The recession is teaching us all to do more with less. This week we heard how to get more revenue from less Sales leads from The Mathworks and Toby Churchill. And we debated how to get more successful local enterprises with less government support.
The Mathworks develop and sells Matlab software for technical computing and model based design, employing more than 2,000 people around the world. Its founders still own the company, drawing on a long personal history of academic numerical analysis to support over 1 million scientists and engineers in innovative technology companies, government research labs, financial institutions, and at more than 5000 universities. In the UK, many of those users work in Aerospace and Defence and in Financial Markets, and the recent turmoil in the banking sector required their Sales and Marketing team to re-evaluate how they were spending their time. They integrated their Marketing team into individual Sales territories through an objective planning and feedback process that was initially biweekly and hand-cranked but is now quarterly and generated automatically from their Customer Relationship Management system. They focused Sales effort around leads that were more likely to yield opportunities and revenue (e.g. on those attending seminars rather than browsing a webinar for the first time), while maintaining a broader Marketing presence to build a future pipeline. They are focusing within a big pipeline - in the UK they manage 25,000 leads/year which yield 300 orders/month. The Marketing team can switch effort between territories to generate the leads that Sales need, rather than executing a separate plan based on a different annual cycle as they did before. MathWorks UK strive for a balanced revenue contribution from the many industries it supports. The financial crisis made this all the more acute, MathWorks recognising that its marketing needed to be ever more effect in generating the leads from which sales can create opportunities. The reduction in leads going through to the sales team, MathWorks believes has enabled the sales team to improve the value add they are able to offer customers, in turn increasing revenue. As a result, the Sales team worked 35% less leads more intensely, generating 15% more opportunities and 9% more revenues.
Toby Churchill build and sell Lightwriter portable text-based communication aids for people who cannot speak. Again, the original founder drew on his own experience of being paralysed and losing his speech to develop a tool to help people with conditions including ataxia, cerebal palsy, Aperts syndrome, and war injuries. 37 years later, the company employs 32 people near Cambridge and exports to 23 countries around the world, winning two Queens awards for export. Their sales process takes around 18 months after the user trials the device, because 9/10ths are paid for by someone other than the owner - the NHS, local education authorities, local councils. The product advisors don't think of themselves as salesmen, but as special needs experts helping owners assess whether the device will help them and find sources of funding. When a new management team came in in 2007 the company had experienced flat sales for around £2.5M for 10 years. Now with a renewed focus on the sales process, improved integration to the development team and better bundling of accessories to make the device work "out of the box" they are experiencing 20%/year sales growth and are targetting £10M sales for 2012. They can communicate easily within the team, because the company is still small, so they rely on team meetings rather than formal quarterly assessments needed at the much larger scale of The Mathworks.
The cases from opposite ends of the scale drew a lot of questions from an audience of Marketing and Sales managers from Anglia Business Solutions, AMI Software, Cambridge Broadband, Cambridge Mechatronics, Cognidox, EmotionAI, kpi-insight, Mills & Reeve, Proquest, Red Gate, Scienta, Sentec, Studio24, University of Cambridge, Ware Antony Rust, Xennia, and Zeus. Cambridge companies need to learn more of the skills of advanced Sales and Marketing if the ideas of their expert founders are to reach the world.
Our second meeting this week gave local entrepreneurs a chance to influence local government policy, with a panel including Amadeus Capital, Cambridge City Council, Cambridgeshire County Council, RAND Europe, South Cambridgeshire District Council, the University of Cambridge, and our MP for Cambridge.
