Matthew Batchelor works with Mercia as a growth partner to help our portfolio businesses resolve challenges and accelerate growth. Drawing upon on his expertise as a CTO for businesses such as Thomson Reuters and FindMyPast, Matthew has worked with Mercia backed businesses; Pimberly as an adviser and Rockar Tech as interim CTO and then as an adviser.

We sat down with Matthew to discuss his career journey so far, how his values inform his actions and why success is its own reward.

What prompted you to transition from a full time CTO career to working as an independent adviser?

After 20 years in technology, I set up Integrity Partners to leverage my experience to support a wide variety of businesses in a variety of sectors. As an employed CTO I’d go into businesses to support their scale up and fix technology challenges. But I was very mindful of the fact that, as a CTO, I was one of the most expensive people within the business and I felt that as soon as I’d fixed a particular problem, that my value within the business was diminished. I knew that I wanted to work with multiple businesses at the same time and see the synergies.

When are you brought into a company?

I get brought into a business when there is a need for a solution, whether this is around scaling the business or at certain pivot or inflection points. Within this context, success is achieved by focusing on people, process, platform and product. And invariably because my approach is empathy-led, typically the solutions can be found within the businesses themselves.

This approach proves to be very effective because change can be delivered in such a way that the integrity of the business organisational structure can be maintained yet often people are better empowered to lift their performances. In the event that this is not possible, a sympathetic team redesign that recognises someone’s contribution and strengths can be equally successful retaining key skills within the business.

What do you find rewarding?

I find it most rewarding to find people-centric solutions that will help a business to scale and then see the result of what I’ve achieved after I leave the business. I also really appreciate mentoring and staying in touch with the smart people who have created those businesses. I can see how they are getting on, and then help them when they grow into other businesses. I’ll keep that network to see where they are up to or actually help them with the next stage of their career.

My son’s favourite film is Nanny McPhee, so I’ve seen it a lot on Sundays, and one day the penny just dropped: I’m like Nanny McPhee. “When you need me, but don’t want me, I must stay. But when you want me, but don’t need me, I must go.”

You mentor business leaders and students at the University of Birmingham. What do you enjoy and find comparable about mentoring students and business leaders?

One of the most rewarding things I see, when working with a student or a CTO, is that ‘Aha!’ moment when the penny drops. Then, when my mentee puts that into practice, which could be in a lecture or a board meeting, and they receive positive feedback and are happy and really enthusiastic about the advice I gave, I relish it – it’s the reason why I do what I do.

I went to the University of Birmingham and it was important to me that I gave back. I would have loved to have met someone similar to me as a student to answer the questions I had about what my career should look like, entry avenues to different professions, and those type of things. I get to offer something that I wish I could have had.

Why did you decide to work with Mercia?

In my experience, there are two types of funds. The ones that I like to work with tend to  listen to their portfolio, they work with them and they want them to succeed.  Mercia are my kind of people; they are empathetic. They believe in their portfolio and work with them, not against them.

What are your core values and what values do you look for in the companies you work with?

I named my business Integrity Partners because integrity is at the core of everything I do. I value people who, when they say they are going to do something, they follow up on it; I value those who are very open, honest and transparent. And they don’t view people as rows on a spreadsheet but as individuals. Diversity is also really important to me.

What would you define as a key challenge in technology-led businesses?

Often, CTOs don’t have a seat at the boardroom table yet in many instances they are 50% of the business. Not having board exposure to the CTO is incredibly limiting for growth, especially for a technology-led business. They are intrinsic to the success of a business from start-up through the scaling process. And if they are not able to fulfil this role as the business scales, then there are effective ways of retaining this IP and expertise in the business that is a win-win for the CTO and the business.

 

 

Former HR Director Natasha Wallace supports teams and leaders to optimise performance without compromising on wellbeing. Her business, the Conscious Leadership Company, seeks to help leaders to thrive in their roles using technology to continuously allow leaders to reflect and track how they feel so they can transform their leadership style.

“Leaders who want to create exceptional teams must cultivate a conscious leadership style”

Recently in conversation Natasha she shared her thoughts on how to be a conscious leader – we’ve paraphrased these five tenets and we’ll also be sharing an insightful podcast next month with Lisa Ward and Natasha, during which they delve deeper into the topic of psychological safety in the workplace.

1) Psychological safety in the workplace

Psychologically safe environments are those where employees can challenge their leaders. Google’s ‘Project Aristotle’ study on team performance found that no other aspect of a team – its diversity, skills, capability – were as indicative of strong performance as trust and safety. The ability for employees to tell the truth without risk is integral to high-performance teams.  If you want to read how to create a workplace that engenders colleagues to achieve their full potential in an environment that also empowers innovation we would point you to Amy Edmondson ‘A Fearless Organisation”.

