INVESTIGACION CAUSAL

It was evident to the interviewer that although it was not expressed there was an implied return on investment model in operation. They were prepared to put time into aspects of the business where there was a higher likelihood of a good return. They were constantly looking for new angles through innovation to improve and develop their business. The work of Demir, et al (2016) reviewed the empirical literature concerning HGFs with a focus on the strategic aspects contributing to growth, one of the five drivers of growth identified was innovation (Demir et al., 2017). It was evident within the growth of each of the entrepreneurs that they were not only keen on innovation but they saw it as essential to the growth of their businesses.

On the innovative unique selling point offering to the market:

“It’s around the technology of – so yeah, there’s – other people have technology but what people don’t have is all of our technology. It’s not as integrated and not put together and then what you may find is somebody might have the technology but they don’t have the supply chain management capability – we’ve got both.” (Case Study B)

“even though we had a tiny product portfolio we had something unique and innovative and different, but our challenge was always that it was a very demonstrable item – whether it was the CD or whether it was the tools, they were very demonstrable, so a small independent store that thought this was the best thing since sliced bread.” (Case Study C)

“Because I was new eyes into the business, it was always tradition where you don’t put prices in the catalogues because 1) it was expensive to change and everything and competitors can see what you’re doing but - I don’t know where it came from but I think I was looking at the likes of companies like Screwfix and Ironmonger Direct where – I mean they weren’t, like, competing with us but I could see their growth history and a lot of their growth was built around the catalogue and their catalogues all had prices in and it was that decision where it was – it made it easier for the customers to buy; they didn’t have to ring up and find out what the prices were.”

(Case Study D)

Innovation reflects the incidence and propensity for the introduction of new products and processes that were commercially beneficial to the case studies. It indicated the propensity for risk taking inherent within each HGSF - “Innovation is risky and often expensive. The value of new ideas and intellectual property is only as great as the firm’s ability to exploit them”

(NESTA 2015 p13). Combining the factors of an aspiration for growth, ability to respond to opportunities, being owner managed and developing control systems was a set of ingredients that facilitated innovation (Roper & Hewitt-Dundas, 2015). The entrepreneurs invested in new technology, ICT systems and process technologies that commercially benefited the HGSFs. There was evidence of a number of product and service innovations within the data springing from BSTEs. This striving for innovation was evident in the way that new products and services were developed.

On finding a new product idea:

“it was a range of pens at the start which was Spectrum Noir which we launched in 2011. And that’s one of them ones – you say about serendipity and coming from an opportunity – so I’d just started going out to Germany and I perceived that the German craft market is way behind the UK craft market and they were very big into

earlier, and there was a guy out there who’d found some special pens that would – that were alcohol based instead of water based that you could colour onto this metallic finish with.” (Case Study C)

The successful profitable high growth of each of the case studies firms was related to their

“value innovation” (Douglas, 2013). They were constantly seeking ways to provide process and product innovations to their respective markets. As stated in chapter one emphasis has been given to innovation as a driver of HGSFs and particularly the episodes leading to high growth. The case study owners evidenced the Drucker (1998) definition of innovation “the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth” (Drucker, 1998, p. 65). The participants were not necessarily inventive, although one case study used an invention as a springboard to their rapid growth. However, they were all relatively innovative.

On bringing a new product to market:

“it was a bit of drinking money whilst I was at university, it was a bit of fun to go on TV and sell an envelope maker and then it was just this little website on the side that my friend’s mum was going to help me run and it was all going to be very small scale but actually it took off way bigger than we ever imagined, you know, once we went on TV and showed people this envelope maker we sold 8,000 in the first couple of hours and then the company that were making them in MDF just couldn’t make them fast enough to keep up.” (Case Study C)

What is meant in terms of “relative” is that within their market and competitive context they were innovative. There was an ability to “join the dots” to take what seemed to be disparate bits of information join them together and make a cohesive whole (Wright, Roper, Hart, &

Carter, 2015). They often developed innovative simple solutions to market issues, new distribution models, ownership models, sales models, etc.

On creating a shared depot ownership model:

“I wanted to expand and kind of started thinking about the investment structure, but it wasn’t more investment structure, it was just the thinking of, like, how can I attract good people to join the company – people that are experienced and knowledgeable within the industry and the only thing I could think of at that time was to give maybe some shares away in the branch that they own and operate. So, I set the branch up independently and giving the guys who come on board a stake within that branch that they own and operate.” (Case Study E)

As Hindle (2009) suggested the entrepreneur is the link between innovation being equal to invention plus implementation with the entrepreneur being the implementer (Hindle, 2009).

Innovation was evidently taking place by combining processes of invention and entrepreneurship and this led to “new knowledge” within each of the firms (Demir, 2016).

Studies of innovation highlight the particular importance innovative output for developing absorptive capacity (Ryzhkova & Pesamaa, 2015). Each of the HGSFs developed a relatively strong absorptive capacity essentially “to use information for commercial benefit” (Cohen &

Levinthal, 1990, p. 128). The ongoing nature of innovation plays an important part of the development of case study firms. The positive correlation between innovation and growth in employment was clearly seen (Sena et al., 2013). It is suggested that the ability of HGSFs to outperform rivals is based upon some form of innovation along the value chain. The participants were very conscious of this as a way of establishing competitive advantage and thus increasing sales.

On developing competitive advantage:

“We figured if we introduced a business model that we never lost a client we’d continue to grow and the customers would remain sticky as long as we did what we said we were going to do.” (Case Study A)

“so, 2016 has been a great year for us, as a whole, and we’ve invested in good things like the app, the Flame app - that’s got a lot of capabilities on there, which social housing love.” (Case Study E)

“And that’s how it kind of came about, so this is what I mean about seeing a product in a different capacity but can we tweak it? Can we tweak it to work for what we want it to do? …that’s what led to the launch of Spectrum Noir alcohol pens.” (Case Study C)

“so now, all local people around here, it’s just common knowledge that you can call in here, pick up whatever they want, job’s done. Whereas years ago, they used to have to ring down there, they used to have to be relying on them people having the stock, you used to then have to rely on that delivery being made to them. So, you know, you don’t want all that hassle and that’s what – you’ve got to make life easy for people, make the buying of it easy for people.” (Case Study D)

“we’ve talked about before, some great technology and that’s what I was looking for – we were doing everything in a bit of a manual way, old-fashioned, a bit fuddy-duddy, but a 108-year-old family business ??? but in here, we started a bit more tech and then those clients have grown naturally and we’ve got one or two big new clients who are doing a lot with us.” (Case Study B)

There was obviously a strong emphasis on sales. There was a strong perception that the future growth of the firm depended upon future sales growth. There was a great weight put on generating new business. As well as managing existing growth there was a high level of aspiration to exponentially increase future sales. Sales growth was considered to be a way of validating the business model and created a feeling of wellbeing in terms of ongoing success.

The profitability derived from the sales also allowed for further growth, each of the case studies, beyond the initial investment in establishing the business, was self-funded from positive cash flow generated by profitable sales.