SMEs feel renewed confidence, but rising costs must be curbed

 

As small businesses around the country wait to see what Budget 2015 holds for them, new research has found that Irish SMEs have fared well in the latter half of the year, with many reporting increased business confidence.

– Colette Sexton Sunday Business Post

 

SMEs feel renewed confidence, but rising costs must be curbed

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SMEs feel renewed confidence, but rising costs must be curbed

 

 

Irish Executives Summit 2011

Des Kirby digital marketer at LEAPThere was a sense of history in the making today at the Radisson Hotel in Galway. In the midst of Greek default threats and ominous warnings for the Eurozone, a group of entrepreneurs gathered in the conference room determined to find solutions not excuses. John Keogh, Senior Vice President of GS1 Global Office and founder of Irish Executives, kicked off proceedings by talking about the idea of business people connecting online and then meeting offline. With a membership of over 8000 on Linked In, and rising, this Summit was about turning that virtual community into a real world networking experience. There were four key themes on the day; cloud computing, social media , leadership and the Irish diaspora. It was clear that Mr. Keogh is keen to mobilize Irish people around the world, not just in Ireland, and social media makes this goal more attainable than ever before.

Cloud computing is still a phenomenon that a lot of people are unclear about, but a panel comprising executives from Goshido, Blueface, Big Dogg and Microsoft helped clarify matters. Put simply, cloud services are a way to reduce costs and increase efficiency. Firstly, cloud companies act like a utility service that can provide your IT needs without having to worry about internal servers, breakdowns or security issues. Secondly these services are relatively cheap compared to traditional IT costs. The panel also seemed excited about Cloud Telephony, with one member proclaiming that ‘renting a fixed line is dead.’ Really? Well apparently with the increase in mobile device intelligence we have now reached an age where there may not even be a need to rent an office space for some businesses. There is no large hardware or capital costs involved either. With cloud utility companies and cloud telephony, many companies can now save themselves a small fortune on rent, bills and IT costs. According to the panel 50{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} savings are now the norm; welcome news in this current economic climate. Microsoft’s Declan McGovern emphasized mobility as the big advantage of cloud services, ‘you can work from home, hotels, wherever’. Other major advantages are that they are easy to implement and cloud companies provide their customers with all the latest software developments. Whether there are extra charges for the updates wasn’t made clear. What is clear is that the cloud is changing the business environment. The panel left us in no doubt that cloud computing is the way to go for businesses who want to embrace a more cost effective future.

Kingsley Aikins from www.networking- matters.com is a man with a long history of supporting Irish business and gave a very interesting talk on the concept of diaspora. Kingsley maintains there are many Irish diaspora from over 5 million in the UK to 500,000 in Argentina. Would you have guessed there are that many with Irish blood connections in one single South American country? No, nor would I, in fact Argentina wouldn’t enter my head as a major cultural or commercial connection. Citing Israel as another example, these diaspora have the power to transform entire economies. And it goes beyond economics; Irish American diaspora played a part in the Northern Ireland peace process. Other examples of governments reaching out to the diaspora include India, China and Taiwan. Interestingly, several people mentioned Farmleigh and the Global Irish Economic Forum which is coming up shortly. The idea of a globally connected Irish community is gaining momentum.

One of the highlights of the day was a live demo of the Irish Executives TV channel where a speaker connected live with a Summit participant called Martin Lynch in Toronto as the conference was taking place. Martin was able to give us a live slide demonstration called ’What have the Romans ever given us.’ It highlighted some of the contributions Irish people have made to the world from architecture to submarines. The slide show wasn’t the focus; the focus was the fact that this was real time TV broadcasting across the web specifically for the Irish Executives audience and that was pretty cool. It was also a reminder that the people behind the Summit are serious about building a global Irish community that reaches out to each other.

But the innovations didn’t end there. John Keogh also announced a competition titled Inspire Ireland, with €150,000 in investment money up for grabs. Any companies that can inspire a business idea that contributes to the Irish economy are welcome to enter the competition which is scheduled for the end of September.  John also announced the beginning of Irish Executives Press also to be launched later in the month. As I understood it, the IE Press will publish ebooks written by those interested in a particular subject e.g. Lean Manufacturing. The writing and editing process takes place over 8 – 12 weeks. Judging by the level of experience and talent at the conference I’m sure there will be plenty of people interested in contributing to this new facility. Fancy getting your own ebook published? Then stay tuned in to the Irish Executive group on Linked In for updates.

There were a couple of workshops that took place at the Summit too. Social Media led by Niall Harbison and Niall Devitt and a 21st Century Networking workshop led by Kingsley Aikins and Ed Kelly. I attended the Social Media workshop as I’m currently in my own developmental process of learning how to utilize social media platforms. I figured I might pick up some tips here and I did. One tip, from Niall Devitt, was simple in its theory but worth bearing in mind for any social media newcomers like myself, that is to listen to the online conversations. Seems obvious, but only to the more experienced tweeters and Facebook campaigners. For the greenhorns it is a vital message. We must learn to pick up on the rhythm of the conversations happening online and then target the ones relevant to our business. There’s little to be gained and too much time lost in conversations with everyone and anyone. Networking and building meaningful relationships is a learning process that starts with listening to the ‘noise’ online and deciphering the pertinent from the irrelevant. Another useful tip offered by the workshop panel concerns blogging, and it relates to the comments box. The advice was to interact with other blogs, leave comments in other writer’s boxes as a means of opening up lines of communication. It’s all part of the culture of online relationship building. Further tips from the Boards.ie director John Breslin, included avoiding the hard sell, a big no-no in the social world. Online communities are about sharing, informing, educating, connecting, trusting. But of course the social networks are no longer just there for amusement. They may have started out that way but the virtual world has splintered into various groups and one of them is the business group and this group wants tangible results not just cosy cyber relationships.

Our own Mike Gaffney, CEO of LEAP, was on the Leading People panel that also comprised Dr. Briga Hynes (UL) and Colm O’Brien (Carambola Kidz). Mike pointed out that leadership is something that can be taught and 86{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} of leaders are according to Stanford research. Self- awareness is the critical factor here and Mike did a good job of clarifying an issue which still confuses many business owners. That is the issue of growing your business as opposed to managing its day-to-day operations. Too many company owners think they can, and should, be doing both. But leadership is about being comfortable in the leader’s role and allowing managers to get on with the daily operations. As Mike pointed out, some CEO’s can become too involved in management activities and become more of a hindrance than a help. There was a large crowd in the conference room and I’m sure this message resonated with many of them. I think a good example of Mike’s philosophy of leadership in action was Liam Ryan of BMS Ireland. BMS produce torque tools and abrasives and Liam has grown his business by focusing on innovative products for the market. He spoke plainly but wisely about his business – ‘I am not an engineer so I hired engineers to do the work.’ Liam is clearly a man who knows how to separate his leadership role from that of the management. It is easy to see why he won the SFA National Small Business Awards 2011. Both Mike Gaffney and Liam Ryan have a clear and pragmatic style of talking that appealed to me on the day and I think a lot of others appreciated it too. Conferences such as this can sometimes cause a sense of bewilderment when faced with the overwhelming expertise that many entrepreneurs have. With some speakers I occasionally find myself thinking ‘what the hell is this guy talking about?’ So it was good to have some panellists who are prepared to speak plainly on issues like leadership, executive coaching and management roles.

The innovation panel included Siobhain Duggan of GS1 Ireland and Craig Meek founder of Powow. At the end of the conference I wanted to get some other people’s perspective on the day’s events and these two participants kindly agreed to share their thoughts on the Summit. Siobhain had this to say:  “Fantastic idea to bring executives together and to share ideas and experiences. I learned a lot from the various speakers and will definitely be an active member in the network in the future. I look forward to seeing Irish Executives evolving to help Irish businesses.”

Craig’s thought of the day was: “It was a very energized day with the collaboration through Irish Executives TV to set up a platform. But Peter’s insight was the highlight of the day.” The Peter he referred to was probably the highlight of the day for many people, that is keynote speaker Peter Hinssen, who delivered a very funny talk on where we are now in the world of technology. Accompanied by a slide show on the big screen that was as slick and polished as Peter’s performance, he focused primarily on the topic of his second book The New Normal.  The basic concept of The New Normal is that we are only halfway through the digital revolution and there are still a lot of changes ahead. God help us! Peter is a funny guy and had the crowd laughing for over an hour. But there isn’t enough space here to dissect his concept. I guess you’ll just have to buy the book. Or go visit him at http://www.peterhinssen.com/books/the-new-normal.  I also asked Peter for his thought of the day. He had this to say: “This was the first time a virtual group became physical, where the group dynamic became tangible.”

Niall Devitt’s thought of the day was, “the Summit was about redefining what it means to be Irish. Rediscover our outlook and perspective.” Mike Gaffney  thought the Summit was “an inspiring conference and a huge credit due to John Keogh and everyone involved in organizing it. Great to see everyone so energized after it.” But I guess the final thought of the day has to come from the man who started the whole Irish Executives ball rolling. John Keogh said: “Reach out in Ireland and outside Ireland and let the world see what we have to offer.” People most certainly are reaching out and who knows what collaborations might result from today’s Summit. Perhaps some of them might come back next year to let us know. That is, if there is another Summit. I for one hope there will be, until then happy networking.

 

Des Kirby
LEAP

Succession Planning Within a Family Business

Succession Planning Within a Family Business

”They f**k you up, your mum and dad.
They may not mean to, but they do.
They fill you with the faults they had
And add some extra, just for you.

But they were f**ked up in their turn
By fools in old-style hats and coats,
Who half the time were soppy-stern
And half at one another’s throats.

