Supporting the future champions of the UK economy
It seems likely that the highest value use of the cream of executive skill, talent and experience for an economy as a whole is employment at small and medium-sized enterprises with high growth potential. As the Financial Times has pointed out SMEs ‘are the economy’s backbone and provide the lion’s share of private sector employment’ (May 24, 2012). It is a pity for the economy as a whole, therefore, that top executives spend most of their working lives at large companies that can afford to pay them top dollar.
It is the same with top-level consultants. They could help to create more economic value at high growth SMEs than at large companies but fast growing SMEs can’t afford their fees. SMEs are generally under-advised. A 2011 report by the Department for Business Innovation and Skills found that only 42% sought external advice, compared to close to 100% of large companies.
This relative lack of high-quality counsel and experience at SMEs is inhibiting the realisation of their full potential.
In its report ‘Future Champions: Unlocking growth in the UK’s medium sized businesses’, the Confederation of British Industry (CBI) urges such firms to ‘to bring in external management’, because ‘as medium sized businesses grow the need to recruit the best talent and skills and source the best advice is paramount’.
Executive Alumni’s solution to this sub-optimal allocation of talent is based on the recognition that an executive’s talent does not fade abruptly away the instant he or she decides to stop working full time. These executives are just as well-informed, well-networked and well-equipped to add value to enterprises as they were before. And many are eager to continue to exercise their abilities, if their involvement can be combined with portfolios of other activities.
Apart from the additional clout these experienced executives give to an SME in its relationships with banks, suppliers, customers, and other key constituencies, the attraction, for SMEs, is that they normally have full pension ‘pots’, and may be less interested in the fees they earn from part-time appointments at SMEs than in how interesting and challenging they find the work.
Executive Alumni acts as a go-between, linking this neglected supply of high quality executive talent, with SMEs that need it, but cannot ordinarily afford it.
The details of the engagement (per diem fees, salary, equity-sharing or some other arrangement reflecting the cash constraints associated with rapid growth) are up to the parties involved.
It’s much too early for Western economies, with their rapidly ageing populations, to put their ‘baby-boomers’ out to grass. The economy needs their abilities and time, or at least some of their time. It’s a terrible waste to sacrifice this value-creating power on the altar of an arbitrary and inappropriate retirement age. Executive Alumni provides a meeting place for those wishing to continue to use their experience, wisdom and talent, with growth-hungry SMEs that know they need it, but that could not otherwise afford it.