vital to breaking through to the growth phase.

Phase 3: Growth – becoming a leader!

The business has begun to get real traction, you’re attracting some great customers and employees and are known within the industry and things are feeling a little more stable. Stability, however, can result in a loss of the restlessness and entrepreneurialism that’s got the business to this point.
The major challenges include:

  • Developing the leadership capability required to take the business to its next level
  • Reigniting your entrepreneurial spark and reconnecting with your vision and purpose
  • Packing your business full of the talented people needed to deliver growth
  • Providing the opportunities for talented people to grow their career within the business
  • Making sure that the business’ systems and operations continue to deliver the value proposition
  • Having visibility of and understanding what causes either good or bad performance
  • Nurturing, enhancing and maintaining the businesses culture, value and purpose.

Phase 4: Expansion – Mastering Leadership

Your business has been successful, you’ve expanded geographically, perhaps made a few acquisitions, but it’s likely that your market is becoming more crowded and competitors are approaching your customers and your staff. Growth requires something new to differentiate from the competition and to retain profitability. It’s time to break the mould and rewrite the rules of competition creating a culture capable of developing and executing the ideas that will disrupt the market.

  • Developing a culture capable of generating and moving forward the new ideas that will fuel your next growth curve
  • Breaking down the silo mentality and sub cultures that has formed over time
  • Communicating and having presence across a larger business
  • Keeping people aligned to the businesses vision and goals and living the businesses values and purpose
  • Developing effective governance and keeping an increasingly complex group of stakeholders happy.

To find out what support and finance is available to support your growth then please visit www.northeastgrowthhub.co.uk

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In conversation with Colin Bell, Business Growth Director at the North East LEP

For the North East to make a step change we need more businesses to scale-up. We need an entrepreneurial conveyor belt of people starting businesses; people who grow the businesses they started into micro businesses; micros businesses into small businesses and so on until they become the big businesses of tomorrow – simple!

If only life was that simple, lots of things get in the way. Some people don’t want to grow and they certainly don’t want the complication of employing people – there is absolutely nothing wrong with that. Many however do hold the ambition to scale their business. They think big, have fire in their belly and want to take on the world.

Unfortunately too few realise their ambition and are left feeling frustrated. They work harder and harder but no matter how hard they try they can’t break through the ceiling and move to the next stage of growth.

So why do so many owner/managers struggle to realise the rewards for their hard work? For most the answer lies in the fact that they haven’t made the transition from working ‘in’ their business to working ‘on’ their business. No matter how hard they work, the owner/manager will only ever have limited time and energy and if they don’t let go and empower others to run the business then they are unlikely to achieve their growth ambitions. So how can they make the shift? Let’s look at what’s arguably the world’s most scalable business ever.

Love them or loathe them, McDonalds is arguably the world’s most scalable business. McDonalds serves 75 burgers every second yet in the 1940’s it was a small family restaurant. So what lead to McDonalds having over 34,000 restaurants in 119 countries?

Using lean production techniques, both Dick and Mac McDonald pioneered a highly efficient service system that not only produced food quickly but also delighted customers. The restaurant proved popular yet remained a small family restaurant for some time. So what changed?

In 1954 Ray Kroc – a milkshake salesman – visited the restaurant and was impressed with the system that the McDonalds brothers had created. Recognising the opportunity, he persuaded the brothers to franchise their restaurant concept. Rather than spend his time flipping burgers, Ray spent his time developing, documenting and refining the businesses operation and business model to enable its rapid expansion.

He dedicated his time and energy to working ‘on’ the business rather than ‘in’ the business. Ray Kroc’s decision to work on the business enabled him to develop a scalable business model through:

– Developing a scalable business model (franchising)
– Standardising systems so they can be easily replicated and ensured consistency
– Keep the number of components to a minimum with a simple menu that used common ingredients
– Develop a supply chain capable of scaling as quickly as the business
– Adopted lean production techniques to keep costs down
– Developed a consistent business operating and training system (the Hamburger University – est. 1961)

The reality is that had Ray Kroc decided to roll up his sleeves and get to work in the kitchen then McDonalds may still be a small family run restaurant. It’s therefore not just about hard work but rather dedicating the time and energy to the things that will scale your business – should you have the ambition to do so.

Colin Bell, Business Growth Director, North East LEP.
Think BIG, Think Growth Hub – www.northeastgrowthhub.co.uk