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Successful digital transformation requires strong leadership. Dave Vincent outlines his tips for successfully embedding innovation in business Growing up in Belfast in the seventies and eighties, I was convinced that by 2020, we’d all be travelling around on flying cars or hoverboards and have a host of robot servants looking after us. Fast forward to the nineties, and I can vividly remember sitting in my university computer lab wrestling with the logic and code required to help teach a hungry virtual monkey how to get their hands on a hidden bunch of bananas. In 2023, while software applications and systems are significantly more developed than in the nineties, the reality doesn’t quite match the vision of the eighties (the hoverboard being the biggest disappointment). I couldn’t have dreamed of many of the developments that have instead taken place, however. Since the term ‘artificial intelligence’ (AI) was first coined almost 70 years ago, we’ve seen wave after wave of technology-enabled innovation, from the rise of personal computing to the internet, mobile devices, augmented and virtual reality, the cloud, the metaverse, self-driving vehicles and now, generative AI. Each shift has captured the imagination, created new opportunities and raised further questions and challenges for business leaders. We are surrounded by technology, and every day, we can see that technology evolves and changes as it impacts how we live and do business. How can technology help? Some of the most frequent questions I hear from clients considering digital transformation are: “Where do I start?” “How do I create the most impact?” “What does success look like?” Rather than starting by asking or thinking about what a particular tool or technology can do, I prefer to reverse engineer the questions and ask: “What are you trying to do in your business or what problem would you like to solve, and how can a digital mindset or technology help?” As these new technologies continue to influence all areas of our business operations, customers and employees, companies need a new type of (digital) leader who can understand, interpret and navigate this digital transformation era. The digital leader Implementing new technology is challenging. The organisation seeking to embed the latest technology — and its staff — must unlearn old concepts and embrace the new systems. For digital leaders, this means adopting alternative leadership styles. In the past, leadership was about giving orders and making decisions. Digital leaders know that successful digital transformation is not just about adopting technology; it’s about transforming business and operating models, driving growth, enhancing competitive advantage and increasing business agility. Today’s leaders must be able to evaluate progress, priorities and business models continually and be prepared to change direction quickly. Digital leaders need to understand not only how systems and technology work but also how that technology will be received and used by staff, as well as how it will impact how employees work and the type of work they do. Digital leaders need to be able to effectively manage employees through shifts and changes to ensure that digital technology is used to deliver the best business outcomes. To make informed and pragmatic decisions about technology, digital leaders must be able to evaluate the impact technology can deliver for their organisations, use data to inform policy and decision-making, and proactively assess and manage risks related to data security. To drive digital innovation, leaders must be agile and flexible, creating a culture where innovation, collaboration and continuous learning can flourish and empower their teams to make data-driven decisions. To ensure focus and alignment, leaders must share a well-defined and compelling strategic vision, calling out what success looks like and showing the roadmap that will get there. It is also important to remember that leadership in the digital age is not just the responsibility of the nominated digital leaders and senior leadership teams, however. Every employee can be a digital leader. The future is digitally enabled Organisations can drive digital innovation and growth from the ground up by empowering staff at all levels to take ownership of, and show leadership in, their work.  The future of work is undoubtedly digitally enabled, and business leaders who are prepared to embrace this change and lead their teams effectively will be the ones to succeed. The digital age allows leaders to create more meaningful and purpose-driven work for their employees and promote innovation and growth for their organisations. Organisations can position themselves for continued success by investing in digital leadership development.  And maybe somebody will finally work out how to create the hoverboard of my dreams. Dave Vincent is a Director of Digital Transformation at Grant Thornton Northern Ireland

The role of performance measurement and control in prisons in the UK and Ireland continues to evolve, write Mariannunziata Liguori and Martin Kelly The prison sector in the United Kingdom (UK) and the Republic of Ireland (ROI) is significant and forms the backbone of the criminal justice system in both jurisdictions. In 2021, approximately £5.4 billion was spent on the prison system in the UK, where His Majesty’s Prison and Probation Service (HMPPS), an executive agency of the Ministry of Justice (MoJ), is responsible for 117 prisons in England and Wales, including 104 public prisons and 13 private. Three private sector companies – G4S, Sodexo and Serco – manage the private prisons with a combined operational capacity of 16,000 places. As of March 2021, there were 78,058 prisoners overall. In ROI, the annual budget for the Irish Prison Service (IPS) for that year was €395 million, for an average of 3,792 prisoners. The IPS operates as an office of the Department of Justice (DoJ). There are currently 12 prison sites in the Irish prison estate, none run privately. We have recently conducted research exploring the relationships among key stakeholders and performance management tools involved in the provision of prison services in both the UK and ROI. Key stakeholders In the UK, specifically in England and Wales, within HMPPS, the Prison Group Directors are responsible for the operational delivery and strategic development of up to seven prisons at a time. To manage the contracts with private providers, moreover, there is a Head of Custodial Contracts for HMPPS, who ensures that the private contractors deliver to the expected standards.  At the local level, prison governors are expected to provide vision and strategic direction for prisons, ensuring that their site is secure and operationally stable, while maintaining decency and compliance with key performance metrics and targets. In the ROI, the governor in charge of each prison is accountable to the Minister for Justice, through the Director General of IPS, for the safe and secure custody, care and rehabilitation of the prisoners in their care. The governor is also responsible for effective corporate governance at prison level and for cost-effective performance against agreed plans. The research highlighted that, in the ROI, key stakeholders (DoJ, IPS and governors) considered a strong and clear governance system as essential. IPS and governors were perceived as the main actors through whom all decisions and changes had to pass and be approved. A main underlying factor emerging in the provision of prison services was the ability to manage relationships across the wide range of stakeholders and levels involved. Such relationships were influenced by both human agents’ behaviours/attitudes and contextual/physical factors (such as regulation, changes in control and performance measurement systems, availability of resources, contractual aspects, etc.). When compared with the UK, a greater emphasis on softer control and measurement aspects, such as social and human conditions, as well as Health and Safety, became apparent in the ROI. Within the UK, on the contrary, key stakeholders (MoJ, HMPPS, governors and contractors) emphasised contract management issues as being critical to the delivery of services. In both jurisdictions, the role of, and relationships between, the governors and HMPPS/IPS were of critical importance. The empirical evidence suggested the need for greater clarity on their respective roles and responsibilities. The contention for increased efficiency and transparency has led, over time, to a proliferation of new control and performance measurement tools, with an excessive emphasis on standardised and quantified performance measures. If care is not taken, this could lead to a diminution of accountability by narrowing the focus of management on a few numbers, rather than the overall quality of the service provision. Performance measurement and control The research showed that, compared with the ROI, the UK stakeholders at all levels were more wedded to business-like approaches, stressing the importance of efficient and cost-effective prisons and good contracts to manage their services. In both jurisdictions, and regardless of their public/private nature, prisons mainly replicated external mandatory controls and measures. However, there was also an acknowledgement of the unifying role played by accounting and measurement practices and the benefits that common standards and professionalism could bring when new knowledge and techniques are integrated into existing systems. In 2018, a new performance framework, the Prison Performance Tool (PPT), was introduced in the UK to monitor the performance of prisons. Similar in principle to the Balanced Scorecard, the PPT uses a data-driven assessment of performance in each prison to derive overall prison performance ratings. Data for the various measures in the PPT, along with overall prison ratings, are released at the end of each year on GOV.UK, as part of the Prison Performance Ratings publication. These ratings are publicly available and form the basis of a league table of prison performance. The PPT performance measures are weighted according to HMPPS’s priorities. For example, in 2019/20 there was an emphasis on safety and drug levels, living conditions and risk management, as well as security measures and data quality. In ROI prisons, more integrated and comprehensive performance-measurement systems are currently being developed with the aim of strengthening governance and accountability, improving the prisoner’s journey and the safety and security of prisons. IPS has recently introduced a new operating model to align functional responsibilities between directorates and the various operational sites (including prisons) and to provide clarity on decision-making authority and accountability. The Oversight Agreement 2022–24 sets out the key governance and reporting arrangements. Consistently, IPS is required to develop a multi-year Strategic Plan. This defines the mission, vision and values of the service and is expected to incorporate appropriate objectives and goals along with relevant indicators and targets against which performance can be measured. At present, only a limited number of performance metrics are produced and made publicly available. Moreover, such quantitative performance data are limited in scope. For instance, there is no breakdown of figures for each prison, so it is difficult to see which are performing well, or otherwise, against the relevant targets. While key stakeholders in both the UK and ROI indicated that many of the performance measures in place were relevant, governors frequently pointed out that prisons were not sufficiently resourced to achieve some of the targets set, which ultimately affected the prisoners’ experience. It was concerning, in particular, that there was still relatively limited information, in the public domain, in relation to health and education in prisons. With reference to private prisons in the UK, moreover, the role of the public sector controller was identified as being particularly critical. The controller is the MoJ’s on-site representative in each private prison and effectively monitors performance on the ground. Private prisons’ performance is measured through the same system public sector prisons are subject to. In addition to this, however, each contract also has specific contract-delivery indicators (CDIs) built into it with financial incentives. If a private prison operator does not meet its target for a CDI, it may incur a financial penalty. Contracts between private prison providers and the MoJ are highly complex. The contracts are normally an extensive suite of documents comprising the main contract and up to 30 detailed schedules, many with their own constituent parts and appendices. For the 13 private prisons in England and Wales, there was a significant level of compliance and assurance reporting. Private prisons were generally perceived to be under greater control and scrutiny, when compared with their public counterparts, because of the greater contract detail and the presence of public sector controllers within their walls. A potential concern in this area would be the narrow competitive base of the UK prison market and, consequently, the MoJ and HMPPS’s continued reliance on the same few contractors, even when there is evidence of inadequate performance levels.   Conclusions The prison system represents a unique context in which many different stakeholders collaborate. Partnerships are critically important to ensure good performing prisons. Governors in both jurisdictions were conscious of the limitations of performance measurement and that existing indicators did not always reflect their priorities. If the application of performance measurement systems is perceived as inflexible, staff will focus on short-term achievements, paying less attention to the longer-term impacts. The enabling or constraining effect of the systems set in place, and their ability to influence, in one way or another, decisions and behaviours was perceived as being particularly important. If performance is to be effective, an integrated and inter-organisational governance approach becomes essential. Whilst the research highlighted that some excellent work is being carried out in individual prisons in both the UK and ROI, there is still some ambiguity as to how, exactly, this is being effectively captured within the wider performance reporting and control systems of the public sector. In both jurisdictions, there is a clear and increasing desire for consultation and inclusion in decision-making processes. The role of performance measurement and control is evolving and no longer covers only the assessment of organisational results, but increasingly includes managing change, organisational relationships and the external environment. Successful prisons will be those that broaden their view, from looking inward to looking outward towards the community. This article is one of the outputs of a research project by Mariannunziata Liguori (Durham University Business School) and Martin Kelly (Queen’s Management School, Belfast) funded by Chartered Accountants Ireland Educational Trust

In a competitive professional services landscape, visible expertise can be an asset. Mary Cloonan outlines five strategic steps you can take to build trust and stand out in your field In today’s competitive environment, innovative professional services firms prioritise visible expertise to help maximise business development opportunities.  There are a few reasons visible expertise is essential for professional services. First, it’s a way to differentiate your firm from your competition. In a world where firms are constantly vying for attention, being known as an expert in your field sets you apart. Second, it’s a way to build trust with your current and future clients. When you share your ideas and knowledge, you demonstrate confidence in what you do. This confidence transfers to those who see you as an expert, instilling trust in your abilities. Third, it allows you to prioritise market development efforts and resources. By selecting a few key areas, you can focus marketing efforts to maximise returns from minimum investment. And finally, by sharing your ideas and thoughts on a given topic, you are positioning yourself as an authority – someone up to date on the latest trends and changes. To embark on this journey, here are five steps you can take: 1. Claim a segment Select a specific sector or industry segment and focus your efforts on this area. Build your knowledge through reading, attending relevant events, networking and writing about it. Sharing your ideas positions you as an authority. 