Addressing Scotland’s leadership gap

As part of our support for GEW we recently held an event in Edinburgh which brought together a host of successful business owners and entrepreneurs across a wide range of sectors and industries. The panel also included experts on high growth businesses and the Business Growth Fund to explore the challenges facing companies as they seek to grow. In particular, ‘the leadership gap’ as identified in renowned investor and entrepreneur Sherry Coutu CBE's scale-up report.

Our event systematically focused on how leadership can help a business have impact and grow, what became clear is that a leadership gap does exist and the business community in Scotland must therefore make a sustained and collective effort to close it. Through collaborating with and promoting organisations that help scale-ups fulfil their potential, Scottish enterprise can be pivotal to drive economic growth and inspire more budding entrepreneurs to follow suit.

Scale-up leaders have identified access to talent as a key challenge. Many businesses have difficulties finding competent talent and often having to recruit overseas. Indeed this ‘brain-drain’ was raised at our event, with panel members highlighting the longstanding trend of Scottish graduates gravitating towards the bright lights of London.

To nurture home grown talent, the younger generation could be made aware of the skills they need for the jobs that will be available to them when they are finished their education and also the increasingly diverse range of opportunities. Tech industries, for example, are growing rapidly with some of the skills required differing greatly from traditional professions. We need to ensure there is a pipeline of suitably skilled workers to resource the sector’s requirements and become future leaders.

Scale-ups themselves should be promoting career opportunities to people from the industry as well as from schools, colleges and universities –, our economy would be more productive if people were moving more efficiently from shrinking industries to growth sectors.

There can be a lack of capacity and experience in some businesses senior leadership teams when it comes to managing rapid growth. Leaders in companies scaling up at pace need to learn how to cope with changing demands, but many struggle to develop their managerial and leadership talent. There is a shortage of role models who have ‘made it big’ to provide vital mentoring and advice to ‘first-timers’. Mentoring from business leaders who have scaled companies before can have a major impact on those lacking in experience. That’s why it’s so important we support incubator hubs like Codebase to provide this network of expertise to start-ups and help take them to the next level. We have launched our new ‘Barclays High Growth and Entrepreneurs’ proposition as a direct response to the Britain’s scale-up gap which will help the UK compete on the global stage.

Funding is a challenge too and we as a bank have recognised that products must meet the specific needs of modern scale-up businesses. A tech business, for example, has a completely different growth cycle from a more traditional manufacturing company and funding options must reflect this. Our event panellists also identified a lack of venture capitalists in Scotland which means there is a greater responsibility for banking institutions to help meet the needs of entrepreneurial business.

Our latest Entrepreneurs Index report out this week confirms that Scotland has a growing pool of talented entrepreneurs. Start-ups are increasing at twice the rate of the UK average, however, the number of high growth companies are falling. We’ve clearly got the first part right but now we must develop the support structure businesses need when it comes time to scale up to ensure we aren’t missing out on a key driver of economic growth.

Ally Scott is managing director of Barclays in Scotland and Northern Ireland