When no roadmap exists, know your options – with Sean Sutcliffe

Heading into uncertain situations, knowing your options and being flexible on strategy can be as crucial to the survival of an established business as it is for a start-up


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“I wonder if this is also true for some of the situations you look at as value investors – where companies have successfully run along a road for 100 years and then suddenly their whole world implodes from a strategic point of view.” This observation was recorded a few months ago in a conversation for The Value Perspective podcast and yet, reading it today, it is hard not to view it in the context of the Covid-19 pandemic.

Our guest this time is Sean Sutcliffe who, after more than 25 years in the chemical, defence and oil and gas sectors is now CEO of Oxford Space Systems – an award-winning space technology business pioneering the development of a new generation of deployable antennas that are lighter, less complex and lower-cost than those currently in commercial use.

Given the unifying theme of this series of podcasts is decision-making at times of uncertainty, we suggest to him that engineering might have an advantage over the world of business here because, to some degree, many of the variables involved are more knowable. Sutcliffe is quick to set us right, however, replying: “Sadly, engineering isn’t as cut-and-dried as you might think.

Cause and effect

“You are dealing with ‘noise’ – that is, noise around the data you collect – and there are so many variables that you cannot really understand them. In an engineering experiment, in a lab ... then, yes, maybe you can see action and reaction but, out there on a chemical plant, say, dealing with a complex mechanism, it is much more difficult to understand cause and effect.

“So you have to have a hypothesis you can then test and hope the data you are receiving is able to make it through the noise.” This also holds true as a company takes its product to the market, Sutcliffe points out, explaining: “We might have a hypothesis about how, in this case, our antennas are more compact and offer higher performance and therefore they are going to give a competitive advantage to our customers.

“Yet all we can do is put our product into the market, talk to our customers and see what does and does not work. If the product doesn’t sell, maybe that is nature telling you something about your experiment – and you had better try something different. So you can use that ‘hypothesis and data feedback’ route with an emerging business – although it can perhaps be one of the most frustrating things about a start-up.

Undeveloped markets

“I come from the oil and gas world and, if you drill a well, say, you look at the data, you interpret it and you decide what to do next – because you have seen it before. In the start-up world, however – and particularly when you are going into new markets that have not been developed before – it can be quite difficult to know what to do next.”

As such, says Sutcliffe, knowing your options and being flexible on your strategy – in effect, recognising you do not know for certain where you are heading – is important for tech start-ups. And this is where he wonders if the same holds true for the sort of recovery situations value investors traditionally focus upon “where companies have successfully run along a road for 100 years and then suddenly their whole world implodes”.

“There is no roadmap here,” he adds – offering another idea with resonance for the pandemic. “What would have worked for these businesses in the past when they stumbled is not going to work in the future. They have got to think outside the strategic box and be willing to see the signals – the little feedback loops – and then understand and try and test things, in a way that can be quite difficult for established businesses.”


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