As values align, distinctiveness still shines through for new winners
Amid persistent challenges, adaptability and innovation is being supported by deeply ingrained sustainability and impact awareness among the 2023 Best Managed Companies
In the 15th year of the Ireland’s Best Managed Companies programme, Bank of Ireland is delighted once again to be lead sponsor – for a sixth consecutive year.
This year has seen similar challenges to last year, with global disruption still being felt due to many factors, as well as continued inflationary pressures. And yet, the best managed companies have shown resilience, perseverance, and extraordinary flexibility and adaptability.
Notable among 2023’s new winners is an awareness of the macro trends globally, as well as the more national and local concerns. Environmental, social and governance (ESG) initiatives have been around for a long time, and last year we would have seen it coming to the fore, but as expected, this year it has become a core tenet of businesses’ strategy.
Given the importance of strategy as a key pillar for evaluating a best managed company, the judging panel likes to understand how ESG has been as interwoven into their growth plans as it has in every instance this year
Furthermore, best managed companies are thinking about their pathway to net zero, and what they can do to improve their supply chain in that context. From a financial perspective, it is critical that companies become more sustainable and that they have a clear sustainability strategy in every sense, because if they are not sustainable environmentally, ultimately they risk losing value and elevating inherent business risk. However, there are also many opportunities.
What strikes me when I look at the best managed companies is that there are various sizes and shapes of companies across many different sectors, but each is aware that they have a carbon footprint. As awareness, understanding and visibility continue to grow, the need to understand where their business fits into larger global supply chains is increasingly important, for small businesses right up to the larger corporates.
With the larger corporates becoming subject to the Corporate Sustainability Reporting Directive (CSRD) next year, there will be even more scrutiny in this area. While smaller companies are not in this tighter timeframe, they are nonetheless part of a fundamental supply chain, so certain responsibilities also fall on them. The increasing awareness and preparation on all sides is most encouraging to witness.
Resilience and adaptability
Looking back over the last six years of my involvement, if one thinks about all the crises companies have encountered, one cannot help but admire the resilience and adaptability displayed.
For many, the risks in exiting the Covid crisis were almost as severe as while we were in the midst of that crisis. Some business models that looked highly exposed – as people and markets recovered and exited government supports – were successfully redefined and thrived in new conditions. To me, the flexibility shown through Covid has stood all of the companies and the management teams, both among the new qualifiers and those already in the programme, in great stead, demonstrating sound planning, agility in their practices and hard work.
We have seen companies in the broader programme who have really struggled with parts of their supply chain and have had to somehow manage to either diversify their suppliers, find an alternative, or buy themselves time, all of which costs money and working capital.
The other environmental factor that cannot be ignored this year is inflation, with rising cost of living a core factor affecting all businesses and consumers, with several interest rate rises, resulting in increases in the cost of debt and the cost of finance. Hence, financial flexibility and balance sheet strength are always considered and looked for in a best managed company.
It goes without saying that one of the most critical factors in any best managed company is the management team. This programme is really geared towards identifying and recognising great management teams. We look for a balance of capability and experience across the management team, as well as a range of age, gender, background and diversity of thinking.
An additional key point that differentiates a best managed company is a clear succession plan. This is especially important in a family-run business.
An effective digital strategy is another key element for best managed companies. A well-defined strategy that projects out over the next 3-5 years is a good indicator of overall strategy and quality of implementation.
In delving further, what stood out was the way that some of the businesses were able to tell their stories. When considering the full range of applicants, some shared real insights into their business and their experiences to inform their current strategy and future growth plans, enabling the judging panel to identify and appreciate managements’ unique perspective of their business, their markets, their teams and their key success factors.
Culture and learning
Culture has its own pillar in the judging framework and reflects its importance for a successful company. This is particularly important with values and mission, which are appealing when attracting and retaining new talent. The judges always want to see good employee communication and engagement on business strategy, but also on values and goals.
Judges always learn a lot from the process too, as new entrants, and requalifiers share their stories, the challenges encountered and how they have achieved success.
Even though the programme measures success across the same criteria, there are always surprises and stand-out elements that make the programme an exciting prospect each year.
We also look for those businesses that take advantage of the full range of supports from the programme. That is not just through the application process, but also the coaching and mentoring, and tapping into the knowledge of the alumni network. The programme has many opportunities to network with other winners and requalifiers who have a wealth of experience to share and learn from.
I want to congratulate all the winners from this year’s programme, particularly the new winners, and wish them the very best in all their future endeavours.
Nikki Canavan is senior director and head of origination, market development and sustainability at Bank of Ireland, Corporate Banking