2) Establish a clear vision

Create a vision of your organisation that goes beyond profit objectives and creates roles that support its delivery. A disconnect between vision and the lived experience of employees day-to-day results in disengagement. Disenfranchised employees who feel like they can’t positively influence their organisation don’t perform as well as engaged employees working toward a purpose.

3) Cultivate resilience

It’s well-known that resilient workforces deliver higher performance over a long-term. However, leadership burnout doesn’t get much attention, but has a clear negative impact on organisational performance.

A recent Deloitte Report stated that 82% of leaders are exhausted, 68% of leaders are stressed by their workload, and 62% of leaders want to provide better wellbeing support to their employees. When leaders cultivate their own resilience by developing a conscious leadership style, the whole team benefits.

4) Fail fearlessly

Organisations should help their leaders to foster resilience by creating safe environments in which to fail. Leaders in safe environments have the autonomy to try new ideas and make mistakes in the process. Allowing time for exploration means that the infectious and positive values of creativity, innovation, motivation and excitement are fostered throughout the organisation.

5) Develop self-awareness

Self-aware leaders are strong leaders. Natasha recounted her earlier career as a HR Director and how she pushed her team to perform to the best of their ability without creating a safe space for people to self-express authentically. As a result, herself and her team suffered burnout.

Leaders who understand their strengths and weakness are more adaptive and flexible when faced with challenges. They understand when to step-up and when to withdraw, and as a result, feelings of autonomy within teams increase and overall organisational performance improves.

Nigel Owens, Mercia Portfolio Director; Sarah Williams, Mercia General Counsel and Company Secretary; and serial non-executive Frank Collins, sat down to discuss exits to trade or secondary buyouts. With a combined 59 years of exit expertise, our panel advised our guests at our Chair Summit 2022 on how businesses can best prepare for exit.

Prepare for an exit, but do not presume when or how it will happen. This was the pivotal comment of the day, drawing consensus from our panel that exits rarely arrive in an anticipated form; buyers often emerge from left field and timings take you by surprise.

Drawing further inspiration from this fireside chat we share these insights for you.

Run it like you will never sell

This is a bold statement, but one intended to narrow the focus of business leaders on creating value. The strategic plan for growth should run parallel to the exit strategy.

Our panellists’ advice to management teams was to run their business like they will never sell it and as though they will have an interesting approach tomorrow. Negotiating the tension between these two opposing imperatives is tricky but necessary as the buyer might not want to buy when management want to sell. However, business leaders should be adaptive and ready to sell if an offer is made that meets the objectives of everyone involved.

Consider your exit from day dot

Business leaders should start to consider the exit the day their first investment completes. Because good exits come from businesses that are run as though they will never be sold, understanding the value drivers for the business from the outset will help to refine the business plan.

Leaders must rise to the challenge and knuckle down during the period of frenzied activity that the first investment heralds and gain a clear understanding of what those value drivers are. They could be revenue, revenue growth, profitability, profitability growth, the technology, the people, or a combination of all and more. Understanding those value drivers and how they develop over time is key to all leaders.

Retain a focus on performance

Know what good performance looks like in your business and meet it. Hitting your numbers is important because regular underperformance knocks confidence in buyers. Those numbers do not have to be profitable numbers, but your business plan must be a meaningful document that has reachable targets. Buyers will look at it.

Maintaining accurate records is critical. You should maintain your data room following completion of your first investment. The unexpected is what derails most deals, but accurate record keeping saves you from trying to plug unexpected gaps during the due diligence process. Identify and highlight potential issues as they occur so you are not struggling to amend the unfixable when it is too late. A lack of preparation, poor record keeping, weak governance and data gaps are the chief factors that repel buyers.

There is no such thing as the right buyer

The perfect buyer is rarely the purchaser. The best most businesses can hope for is the best buyer at the right time.

Buyers often come from an unexpected direction at an inopportune time. Your potential buyer may perceive your business’ value in an area that you did not anticipate at the outset. To anticipate this, business leaders should retain an open mind about what are the value drivers of their business are. Buyers might see your business as an add-on to one in their portfolio, a means of accessing a new market or a method to acquire some new IP. Once you refine your buyer pool, you may need to tweak the message about what the respective value drivers are in your business to suit the interest of potential buyers.

What makes a bad deal?

