For the second year running, Bank of Ireland’s team of Best Managed Companies coaches had the privilege to spend time with some of the country’s most ambitious businesses and their management teams.
We’ve met some of Ireland’s most talented business leaders in conference rooms, on production lines and on building sites in all corners of the country and heard about their aspirations and challenges.
The assessment framework used in the programme speaks to the values that we in Bank of Ireland aim to uphold, namely being customer-centric, accountable and being agile in our proposition, our decision-making and our service delivery.
The theme of how to succeed and scale internationally was a near-constant in our coaching sessions, consistent with Bank of Ireland’s latest Economic Pulse research which indicated that two out of three companies remain on a growth trajectory with ambitions to expand both at home and abroad.
Navigating the environment
While the opportunities presented by global expansion are ever more important for businesses, it is important to be cognisant of, and plan for, the macroeconomic headwinds we are experiencing.
Traditional trade relationships have been unsettled by policies introduced by the US, while Brexit presents an obvious juncture of uncertainty for Irish businesses with regard to future trading arrangements.
While the path of Brexit is still unclear, Irish businesses retain a unique understanding of the British market, and are looking for solutions to address the uncertainties surrounding trade with our closest neighbours.
To support them in this process, Bank of Ireland has launched a €2 billion Brexit fund to help Irish businesses prepare for Britain’s departure from the EU.
This fund follows an increase last January in our unsecured FX Facility, from €20 million to €50 million given ongoing demand from business customers.
This facility is designed to support businesses to manage foreign exchange risk and retain certainty on their cashflow and profit margins - both of which are critical to navigating Brexit uncertainty. We will also run a series of nationwide Brexit events, aimed at small and medium enterprises, over the coming months.
Many Irish businesses are also looking further afield for opportunities to grow. With opportunity, there are invariably challenges, and scaling internationally is no exception.
Our own customers, and the companies we coached through this programme, have shared with us the challenges of adapting to cultural differences, language, recruiting and retaining appropriate skillsets, and cost (the costs of scaling abroad are often greater than in a business’s domestic market - at least initially).
In addition, having a sales force on the ground in new markets is often required, which can be expensive and harder to effectively manage remotely.
Prepare for success
On the positive side, there are a number of mitigants and a wealth of excellent supports available, both state-supported and through the private sector to help Irish companies in this regard.
As a result, despite the challenges Irish companies have enjoyed great success abroad and continue to increase their share of the global market, with over 7 per cent export growth achieved in 2018 and 5.5 per cent growth predicted in 2019.
Careful planning, seeking appropriate and expert advice, and being cautious and realistic in the ambition you set for your business in the early planning periods are critical. Being prepared to change and adapt your strategy, and potentially your product, to suit local demand and tastes are other key learnings.
The sheer extent and size of the country can be overwhelming, and knowing how and where to start can be a challenge.
Again, through our coaching experience, we were impressed with many of the Best Managed Companies which have shown agility, innovation and patience to successfully expand into international markets.
In this regard, Bank of Ireland works closely with our customers, their business advisers and agencies such as Enterprise Ireland, which provides excellent local supports through their network of offices in international markets.
Several of the companies we coached referenced diversifying their international footprint away from the British and US markets, to navigate around some of the headwinds of Brexit and trade wars. Some have looked east but within Europe, pointing to the opportunity presented from Poland’s vibrant economy, a 5 per cent growth rate and an emerging middle class.
Irish exports to Poland, Hungary and the Czech Republic - predominantly across the pharmaceutical, chemical and food sectors - have increased fourfold since 2003 to €2.45 billion in 2018, surpassing the amount we sold to the North that year.
Meanwhile, across the globe, it’s difficult not to mention China when discussing trade opportunities; the world’s largest market with a population of 1.4 billion people - and the EU’s biggest source of imports and second-biggest export market.
On average, China and Europe trade more than €1 billion a day, with exports from Ireland across a range of sectors doubling over the past decade to €5.5 billion in 2018.
Cultural-based barriers to entry are slowly being eroded. There are 300 million Chinese people learning English – the same as the entire US population.
There are also 17,000 Chinese people living in Ireland, many of whom are students. It’s a cohort that Irish exporters could do well to lean into and leverage.
Dedicated to success
Henry David Thoreau said: “Success usually comes to those who are too busy to be looking for it.” Becoming a Best Managed Company takes dedication, ambition and delivering the highest standards of management practice every day, which in turn results in the achievement of business goals.
On behalf of Bank of Ireland, I’d like to congratulate all the winning companies and wish them continued success, both at home and on the world stage.
Nikki Canavan is senior director of new business origination at Bank of Ireland Corporate Banking