18 May

Forward thinking

first_img Comments are closed. Related posts:No related photos. Forward thinkingOn 11 Apr 2000 in Personnel Today Previous Article Next Article Turning ideas into commercial success relies on aligning HR policies tobusiness plans, as Silicon Fen firms can testifyIn the early 1990s, Jon Sparkes set up a Derbyshire company which gaveemployment opportunities to the long-term unemployed, a local fore-runner ofthe Chancellor’s New Deal. Since 1995, at Scientific Generics in Cambridge, hehas helped promote innovation and employee ownership in the hi-tech sector. Aslast month’s Budget made clear, this is the other main strand of Brown’semployment policies.Scientific Generics, which last month announced plans to go public, is astar performer in “Silicon Fen”, one of the few parts of the economyto have overcome Britain’s failure to convert inventions into commercialsuccess.Spearheading the rapid growth in the region are personnel policies.”One of the key drivers is the innovative capability of our people,”says Sparkes. “Human resources has to be closely aligned to the business. Inproviding services to clients we have a massive training challenge. We aretaking people with superb academic backgrounds and throwing them into asituation where they are serving clients directly.”Personnel factors played a major part in the decision to go public. “Weare looking to get liquidity into the shares so that we can reward peoplebetter,” he continues. Brown wants to see a stronger link between employeeshare ownership and company performance. His all-employee share ownership willbenefit from reductions to Capital Gains Tax.Sparkes welcomes the announcement. “Anything that frees up either thebusiness or individuals from regulation or deductions to gains is going to beof potential help.”As share ownership spreads and markets change rapidly, the Cambridge modelis likely to become a pattern extending to other parts of the economy.”What is happening in Cambridge is, in some ways, ahead of what theGovernment is trying to stimulate,” he explains. “Provided we get theinfrastructure right, this pattern of development is going to be very positivefor the economy.”What defines this almost mythical “Cambridge phenomenon”? As inSilicon Valley in California it is characterised by close links between a topuniversity and companies, and incentives to set up firms quickly to exploit newtechnologies. Many firms start as spin-offs from larger companies, or get help frombusiness incubators. If you work for Scientific Generics and develop acommercially viable new technology, the company will help you set up on yourown. It will also throw in consultancy and subsidised central services like ITand personnel administration.What does the parent get in return? In some cases it owns the intellectualproperty; and has an equity stake in what are typically successful,fast-growing enterprises. Moreover, the offer of help to set up on your own canbe bait at the initial recruitment stage.Developments like these now have their own momentum. Walter Herriot,managing director of Cambridge-based business incubator St John’s InnovationCentre, says, “If you talk to a significant number of start-ups it is notthe tax that started or helped – there are other issues, like satisfaction andreturn. Tax will reward people more, but I would have thought that the impactwould be marginal.”Herriot believes that the main bonus from the Budget is in the other mainchange to Capital Gains Tax – the new low rate of 10 per cent for assets heldfor four years. “People will be encouraged to invest, and this will helpcompanies to invest,” says Herriot. “We want to see more investmentat the earlier stage. That is where there are problems. Once companies have atrack record the mature venture capital industry comes into play.”The St John’s Innovation Centre, started by St John’s College at CambridgeUniversity in 1987, helps the very early-stage hi-tech companies. Itaccommodates around 50 new businesses at its premises, and advises a largernumber of other small firms. For the 150 or so companies to have begun life inthe St John’s incubator, he reports that 135 have survived.They do not all stay as minnows. St John’s helped Zeus, founded five yearsago by Adam Twiss, who has the potential to become a British Bill Gates. Zeusis now the world’s fourth Internet server provider, gaining market share fromMicrosoft and Apache. Its technology provides fast Internet connections, and asa specialist in e-commerce solutions, it is set for further dramatic growth.Traditional personnel problems do persist in the region, but Cambridge firmsare proving equally innovative in tackling them. In recruitment, theconventional approach of waiting for a vacancy, assessing the skill mix andputting out an ad does not apply. “If we can see an opportunity to developthe business in another area that will mean inevitably recruiting people whenyou do not have immediate work for them,” says Sparkes.In an example of this, Scientific Generics made a strategic decision torecruit industrial designers before there was any work for them. “Now, sixmonths on, they are very busy,” says Sparkes.He recruits globally, and welcomes the loosening of immigration controlsannounced in the Budget. “We were in discussion with a candidate in Indialast week who has now accepted a job in the States. It was taking us longer towork out if we would be able to employ him.”Global recruitment, cutting-edge technology and helping start-up companiesmay seem exotic tasks for most personnel directors. But these are specificsolutions to generic problems. By putting people and personnel management atthe centre of business development Cambridge has a few lessons for the rest ofthe economy.last_img read more