LEADERSHIP, LEADERSHIP, LEADERSHIP. AND GROWTH.
First published on the Engine Shed website, and reproduced here with their kind permission.
I was challenged recently around Bristol’s One City Plan and if the “growth” that we talk about so much is desired and needed, and if so, which companies are going to deliver this growth? SMEs, multinationals, or what? And how does entrepreneurship deliver inclusive and sustainable growth?
This is a really good challenge, and one that deserves some thought and clarification on my personal view of what “economic growth” means, and what we need to do to make it happen inclusively.
First of all, we have frequently talked about sustainable economic growth, and I fear that that gets interpreted as every company that starts must grow and aspire to be something much larger. I don’t think that’s the case at all. One of the biggest reasons, in my view, that Bristol & Bath has such a strong and resilient economy (albeit not yet benefitting all) is the diversity: of sectors, industries, and stages of enterprise as well as the people. We also benefit, I think, from a strong set of ethics, and this permeates the majority of businesses that I meet or have worked with. One way that manifests is in support of local independent businesses.
Is it essential that the baker on Gloucester Road or the pub on North Street expand to a chain? Does it automatically benefit customers, employees, owners, and the economy if they do? It might, but if growth brings risk of failure (over-trading, over-reliance on a market, economic conditions outside of the entrepreneur’s control, or just simple mistakes) is it not better to concentrate on creating a solid, resilient, profitable, and impactful business? My view is that we should encourage and support entrepreneurs in fulfilling their potential and not pressure them into growing for growth’s sake. Or, don’t chase the unicorn, would be another way of putting that.
That doesn’t mean that taking investment and scaling up your business is wrong. My point is that a successful and resilient economy benefits from a healthy mix of all types of business, including for-profit and not-for-profit; new startups, existing businesses growing and, probably to a lesser extent, within multinationals.
Therefore, to achieve economic growth, we need companies that grow as well as more companies that ‘find their level’. You can achieve an increase in aggregate revenue of the region’s businesses by increasing the number of companies, as well as increasing the revenue in each business. The same applies to employment. More businesses also creates more resilience. As long as they are well run.
Which is, of course, where leadership comes in. Whether you should grow your business or simply excel at what you do at your current scale, and whether you take investment or grow (or not) your company through sales, is a leadership decision. The quality (knowledge, skills, and mindset) of the leadership on the board will thus dictate the path a company takes and how it gets there.
If “growth” of the economy is about growth in the number of employers as well as growth of individual employers, then it follows that inclusive growth is significantly about people from all backgrounds gaining meaningful employment or becoming employers (or sole traders) themselves.
We are already doing some work (with ACH, University of Bristol, WECA, and Barton Hill Settlement) on the entrepreneurship strand of that, so let’s focus on what is a huge opportunity: of more employment opportunities being available and accessible to under-represented communities. I have opined previously on the value of a diverse workforce, but how do we make it happen?
There is a supply side context to this, and a demand side. The supply: young people and adults need the right training, soft skills, and signposting, but employers need to be open and accessible in their recruitment practices and in nurturing talent already in, and joining, the business. This is good business sense, obviously.
Some of it is cultural, and that is where we come back to leadership. And the board. If the board understands the value of diversity (in general, not just gender, ethnicity, or other characteristics) and demonstrates that, by for example having a diverse board composition, then a culture or embracing diversity has to be far, far more likely to achieve positive results – for the business, for the local economy, and for communities.
Not that a diverse board guarantees an effective board, but I would suggest it should be a focus of attention for us to help businesses and social enterprises diversify. What do you think?
My view, therefore, is that good entrepreneurship if combined with good leadership, that understands the role of the board, the value of diversity, and knows how to nurture its talent, will drive sustainable and inclusive economic growth across the private and third sectors.