Starting a business takes entrepreneurship. Growing it takes leadership. There’s a difference. It’s a fact Lulu O’Sullivan knows firsthand, having established and grown two successful online retailers.
A mark of her success in leading GiftsDirect.com to where it is today – with a multimillion euro turnover and a staff of 38 – is that when she started, in 1988, the internet hadn’t yet been established.
“Back in those days it was all about direct selling. When the internet came along, it fitted us nicely. But the thing about selling online is that you have no choice but to be innovative, because online changes constantly. The technology moves and you have to move with it,” says O’Sullivan.
In 2008 she decided to scale up. To help her do it she enrolled on Leadership4Growth, an Enterprise Ireland programme designed to enhance the leadership and strategic capability of chief executives.
She signed up not because of the recession, but despite it.
“My fear was whether I should really be taking time out of the business to do it. It seemed wrong to even be thinking about scaling up when the walls were falling down around us. But it turned out to be the best decision ever.”
Leadership skills
Developing her business’s leadership and management capability proved crucial to the business’s subsequent success.
“It teaches you that if you are going to scale up, you’re going to have to put systems and structures in place to support that. Prior to Leadership4Growth, my business had grown in the classic entrepreneurial way – by the seat of our pants, forever chasing the next shiny button. What I learned is that, if you want to scale up you need to mature your leadership skills.”
Participants are given access to a high-level business coach. O’Sullivan’s was a serial entrepreneur and a venture capitalist.
“As a result we were getting all this top-level information straight from places like Stanford University and applying it directly to our business reality,” she says.
“I saw that I needed to make some key hires. When you start a business you’re a Jack of All Trades but to scale up you need to build a team with expertise in different areas.”
Internal training
Developing people internally is one of the best ways to achieve this over time, which is why one consequence of the programme has been ongoing investment in internal training and development. “At this stage, of our top team of five, three have now been through Leadership4Growth,” she says.
But the most visible consequence of O’Sullivan’s participation was the launch of website TheIrishStore.com, which now accounts for half of overall revenues, with 90 per cent of its sales coming from overseas, mainly the US.
“The whole aim of Enterprise Ireland is to help Irish businesses think about exporting, and then supporting them to scale up by doing that. For me, that really worked.”
For Mark Christal, Enterprise Ireland’s head of client management development, it’s all about the team.
“The importance of a strong, structured, management team is critical for Irish companies if they are to achieve scale,” he says. The recession bore this out. “With the crash, companies that didn’t have the capacity at management level, and the structures in place to support their business, found it much harder to absorb the shock.”As things improve, developing leadership and management capacity becomes an important weapon in the war for talent too.
“People are going into businesses looking to see if this is a well-run company, one that is going to develop me and my skills. Does it have a good culture, where people are engaged?”
To achieve that, you need a CEO not just with ambition and drive, which are prerequisites, but with leadership skills.
“One of the big gaps we see in Irish business is that not enough companies have a dedicated resource to manage and develop people,” says Christal. “A leader is someone who can clearly articulate a vision, communicate it and bring people with them.”
Those skills are particularly important in times of change, whether that be recession, new markets or life post-Brexit. A large part of what Brexit will mean is unknown but what we do know is that it will put the ability to open new markets, to diversify, to become more competitive to the fore, and having the management capacity to steer your way through that is going to be really important,” says Christal.
Leadership capability is about more than the senior people in an organisation too. Mid-level managers are also leaders and need to develop skills and understandings to ensure their company maintains a competitive edge.
Speaking at the recent Irish Times Brexit conference, Taoiseach Enda Kenny cautioned that the "war for talent" will intensify as companies compete for new opportunities arising from the Brexit vote.
“The availability of talent, especially in new and emerging areas of enterprise, will become an increasingly prominent factor in the minds of investors,” he said.
Leadership4Growth is run by Enterprise Ireland in conjunction with IESE (IESE.edu) in Spain, a world leader in customised executive education. Since it was launched in 2006 the year-long course has had more than 300 C-suite executives take part.
Follow-up studies show 76 per cent growth was recorded by Leadership4Growth companies operating in the software and services sector five years after the programme. For participants in the construction sector, construction exports rose 80 per cent following the programme.
Another study, into the impact of its business coaching, found 87 per cent of CEO participants said it helped them facilitate changes in their business, and 74 per cent made significant management changes as a result of it.
Greg Hayden, co-founder and CEO of Ethos Engineering, a mechanical and electrical consultancy, is one of those. He set up the business in 2005, with a staff of six that grew to 35 within three years. Then the recession hit and “the wheels fell off the wagon,” he says.
“Overnight we had bad debts of around €2 million and the loss of 75 per cent of our staff.”
He responded by refocusing his attention overseas. It was while he was in the Middle East, securing introductions from Enterprise Ireland, that he heard about Leadership4Growth. He signed up in 2010.
“What it did for me was make me conscious of my own shadow within the organisation. To get enthusiasm from people you have to be enthusiastic and not be afraid of change. Today we are constantly transforming, it’s just what we do. You have to, because business is a rollercoaster.”
For Hayden, who has an MBA from UCD, Leadership4Growth “reminded me of an MBA, but one where the case study you focus on is your own business,” he says.
That doesn’t make it easy. “You start with a 360-degree appraisal of your leadership, where they talk to your entire management team, about you. You get a document in which the first two or three pages say nice things but the next six or seven are not so nice. Whether or not it’s all true, it’s the perception, so you have to deal with it.”
A key lesson for him was to delegate. “I think I was guilty of holding on to the reins too much. We now have a culture where everyone, throughout the organisation, is encouraged to be the person that creates opportunities for someone further down the line,” says Hayden, who this week won a CEO of the year award in the UK.
Today the business employs 82 people, managed by five operational heads. Here too, building management capacity is key. “All of these five guys got where they are by being good engineers. But no one ever taught them to be good leaders, or even better managers, which is why we have them all on courses now too.”
[ https://goo.gl/RxJfXBOpens in new window ]
[ ambition.enterprise-ireland.comOpens in new window ]
ENTERPRISE IRELAND Management Capability
Leadership4Growth is just one of a suite of programmes available from Enterprise Ireland to help manufacturing and internationally traded services companies build capacity.
Excel at Growth is a range of short programmes aimed at addressing the growth challenges of Enterprise Ireland companies by providing practical tools and frameworks that can be easily implemented in-company.
Innovation4Growth is designed to meet the needs of Irish companies seeking to use innovation as a way to unlock opportunities in the marketplace. Platform 4 Growth is a management development programme designed to challenge SMEs to scale and to support client companies that are serious about growing their business.
Enterprise Ireland can also work with you and your management team to assess your company's management development needs and to put in place tailored solutions.
Other supports include a key manager grant, which provides partial funding towards the cost of recruiting a new key manager/employee with skills that are critical for the development of your business for one year.
Companies can also avail of the expertise and advice of a panel of 400-plus active mentors, seasoned executives and entrepreneurs with experience and skills across a range of sectors.
