Leadership through challenge and change

Today’s business leaders face a range of challenges for which little in the past could have prepared them.

To face those challenges, and lead their businesses into the future, leaders must not only be lifelong learners, they must also have the support of their peers and networks.

Ireland’s Best Managed Companies Symposium connects leaders, allowing them the opportunity to build their networks and expand their knowledge — ultimately supporting the growth of their people and businesses.

The event, run by Deloitte in association with the Irish Management Institute (IMI), hosted senior leaders from within the Best Managed Companies network in the Aviva Stadium.

“You’ll need no reminder that the last few years have presented us all with intense challenges — Brexit, a global pandemic, wars and geopolitical tensions, an energy crisis and record inflation,” said Brian Murphy, lead partner, Ireland’s Best Managed Companies, Deloitte, addressing the event. “We’re continuing to face a tumultuous period in global financial markets, creating uncertainty and nervousness in the market.”

Murphy highlighted the ongoing job losses within the global tech companies operating here and contrasted it with the strong indigenous growth, and the collective experience of the organisations in the room.

“While the global mood darkens, there is opportunity for our indigenous tech sectors to acquire the many more skilled, experienced, and insightful people available for work,” said Murphy. “As leaders within Best Managed Companies, you have shown great resilience in how you continually navigate your teams and business to overcome obstacles. Being a leader is no easy feat, but by staying curious and adaptable, you and your teams can overcome any challenges that come your way,” said Murphy.

Emphasising the role that collaboration and networking with other leaders plays in today’s fast-paced business landscape, Murphy added, “By sharing ideas, best practices, and developing relationships, we can all work towards building a stronger and more resilient network of Best Managed Companies across Ireland.”

Four pillars of the best managed

Shane O'Sullivan, interim chief executive of IMI, described the Best Managed Companies Symposium as a testament to the exceptional performance and unwavering dedication of remarkable organisations. “Being recognised as one of Ireland's Best Managed Companies is not just an accolade,” he said, “It symbolises commitment, resilience and visionary leadership.”

O’Sullivan highlighted how the four pillars used to evaluate Best Managed Companies serve as the foundation for successful organisations.

“These pillars are crucial for identifying competitive advantages, embracing disruption and driving sustainable growth. When evaluated against these four pillars, Ireland’s Best Managed Companies showed great ability in navigating the complexities of today’s dynamic business environment.”

Drawing from IMI’s work over the past 12 months with senior leaders from the Best Managed Companies and beyond, O'Sullivan discussed the business impacts of the evaluation pillars, which strongly align with the values and teachings of IMI. Starting with the financial pillar, O’Sullivan emphasised how financial strength is the lifeblood for every organisation.

“Financial strength encompasses the ability to maintain profitability, combat inflationary pressures and ensure long-term sustainability,” he said. “Combined with a focus on robust governance – encompassing transparency, accountability and compliance – and you have a business model built to last.”

O’Sullivan also emphasised that organisations must identify “where to play” and “how to win”, with agility and the ability to anticipate future trends, optimise costs and effectively allocate resources all essential components for success in today’s business environment.

Moving on to the strategy pillar, O'Sullivan highlighted its role in shaping and supporting an organisation’s direction and purpose, noting how the Best Managed Companies have showcased their prowess for “strategic thinking, embracing change and discovering new opportunities.” Similarly, the capabilities pillar encompasses the skills, competencies and resources driving an organisation's day-to-day performance, according to O’Sullivan, who called for continued and vital investment in talent development, technological advancement and operational excellence.

He also highlighted the key role proper KPI reporting plays in building and enhancing core competencies and capabilities. “We also know the best organisations align their KPIs to their strategic goals,” said O’Sullivan.

Moving onto the final pillar of commitment, which O’Sullivan called “the bedrock of organisational culture, reflecting the dedication, passion and alignment to a shared vision and values that drives individuals and teams to go above and beyond.” He acknowledged the Best Managed Companies are representations of commitment to excellence, innovation, collaboration and continuous improvement.

“And while you come from different sectors with different perspectives,” added O’Sullivan, “I think you all share at least one thing in common: commitment to your business and commitment to your people.”

Announcing the launch of IMI’s new Senior Executive Experience, O'Sullivan noted the increasing number of senior leaders returning to IMI since the pandemic. “They’re looking to enhance their strategic toolkit, sharpen their decision-making skills and effectively navigate increased complexity,” said O’Sullivan.

