Spotlight

2022 represents a new dawn for boards as the panic brought about by the COVID-19 crisis subsides and businesses learn to live with the associated uncertainty. For many boards, it represents an unprecedented opportunity to transform, writes Kieran Moynihan. The pace of change in boardrooms before the COVID-19 crisis could best be described as glacial, with very little change over many decades in how board directors were recruited and how they functioned. For most boards, COVID-19 has been an acid test of their effectiveness, leadership, and resilience at a time of extreme crisis. It also asks fundamental questions about their core purpose and values in terms of how they treat their customers and employees, how they balance the interests of their shareholders and stakeholders, and their overall contribution to – and impact on – society. While several forward-looking boards are seizing the opportunity to fundamentally transform how they operate and who sits around the table, many boards are still clinging to an outdated model. In short, their composition and functioning are no longer fit-for-purpose. Organisations and their boards face fundamental challenges to their long-term future: how they navigate through a maelstrom of economic headwinds, sector disruption, and rapidly changing customer requirements. Then, there are the existential challenges such as climate change and employees embracing a new flexible work paradigm and who want to work for organisations with genuine purpose and values. Board composition and diversity: breaking the legacy mould The day will come when we will no longer require trojan efforts by initiatives such as The 30% Club and both government and institutional investors to persuade and cajole boards on the value of board diversity (gender, age, sector, ethnic, thinking style and customer demographics). The COVID-19 crisis accelerated this transition. Many boards struggled to demonstrate a diverse mix of non-executive directors (NEDs) who could bring value in the form of creative solutions to severe strategy and business model challenges; an understanding of the impact on customers and employees; and a vibrant range of thinking styles to enable the board – in partnership with the executive team – to imagine a very different future for the organisation. Progressive boards are now assembling “the best board team we can find” where diversity is celebrated. One’s gender, age, sector, ethnic or geographic background no longer matters, provided the end product is an exceptional board team. An exceptional team can be described as one with strategic fire-power, independence of mind, understanding of customers and sectoral trends, and the capability to combine high-quality challenge, debate and oversight with support and value-add to the executive team. In the COVID-19 era, many boards ‘got religion’ regarding the gaping hole in their board composition. There is a dearth of younger NEDs who have digital DNA and truly understand what it means to embrace environmental, social and governance (ESG) criteria and embed it into the fabric of the organisation. I have evaluated and supported some exceptional NEDs in their 60s and 70s who do not understand the evolving digital world, the danger of cybersecurity threats, the mindsets of customers in their 20s and 30s, the values and aspirations of younger purpose-driven employees, and the need in some cases for transformational business models. What boards need is a vibrant mix whereby you get the best of both sets of NEDs, combining the deep experience, leadership and wisdom of the older NED with the dynamic, fresh perspectives and current expertise of younger NEDs. ESG: a defining moment for boards As the dust settles on COP26 in Glasgow, it has dawned on the boards of many organisations that they have a compelling responsibility to tackle climate change and reassess how their organisation contributes to society. There have been some critical foundation stones for ESG. These include the introduction of triple-bottom-line economic thinking, the growth of corporate social responsibility (CSR), and milestones such as the Business Roundtable statement in 2019 that companies need to serve not only their shareholders but all key stakeholders. ESG has become the hottest topic in boardrooms worldwide as institutional investors, customers, employees, governments, and society redefine the role of companies. While the seriousness of the climate change crisis has correctly focused attention on the ‘E’ in ESG, the spotlight on the ‘S’ and ‘G’ has also grown considerably. In the coming decade, ESG could become the single most significant change catalyst for boards of directors. Purpose-driven: an opportunity for servant leadership by the board In evaluating and supporting boards week-to-week across the world, those that impress me most have a triple-helix in their DNA of customer-centricity, employee engagement, and a deep commitment to ESG and ‘doing the right thing’. These boards also have a diverse mix of high-calibre board members, generalists, and sector specialists with a great balance of robust intelligent oversight and outstanding support to their CEO and executive team. However, at the core of these boards is a profound clarity of purpose, a vibrant and healthy culture, and the highest standards of behaviours, ethics and values. In addition, modern progressive boards have a core modus operandi of servant leadership and the most profound respect not only for their shareholders but their employees, customers, and broader partners in society. I believe that purpose-driven servant leadership by the board will become the defining paradigm of organisations that thrive in the coming years. Re-shaping the relationship between the board and its employees One of the not-unexpected consequences of the COVID-19 crisis for many boards was the realisation of the fundamental role and importance of the organisation’s employees. In a recent survey by the Chartered Governance Institute of FTSE 350 companies in the UK, 53% changed their approach to “workforce voice” during the pandemic. In addition, 68% of the boards surveyed now believe that they are more aware of “employee opinion”. But why has it taken a pandemic crisis for these boards to realise that an organisation’s employees are a critical stakeholder, deserving of the utmost respect and support from the board and their voice incorporated into the major decision-making of the company? In reality, many CEOs are culpable for wanting to separate the board from the organisation’s employees to control the narrative and deflect attention away from a poor organisational culture, avoidable turnover of employees, and serious operational or customer problems. In Ireland and the UK, there has been severe resistance to employee representation at the board table. This is understandable when you consider the challenges of finding an employee board member who can bring the employee voice to the table but balance the overall needs of the organisation as well as the complexities of industrial relations. The resistance by boards to genuinely partnering with their employees is also a stubborn hangover from the traditional elitist ivory-tower paradigm where employees did not figure as critical stakeholders. One of the most practical methods to ensure that the employee voice is heard at the board table is a strong non-executive director who understands the employees’ perspectives, with solid support from the board chair. This