John Kerr: growth opportunities and challenges
- Date Published
- John Kerr is an experienced business leader whose career has focused on advising companies on global growth strategy and business transformation
- Formerly Global CEO and Vice Chair of Deloitte Consulting, he has leadership experience in more than 40 countries
- He led the creation of the first Big Four dedicated digital consulting business, Deloitte Digital which he built into a $4 billion operation active across 30 countries
- He holds non-executive roles with digital marketing business Kin and Carta, virtual signature specialist Docusign, alternatives asset manager LCM Partners and sits on SEP’s Advisory Board
- He is a Chartered Accountant with a BA in Business and Administration and a trustee of Plan International, a charity advancing children’s rights globally
How is Covid impacting growth opportunities for tech companies?
It is a time of rich opportunity for innovative business models. Barriers to entry have never been lower and I have never seen a more exciting or faster-moving market than the one we’re in right now.
The emergence of digital and cloud is enabling multiple new business models. Cloud is becoming a strategic tool. That makes more SaaS (Software as a Service) models viable as companies can access markets faster or more cheaply.
In some ways this is a ‘Wild West’ moment for emerging technology: there are relatively few pre-identifiable winners and lots of participants. There are players creating new markets at the same time as new players are entering existing markets.
We have previously witnessed the technology market evolve through highly divergent phases to convergent and then relative stasis. Now we are in a highly divergent phase again, but the impact can be even greater this time around because technologies are so much more capable, it is cheaper to launch and you can develop a viable marketable product much faster.
Might an economic downturn make it harder to obtain growth capital?
There’s still a lot of investment money out there seeking a home, but it needs to be matched to the right market opportunity with the right plan. My advice to any entrepreneur coming with a proposal right now is to be realistic about timeframes. What this crisis appears to have done is to elongate timeframes.
Prior to Covid a company may have looked ahead and said, ‘In 12 months I can be here.’ Realistically, in many markets the next 6 months will be very uncertain so it requires a realistic view of how long it will take to achieve goals and also a genuine assessment of the cash and resources required until some degree of normality returns.
The current climate may also present new opportunities for growth particularly for those targeting a business or sector that is contra-cyclical or for those willing to switch focus to sectors that may be more attractive now.
Sometimes to penetrate new markets or launch new services you need to invest in additional people with the right skills and experience. If it takes longer than anticipated for them to be successful that comes back to money – so money, skills and talent are all interlinked building blocks for growth.
My advice is be realistic about the next 12 to 24 months and ensure sufficient wiggle room within your assumptions about when the market might be turning.
Do global giants and entrepreneurial companies face different growth challenges?
The main issues in terms of operating challenges are not significantly different for larger or smaller businesses. There may be a difference in terms of governance or capital allocation, but similar disciplines apply.
A common obstacle is finding the right way to access the right market. There’s no doubt scale helps with market access because someone somewhere in a large organisation will know someone you need. But the way the world is moving in the direction of eco-systems and partnerships and alliances, means that business size will be less of a factor.
What is the most daunting challenge you have faced and what did you learn?
You learn far more about yourself from a crisis than you ever do from being successful. I was a member of the global board of Arthur Andersen when the Enron financial crisis emerged in 2001-2002. The crisis was in audit in the US and I ran the EMEA consulting business – so Enron was not in my business area or geography but it had an enormous impact on the organisation.
I oversaw a strategic review of the business, litigation and restructuring strategy, merger and sale negotiations and also winding down of different parts of the business. I learned an enormous amount about governance, performance and leadership, and handling crises.
I learned lessons I use to this day. In a crisis you need courageous people around you…If you’re thinking you should ask a question then you probably should. Learning to ask the right questions is a key boardroom skill – knowing when to take a stand and if you are not getting the answer you need, when to keep going even if it might make you unpopular.
What have been the guiding principles throughout your career?
Partnership and stewardship. The ethos of developing strong partnerships to pursue a common purpose is very precious to me.
Stewardship is also important. I have a strong belief in leaving an asset or a company you have worked with in better condition than when you found it. I think it also typifies how the SEP team look at situations.
From your perspective, sitting on SEP’s Advisory Board, how would you define SEP’s approach to investment?
Investing is not a spectator sport for SEP – it is a participatory one. The team are very experienced in the markets in which they operate, and they bring that knowledge of business growth to the companies they invest in. It also helps that they have invested though different economic cycles. A lot of private equity firms run decisions off a spreadsheet, SEP are typically prepared to roll up their sleeves and engage closely with the management teams they back.
It’s a pretty lonely place leading a high growth company, so having someone you trust on board is invaluable and SEP are very ethical and approachable people. The investment team are very much partners in the growth journey. It’s a mature view of building relationships and long-term value. The needs of the business come first as opposed to focusing on short term returns.
You just need to look at SEP’s portfolio history for proof that the team really know what they are doing – they’ve been very effective investors and I’ve got huge respect for that.
What does the Advisory Board bring to portfolio companies?
The Advisory Board is a really interesting group of people. The members have very different experiences and unique perspectives. We have experts in e-commerce, data analytics and tech services but our common bond is advising or growing global businesses.
We are all well-connected and can potentially open doors for portfolio companies, making key introductions at the right time. The challenge is to help find the one person who is right for what a company needs to get them to the next stage as opposed to sharing 5,000 people you are connected to. I ask whether I can act as a ‘Sherpa’ for a new market or introduce a key contact they might want to partner with.