South: Motivating stakeholders in 21st century businesses

Amid the unavoidable headwinds of the global economy, it’s a good time to be a UK entrepreneur, particularly in the south, writes Richard Baxter, senior partner at Stevens & Bolton LLP.

 

Reflecting on our recent entrepreneur forum, I was struck by the waves of positive data washing over us from our various expert contributors:

• new company formations at record levels;
• entrepreneur confidence greater than for many years;
• a relatively benign UK economic outlook from the Bank of England;
• plenty of funding in many shapes and sizes for well-run growing businesses;
• a recent election result perceived as business-friendly;
• a return to a more buoyant M&A climate.

The other topic that came up time and again was the importance of attracting and retaining the right people. And in turn we discussed the range of things today’s workers look for in a job, reflecting the social and personal priorities of many in the 21st century. These included many softer areas beyond the basics of ’pay and promotion’:

• the importance of a clear purpose that workers can personally identify with and feel proud to be part of;
• leadership and enthusiasm throughout the business;
• culture, work-life balance and flexible working;
• learning and development, including new media;
• fun.

We see the importance of responding to those priorities in our own business at Stevens & Bolton, and it’s clear that many of our clients are in exactly the same position.

Many challenges remain of course. The war for talent with low unemployment among the well-trained is a particular frustration for many.

And many current leaders worry about how the next generation can have such high personal expectations while not wishing or able to sign up to the levels of single-minded commitment to the job shown by many that went before.

Personally, I have great confidence in the next generation – I’m sure they will be well able to look after themselves and if a successful business looks a bit different in the future, the usual hallmarks of quality, distinctiveness, relationships, cost-effectiveness and culture will still be there.

So what might leaders of successful growing businesses be focusing on to keep their teams motivated and happy? We see some or all of the following:

• plenty of interest in binding in stakeholders with share and other incentives, including EMI and ESS;
• ensuring the business is investor-ready, with clear business plans and where appropriate EIS and SEIS clearance secured in good time;
• clear and open communication, managing good and bad news, ensuring a shared sense of purpose;
• managing performance fairly and clearly to gain trust and minimise disruption and cost to the business;
• well-structured management teams with effective delegation rather than an autocratic leader trying to keep control of everything;
• flexibility, supporting and developing each member of the team as an individual.

Advisers have their part to play, although understandably entrepreneurs have a keen eye for cost-efficiency and budgetary certainty.

Plenty of free information is out there, including free guides to download from our website.

Many advisers like us are happy to spend some investment time getting alongside growing businesses, in it for the longer term. But ultimately it’s worth investing to ensure that any incentive arrangements in particular are carefully tailored and will stand the test of time to deliver the desired commercial and taxation objectives.

As always, our entrepreneurs are leading us out of some difficult years. There have been some spectacular recent success stories and plenty more will follow. Those that can successfully blend traditional entrepreneurial spirit and 21st century people motivation will be ahead of the game.