approach ensures that the employee voice is factored into the overall decision-making of the board. It is another area where improvements in board diversity can help modernise its mindset and attitude toward employees. Customers: the most important stakeholder of all? Ireland has been blighted by some terrible examples of customers being mistreated by companies and organisations for many years. Whether it is the misselling of financial services products, appalling levels of customer care, or the cover-up of negligence in the health sector, we have had – and continue to have – boards with simply appalling attitudes to their customers and the people they serve. In the company sector, the tide is turning. The oft-rolled-out excuse by boards that “we simply didn’t know that our customers were being treated so badly” simply doesn’t cut it anymore. When evaluating boards, I always seek to understand how the voice of the customer or service user is heard and prioritised in the boardroom. Which non-executive directors will stand up to a CEO to say that poor customer treatment is simply unacceptable? Does the board realise what the customer experience actually is? This is what servant leadership at the board level means: putting customers at the heart of the organisation’s functioning. Culture, ethics, and a commitment to do the right thing Despite the continual strengthening of corporate governance codes and company laws, there continues to be a never-ending cycle of boardroom scandals in Ireland and internationally. The introduction of the Companies (Corporate Enforcement Authority) Bill 2021 paves the way for a new independent statutory authority, the Corporate Enforcement Authority (CEA), to investigate and prosecute economic and white-collar crime in Ireland. This is an important stepping stone, building on the solid work of the ODCE. However, unless the right culture and standards of ethics exist in an organisation and you have a sharp board and committees such as audit and risk on its toes, you will always have the potential for boardroom scandals – irrespective of how experienced board directors are. We are slowly starting to move away from some of the worst attributes of the elitist board model in terms of arrogance and disrespect by board directors for their responsibilities – not to mention the shareholders and stakeholders they serve. This is one area that has changed significantly in recent years in terms of the board chair’s critical responsibility to set a very high bar for the organisation’s behaviours, ethics, and values. The board chair has a critical responsibility to set the board’s moral compass, conscience, and commitment to do the right thing. With ESG and society in general setting the bar higher for boardroom standards, today’s boards are under no illusions regarding the high standards expected of them in discharging their legal and fiduciary responsibilities. Resilience, strategic agility, and a new paradigm for risk management From the outset of the COVID-19 crisis, I found it striking to see the difference in the quality of crisis management by highly effective boards compared to ineffective boards. One of the hallmarks of high-performing boards is resilience and the ability to cope with a significant crisis. As we look forward to 2022, most sectors will continue to experience significant headwinds and volatility, requiring continual strategy and business model evolution. Progressive boards are now adopting a far more agile mindset on these issues and have a greater appreciation for risk management. I now see progressive boards take a far more pragmatic approach to risk management, making more use of scenario analysis and learning the lessons from COVID-19 in terms of cascading risks (i.e. how the pandemic and the resulting public health restrictions completely turned the world of work upside down and disrupted the world’s complex but fragile supply chains). Walking the talk on the board’s performance and re-thinking board director tenure I am continually taken aback by the number of boards that put in place the most elaborate performance assessment structures for their CEO, executive team, and employees, but when it comes to their own annual assessment of their performance, both individually and collectively as a board, they either have inadequate basic processes or undertake pointless tick-the-box exercises that add no value. In many cases, I see large companies and organisations where each board chair and director’s performance are not assessed annually. However, there is a strong trend emerging of shareholders, institutional investors and broader stakeholders asking far more searching questions about the effectiveness and performance of the board, the level of value added by the board, and whether the board is walking the talk on assessing and improving its own performance – as well as replacing board directors who are not performing. In the best boards, every board director must continually justify their presence at the board table irrespective of their profile and past glories. One characteristic of many ineffective boards is the bad habit of leaving in place under-performing board directors. This has seriously impacted many boards’ ability to improve diversity and bring in critical new skillsets. However, this is starting to change. You will soon see a greater degree of refreshing the board of directors, with under-performing directors replaced and a more robust performance culture instilled to ensure that the board truly excels for shareholders, employees, customers and stakeholders. Summary One of the unexpected impacts of the COVID-19 crisis is the opportunity presented to boards to reflect on their purpose, how they function, and the value they add. It has also allowed them to consider how they partner with the CEO and executive team, their ability to handle major crises, and the agility required in terms of strategy and business models. There has never been a greater spotlight on the role of the board of directors, the critical leadership it provides to the organisation, and its broader set of responsibilities to shareholders, employees, customers and stakeholders. The boards that will thrive in the years to come will be highly diverse with a great mix of general and sector-specific skillsets. They will also place employees, customers, and the critical needs of society at their core. The current ESG momentum is vital as it is finally breaking the shareholder primacy and profitability-at-all-costs paradigm that has, to be honest, not served society well. Shareholders and institutional investors now understand that you can still drive long-term, sustainable profit and success while simultaneously being a highly ethical and respectful organisation that truly excels for all stakeholders. This enlightened model of servant leadership-centred and highly diverse boards with a solid moral compass and conscience underpinned by a high-performance culture is also key to significantly reducing board failures and scandals. There has never been a better opportunity for boards of directors to look in the mirror and ask searching questions about becoming a modern, progressive and diverse board that is purpose-driven and deeply committed to excelling for shareholders, employees, customers, and stakeholders. Kieran Moynihan is Managing Partner of Board Excellence, which supports boards and directors in Ireland, the UK, and internationally to excel in effectiveness, performance and corporate governance.

