COMMENT: Managers should look to themselves to deal with post Celtic Tiger economic issues

Irish managers are facing a new and sometimes bewildering environment: Inflation is running at 5 per cent; interest rates at 2.5 per cent; pay rises at 7 per cent with public benchmarking to come; astronomical insurance costs; poor physical infrastructure; weak and exorbitant electronic infrastructure; and problems with housing, transportation and healthcare. All are becoming critical wage drivers for staff.

In addition, the euro is gaining strongly on the dollar, putting Irish exports to the US at risk and increasing our own cost base relative to the US.

How are companies going to survive, and how do they lay the foundations for sustainable growth for the future? Irish managers are faced with these and many more questions.

Can we reduce our manufacturing costs here and instead focus on business development and innovation from Ireland? Is now the time to move our manufacturing to, for example, Poland or what about Estonia?

Has the time now come to consider China? It is becoming the global factory, its business practices are reputedly improving fast, it has an immense home market, and is just as close as California and only eight hours ahead of Ireland.

Managers should know who else is doing this today in Ireland, and learn from them and their experiences.

Irish managers must consider how to catalyse their companies for innovation. But how should we best manage innovation?

Should we set up a dedicated research and development group? Would it now be wiser to spin out some of the better ideas and entrepreneurial staff? Would they be able to move faster outside of their existing organisation?

But then how can we retain control - and won't the staff left behind become disenchanted with what they may perceive as a stagnant organisation?

Can an acquisition address an innovation deficit - and if so, is our organisation now sufficiently prepared to acquire and how do we find the right technology company for us?

Could we co-operate with a university? If so, how do we have the time to manage such collaboration; how long before something useful emerges; and how do we keep the project commercially focused?

What about subvention from the taxpayer - are Science Foundation Ireland and/or the EU Framework Programme really relevant to our business needs and how could we make them work for us in our organisation?

Managers are asking themselves if there are other companies in Ireland with whom they could co-operate and build a value chain to develop a joint market niche? This includes business co-operation and shared innovation with foreign multinationals operating in Ireland.

Managers sometimes have concerns that in practice they would need to work with corporate executives of multinationals overseas in order to underwrite a local Irish relationship. Being aware of role models already here in Ireland, and what can be learnt from them is valuable.

Further improving the value that staff bring to an organisation is another key concern. How well do staff understand our business and how will they accept the need for strategic change?

Can our staff accept the new business conditions post the Celtic Tiger? How can we get them to reduce our cost base and how can we best incentivise them for the uncertain future ahead?

Managers need to work with staff to address together the challenges faced by their organisation.

Managers are seeking how to enable their boards to be more effective. Isn't it wise to amend our strategies in the new geo-political environment?

How will the board accept the need for change and how can we best persuade them? What are the appropriate corporate dashboard metrics for our company, and how do we ensure that they accurately reflect reality in the organisation?

How can we as managers best persuade new talent to join the board table, given the perception of new risks of litigation arising from revisions to corporate governance law?

How should the board help us develop new business, and how can we ensure the board is adequately equipped to do so?

Post the Celtic Tiger, Irish managers are facing a new set of problems. Their ability to solve them will determine the fate of the Irish economy, directly affecting the future of our society.

While there are industry bodies to lobby and change political and regulatory policies, despite good MBA and business schools for young graduates, and regardless of the excellent executive development schools operating overseas, the core help must be an Irish-based network understanding the needs, concerns and aspirations of Irish managers.

Chris Horn is the newly elected chairman of IMI and chairman of Iona Technologies. He will be hosting this year's IMI Management Conference, Back to Basics: Survive & Thrive, which takes place in Killarney on April 4th and 5th, which will feature Irish and international management speakers and practitioners. For more information visit www.imi.ie/conference.