Businesses that are driven by innovation are growing rapidly at certain times. Everyone is busy when a new product or service is being developed for the market. Technical development, marketing, manufacturing scale up issues to iron out, sales strategies, internal resource allocation, and sometimes fund raising to foot the bill.
So overwhelming can it become that it’s really difficult to get up onto the ‘balcony’ and take a look at the business. Not the product, not the operations, but the whole business. Where it’s currently sitting, where it needs to be, and what needs to be done to get it there. And even if you could get up there and get an aerial view of things, unless you are incredibly disciplined you are unlikely to have an objective view.
We recently held a Venturefest feeder event at our #HelloDigital Centre on Inverness Campus to discuss this very topic. Twenty SMEs and a few HIE staff got together to discuss Non-Executive Directors (NXDs) and how and when they can add value to SMEs with ambitions to grow rapidly through innovation.
And what better way to get an insight into the NXD’s role than to ask one. We were lucky enough to have Iain Scott – seasoned NXD and Gatekeeper at Highland Venture Capital – in our midst, and he imparted three useful pearls of wisdom:
- Non-executive directors will look for the ‘nugget’. What does this mean? It means they want to ‘get’ what the company’s unique offering is. If you can’t articulate this you need to learn. Funders, stakeholders and employees also need to have an understanding of what makes the company what it is.
- They are there to ask the unaskable. It might make you uncomfortable, but that’s generally why they are hired. By challenging the strategy they are testing it and preparing you for at least the same degree of challenging should you take a proposition to investors.
- They are not there to solve the problems. They highlight problems. You decide how you want to act on this information and how the problems need to be addressed.
Tough love you might say. But whether or not you decide to appoint an NXD (and that is very much personal decision for the company), all companies need a method for testing their strategy and their assumptions.
Creating an environment that allows the status quo to be challenged is essential for innovation. You think your product is perfect; do customers share this view? You think internal processes are fit for purpose; do staff agree? One sure way to find out is to ask them!
We’ll be interested to network with SMEs at Venturefest and see how you are approaching the business of business development and who is asking your company the unaskable.