Bad deals were those which lack honest conversations. Adversarial deals rarely lead to successful exits. Corporate transactions should have both sides of the table working in tandem toward the same objective. Everyone naturally wants their unique objectives to be met and their position protected, but open dialogues are necessary for deals to make it over the line.

Have clear expectations

Many deals fall away because stakeholders lack clear expectations of price on exit. Management teams could initially be excited by a headline number, but once tax bills are calculated and everyone realises how much they will take home, sometimes that number no longer works. To avoid this, management teams should know what numbers will cover the related tax costs and be remunerative enough for everyone involved to accept before sitting down at the table.

Be conscious of personality fit

Personality fit is integral to constructing successful management teams and is an equally important aspect of choosing the partners that the business works with during the exit process. Not everyone has the right skills to maximise shareholder value on exit.

Non-executive directors need to have the tough conversations about whether the management team has the right skills, capability and desire to deliver what will be expected of them when exit comes.

Good Chairs can provide appropriate, respectful feedback to the team about which personalities will best lead a business to a remunerative exit and beyond. A strong Chair can build teams that not only deliver exits but propel growth in the business’ next chapter.

As an exit approaches businesses will work very closely with and depend on their advisors. Choosing the right advisor can make all the difference toward as whether there is smooth exit process and outcome, or not. All advisors should be cautious, but uncommercial advisors can jeopardise transactions. Successful advisors are those who are neither excessively cautious or heedless but can draw on their expertise and resilience to negotiate for the best possible exits.

Loyalty matters less than suitability in the run up to exit. You may trust your long-standing legal adviser, but management teams should elect advisors best suited to the task at hand, even if that means introducing new personalities to the business. This is especially beneficial for cross-border transactions, when someone who can negotiate different territories,’ cultural differences can smooth the process.

In conclusion

A successful chair or non-executive director can provide the appropriate insight and feedback to propel growth. They can draw on their expertise to support in team construction, by focusing on personality fit; establish good data collection and record keeping; and by creating a business plan which clearly details value drivers. Great chairs and non-executives not only are instrumental in driving the kind of value which delivers exits but are the architects of the growth that comes next.

Zendesk makes customer service better. It builds software to meet customer needs, set your team up for success, and keep your business in sync.

Jeremy Ambrose joins us once again, this time focusing on those looking for investment or next round investment. This sesson will cover:

• A fun look at how to grow your valuation and what you need to have in place
• A look at both financial, legal and operational due-diligence to maximise your valuation
• What goes up- can easily come down. How to lose valuation in an investors eyes
• We use a model to grow your valuation to £2.1M and then lose it all in one session

Axiologik is a Leeds-based consultancy that helps organisations such as The Home OfficeNHS Digital and Selfridges establish, develop and evolve their digital transformation programmes.

Mike Quate, Gordon Cullum and Adam Cockburn from Axiologik, will share their thinking about the considerations needed to start and develop greener and more sustainable technology plans.

The session covers:

 How vital is the development of technology plans
Creating more value through greener solutions
 How Cloud and Sustainable IT choices can aid cost
 Track and measure the impacts made when targeting carbon neutrality

Zendesk makes customer service better. It builds software to meet customer needs, set your team up for success, and keep your business in sync.

Jeremy Ambrose from Zendesk presents ‘How to turn your Customer Service Centre into a profit centre’.

Jeremy covers such topics as:

• A deep dive into CX trends that have been used by scale-ups and unicorns, compared to near linear growth businesses.
• Insights from working with 4500 startups/scaleups about how to really grow your customer service centre to support your company growth.
• How to save time and effort and get back to working ON the business not IN it.
• Actionable takeaways and timelines for when you should be doing what when it comes to automating customer service.

Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

We provided a live management presentation and Q&A, presented by Dr Mark Payton, Chief Executive Officer, Martin Glanfield, Chief Financial Officer and Julian Viggars, Chief Investment Officer.

 

Read the full RNS here
Visit our Prelims 2022 area here

 

Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

Highlights

  • Adjusted operating profit up c.152% to £8.4million (2021: £3.3million)
  • Realised gains and finance income totalling £12.2million generated from the sale of Faradion
  • £11.4m fair value movement in direct investments, including fair value uplift of £6.7million in nDreams following significant third-party investment
  • Profit before taxation of £27.4million (2021: £34.0million)
  • Proposed final dividend up c.67% to 0.5 pence per share (2021: 0.3 pence per share)
  • Net assets of £200.6million (2021: 176.0million)
  • Net Assets per share up c.14% to 45.6 pence (2021: 40.0 pence)
  • Cash and short-term liquidity investments of £61.3million (2021: £54.7million)