Stability, curiosity and creativity

These pillars help a business to achieve a certain stability for progress, amid the broad spectrum of uncertainty the world is experiencing. These conditions were characterised by Ade McCormack, founder of the Intelligent Leadership Hub, who outlined how the current volatility will result in continual disruption that old business models were never designed to cope with.

“Unfortunately for those of us who are thinking that disruption was a temporary stage,” argues McCormack, “the reality is disruption is only just taking off its tracksuit. Most organisations today are based on factory or industrial era principles — process first, people second. For that model to work, we needed predictability in society. You could call it synthetic certainty.” McCormack argues that businesses today need what he termed ‘super resilience’ as well as an enablement of those most human of characteristics: curiosity, creativity and courageousness.

It is “curiosity, creativity, and courageousness that has enabled us to adapt,” he argues, “to where we are today. The trouble is, in most workplaces, any attempts at being curious, creative, or courageous will result in a stern conversation with HR.”

Ireland, however, is possessed of a confident entrepreneurial spirit that is borne of creativity. Author and researcher on creativity and business, Frederik Haren conducted a straw poll to establish that around 85% of the room considered themselves to be creative. He showed from his global research that this was not only above the general average of 45%, but it was above the European average of around 70%, and actually closer to the American average which was in the nineties. It was, however, inversely proportional to the number of people who regarded their respective organisations as doing enough to support the needs of creativity.

The major advice from these business thinkers was that it is those businesses that recognise these needs that will achieve the necessary experimentation to innovate, through curiosity and creativeness, combined with a courageousness based on sound research and good governance, to continue to thrive amid the quickening pace of change and the maelstrom of challenges.

Leaders’ voices

The symposium brought together and drew on the experiences of a range of Best Managed Companies winners to highlight how informed leadership had set businesses on a path to growth and development, even in these most challenging times.

New markets and new opportunities are a key element of growth and a simple, well thought out strategy for growth was what helped Kerrygold as a brand propel its parent company to the success now represented by Ornua Group. Ornua’s former chief executive, Kevin Lane, who is now a non-executive director with Hansen Plc and Grosvenor Food and AgTech, said the management team looked at each market individually, and prepared for hard work, but were always open to local knowledge.

“For us,” said Lane, “every time we went to a new market or we tried to develop a new geography, we had a fairly simple template that we always followed, and we recognised from the outset that every market, whether it’s a developing world or a new market, is different and the consumers or the customers in those markets have to be treated as unique.”

Research is vital, he argued, with every available source, in market evaluations. The business looked at the consumer to see if the product was a fit and admitted that sometimes change was necessary to its gold blocks, so familiar to consumers here. Furthermore, Lane said that after rigorous evaluation, sometimes the conclusion was not positive.

“Sometimes that research told us that we shouldn't go there,” he admitted, “that we probably weren't going to have a profitable developing business in that market.” When asked to elaborate on the point, Lane added that in certain developing markets, prevailing conditions were not favourable.

“We got more ambitious and wanted to tackle Asian and African markets, and we learned when we did our research, particularly in certain countries, that the affordability and the disposable income available to consumers would mean Kerrygold just wasn't going to be able to feature because it was far too expensive, and if we wanted to do business in those countries, we either had to hugely tailor our offering and make it more of a powder product at a much cheaper price than premium butter selling at three or four euro a pack.

“We learned that there was no point going into certain markets where we couldn't be successful either at a sales level or a profitability level. And the best money we spent on researching the market to go in and grow there became the best money we saved by not actually going in there and having a hugely unprofitable business.”

Research and adaptability

Research and market knowledge, though tempered with no small amount of perseverance, also guided Irish Dog Foods in its growth strategy, said chief executive Liam Queally.

Having tried to crack the American market on more than one occasion, the company applied its ability to develop products informed by trends such as humanisation, evolving family habits and the sheer explosion of pet ownership, to find the right combination of quality, cost, and distinctiveness.

“In the southern part of the United States,” said Queally, “we do a lot of dog treats, for example. That would be the likes of fried chicken, barbeque brisket, and things like that. That probably wouldn't sell 10 kilos over there in Ireland, but it's tailored for that market and likewise for markets all around the world where there's a lot of trends, and there's a lot of market information there. We work in partnership with the customers to develop that type of range and we've been very successful in markets like that.”

