The singing industrialist: how Sir George Buckley drives growth and innovation in business
Following Odgers Interim’s recent Programme & Project Management reception with Sir George Buckley; Tom Legard, Partner and Head of our Industrial Practice, explains how to build and sustain a high-performing company
What do Sir George Buckley and The Damned's guitarist Raymond Ian Burns have in common? They have both sung versions of ‘Happy Talk’, the show tune for the 1949 Rodgers and Hammerstein musical, South Pacific.
Whilst Burns achieved a UK number one hit single with his cover of the song, Sir George was merely using it to allude to the need for businesses to have a dream; “if you don’t have a dream, how you gonna have a dream come true?” The impromptu verse – which was joined by many in the audience – was part of his speech at our annual Programme and Project Management reception last month. Addressing the 44 other attending industry leaders, he revealed his ‘secret recipe’ for building and sustaining a high-performing company. With innovation as the key ingredient, here are 5 key tips from one of the world’s most successful businessmen:
1. Grow faster than the marketplace
Any company in any industry that aspires to be a high-performing business needs to be growing faster than the marketplace. If they are not, they are losing market share to competitors. Whilst companies would for example, like to optimistically forecast a growth rate from 2% to 5%, in reality a company that operates in a 2% growth market is likely to only grow at 2%. Any business leader worth their salt understands that shrinking and cost-cutting is not an effective method for long-term sustainable success and therefore the only option is to actively intervene against the market conditions. To do this, you need to identify or create ‘pocket growth’ within your core markets that is consistent with your higher overall growth targets and then do something different and better to stay one step ahead of the competition.
2. Punch above your weight
Growing faster than the marketplace is of course an uphill battle for smaller companies who will struggle to gain market share from well-established industry giants that are any number of times their size; it would be impossible for a medium-sized drinks manufacturer to out-procure or out-sell Coca Cola for example. The company would not be able to buy goods and services less expensively, nor could they compete with the brand recognition of a FTSE 100 drinks manufacturer. It means that if you are in a lighter weight category than the competition the only way of gaining a sustainable competitive advantage is to outthink them through innovation.
3. Look to your best-in-class margins
Identifying the best-in-class and the ‘outliers’ in your industry will give you an accurate gauge of how much your business can organically grow and how much it can invest in the future. In the food and beverage industry for example, the best-in-class operating margin is roughly 3%, with Starbucks being the outlier at 11%. This potential for organic growth is a key indicator of a company’s ability to adapt to changes in market or regulatory conditions and its capability to therefore survive disruption and competitor actions.
4. Innovate everywhere
Innovation should not just be focused on product or service development. To achieve high-performance and a sustainable competitive advantage, it’s important to innovate across the entire company. This means embedding a culture of optimism and curiosity into your workforce to engender innovation at all levels; from the top down, starting with the CEO. Your employees need to get comfortable with uncertainty and condition themselves against the peaks and troughs of success and failure in innovation. However, when it comes to solving the puzzle of achieving growth through innovation it’s important to note that your core markets are shrinking every day. In order to understand the potential success and life-span of a new product innovation, you need to have an accurate measure of how fast your core markets are eroding.
5. Have a dream
The lyrics in the Rodgers and Hammerstein musical ‘Happy Talk’ are as true today as they were in 1949. If a company doesn’t have a dream, it doesn’t have a single tangible goal to work towards and therefore loses out on the drive and focus that this brings. The long-term success of a company hinges on the organisation knowing what it wants to be when it ‘grows up’ and it needs to make a decision about what this is early on its formation. Once the company has a dream, it then needs a strategy for achieving it and the people to relentlessly carry it out.