Brendan McGurgan FCA explains the four facets of Sebastien Tondeur’s Magic Diamond of Performance, which has helped the MCI chief’s company scale at speed and generate annual revenue of over $500 million. Sebastien Tondeur, CEO of MCI, has led the company on an incredible scale-up journey. From a team of 30 operating in his home country of Switzerland, MCI has grown to employ almost 2,500 across 60 cities in 30 countries. Today, the company has revenue of over $500 million. There are, of course, many facets to this success, but I want to focus on the novel way Sebastien manages company performance. The Magic Diamond of Performance, as he calls it, focuses on four areas: Financial success; Employee promoter score (eNPS); Customer promoter score (cNPS); and Sustainability (aligned to purpose). Sebastien argues that you don’t need to measure and manage hundreds of different metrics. Instead, focus on these four areas and you will save time, energy, and resources. You will also remain acutely sensitive to the pulse of the business. Let’s look at each in turn. Financial success Anyone leading a high-growth or scaling organisation understands the importance of financial metrics. As a Chartered Accountant, I am only too familiar with ROCE, ROE, EBITDA, ROI, APT, etc. Put just about any three letters together, and it will likely be an acronym for yet another financial measurement. The question, of course, is which should you focus on? Sebastien cites four, which combine to capture financial performance. This is positioned at the apex of the diamond. Sales growth; Gross profit margin; Net profit margin; and Cash headroom. Sales growth Sales growth indicates the sales team’s ability to increase revenue over a fixed period (current month vs prior month, current quarter vs prior quarter, current month vs same month prior year etc.) It is calculated as follows: As a benchmark, a scaling company has average annualised sales growth of 20% over three years. Gross profit margin Gross profit margin indicates the amount of money remaining in sales after deducting the costs of goods sold. The calculation is as follows: Gross profit margin assesses how efficiently the company generates profit from sales. For example, suppose your gross profit margin is low compared to your peers in your industry. In that case, it may point to inefficiencies in your manufacturing or lost opportunities in terms of realisable sales price vis-à-vis the value you are delivering to your customers. Net profit margin Net profit is arrived at by deducting all company expenses (excluding the cost of goods sold) from gross profit. Net profit margin is the ratio of the net profit that is generated as a percentage of revenue. It indicates how much of the revenue you earn is actual profit. Here is the formula: Net profit margin = net profit/total revenue x 100 Net profit margins vary by business size and industry. As a rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered good, and a 5% margin is considered low. A consistent net profit margin aligned with sales growth is reflective of a successful scale-up. Significant fluctuations in net profit margin while a company is growing is often symptomatic of deficient processes and systems capable of supporting sustainable growth. Cash headroom There is an old saying in business: “sales is vanity, profit is sanity, and cash is reality”. This is very much the case in a scaling business, where cash is the fuel for growth. I led the finance function of a dot-com company through the boom and bust of the early 2000s. It was my first taste of industry, and it provided a lasting and salutary lesson in the importance of cash. It was there that I learned the golden rule: “s/he who has the gold makes the rules”. Cash headroom refers to the difference between a business’s required monthly cash resources and the available cash resources. For example: assume a business must pay out £1,000 per month to cover overheads and expenses. If, after payments from customers, it has £5,000 in the bank, the business has cash headroom of five months. To put it another way, if there are no further customer orders, there is sufficient cash in the bank to cover five months of committed overheads and expenses. In my previous business, we targeted a business KPI of six months’ cash headroom. Anything more would trigger a conversation about where to better deploy the surplus cash. Anything less triggered a deeper look at the reasons why. Are orders declining? Are customer payments late? Have we seen a general increase in costs? Employee net promoter score (eNPS) If people are the most important asset in business, then leadership should protect and nurture that asset. To do this, you need to know how happy your team is and how engaged they are with your business. Good business leaders want their people to bounce into their workplaces, to bring high energy levels and a keen desire to provide amazing service to customers. A good leader wants to provide fulfilling, meaningful, vision-aligned work to the people they employ. One of the world’s leading experts on customer and employee loyalty is Fred Reichheld, the founder of Bain & Company’s loyalty practice. Fred created the Net Promoter System (NPS) in 2003 and since then, it has been used by a range of leading companies such as Apple Retail, Philips, Charles Schwab, Allianz, American Express and Intuit to generate extraordinary results. In essence, