Feature of the Week

April 7, 2014 12:03 am

Changing the mindset and management of Irish SMEs

DUBLIN, IRELAND - April 03, 2014: Richard Cullen, the co-owner of The Jelly Bean Factory, stands beside a carrying belt full of jelly beans at the company's production line in northern Dublin, Ireland. CREDIT: Paulo Nunes dos Santos for The Financial Times©Paulo Nunes dos Santos

'It's all jelly beans'. Richard Cullen, co-owner of The Jelly Bean Factory

The lobby of the office building that houses Piero Tintori’s technology company in central Dublin is deserted on a bright, breezy spring day. The lift takes visitors to a dark, second-floor corridor where the door to Terminal Four, as Mr Tintori calls his company, bristles with security buttons. Above the buttons is a Post-it note telling visitors to “Please Knock”.

The surroundings say “start-up”. But Terminal Four is 13 years old – practically middle-aged in the tech world. And appearances can deceive. Mr Tintori sometimes sounds like the raw entrepreneur he was when he began in 2001, with a degree in computer applications from Dublin City University, a small pot of funding and one US customer, to set up Terminal Four in his parents’ attic in Glasnevin, a suburb of Dublin. (His mother did the paperwork).

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But he is now chief executive of a company that is one of the biggest suppliers of software programmes to universities worldwide, helping them manage their many websites and communicate with students. Now, after participating in a leadership course – developed by Enterprise Ireland, a state agency that helps Irish companies make the leap into global markets – he says he can double its revenues by 2016, to €15m.

The course, Leadership4Growth, is run by EI in partnership with IMD in Lausanne and the Irish Management Institute, which provides business coaching. EI began offering the course in 2006 with Stanford Graduate School of Business and subsequently Duke Corporate Education and IMD. To date EI has run nine courses, four with Stanford, two with Duke CE and three with IMD. The next is due to begin this month with IMD.

L4G aims to encourage chief executives of small and medium-sized Irish enterprises to think differently about how to manage their companies. EI targets those companies that it believes could benefit from the programme. Occasionally, chief executives hear about the programme from their peers and approach EI directly.

Mr Tintori is enthusiastic about the course. “They deconstruct you personally – I’m a different person now,” he says. “This course is one of the things that has changed my life both professionally and personally.”

That is a large claim to make for what might be considered a piece of management training. Yet Mr Tintori’s opinion is echoed by other Irish entrepreneurs who have done the course. To date about 300 chief executives from Irish SMEs have taken part in the L4G course, which runs over a year with five days in Dublin and three five-day sessions at IMD. L4G costs €53,000 per participant. Smaller companies pay 30 per cent of the cost and larger companies 50 per cent, with EI picking up the balance.

Suzanne Carroll, managing director of Bellurgan Precision Engineering, which makes parts for medical devices (among other things) in Dundalk, north of Dublin, completed the course in 2013. Her father founded Bellurgan in 1978 and she and her four siblings now own and run it. It is aiming for €10m of revenue this year, a 30 per cent jump on 2013. It employs 85 people – “and we’re hiring”.

Among the issues her course addressed were those that are critical to any company but rarely get attention because of the demands of day-to-day management, she says.

Ms Carroll describes them as “what if?” scenarios. “What if the materials we use today stop being used? What if stuff you have no control over actually happens? What are the opportunities within those ‘what if’ scenarios? How do you train your mind to be prepared for all of that? There was a lot of that on the course. They [the instructors] really make you feel you shouldn’t be so smug.”

Richard Cullen completed the course in 2011. His group comprised executives from Irish food companies. He says he and his father Peter – they are joint managing directors and founders of The Jelly Bean Factory, near Dublin – “had heard about the course from previous participants. “It began on a Monday morning and by Wednesday I was completely brain-dead, it was so intense.”

One of the most striking aspects of the L4G course, cited by all the participants interviewed, is that it convinced them to do one thing brilliantly rather than trying to spread their companies too thinly.

“If there is one word, it’s ‘focus’,” says Richard Cullen. “Focus on what you’ve got. That is one of the strongest things out of it for me.”

The Jelly Bean Factory exports to 50 countries, has turnover in the region of €13m, employs 70 people, supplies 45,000 retailers in the UK alone and makes 12m jelly beans a day. “It’s all jelly beans,” he says.

Ms Carroll says one of the family’s aims now is to do business only with customers where Bellurgan is the biggest or only supplier of a particular product. “I’ve got clarity on what we are doing and where we want to go with the company. The critical thing is that we add value, not just capacity” for customers, she says.

For Mr Tintori one of the main lessons from the course was that “if you are going to screw up, just screw up once”. He had considered himself to be the leader [of Terminal Four] but did not understand what that meant, he says. “The course put me into the mindset that I needed to be the leader. It’s very clear now that I am the chief executive, majority shareholder and leader of Terminal Four.”

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A world of ambition

It seems improbable that a small company outside a small town, on the east coast of a small country on the edge of Europe, could compete in a global marketplace. Yet Bellurgan Precision Engineering, founded by Suzanne Carroll’s father in 1978 and still owned and run by the Carroll family, proves that location is a state of mind.

Bellurgan began by making spare parts for multinationals based in Ireland; early customers were ABB and Amdahl. “Logistics are not an issue – our products are high value, and we can deliver to Shanghai in 24 hours,” Ms Carroll says. Dublin airport is 30 minutes down the motorway, for instance.

The Leadership4Growth course shows participants not how to leap geographical hurdles but how to navigate management, psychological and cultural ones instead. That is what Enterprise Ireland had in mind when it started the course with the Irish Management Institute and IMD. (It also runs courses with Stanford and Duke universities in the US).

Niall O’Donnellan, head of policy, people and investment at EI, says it sees many Irish chief executives enter the course believing their companies could hit €5-€7m of turnover in three years and come out thinking they can achieve 10 times that. “It’s primarily about Irish SMEs with global ambitions,” he says.

Ms Carroll says one way in which Bellurgan is starting to benefit is a change in the company’s corporate governance to make it less informal and bring in outside experience. “It has really just been the owners,” the Carroll family, running the company and serving on the board, she says. “That is going to be one of the things that will change over the next few years as a result of the course.”

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