Man hands on misery to man.
It deepens like a coastal shelf.
Get out as early as you can,
And don’t have any kids yourself.”

Philip Larkin

 

Family Business
The dynamics of family life is complicated enough but when you add the complexities of business to the mix then you have the potential for a really explosive situation. When your work colleagues are also your brothers and sisters, or your boss is your father or mother then the appeal of a family holiday isn’t quite so attractive. One of the most amazing facts of life in Ireland is that over 75{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} of all businesses are family owned and account for 50{aa1e4c34c9c0f46e0a1f04e30c2eb1b9efaea7a47ed6ca6f324476e114da37f4} of employment in the economy . Despite these numbers there is little attention paid to this sector by the political classes, policymakers and state agencies. In fairness, this may be as a result of the fact that this is an extremely complex area and it is difficult to know where to start.

The most startling statistic of all is the high failure rate of family businesses. Only one in three family businesses survive the first generation. In turn, one in two of the businesses survive the handover to the grandchildren. So how can we lessen this rate of failure? One of the problems is that many families turn to accountants and tax advisors for direction in how to best hand over the assets to the next generation. It is understandable that the advice they get is focused on the numbers and there is a natural reluctance to stay clear of the tricky stuff. By “tricky stuff” I mean the relationships between some of the family members may be fraught. In some cases the parents maybe separated, sisters don’t get on, brothers aren’t talking and inevitably there is a black sheep in every family.

Business Assets
Problems become worse when there are grandchildren. The business may not be substantial enough to support the growing needs of the family. The assets of the business might be more valuable than the business itself so that some family members might want to sell out. Every family has differing tensions that can spill out into the wider family and sometimes succeeding generations. So what can you do?

From my experience of working with family businesses there are four reasons why the business fails. Firstly, the business is not viable. In this case there is little that can be done and the inevitable takes its course. Secondly there may be reluctance for the founder to hand over the business to the siblings. This is understandable in that the skills required to start up and build a successful business are completely different from the ability to stand back, plan and develop the next management team to take over the leadership role. Business founders are not known for their ability to delegate.

Different Generation With Different Needs
The third reason for failure is that the children of the founder may have no interest in continuing the business. In some cases, when the children are old enough they can’t wait to get away from hard graft that they may have had to put in after school or during the summer holidays. Or very often the children’s education is paid for from the business and the next generation are qualified in an entirely different field, therefore may not only lack the interest but they may also not have the necessary skills to run the business.

Planning Failure
But the primary reason for failure is common to all businesses….the failure to plan. The difference here is that the family business requires a different type of plan than a standard business plan. LEAP is a company dedicated to developing leadership in Irish businesses. During my time with LEAP I have gained a lot of experience in working with family businesses. I take a holistic approach that combines the needs of the family with the needs of the business.  Through its work with business owners, LEAP identified that there are particular problems in dealing with family businesses and as a result has developed a specific programme for this sector.

The approach covers four main areas:

1. Good Fences Makes for Good Neighbours
This is essentially a strategic plan that has a short-term and long-term requirement. In the short-term we need to establish Key Performance Indicators for the business. There must be clear divisions between the various strands of the business and individual accountability. There must be a well-defined organisational structure and roles and responsibilities assigned so that each individual’s contribution can be measured. This element of the programme can go a long way to reducing the tensions between family members and helps to clarify who is really contributing to the success of the business. Once this portion of work is completed it will help to lay the foundation for the long-term plan for the organisation. It is only then that we can address restructuring, leadership and ownership issues.

2. Family Planning
Now that your family is maturing you begin to realise that “family planning” is more than contraception. A plan is needed to maintain a healthy and successful family unit. For example it may include each individual developing their own personal plan that meets their own wishes while at the same time dovetailing their plan with the overall family business plan. It may also cover the entry and exit policies of the family members working in the business.

3. The Crown Jewels
The transfer of wealth and property can be a cause of major stress for family members. A plan that covers the legal and tax implications of the restructuring of the business will need to be developed. How to determine the most effective transfer of the ownership the business, the division of the proceeds of the sale of the properties etc. will require sound professional advice.

4. Succession Planning
There are lots of examples in history of family dynasties succeeding through the generations. There are some very bad examples also. The difficult subject of succession planning must be addressed in an open and frank way. Very often the only way this can be achieved is by having an outside person facilitate the process. Someone who is fair-minded and has no vested interest in the succession plan is the best option. I believe that the underlining danger to both the business and the family can be avoided by taking a methodical and structured approach in developing the above plans. If the problems are addressed in a professional manner, and a structured facilitated approach is adopted, then there is great potential for positive outcomes for all concerned.

Families, or more importantly, family businesses don’t have to f**k you up! The message is, don’t leave things to chance, get some professional help and plan your way through this potential mine field!

Programmes

 

 

John Raftery
Senior Partner, LEAP

Posted by Des Kirby

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