2. Know your audience Understand your target audience. Identify their pain points and position your visible expertise as the solution. It also helps to tailor your knowledge to the specific needs of your audience. 3. Sharpen your skills You can’t have expertise in anything unless you stay up to date with the latest trends and changes in your industry. By continuously educating yourself, you can position yourself as an authority in your industry. Whether through articles, blog posts, speaking engagements or podcasts, ensure you have the most current information. 4. Create a profile-building plan Plan how you will share your expertise. Determine the best platforms for your content that align with your target audience’s presence. Consider a mix of content types, such as articles, blog posts and videos, to reach a wider audience. 5. Execute the strategy Consistency is key. Execute your plan effectively and keep your target audience in focus. Track your progress by monitoring website traffic and social media engagement. Once you consistently push your expertise to the target market (through articles, videos, social media posts, etc.), adapt your strategy based on the feedback and insights gained along the way. Building visible expertise is a gradual process, but by starting with these five steps, you will be on your way to becoming the top-of-mind choice for your target audience.  Mary Cloonan is the Founder of Marketing Clever

Succession is a multifaceted process that involves financial, emotional and strategic considerations. Mark Butler explores the critical aspects of ensuring the seamless transition of a business from one family member to another Succession decisions in a family-owned business can either fortify its legacy or lead to its downfall.  Having navigated the challenges of Brexit and COVID-19, businesses are now focused on long-term planning and preparing for the unexpected. In family-owned businesses, this includes succession planning, and getting the process right is crucial. Early-stage conversations The foundation of a successful succession plan is open and honest communication. Family members, especially the current owner(s), should initiate conversations about their wishes and intentions for the business’s future early to mitigate misunderstandings and conflicts down the road. By discussing their vision for the business, leaders can set expectations and ensure alignment among family members. The next generation Incorporating the next generation into the business as soon as practical is vital. This not only allows them to learn the ropes but also provides an opportunity to build the necessary skills and experience. Mentorship and on-the-job training can help bridge the generation gap and sustain relationships with suppliers and clients to ensure a smooth transition. Waiting until the last moment to involve successors can be risky, as it may leave them unprepared to take the reins. Owners should give the next generation every chance to learn while they are still there to assist.  Let go and step back One of the most challenging aspects of managing succession is the emotional struggle to let go. Founders and current owners often have a deep emotional attachment to the business they have built over the years. Knowing when to step back and relinquish control can be an emotional wrench. Recognising that this is in the best interests of the business and the family’s future can help to make the transition smoother – but not necessarily easier for many. Structure for business, not tax Structuring the business appropriately can help to ensure its sustainability during and after succession. While planning for tax efficiency is essential, it should not come at the expense of the business’s overall health. Business goals and the company’s best interests should always take precedence over tax planning. Planning first and then executing tax-efficient strategies is more prudent than forcing the business into a tax-efficient mould. Tax benefits, such as retirement relief, can help to minimise the costs of passing on the business, but they are there to help succession, not dictate it. Family shareholder agreements A robust family shareholder agreement is a cornerstone of successful succession planning. This agreement outlines the rights and responsibilities of family members with a stake in the business and addresses issues such as shareholding percentages, decision-making processes, dispute resolution mechanisms and the roles of family members within the company. A well-drafted agreement can prevent conflicts and provide a clear framework for the governance of the business. Fairness vs. equal shareholdings Fairness in succession does not always mean equal shareholdings for all. Each family member may have different skills, interests and levels of involvement in the business. The primary goal should be to ensure the long-term sustainability and prosperity of the business. This may involve distributing shares based on merit, responsibilities and contributions rather than a one-size-fits-all approach. Fairness should be synonymous with the best interests of the business and the family. Secure the business’s legacy Succession planning in a family-owned business is complex and delicate. It requires open communication, early involvement of the next generation, the courage to let go, proper business structuring, family shareholder agreements and a fair distribution of responsibilities and shares. Some business families think their company and family issues are unique. Sometimes, they are correct, but advice from experienced advisors can help to structure a succession journey that starts long before the keys are handed over. Succession should be viewed as an opportunity to secure the company’s legacy and foster growth, not merely as a financial transaction. By prioritising these elements, family businesses can ensure a seamless transition that benefits the enterprise and the family it supports. Mark Butler is Managing Partner at HLB Ireland

Budget 2024 introduced measures for individuals and businesses facing another winter of high costs. Brian Brennan discusses this year’s package and the future-focused benefits of the new State funds The tax package of €1.3 billion introduced under Budget 2024 cast a wide net across Irish society, from income tax breaks for individuals and mortgage interest relief for homeowners to a rental credit increase for tenants, tax relief for landlords and tax reliefs and supports for businesses. The Budget also provided for tax-raising measures, including extending the bank levy to raise €200 million. A substantial tax package The tax packages for Budget 2024 and Budget 2023 were substantially larger than the tax measures introduced in the two previous pandemic Budgets. While substantial budgetary packages are becoming the norm, so are the inflationary challenges facing businesses and individuals. Minister for Finance Michael McGrath had to formulate a tax package at the risk of fuelling inflation balanced against the need to take action to provide respite to households and businesses facing another winter of high energy and living costs. Given Ireland’s exchequer surplus for 2022 and forecasts of short- to medium-term surpluses on the back of strong tax yields, it is difficult to imagine the Government failing to deliver a package of this magnitude. Business measures Companies in Ireland, both multinational and indigenous, will welcome enhancements to the research and development (R&D) tax credit. The rate increase from 25 percent to 30 percent will maintain the net value of the existing credit for businesses subject to the new 15 percent minimum effective tax rate resulting from the Base Erosion and Profit Shifting (BEPS) Pillar Two reform package. SMEs and those companies outside the remit of Pillar Two will benefit from the rate increase. SMEs will also welcome the doubling of the first-year payment threshold from €25,000 to €50,000.  A new capital gains tax relief (CGT) for angel investment in innovative start-ups has the potential to provide alternative funding streams for new businesses. Qualifying investors may avail of an effective reduced rate of CGT of 16 percent – or 18 precent, if through a partnership – on a gain up to twice the value of their initial investment subject to a lifetime limit of €3 million. The details of how the new rate will apply will be set out in the Finance Bill. This is certainly a welcome initiative in supporting enterprises that hopefully avoids being so restrictive as to be of limited practical use. The Employment Investment Incentive and Key Employee Engagement Programme will also be enhanced. Minister McGrath announced the establishment of a dedicated working group focused on simplifying and modernising the administration of business supports. This was in response to feedback that the rules and requirements surrounding tax reliefs and schemes are complex, which can make them difficult to access. Plans for an extensive public information campaign with Revenue to raise awareness of the range of tax credits and reliefs available to PAYE taxpayers were also announced. Regarding revenue-raising measures, Minister for Public Expenditure and Reform Paschal Donohoe  announced an increase of 0.1 percent to all PRSI contribution rates from 1 October 2024. While the Minister described this as a “modest” increase, it paves the way for further increases in the years ahead to fund the pension system for our ageing population. Wise use of resources While tax breaks and supports dominated media coverage of Budget 2024, it is essential to acknowledge the fiscal prudence demonstrated by the Government in plans to establish two new funds to ensure that windfall taxes do not become part of Ireland’s core national spending. The Future Ireland Fund will help fund the healthcare, pension and home care costs of Ireland’s ageing population. It will receive €4 billion on the dissolution of the current National Reserve Fund and 0.8 percent of GDP annually from 2024 to 2035, with the potential to have accumulated €100 billion by 2035. The Infrastructure, Climate and Nature Fund aims to address Ireland’s record of halting capital spending during economic downturns. This fund will also support climate action with €3 billion earmarked for capital projects to help keep Ireland on track to meet carbon budgets. The National Reserve Fund will make a €2 billion contribution in 2024. Additionally, €2 billion will be invested yearly until the Infrastructure, Climate and Nature Fund reaches €14 billion. Future budgets In Budget 2024, the Government is striving to make the best use of the resources available now to alleviate the impact of inflation on households while also sustaining an environment in which businesses can grow. Of course, there is always more a government can do regarding support. However, if Ireland can achieve the funding targets underpinning the two new State funds announced under Budget 2024, the country will be in a good position to respond to unforeseen future events. Brian Brennan is a tax partner at KPMG You can hear more about Budget 2024 on the Accountancy Ireland podcast, available on Spotify, Apple Podcasts and at accountancyireland.ie.

As the pace of change intensifies, changeability is becoming an increasingly important attribute for all organisations. David Codd explains how to get it right Change is a constant.  Many organisations are rethinking their purpose and adopting a more balanced outlook that recognises their environmental and societal impact.  Technology continues to change markets fundamentally, and now, artificial intelligence is changing how work is done.  Added to this, organisations are having to contend with changing geopolitical forces and events like Brexit and the war in Ukraine. Therefore, the most important attribute for ensuring your organisation’s long-term health is arguably its ability to sense what needs to change and successfully manage change repeatedly.  Here are my top tips on how to achieve an effective culture of changeability. Critical success factors There are four critical success factors that can guide boards and executive teams in shaping their organisation to be ‘fluent’ at change. Your organisation must be: aware; inclusive; aligned; and adept at change management. So why are these factors critical to success? What are the barriers that prevent organisations from being effective, and how can they be overcome? 1. Aware Awareness in this context relates to strategic sensitivity – being highly attentive to strategic developments both inside and outside the organisation.  An organisation requires a comprehensive view of the current and future landscape and a considered position on what that means. Otherwise, groupthink and complacency can creep in, and the organisation can stagnate.  Barriers can arise when teams are too busy (under too much day-to-day pressure) or too proud (already delivering success).  So, how do you get over these barriers? Through process and challenge.  A well-run and well-structured strategic planning process, with senior management and board input, supports quality thinking. By not prejudging the outcome, you normalise constructive questioning of the status quo and open minds. A strategic review needs to have a challenge built in. Some challenges can come from deep customer insight. 2. Inclusive Changeability is enabled by being as inclusive as possible. Inclusiveness can unlock your talent’s potential.  At the very least, colleagues have a right to expect that the rationale behind any intended change is clearly explained to them.  When done well, this can help you to achieve acceptance, but it still falls short of full ownership. The best results are built on strong buy-in secured through real participation.  In any organisation of scale, one barrier to inclusivity can be the inability to have everyone participate in every change decision – it’s not always feasible. In organisations of all sizes, varying degrees of confidentiality are usually necessary when change is planned or implemented, e.g. entering competitive markets, using acquisitive strategies, and making difficult cost-reduction decisions. To overcome these potential barriers, leaders should provide frequent, engaging progress updates to the whole workforce – both successes and challenges – not just titbits of good news. If using third parties to gather insights, partner relevant internal teams with them. Once the overall direction is set, involve colleagues in ideation for implementation in their own function.  Building trust is a two-way process. Staff engagement can be objectively measured, and the results and trends can be shared internally. Then colleagues know that their organisation is really listening. 3. Aligned The different components of an organisation need to be aligned for change to be successful. If vital components are misaligned, then change will be blocked or at least compromised. This is clear but not easy to achieve, especially in a big organisation.  Barriers here can arise when the vision underpinning change is not clearly articulated – it can be perceived as meaningless background noise. For reasons rooted in a lack of trust, you may find that teams pursue different agendas or adopt a wait-and-see stance. Similarly, individuals and teams often have understandably limited exposure beyond their own area and, therefore, cannot be expected to immediately align behind a general direction they can’t relate to.  Purpose, vision and strategy must be clear and expressed and fleshed out in ways that everyone can relate to.   4. Adept at managing change Change is disruptive and potentially destabilising, so effective implementation needs focus and skill. The barriers here can include the complexity of the project and a shortage of appropriate expertise. Portfolio management, run as a process with executive participation, can bridge strategy and the plan-of-action.  It facilitates good collective choices by prioritising proposed change initiatives versus strategic objectives, recognising that human and financial capital are scarce resources.  Similarly, while project managers can usually be contracted in, it can be difficult to free up internal people who have deep functional knowledge and enjoy projects.  Experienced programme and project managers (ideally with functional knowledge) are essential. A highly beneficial medium-term measure is to develop ‘hybrids’ – people who can work across functions and switch between operational and project management disciplines. This contributes to a higher project success rate and a faster pace. The changeability lens Regardless of whether your organisation is currently undergoing significant change, it can be helpful for leadership to apply a ‘changeability’ lens to the organisation as a whole.  Use the four critical success factors to take a view on the change capabilities, processes and culture that you will need and create an action plan to address the gaps. A thorough review can form the basis of an enduring strong change capability – the key to your organisation growing from strength to strength. David Codd is a Chartered Accountant and transformation specialist