Managed fund developments

  • Third-party funds under management (“FuM”) of c.£758million (2021: c.£764million) contributed £19.5million in revenue, excluding performance fees, for the year (2021: £18.2million)
  • Cash returned to fund investors from successful realisations of c.£87million (2021: c.£27million)
  • Venture FuM c.£592million (2021: c.£600million)
    • £15.7million successfully raised across three Enterprise Investment Scheme (“EIS”) funds during the year
    • c.£15million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Equity mandate, with effect from 1 November 2021
    • Interim and final dividends totalling £17.0million paid by the three Northern Venture Capital Trusts (“VCTs”), in addition to special dividends paid of £20.8million arising from successful realisations
  • Private equity FuM c.£48million (2021: c.£54million)
    • Portfolio trading and prospects improving post pandemic
  • Debt FuM c.£118million (2021: c.£110million)
    • Accreditation awarded to the Group to deliver debt funding under the Recovery Loan Scheme (“RLS”)
    • c.£11million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Debt mandate, with effect from 1 November 2021

Direct investment portfolio developments

  • Direct investment portfolio fair value of £119.6million (2021: £96.2million), up c.24% notwithstanding the significant investment realisation of Faradion, completed in the year
  • Sale of Faradion in January 2022 resulted in total cash receipts of £19.4million (including a £1.5million loan repayment), generating £9.9million of realised gains together with crystallised loan interest and redemption premiums totalling £2.3million for the year
  • £18.4million net invested into 16 portfolio companies (2021: £15.4million net invested into 19 portfolio companies), including new direct investments into Forensic Analytics Limited and Pimberly Limited
  • Completion of a significant third-party investment into nDreams, resulting in a £6.7million fair value increase to the Group’s investment holding value as at 31 March 2022

Post year end developments

  • In April 2022 the Group’s AuM surpassed £1.0billion, with the three Northern Venture Capital Trusts raising £40.0million through the allotment of new shares, plus Mercia’s maiden Knowledge-intensive Impact EIS Fund raising £4.5million. Both successes reflect continued confidence in the track records of the VCT and EIS portfolios and the investment teams who manage them
  • Demerger from Intechnica of its cybersecurity bot-management business Netacea, to allow both companies to benefit from a refined focus on capitalising on their respective significant growth opportunities. Mercia retains stakes in both businesses post demerger equal in value to its previous holding value
  • Exciting commercial progress continues to be made by the direct investment portfolio
  • Mercia has been accredited as a carbon neutral organisation, demonstrating its commitment to ESG principles

Mark Payton, Chief Executive Officer of Mercia, commented:

“I am pleased to share a set of results that showcase the strength and maturity of Mercia and its business model. The significant success that we have seen during the last two financial years, and our positive future prospects, have been made possible by the combined efforts of everyone connected with Mercia. I would therefore like to express my sincere gratitude to the amazing portfolio companies that we have the privilege to support. As a Group, we are also very appreciative of the growing belief in Mercia from our third-party fund investors, and both VCT and Mercia shareholders, that the UK regions can deliver value and returns. Finally, I would like to thank Mercia’s employees, without whom we would not have become who we are today: #OneMercia.”

Read the full RNS here
Visit our Prelims 2022 area here

 

Liz Wood from Comply Direct will discuss the feasible actions businesses can take to reduce their carbon emissions and work towards a net zero target.

During this webinar we will provide a comprehensive overview of what net zero means, as well as the importance and benefits for businesses of committing to a net zero carbon target. In addition, we will share the roadmap of essential actions an organisation wanting to achieve net zero will need to address – including, carbon footprint measurement, carbon reduction planning, target setting and carbon offsetting.

As climate change is the defining issue of our time, investing in sustainability is becoming increasingly paramount for businesses. More and more organisations now require their supplier base to have made carbon commitments which is an example of the many further economic, commercial and environmental benefits of embracing sustainability, for both your organisation and the wider environment.

Anna Sutton is the co-founder of The Data Shed, and will be looking at the impact of good data on investor confidence, due diligence and, most importantly valuation.

The Data Shed is a Data Consultancy working with organisations of all shapes and sizes at varying stages of their investor journey. Specialising in integrating data sets to drive insight and value, The Data Shed focuses on how their clients can leverage their data as an asset whilst minimising risks.

Backed by research, The Data Shed has found that data is becoming a more important area of focus as each year goes by. In this session, we will focus on how data can play a key part in driving the best outcome for both sides at each stage.

Sign up for more Mercia events here