The Future Champions report, recently published by the CBI, illustrates just how important the UK’s mid-sized organisations are to the overall economy – delivering more than a quarter of all UK revenues and providing one-in-five British jobs.
To my mind, however, the real definition of mid-size is more about the stage of lifecycle a business is in; crucially, they are in the middle of their development, often on the cusp of big and future defining changes.
It’s these mid-sized ‘frigates’, built for speed and manoeuvrability, unlike the oil tanker enterprises, that are the pride of the UK’s economic fleet and have the potential to alter the course of the UK economy.
From manufacturers to retailers, IT and professional service businesses, mid-sized organisations wield huge potential. And with the powers that be now putting extra effort into boosting the mid-market we could see them playing an increasing role.
While mid-sized organisations might face big change, they are far from needy or floundering. We’ve seen these high-growth, rapid-change organisations bite the bullet to take their businesses forward. For example, there’s been massive change in the not-for-profit sector, driven by a need to make funds go further and combat the impact that sluggish consumer spending has on its donations. We’ve seen the leisure industry – dominated by mid-sized firms – thrive on a national scale with acquisition activity. And we’ve seen rising stars in the troubled UK retail sector go global, to not only survive but flourish. There may be much more to be done in this market but the foundations and the belief is already there. Its very familiarity with change makes the mid-market probably the most dynamic and change-ready part of our economy. With greater backing, the world is its oyster.
It is critical these organisations retain the art of control in their businesses. They can do this by ensuring their processes are future-proofed, costs and cash flow are in check and spending is well controlled. Tightly managing the order-to-cash process becomes more critical as businesses grow, as does visibility of what is being purchased, from whom and on what terms. While some mid-market organisations may lack the depth of procurement knowledge that exists in larger enterprises, buying the right things from the right suppliers at the right price is definitely becoming more important to them.
The CBI forecasts that with the right nurturing and encouragement, mid-sized organisations could inject £20 billion-£50 billion into the UK economy by 2020, but as deputy director general Neil Bentley, said: “Even with the right level of ambition, firms will struggle to grow if they lack the right capabilities internally.”
It’s often when an organisation becomes mid-sized that the management of its business gets much more complex. This should be a guiding principle in the government’s support.
☛ Daniel Ball is director of Wax Digital