P EOPLE ; R ECRUITMENT AND D EVELOPMENT (ACD1)

A great deal of thought and effort went into recruiting people, particularly the first hires. This represented a major shift in thinking for the founders and to some extent a letting go of aspects of their business. The appointment of people to the “management team” was a crucial and pivotal point in the growth story of each case study (Xu, 2015). Each of the case study firms was on a different point of this spectrum of people change and development (Bessant et al., 2007). What was evident was that the first hire was extremely important – “the challenge for solo entrepreneurs to add their first employee is arguably the single biggest growth event facing any growing firm” (Coad, Nielsen, et al., 2017, p. 1). The first hire resulted from the owner managers feeling that they had “too much on their plate”, it involved a large mindset change from the entrepreneur and the decision to recruit was not taken lightly – “the first hire brings about many challenges relating to work organization (Coad, Nielsen, et al., 2017, p. 6).

On recruiting the Depot Manager:

“It was not easy getting them to jump from stable jobs, Not at all!... but I could see it from his perspective; we were just such a new entity then, we’d only been trading at just a year and a half I think at the time when I was starting the negotiations to get him on board. So, he was very reluctant to leave that security…But I got him, I got him in the end, and like I say it’s turned out to be one of our best branches as well. “ (Case Study E)

On recruiting the Operation Manager:

“Paul, used to pop in for a cup of tea on a Friday, he was someone I could trust, after a while I realised that he would be good to have in the business, so I asked him if he wanted a job and he after a bit of haggling he agreed” (Case Study D)

On recruiting the sales team:

“So, it was an opportunity that we seized – they that we were very good at what we did but not very good at selling, we just lived off referrals really. And that was the change that delivered I suppose £10 million more of business.” (Case Study A)

On recruiting the Dutch Firms sales team:

“about a year later then took two Dutch people on who worked in that business who are our two agents in Holland, so they’re not on staff but they’re exclusive agents and they’re purely commission based and they’ve grown our Dutch business from nothing to where it is now, about 6/700,000 euros in the last two or three years and that’s supplying little independents in Holland.” (Case Study C)

There was a strong recognition of the need for personal change to cope with the demands of rapid growth (Desai, 2017). The transition from being owner operated and owner managed this is the move from doing everything within the business to delegating the operational and tactical decisions, for some entrepreneurs this can be traumatic and effectively curtail the growth of the firm if not effectively achieved (Franco, 2017).

On recruiting the Product Development Director:

“I’d started running a few focus groups of crafters locally –one of the people that started coming …was a girl called Lianne and she was just – she was exactly our type of profile customer, … I just really liked her as a person and I got it into my head that I wanted to employ her and I wanted to employ her to run my product development because she was – I was not a crafter, she was…she could actually help me with understanding what the consumer wanted” (Case Study C)

On recruiting a Finance Director:

“I needed more support in running the business, particularly with the bank and putting systems in place.” (Case Study B)

On partnering with the Technical Director

“He was a guy I had worked with and he was very good at what he did, we got on well together he was good technically and I was good with the business side of things.

He put together the technical team” (Case Study A)

Each of the businesses was focused upon sales growth and the organisations were configured in such a way as to facilitate business development.

On focus on growth:

“Could we do more – could we double our sales – double our turnover year on year?

So that’s – I love a big target, so that’s what I set out to do, so I, sort of, kind of built a – over the course of three months – a plan, a three to five-year plan to double our sales, double our turnover year on year to £30 million, £60 million then the absolute juggernaut which will be the £120 million, but we’ll see, we’ll see.” (Case Study E)

“And that was the change that delivered I suppose £10 million more of business and I think everything else has been managing scaling, so we focus very much on people development, six-month reviews, setting objectives, life objectives, helping people achieve the car they want, the house they want, so they buy in to everything we’re doing.” (Case Study A)

“Yeah we’ve done an awful lot of work last year laying the foundations. Which should allow us – looking at the numbers – what we’re forecasting, I mean we’re budgeting 16 in the UK this year so from 11.4 to 16 is huge growth. It’s a 50%

growth again. Yeah, and as I said we don’t know what the US could do. So, as a group, we could grow 30/40% this year and the group as a whole, when you add the US in, has gone from £10m to £20m sales in the last two years – in pounds.” (Case Study C)

This was reflected in the culture of each organisation. The entrepreneurial teams, were small with little formal hierarchy and a flat organisational structure (Colombelli, 2015). The structures, being flat, were very responsive to the needs of the customer. The growth mindset of the entrepreneurial leader of each firm reflected in the entrepreneurial team. All the case study firms followed Coad and Timmerman’s model of “dyads” that is teams of two as key strategic entrepreneurial decision makers (Coad, Nielsen, et al., 2017). Each of the teams had the skills necessary to run a successful business. It was the case in each of the HGSFs that recruitment or involvement of the key people in the business was a BSTE.

