Wrong board led to business failure
Having the wrong people on his board is what led to the downfall of Tom Dawes’ first business.
Some, he says, had been forced on him by funders whilst others simply weren’t the right fit. When his order book started drying up following the 2008 financial crash, Dawes then found he was left to keep Aerogistics afloat by himself until its eventual sale in 2010.
It was a harsh lesson learned in business and the reason he has carefully selected the people around him at Cheshire-based Valuechain.
The Daresbury business, which produces software for the manufacturing industry, was a 2016 Northern Stars finalist and counts the likes of the Ministry of Defence, BAE Systems and Bentley among its client base. Its success is, in part, down to having the right people on board.
From an initial board of two, Dawes and his co-founder employed others to bring in the skills they were lacking, including a commercial director who would focus on growth and a recruitment director. A non-executive chairman, who was a trusted contact with years of experience, was appointed to cast fresh eyes over what they were doing.
“We recognised that we needed somebody who could help make sure we were working on the business rather than in it – somebody who wasn’t going to get stuck in the day-to-day running of the business,” Dawes says.
Have the right chemistry
The thought-out strategy was in contrast to how things had been at supply chain integrator Aerogistics.
“One tip I would give now is to do what’s right for your business rather than what looks good on paper – and find somebody with the right chemistry rather than someone being forced on you.”
Dawes acquired another business in 2016, and that brought a non-executive finance expert onto the board, though this may change in the future.
“If I was going for other funding, which we will be doing in 12 to 18 months, I’d recruit a full-time finance director,” he says.
He recommends deciding on the type of person you’re looking for before you begin your search, saying: “Scope out what the ideal person would be.
“Is it somebody who’s worked for a particular type of company, with certain experience? Or who has gone through certain challenges? Define what you’re trying to find and then use your network.”
Dawes also says that those employed should share the same values for the business.
Non-executives can help out in varying degrees, with a tech expert at Valuechain knowledgeable about scaling up businesses and providing additional mentoring for the management team.
Dawes admits that non-executives can be expensive but are cost-effective in comparison to a full-time board member. A half-day a month might, for example, be adequate for the skill set you need.
An annual review can be useful to assess whether that person is still the right fit for the business, which, at Valuechain, takes place every September and can make difficult conversations less awkward.
When it comes to other board members, assess whether you need to bring in that expertise or whether it can be gained elsewhere.
“Identify the strategic benefits and make sure you bring in people that are doers to justify that fixed overhead,” he says.