Lord Philip Hammond Interview with Noor Sugrue
The former UK Chancellor of the Exchequer talks to Noor Sugrue about entrepreneurship, government signposting and why Jamie Dimon CEO of JP Morgan thinks all corporates should be scared of start ups.
He says: “Entrepreneurs are doing fantastically interesting, innovative and clever things. Today there is more mentorship available, there’s better cultural acceptance and there’s more money available than ever before…governments just need to make sure that the route to entrepreneurship is open and signposted to people from all backgrounds.”
Noor Sugrue in conversation with Lord Philip Hammond
Noor Sugrue: Hi, I'm Noor Sugrue, the founder of Vintro. For today's interview, I was lucky enough to be joined by Britain's former Chancellor of the Exchequer and current Vintro advisory board member, Lord Philip Hammond. I began by asking him how important entrepreneurship is for the future of the global economy.
Philip Hammond: Entrepreneurs are going to be absolutely crucial as we move forward. The economy is becoming more open, more fast moving. The fourth industrial revolution is going to be a period of incredibly fast moving technological change, which is going to change all of our lives, the way we do business, the way we live, even the way we do our politics. So understanding entrepreneurs, supporting entrepreneurs is going to be more important than ever. And if that's important to us in the developed world, it's going to be even more important in the developing world where entrepreneurs are applying technology in a way that skips over generations of evolution of systems and infrastructure and gets to the answers and really supports development.
Philip Hammond: So across the entire spectrum, developed world, emerging markets, less developed economies, entrepreneurs and their innovation and their ability to deploy technology is a vitally important social good and governments have to support them to promote it.
Noor Sugrue: So how do you think governments are doing in supporting early businesses and what more can be done?
Philip Hammond: We've got to make sure that the route to entrepreneurship is open and signposted to people from all backgrounds because it is a great a great way of levelling. And if we can genuinely look people in the eye and say that opportunity is open to all, then we diffuse what otherwise could be quite a reservoir of resentment against the system. And it doesn't have to be that resentment because the system can be open, can be accessible to everybody to make their way into and to make their mark through entrepreneurship.
Noor Sugrue: Philip I absolutely love that response. A lot of what you just spoke about really resonates with me. And when I'm speaking to entrepreneurs, what I'm hearing from them as well, there is funding and there are resources out there. But it's not that easy at actually connecting the entrepreneurs with the right resources.
Philip Hammond: I do agree with you that signposting is also critically important, not just signposting to capital, but signposting to key contacts, signposting of the route through the maze that is getting from an idea to actually having a successful business.
Noor Sugrue: And a lot of that is building relationships and it's the power of human connection. And to date, those relationships have largely been built off of serendipity. So I'm curious how your experience in education at Oxford shaped how you went about building relationships when you were getting started?
Philip Hammond: Yeah, look, it was a pivotal moment for me going to Oxford. I went to a very ordinary school and, you know, I had friends, but they weren't influential friends. And then suddenly I found myself in Oxford where I was surrounded by these amazing people, brilliant people and famous people and well-connected people. So you just have to break down those barriers and signposts the way.
Noor Sugrue: So then how important do you think it is that these opportunities are democratised and that we eliminate the perceptions of good fortune?
Philip Hammond: It's really important that people don't feel excluded from the opportunities that exist in society, but it's really important that people feel that they have a stake in society. But I do think that most people feel that everybody must have an equal access to opportunity, to education, to being able to gain the skills and then to being able to access the opportunities that exist, whether it's in entrepreneurship or in another field of endeavour. And I think so long as you can put your hand on your heart and say this is an open system, we welcome anyone who has the talent, the determination, and is prepared to put in the sheer hard work to succeed.
Philip Hammond: I think that is a sustainable system. But as soon as you close those doors and say, you know, it's only people on the inside who are allowed in here, then I think you have a problem and ultimately you don't have a sustainable societal structure.
Noor Sugrue: 100%. I couldn't agree with you more, so I'd love to take a moment to go back to your childhood, I heard that you were very entrepreneurial growing up and we even organised discos. I'm curious what sparked that entrepreneurial spirit in you growing up?
Philip Hammond: You know, if you're a sportsman, you take part in the sport because you want to win. You do something entrepreneurial. It's a challenge. you set out to do it. You want to do it. You want to deliver. It wasn't just about making money. I made a little bit of money in my in my schoolboy business endeavours. But it was also about carving a niche for yourself, becoming popular, doing something that the other kids thought was great and wanted to be part of.
Philip Hammond: I'm not a psychoanalyst, but I guess anybody who's an entrepreneur and actually probably beyond that, in lots of fields, there are some sort of deep drivers inside one's own psyche that make you want to go out there and demonstrate that you can set a goal and deliver it and that you can really do something and really make things happen.
Noor Sugrue: And so looking back at your own experience, what advice would you give your younger self?