The success of this approach is characterised by the recent announcement from the company of a €20 million investment over the next three years and the creation of 150 jobs.

However, Queally insists there is a balanced approach which considers more than just cost or profit. “It's not all about keeping a low price. If there's demand there for your product and you build a market, you have to invest in it. The food business prices are coming back now, and energy price cuts are coming back. So yes, you do have to tailor it, but at the same time, if you have something that’s working, you just need to work with the customers and that’s how you protect your margin, your business margin, and your business growth.”

Symbols of trust

Accreditations and recognition of governance and quality can be important elements in helping a business expand not just into new markets, but also internationally. One such mark is Guaranteed Irish, now celebrating its fiftieth year.

“Guaranteed Irish is now the national symbol of trust and business, and deservedly has earned that reputation over the 50 years,” said its chief executive Bríd O’Connell. “The guarantee now is a licence that's offered to businesses who are successful on application, and have to go through quite a rigorous due diligence and appraisal system.”

“The guarantee,” she continued, “is that the company guarantees jobs, it guarantees support and feedback and commitment into its community and by community, we mean the Republic of Ireland. And it guarantees provenance so that the business is paying back into the Irish economy.

“It's really interested in how Ireland is performing, be they homegrown or international because they have a commitment to the people here on the ground and of course sustainability is the fourth pillar.

“It's all about making sure that we have a sustainable society in the greater sense. It's not just about profit, it’s what we do with that profit, to have a real sense of purpose in the community and in society.”

O’Connell said that Guaranteed Irish today is about supporting businesses, homegrown and international, who support jobs, communities and provenance in a sustainable manner in Ireland. “That's the licence that people apply for, and if they're awarded it, they use it really successfully, both at home and abroad.”

The mark is also starting to travel, O’Connell reports. “We represent 2,000 business members at the moment and that has gone from 200, back in the 70s and 80s, when it was first launched.”

Today, Guaranteed Irish is a not-for-profit that is entirely funded by its members and sponsors, who collectively turn over some €13 billion domestically, and are responsible for nearly €50 billion globally, said O’Connell.

Thriving in adversity

Despite the series of challenges experienced in recent years, Irish companies have demonstrated agility and resilience, according to Karen Cohalan, head of Fintech, Financial and Business Services, Enterprise Ireland.

“If we look at the trends from ‘21 to ’22,” said Cohalan, “we are dealing with the pandemic, war, rising energy costs, inflation, interest rates hikes, and so on. Despite these challenges, innovative Irish companies showed resilience and companies supported by Enterprise Ireland saw their exports rise by 19% last year to €32.1 billion, the highest ever year-on-year level of growth in the history of Enterprise Ireland. Of that, companies we support in the food and sustainability sector saw a 23% increase in exports in 2022, and there was a rise of 18% in exports from client companies we work with in the technology and services sector, many of whom are in the room here. It was a fantastic result and a testament to Ireland’s innovative entrepreneurs who have a hard-won reputation globally for quality and service.”

With regards to the biggest markets for growth, Cohalan recounted a specific agenda. “We’ve long been really dependent on the UK market, our largest export market, and Enterprise Ireland set out an agenda to try to reduce that dependency by four years ago with Brexit, and that has been achieved. Of the total exports of all of our companies, 29% still go to the UK market and that represented last year an 18% increase into the market. It’s still an important market, but the biggest increase we found was in our eurozone, and that’s been a big emphasis on that 28% growth in exports into the eurozone market. The US is also a very important market and we had 13% growth in that market last year.”

Talent troubles

A recurring theme through the strong growth stories, has been sourcing and developing talent, which is a challenge for many. More than one Best Managed Companies winner observed that the best managed accolade is a distinction that helps attract talent. Irish Dog Food’s Queally has described how talent retention has been a key benefit of the development strategy it has followed.

Queally acknowledged that the business’ financial strength has allowed it to pay its people competitively, but that there was much more to its excellent record of talent retention. “We consider our business is really family. For all our people, our family, to work in our business, they need to be safe.

“With most of our team members and staff, they are with us since the beginning. We’ve a great ability to nurture growth from within the business as well. There’s room for people to come in at the bottom and work their way up through the business and it’s something that people like. There’s greater potential for everybody that comes in to work in the business.”

Scaling up and out

Strong growth trajectories can lead a business to consider markets beyond these shores, which can mean more than just new markets, but also the issue of scaling.