There was an element of luck or serendipity in the finding of the right people with, fortuitously, the appropriate skill set. The development of the capabilities to exploit opportunities, over time, involved more of a team effort (Eisenhardt & Martin, 2000). The makeup, background, experience and attitudes of the team very much influenced the growth performance of the firm (Delmar & Shane, 2006). Each of the entrepreneurs had made a conscious decision and had made a great effort to recruit people who had appropriate experience and the backgrounds relevant to the needs of the business. They gave recruitment very careful consideration and consistently looked for the “cultural fit” of the individual.

On recruiting people:

“New staff on board, to cope with what was happening at the time - with all this, this progression here, what happened – certain things were keeping these people happy, taking staff – we’ve never looked – we’ve always handpicked” (Case Study D)

On the focus on people:

“we focus very much on people development, six-month reviews, setting objectives, life objectives, helping people achieve the car they want, the house they want, so they buy in to everything we’re doing.” (Case Study A)

Each of the HGSFs was launched in the NE, started by local people and employed local people. This is evidence of the importance for employment creation by the HGSFs in the NE.

On locating in the NE:

“I went to a distributor in the North West and realised that there was nothing like this in North East” (Case Study D)

On being in the North East.

“There are a couple of national outfits that do what we do but there was no one really focused on the North East” (Case Study E)

This AC domain is significant in relation to the impact that these firms and firms like these, can have on addressing the regional disparities of the North East – “High-growth firms are important contributors to job and wealth creation. A small set of high-growth enterprises drives a disproportionately large amount of employment creation.” (OECD, 2016, p. 98). The category also indicates the importance of the profile of hiring which changed with the different idiosyncratic stages of growth of each case study. Coad, et al (2014) posed the issues facing HGSFs – “Do HGFs benefit from recruiting individuals with a high human capital base, allowing them to tap into their employees’ prior business and industry experiences to further the growth of the firm? Or conversely, do HGFs benefit more from recruiting low-educated but perhaps more committed employees, which they train in-house”

(Coad, Daunfeldt, Johansson, & Wennberg, 2014, p. 294).

Evidence within the empirical research suggests that there is a “profile” of capability recruitment, meaning that as the firm grows then the people recruited have greater specialist capabilities.

On recruiting people with greater skills:

“I mean if I touch on 2017, the growth we’re going to finish off £14.5 million but my staff’s gone to 42 staff, I mean from 2016-2017, I mean, I’m losing track of my staff that I’m employing but, ??? because I’m building the infrastructure – in place, we’ve managed to cope with what we had but recognising that, you know, we need stock controllers, we need – I need a financial controller in place looking after the finances, a more structured senior management team that offers more support to the branches, centralising a lot of the functions for the branches so they can even sell.” (Case Study E)

“And that was the change that delivered I suppose £10 million more of business and I think everything else has been managing scaling, so we focus very much on people development, six-month reviews, setting objectives, life objectives, helping people achieve the car they want, the house they want, so they buy in to everything we’re doing.” (Case Study A)

“I brought in a Chair, a Chair just to give me time to sit and ‘right, have you done, have you done, have you done?’ and have that – I think we talked about it last time – having those dark days where you get out and don’t worry about the shit that’s going on.” (Case Study B)

The first hire tended to be a “gap filler” a person who complemented the founder, in some instances it was an administrative skill set in others it was business development, sales or operations.

On first the recruit:

“I found a company who could do that for me, which was actually just a one-man-band in a back bedroom set-up, but looked like a company - James – and he did a lot of that work for us and became our outsource for a lot of our digital work that we did – any DVDs we wanted to do, any high-level marketing promotion, he would do that for me and in the end he was the first member of staff that we actually took on who had a skill set that I didn’t have. So that really marked a turning point for us, it was someone on a high salary but it was someone who could fill a gap that I didn’t have and we decided that – we knew that that was how we needed to grow and go down that route.” (Case Study C)

“He was, he was – Gary was with me in 2011, he was kind of – he was there from the start really and then Gary came on board as a - sales director role. I felt I needed someone in that role to fill the gap.” (Case Study E)

“Paul joined the business, he never used to get flustered about things, do you know what I mean? You know, that can be a hard situation as well in an early start-up of a potentially massive business and somewhere down the line was one of his reasons as well for me coming in because you know, I’ve seen him blow his stack. I’ve spoken to him and said ‘you know ???’ and just sort of calm the situation what was going

through his head, you know, he’s one of these blokes, he wants to be there before he gets there. I provided support.” (Case Study D)

The people category also indicated the change within the firm from being entrepreneurially owner managed to be being more “professionally managed” with management systems and processes in place (Timmons & Spinelli, 2016).