Philip Hammond: It is perfectly possible for someone with a great idea to go straight into an entrepreneurial career, to gather around the mentors who do have that experience of the corporate world, who can kind of make good any lack of experience that they have and can thrive and prosper as you are no doubt going to demonstrate to us over the coming months and years.
Noor Sugrue: Thank you so much for that, Philip. And today, you don't need a corporate background to start a business. So it's certainly easier and in that sense. But there's still a role for corporations when people are starting out their business. What is that role?
Philip Hammond: When I was starting in business, you know, 40 years ago, big businesses didn't deal with little start-up businesses. They didn't care about them. They weren't interested in them. They didn't see any value in them. That has changed completely now that we have, you know, by and large, a corporate culture that says small businesses are interesting and they're where stuff happens, and great ideas emerge there. And, you know, we have to keep an eye on them, and we have to try and buy them or partner with them when they start to make real headway with serious ideas.
Noor Sugrue: And from what from what I'm seeing, there's a lot more collaborations and partnerships between start-ups and established corporations. Is this something that is going to be even more important as we move forward and recover from the pandemic?
Philip Hammond: Yeah, well, I think more generally, large scale businesses, let me call them legacy businesses. Incumbents have started to realise that they cannot do the kind of innovation that entrepreneurs do with the agility that entrepreneurs deliver it inside their corporate structures. They just can't do it. So they have to work with entrepreneurs and dynamic new start up scale up businesses, either through partnerships or through supporting them with capital and then buying them out once they've reached critical mass. But they have to work with entrepreneurs.
Noor Sugrue: And technology presumably plays a pretty significant role.
Philip Hammond: The pace of change has accelerated and will go on accelerating as it is now so fast that the structures of large corporate organisations simply cannot cope with it. They cannot move quickly enough within their structures. They may be regulated, which makes it even more difficult to move quickly. And more and more large businesses are recognising that in reality, the only place that technological innovation can be applied quickly and effectively is in small and growing businesses.
And the only way to get things done is to work alongside those small and growing businesses. And let's be clear that there's a mutually beneficial relationship here. Large corporate businesses have all sorts of advantages which they can which they can use to support their mentees, if you like, amongst entrepreneurial businesses that they're mentoring. And those entrepreneurial businesses have the ability to test and prove or disprove. New emerging technologies and ideas very, very quickly and to succeed and prosper or to fail quickly without causing huge collateral damage to their corporate sponsors.
So I think it's a mutually beneficial relationship between corporate sponsors and entrepreneurial deliverance. But in future, it's going to be about entrepreneurial businesses doing the innovation and corporate businesses acting more as sponsors for those entrepreneurs than trying to do the innovation in the House themselves.
Noor Sugrue: And when you hear the head of JPMorgan, Jamie Dimon, saying that everyone in his company should be scared of start-ups, what do you think?
Philip Hammond: Scared ‘shitless’, I think was the phrase he used about dynamic start-up businesses all around them, threatening and challenging their incumbency position. Now to have a global leader of business in a sector like financial services, admitting that every 10 man start up in a garage is a threat to their business, is a is a revolution that would never have happened even five years ago. And that that level of self-awareness is something quite new and it's really accelerating through the corporate community.
And I'm seeing this now since I left government and I've become involved with some tech businesses. The degree of openness by large corporates to tiny businesses and their ideas is really very refreshing. And I think it shows that corporates have developed a real thirst to survive and an awareness that they're going to have to embrace entrepreneurialism if they want to survive.
Noor Sugrue: It's been particularly evident through the pandemic that businesses today are being born with a real sense of purpose. I see it on Vintro. Consumers seem to be expecting it today. Is that something that they think every business has to take on board?
Philip Hammond: Undoubtedly, business has understood that collectively it has to burnish its social credentials in order to have permission to operate in the 21st century. Increasingly, populations are requiring that business does more than just make profits, that it has to display leadership in a whole range of areas and has to deliver positive outcomes that go beyond making returns. But business has definitely become aware that it has to do more in order to be allowed to continue to prosper.
Noor Sugrue: Shocks of any kind create a time of dislocation, but also a time for incredible opportunity. How do you think that we should look back on this period?
Philip Hammond: Well, look. A shock to the economy is actually always good for entrepreneurship because entrepreneurs thrive in a period of rapid change and uncertainty, it creates new opportunities. It's much more difficult for incumbent legacy businesses. They're much less agile. So any shock, any period of economic turmoil creates opportunities and out of these opportunities will grow. The brilliant, successful businesses of tomorrow. It's also the case historically that businesses that are founded in a period of economic recession proved to be much more resilient than businesses that are founded in the good times.
Fairly obviously, really, if a business can survive its first few months and years in a difficult economic climate, it can probably survive anything. So I think this will prove with the benefit of hindsight, you know, looking back in a few years time to have been the moment when huge numbers of flowers bloomed, not all of them will succeed, but a huge number will have bloomed and will have had a chance to demonstrate what they've got to the world.
Noor Sugrue: Philip, it's so incredible talking to you. Lord Hammond. Thank you so much.
Philip Hammond: Thanks Noor.