By Noeline Sanders, Outgoing CFO at Digital Catapult
As CFO of Digital Catapult, I’ve had the privilege of playing an instrumental role in growing the organisation over the past ten years, contributing towards its success as the UK authority on digital technology, and working with 2,743 startups in the past five years alone. I’m incredibly proud to have been a big part of Digital Catapult’s growth, and where it stands today, with around £40m in turnover and world-leading projects across the spectrum of emerging technologies. The CFO’s role is critical to ensuring the success of any business, and that scaling is achieved effectively. Of course funding and stellar financial management goes without saying – but as I reflect on my learnings over the past decade, I am able to identify three other critical learnings that helped us to achieve this success on a strategic, organisational and operational level.
The form of mindset and planning for success
The overriding mindset that is required is one of ‘planning for success’. Whilst this might seem a glib statement and surely what every start-up wants to achieve, the landscape for this is far more nuanced. It is important to hold together that the innovation process is iterative, multifaceted given market conditions and has much ambiguity to contend with. It is also important to keep in mind collaborations which will minimise re-inventing the wheel, being open to new business models and partnerships along the way. Success comes about not only through having a great idea, but harnessing the market-readiness and defining the measure of success at various stages will help in building the plan, the story and the personal satisfaction of progress.
From a strategic directional perspective, the first learning I had a couple of years into my role at Digital Catapult was the importance in establishing a clear focus. Often, many companies, particularly those in the tech space, are too broad in their go-to-market strategy, spreading themselves too thin in the process. Of course every company wants to grow, but there is no silver bullet to success and sustainable scaling… Focusing on a key area and growing slowly and steadily will ensure the most success, and I’ve seen the merits of this approach even prior to my role at Digital Catapult.
During my time as CFO for Apple Computer, as part of the senior leadership team in Europe that was tasked with piloting the personal digital assistant, I experienced the strategic value of narrowing the focus and pivoting fast when required. Working on the business use cases of the personal digital assistant, Apple was encouraged to pivot from handwriting technology to developing the precursor of the iPhone and iPad, which was a change in strategy and market-fit, which took a different direction towards its phenomenal growth. Having seen the success of Apple’s approach, I was able to be a key business partner in supporting the Catapult through its change in strategy.
In the early years, the Catapult’s remit was too wide, based on ‘data’ which could cover a multiplicity of facets. However, to accelerate the adoption of emerging technologies and to fix market failures, we needed to pivot our overall strategy and focus on specific technologies and application areas. This included strengthening our expertise in future networks, immersive technologies, artificial intelligence and distributed ledger technology, and narrowing our application areas down to virtual environments, digital infrastructure and digital supply chains. What this refined focus and quick pivot allowed us to do was focus our resources on making ourselves experts in these specific areas, recognising how emerging technologies could solve specific problems, and developing our core competencies. We were able to establish a solid foundation from which we could expand into other areas organically. If any other CFO is unsure of how they can scale for success, always consider refining your business focus first.
People and culture ingredients
My second learning is that business success is predicated on the people and culture of a business. We often hear the term people don’t leave jobs, they leave bad bosses, but I’d like to change that. I propose that more often: people don’t leave jobs, they leave a bad culture. Lou Gerstner famously said “When I came to IBM I was a guy who believed in strategy and analysis. What I learned was that corporate culture is not part of the game: It is the game.”
This is why Digital Catapult has such high levels of staff retention and levels of staff satisfaction. Happy employees make for hardworking employees, and in my role overseeing vital functions of the business, I’ve seen how important it is to ensure that a positive working culture is experienced in every area of the business. But, culture goes hand-in-hand with people, and I’ve made it a personal mission of mine to promote, advance and emphasise the value of equality, diversity and inclusion in the workplace. In my 25 years of senior financial and operational leadership, I have been promoting ED&I, even before it became a collective lexicon, having seen the value it can bring to an organisation.
When the Catapult was first established, it had something unique in the talent pool of professionals that wanted to work for us and with us… A clear passion for the work that we set out to do, and how we benefit business, industry and broader challenges, while simultaneously supporting and driving economic growth in the UK. This meant that staff at Digital Catapult have been, and remain, dedicated and committed individuals that thrive off success and deliver real results that drive impact. Keeping such driven staff engaged however, is something that a lot of companies struggle with, but what I’ve seen contribute towards Digital Catapult’s success has been the adaptability of its culture while it remains true to its core values. Digital Catapult provides employee assistance programmes, a commitment to improving ED&I and it ensures that all staff recognise the role that they play in maintaining the company’s culture. I’d urge CFOs of any organisation to consider the value of people and culture if they’re looking to scale up and succeed.
Operational drivers as a strong base
A building is only as strong as its foundations and so is an organisation. I was privileged to have had the opportunity to be part of the inception of the Catapult and to be able to influence and shape the foundations of the organisation. I played a key role in its continuing evolution in terms of processes, risk mitigation, compliance and governance structures. It is often the case that young scale-ups only invest time and leadership in these areas when they hit a problem, which then leads to handling matters in an inefficient manner and getting-off on the ‘back foot’. An experienced CFO or fractional CFO ( often the case at this stage) is an investment you can’t do without in getting it right from the get-go for the relevant stage that the organisation is at and towards its long-term growth journey.
As the CFO, I encountered specific challenges and growing pains that were to be expected when an organisation like Digital Catapult sees such significant success like it has, but with the right focus, teamwork and determination we navigated them!
As I prepare for my next role, I’m humbled by the positive feedback I’ve received from my peers such as the Catapult Chair Juergen Maier, who thanked me for keeping things steady during our period of growth, to feedback I’ve had from my team, whom I’ve supported and developed.
What’s the essential topping?…
It’s having an excellent working relationship between the CEO and CFO! This is important for every organisation but more so at the early years and when scaling is underway as everything is being shaped, often with much ambiguity and often with tight finances! The ability to work in a collaborative and highly trusting manner, discuss strategy and tactics, and be proactive in anticipating challenges that need answers is key to business success. The relationship should foster a no-surprise environment irrespective of good or bad news, and of course demonstrate empathy and share the joy of a job well done…. This all adds towards the essential topping!
To wrap it all up….as I’ve outlined in my article, planning for success, laser sharp focus and/or pivoting fast, paying keen attention to culture, getting the operational drivers rock solid from the start and the ‘essential topping’ all contribute towards the recipe for scaleup success in the tech space.
As I move on into a ‘plural career’, I’m applying all of these learnings to date to provide services as a Fractional CFO, NED and consultant with entrepreneurial organisations, helping them in their scaling journey.
