Real change and improvement in business, products or services is often small incremental change disguised as innovation, writes Colm Kennedy of gas and electricity supplier Vayu
The road to recovery and prosperity has been a hard and unforgiving one. Although we are by no means at our destination, we are far enough on our journey that we can start to see the road signs indicating that an end is in sight. A return to the bond market, resilient export numbers, a resumption of consumer confidence and the beginning of stabilisation in the retail sector are all good news stories .
This recession has taught a new generation of Irish business people about the value of entrepreneurship. The chutzpah and energy to give it a go, when the market is against you and the banks don’t want to know you. There’s no doubt necessity is the mother of invention. Invention is happening all over Ireland and there are lots of new companies springing up. I love companies like Glenilen Farms, GoCar and Keogh’s Crisps — all small businesses, inno- vating and creating jobs in their sectors.
Entrepreneurship is often recognised when a new company or new invention comes along. In fact, the real change and improvement in business, products or services is often small incremental change disguised as innovation.
In the private and public sector, sustainable, huge and dramatic improvements and advances would be great to see. However, in reality incremental changes and improvements are far more possible and probable but equally powerful. Imagine the morale boost, power and position of strength the public sector would gain if they offered the Government a small “no strings attached” incremental improvement to the Croke Park agreement.
Being inventive in how you do business is important. There’s a perception in the market that prior to the economic downturn of recent years that everybody, and every business, was given credit easily. Well that wasn’t true for Vayu. In 2004 and 2005 when starting to grow the business, we found it impossible to get banking support. People felt that competing with the State monopolies was a pipe dream. Our solution was to ask some of our most trusted clients to prepay us to help with our working capital requirements, and they did. Their support and our brass neck helped get us to where we are today. We are grateful to this day for the support they gave us.
In spite of the difficulties in our economy, this is a great time to start your own business or become self-employed. Many of the companies which dominated for years in particular sectors have gone or are weakened. Previously it would have been hard to break into a customer base. That’s not true anymore. Every customer and organisation I meet these days is actively searching for better value, more creativity, better and new ideas from its suppliers and partners in order to save them money and make them more competitive.
Vayu is proof that the start-ups of today will be the SMEs of tomorrow, and hopefully the large multinationals of the future. When we entered the Irish gas market, we saw the opportunity to offer innovative products to businesses that had been subject to the limitations of a market with a single provider. The international market dictates the price of gas in Ireland. As a country we import 93 per cent of our needs. Natural gas dictates the price of electricity because gas is one of the biggest input costs for its generation. We constantly monitor the price of gas and inform our customers on a daily basis of the market situation, prices and trends. All of us working with Vayu know that our relationship with our customers is interdependent: if they’re not successful, neither are we.
We saw the opportunity and ran with it and have grown to be an Irish SME which now has offices in the US, UK and the Netherlands. Irish SMEs need to realise that there is a big market beyond our shores; the world is getting smaller.
While there are many incredibly fantastic multinational companies operating in this country providing high- quality employment, it is clear that Ireland’s recovery in large part will come from the success of local and indigenous SMEs. Still today the SME sector provides the backbone of employment in this country. It is crucial that in the rush to attract new multinationals, we continue to support our indigenous SMEs.
For those of us involved in an SME today, hard as it may seem sometimes it’s important that we keep going every day and that the Government in whatever ways it can offers maximum support. For example, in the upcoming Budget it could avoid including any measures which put an additional cost on employing people. We would also welcome greater support for Enterprise Ireland — an agency which has helped many innovators take the next step up the ladder.
The recession has also led many people back to education. The earning power of individuals and most corporates is derived from what they have learned and how they apply that learning to their career or business. That’s true for plumbers and carpenters, for IT consultants and accountants — and for large multinationals. Only the best ones are now in demand.
At every level in our economy, in order to enhance our competitiveness we must encourage, reward and support people who want to learn, change and get better at what they do. At Vayu, although we have fewer than 30 employees, we invested heavily in the development of a “career path model”.
This supports competence mapping and personal development plans for each employee. The attention we paid to this issue has been a key reason we continued to grow during the recent difficult years. We have great people and they are our key asset. The service they deliver to our customers is the basis for our differentiation in the market.
From a broader perspective, a practical step the Government might consider could be deferred tax credits allocated to people based on achievement of qualifications/competencies.
The benefit would apply to those retraining from one career to another, perhaps help those going back to full-time education see a longer term benefit and support others who are finding it difficult to get out of the social welfare trap.
Such credits would offer tangible savings for individuals. The higher level of capability/expertise of the individuals will give them higher earning power and income, which will offset the credits allowed. The real benefit to the country is that the incentive to claim the credits means the expertise of the people has to be delivered from Ireland, incentivising them to either stay in Ireland and earn or return to Ireland and earn. We need to hold on to our best, and prepare to bring back those who left.
A valuable lesson I’ve learned in business is that seldom are things perfect. If you are looking for the information, timing and resources to match perfectly before you make a decision or move ahead with a project, you’ll be waiting a long time.
A great friend gave me a gift for my office, a sign which reads Ancora Imparo (it translates as “I’m still learning”). And when I get something wrong, it gives me comfort.
Sure some things have gone (massively) wrong in our economy which we are paying the price for today, but if we take a break from our old tribal or parochial view and instead look up and forward, we will see fantastic opportunities ahead.
We have a young, vibrant, well-educated population, some of whom now have scar tissue from wounds sustained through recent experiences in a recessionary economy. This will make them stronger and in the toe-to-toe battles that they will have to fight to rebuild our economy, they’ll box above their weight in Europe and further afield and win. Just like our brilliant boxers did in the Olympics.
Colm Kennedy is managing director of Vayu