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Informing decision-making

Applied Analysis

In the scale-up phase, retrospective financial reporting, however good, is not enough. When growth is fast you need high quality, relevant and timely information available to make fast decisions.

You therefore need applied analysis not just financial reporting. Of course, you need the basics of budgeting, board pack, departmental KPIs and proactive cash management but applied analysis goes further linking insight on ways to drive better outcomes to finance departmental reporting. Finance must evolve to become the value add centre of resource allocation decision making information and its ambassadors (CFO or COO) must participate in decision making not in policing outcomes.

Key expert

Steven Dunne

“Generating high quality, relevant and timely information for decision-making is crucial through the Scale-Up phase.”

Steven Dunne, Senior PartnerView Profile

Improving customer experience

Delivery

This covers everything required to deliver the quality product or service that customers will rave about and result in them remaining loyal. The basics will already be in place but through the scale up phase there will be more strain and therefore more need to proactively improve customer feedback loops to prioritise product development and optimise retention, departmental structures, reporting lines and responsibilities, support functions (Marketing, HR, IT, Sales admin support, quality control, Finance/Reporting).

Key expert

Mike Reid

“Scale-ups need to prioritise the customer experience through product development, operations and service.”

Mike Reid, Senior PartnerView Profile

Empowering revenue generation

Customer Acquisition

This is crucial for all growing companies whether B2B or B2C, and the fundamentals are knowing the customer, understanding sales channels and influencers and competitor strategies monitoring and planned response. In scale up, high quality recruitment, delegation and empowerment is a core skill to ensure the company still delivers to the same quality. Account management plans, sales management structure, incentivisation and performance management are all likely to be required for the first time and we can provide precedents and benchmarks for these.

Key expert

James Bagan

“Winning new customers and retaining them is the key to scaling any business.”

James Bagan, Operating PartnerView Profile

Establishing the mission

Strategy

Frogs’ definition of strategy: “A competitive game-plan to achieve an important goal” Particularly during the scale-up phase, where a degree of product market fit has already been established, strategy is not about selling a vague market opportunity but rather combining a clear view of addressable market with a robust plan of action as to how this can be exploited. More importantly, identifying the unique resources and attributes your company has (and will need) to thrive in that environment.

Key expert

David Williams

“As you scale a business it grows beyond senior management’s line of sight, so strategic intent is crucial from a communications perspective.”

David Williams, Operating PartnerView Profile

Building optimal teams

Talent

Talent is where planning and execution intersect. Good people will of course help you to execute better, but if they have the right quality and seniority they will also be involved in shaping strategy through bringing challenging views to planning sessions. We champion developing a culture, organisation and HR approach to nurture and continually assess talent at all levels. As a CEO, your optimal team for the challenge will change over the years. Recognising this fact is essential, as is having an approach to assessing performance, addressing competence gaps and spotting early the need to make a step change and take tough people decisions. A strong senior team is essential to share the burden of responsibility for seeing and delivering the vision that can otherwise become oppressive on the CEO.

Key expert

Shirin Dehghan

“Attracting top talent is a critical ingredient to successfully scaling a business.”

Shirin Dehghan, Operating PartnerView Profile

Achieving organisational clarity

Organisation

Good organisation starts from the top and changes in the board are likely to be the most obvious initial differences when growth capital is taken on. Whilst we add value through our Frog representative on the board, we also encourage a wider review of what skill sets are required (for a new chairman for example) at that level and what the processes should be. The board should be a huge asset to the business and where this isn’t the case, you either have the wrong people on it or you aren’t getting the best value out of them. At the executive level, organisational clarity from the top drives business discipline and accountability through all levels, ensuring a consistent approach of rigorous follow-up on previously set targets or projects. This is not about blame but learning and improving every year.

Key expert

Steven Dunne

“Corporate organisation structure can drive discipline and accountability at all levels in a business.”

Steven Dunne, Senior PartnerView Profile

Realising value

Value

At the early venture capital stage, investors base their judgement largely on high level instinct; the passion and experience of the founders, the size of the market and the innovation of the product approach. At the scale-up stage, the core judgement is whether there is the potential to create a longer term, sustainable and valuable business and to set realistic value creation benchmarks along the way. For small businesses, it will be rare for large purchasers to make an inbound approach unless you make a strategic decision to build your profile and relationships. For many corporates, a commercial relationship will be required before a transaction can be justified. Building multiple relationships keeps options open and gives the best, rounded insight on value creation.

Key expert

Mike Reid

“Value creation is an outcome of building a successful business, not an objective to be set in its own right.”

Mike Reid, Senior PartnerView Profile

Knowing your options

Funding

A successful scale-up will have lots of funding options. A company with few funding options is not likely to succeed. Scale-up company boards must have experience of and network into funding alternatives (internal and external equity rounds, venture debt, working capital facilities, its own customers and ultimately, profits), and should understand the company specific pros and cons of each. One of the most common mistakes is pitching your story too early to investors who say they are intrigued but don’t shift to being convinced. Thoroughly test the core thesis you are asking your audience to pitch to their investment committee. And thoroughly research their key investment criteria, as a debt provider, corporate investor, scale-up investor will all have very different measures.

Key expert

Steven Dunne

“Funding requires a continual questioning of whether the current approach is fit for purpose for the journey ahead.”

Steven Dunne, Senior PartnerView Profile

Building resilient businesses

Sustainability

A core part of the Frog philosophy is helping management to build businesses that can become self-sustaining longer term. Ownership may change but the aim is to create a thriving organisation that lasts the test of time as a business entity not just an innovative concept. This builds on all the other elements of the Scale-Up Methodology, especially clarity of annual strategic plans, providing an action plan for executing new growth initiatives and delivering increased market penetration in a well-researched way. The most effective scale-up CEOs drive aggressive growth, not at all costs, but by judging their ability to attract the right level of resource to fuel the plan, thereby keeping the destiny of the business in the hands of the executive team.

Key expert

Jens Düing

“Making difficult decisions to address the changing needs of a business is critical to its survival and success.”

Jens Düing, Senior PartnerView Profile