For one company, though it had an advantage in being primarily digital, much of its success is attributed to the inclusion of the idea of scaling internationally in early planning.

Lukáš Raška, chief commercial officer of Livesport, said the Czech origins of the company Livesport (known globally by its flagship product Flashscore) saw the founder pose the possibility to scale beyond initial borders very early on. Raška said that having this idea alongside early growth plans meant that when they were ready, the business was more naturally disposed to the requirements.

“It sounds natural, but when I look at other companies, and we’ve scouted over 500 companies last year after we established our own internal M&A department a year and a half ago, to me it seems natural to do that when you can, when you have a digital product or service,” said Raška.

He said they used the recessionary times post 2008 to build and scale. While acknowledging differing conditions internationally, there was a vision to go beyond. “There are no real borders in a global digital world, but maybe only one in 10 companies we have scouted actually did something similar. We did it, but not everybody does. For us, it was natural, and I think it was the cornerstone of our success, the fact that we did it early on.”

Livesport is a Best Managed Companies winner from the Czech Republic, with operations in Ireland.

Opportunities and investment

For another Best Managed Companies Winner, Kent Stainless, early opportunity came from that courageousness described previously. Chief executive Ann O’Brien describes early forays into Qatar when it was not necessarily the accessible business hub it is today. Navigating geographical, cultural, and logistics hurdles, persistence and preparation paid off with a deal to manufacture manhole covers that saw it ramp up to the next level of development. Strong foundations meant that when the transformative deal arrived, the business was ready for the opportunity.

“In a very short space of time,” said O’Brien, “our manholes were in the stadium that the World Cup was played in. I was in that stadium looking at our product. That catapulted us into scaling.”

That success allowed Kent Stainless to compete for further deals, compounding its success. O’Brien relates how efforts to speak with Foster & Partners, a famous London-based architectural practice, had proved fruitless. However, an Irish contact gave Kent Stainless or them an order for a project in Battersea which happened to be next door to Foster & Partners. The architects passing by on their way to work every day noticed what O’Brien termed a “Rolls Royce” job, which eventually got Kent Stainless in the door to make good contacts.

“One of the architects went on to work on Wembley stadium and specified our designs that they had noticed on the project near their office. Once we completed the project at Wembley stadium, a very recognisable project, this reference site opened doors for us everywhere. We doubled our turnover in the UK every two years, and 15 years later we still do major business in the UK,” said O’Brien.

Keeping pace with competition and technological change, O’Brien said that Kent Stainless had used its success to invest in the likes of robotic welders, laser machines, and increasing investment in automation, as well as drawing on supports from Enterprise Ireland, and developing its own engineers and craftspeople. Development that was guided by the four pillars and sound business lessons.

Power of values

Echoing those sentiments of internal development and opportunity, Brendan Mee, chief executive of MTM Engineering, goes further to say that the business has found “tremendous opportunity” in Environmental, Social and Governance (ESG) strategy.

“Global markets will drive towards the more sustainable future, and rightly so,” states Mee. “If you can build a business model that can embrace and enhance that and pull yourself forward on that, you're ahead of the curve.”

Mee argues that ESG is not just about carbon footprint or emissions, it is about how the business operates and that this can be a key differentiator, and a vital aspect in winning the war for talent. As a service-based engineering company, Mee said it materially affects how the business attracts and retains talent.

“It will affect everything in how we retain our people, because it's very much part of the future for the current generations, … it’s meaningful to them. And it's also the right thing to do.”

Culture of success

There was broad agreement across all the business leaders on the various panels, that culture is a foundational aspect of business success, and communication was vital in maintaining it. Ensuring new hires are a cultural fit first, meant that culture could support them in refining necessary skills and capabilities. This extended to mergers and acquisitions too. Ensuring a cultural fit first would mean easier integration, the leaders agreed, many from experience. Easier integration leads to faster time to value from the change.

With business leaders setting a pragmatic approach to doing business from the top, communicating effectively with all levels of staff, to provide a sound footing for everyone to achieve their full potential, creative solutions could be found to every challenge.

Guided by the unique Best Managed Companies programme that evaluates the entire management team and organisational strategy, benchmarking against best-in-class businesses locally and globally, these business leaders can confidently face volatility and disruption to find the opportunity to thrive.

To find out more about the Ireland’s Best Managed Companies programme, visit deloitte.ie/bestmanaged.