RAND, who chaired and sponsored the debate, said that in the face of the worst economic climate for over 70 years, policymakers and entrepreneurs alike need to think differently about how to do more for less. The right set of policies can lead to economic improvement and wealth creation here in Cambridge and beyond. Key areas of discussion were:
• How do we stimulate technological and social innovation? Research shows that successful innovation is not just about creating new technologies, but also about innovating in ‘the way we do things’. Recognising how to stimulate both types of innovation is crucial for policymakers and for local entrepreneurs. Julian Huppert said that we are good at invention here in Cambridge, but need to get better at starting companies that grow here and win us a share of the rewards. Hermann Hauser said we need to innovate in areas that are technical (e.g. the successful ICT and biotech clusters here), business model (e.g. ARM's licensing model), and social (e.g. finding new ways for businesses to engage with the Universities). He suggested R&D tax credits with differentially higher rates for SMEs to encourage big companies to outsource innovation, government procurement with a mandatory proportion spent with SMEs, and Technology Innovation Centres. There was a lot of discussion of procurement as way of stimulating and supporting high tech firms in Cambridge. Joanna Chataway suggested that in addition to traditional contracts from the public sector, Cambridge could experiment with local ‘Grand Challenges’ that would offer prizes and incentives for companies to address pressing local social and technological problems. RAND Europe has done some work on the use of prizes to incentivise innovation.
• How do we make policies ‘smarter’? Successful policies need to be based on robust evidence. We must be able to measure innovation more accurately and effectively so that policy can learn from the diverse and dynamic environment in which innovation occurs. Julian cited Goodhart's Law that government quickly destroys the original meaning of whatever surrogate measures it requires, and got a broad response from the audience that they wanted less forms and simpler measures. Traditionally, patents and publications have been measured and we have developed quite sophisticated ways of measuring those outputs from investment. We are less good at measuring a whole range of other outputs and outcomes including improvements in technological and social process innovations. Joanna suggested that policy tends to focus on the things we can measure easily and this can distort policy. We need to develop new metrics which inform policy more effectively. RAND Europe has done a lot of work on measuring the outputs and outcomes of research.
• How can Cambridge benefit from localising innovation in a global context? ‘Localism’ is a key part of the new government’s agenda and there is an opportunity to think through what this means for innovation and economic growth here, as well as in a global setting. Sian Reid said it is okay to be inconsistent with other UK regions, keeping Cambridge local city experience competitive with Bangalore, Beijing, Boston and the other international destinations that our local businesses really choose between. Tim Wotherspoon was equally keen to point out that South Cambridgeshire was very welcoming of high technology now, a reversal of past policies that had limited the growth of the Wellcome Trust Sanger Institute south of the City.
• How do we realise the full value of existing knowledge assets in Cambridge? As a community we have a rich and diverse set of skills, capabilities and knowledge assets that we can better exploit to support innovation and economic growth locally, nationally and globally. Finbarr Livesey pointed out that cuts in research funding would mean that many University researchers would need to find new jobs in the private sector or leave the region, and that as a community we need to get better at having researchers combine academic and business careers.
• How should Cambridge make the most of the government's call for local groups of councils and business leaders to come together to form Local Enterprise Partnerships? Marshall of Cambridge asked for a show of hands from those present asking whether they would prefer to be in a LEP covering a small geographical area but tightly connected to the hi tech economy locally, or in a large LEP covering a couple of different counties, and got a large majority in favour of the small local geography. John Onslow, who is working on how to approach LEPs on behalf of Cambridgeshire County Council alongside officers from other local authorities, highlighted the importance of the business communities coming together and working with the public sector to promote the Cambridge brand and lead the economic growth of the area, so vital to national recovery.
This was an active debate, engaging an audience including AmiHo, Anglia Ruskin, Genie, Cambridge Angels, Cognidox, eg Technology, EmotionAI, Enval, Ernst & Young, Hewitsons, House of Commons, Media Managers, Medical Research Council, NHS East of England, Owlstone, Polysolar, Redbite, Red Gate, Sentec, SQW, Synalytic, Technology Strategy Board, Teleexpress, and Unilever. It included very experienced serial entrepreneurs including Hermann Hauser, Robert Sansom, and Sir Gregory Winter, as well as those whose ventures are still incubating in University departments or have just received their first Queens Award for Enterprise.
Cambridge is a region where necessity has always been the mother of invention, as academics and entrepreneurs with limited resources have ingeniously found ways to have global impact. The current challenge of doing more with less will bring out new skills here.
