Secret of our mid-cap leaders’ success

Thursday, November 18, 2010 | Posted by: Fiona Cullinan
| Tags: Grant Thornton, growth, awards, M&A, tips, talent, success, National Business Awards, Scott Barnes, mid-cap, winner

Scott Barnes, CEO of Grant Thornton UK, reviews the National Business Awards mid-cap finalists for common denominators that may have helped them survive recession and thrive in recovery

Just over a week ago, 10 National Business Awards finalists were waiting to hear if they were the winner of Grant Thornton’s Mid-Cap Business of the Year category. You can read about our chosen winner here but what were the underlying reasons for the success of these 10 companies? How is it that they all achieved ‘exceptional financial returns, strong growth… and market prominence’ in their sector when others struggled to weather the recession?

Scott Barnes, CEO, Grant Thornton UK, who presented the award, gives his thoughts.

• Returning confidence in the financial sector
“We are seeing confidence returning in the financial sector, and it is also holding up in business services, manufacturing and engineering. Manufacturing and engineering companies have been reducing in size for many years but those that are exporters have been benefiting from the weakened pound. These sectors also began taking corrective action earlier, so they are recovering quicker.”
• Building on strengths to create a differentiator
“We are advising our clients to build on their strengths. A common mistake is to over-diversify in the good times because it means having to retrench in the bad times. We encourage our clients to really invest in areas where they can take a leadership position – which makes it much easier to win business.”  TelecityGroup, the eventual winner of Grant Thornton’s sponsored National Business Award, exemplified this by building on their core business of providing data centres and designing Europe’s most energy-efficient data centre – not only differentiating themselves but saving on running costs at the same time.
• Seeking international growth
“Our larger clients are certainly expanding internationally, to markets like South Africa and Australia, but we are also seeing a lot of inbound investment from India and China. This has been happening for a few years in the case of India, but it’s certainly stepping up and we are seeing more of them listing on AIM.” Many mid-cap finalists have enjoyed significant growth because of their overseas operations.
• Clear integration during M&A
“For those making an acquisition, and we have seen more of this of late, the key is to make sure it fits and there is real synergy. Crucially, there needs to be a clear integration plan because if you can’t leverage the cost efficiencies then it’s a waste of time and money.”
• Getting tactical about talent
“A lot of businesses have stripped out cost by reducing headcount but many are realising that the cuts were too deep, and are looking to re-recruit. The businesses that have been really smart about this aspect of cost, putting some people on sabbatical, or keeping them on part-time or freelance, have kept the talent in the business that will help it to grow again.”
• Regions on the rise
“It’s very interesting to see that this year’s top 10 is not dominated by London and the South East, with a diverse mix of businesses in the Midlands, North-east and West as well. There is a good cross-section of industry represented, with excellent examples of resilient manufacturing, construction and engineering businesses.” The geographical spread of finalists competing for the 2010 Grant Thornton Mid-Cap Business of the Year Award was echoed across the other National Business Awards, with London and the South-east no longer dominating nominations.

For more information on how Grant Thornton can help mid-market companies make smarter decisions about their business, visit our Entrepreneurial Advisory page. Or find your sector to receive dedicated industry advice and business help.

You might also find these posts useful:

* TelecityGroup is Grant Thornton’s Mid-Cap winner in the National Business Awards – a first look at our winners.
* Story of the deal: RDG’s £9.3 million sale to United Business Media – behind the scenes of a multi-million-pound business disposal.
* Top Track 250 tiptoes into emerging markets – this and more on our International Markets blog.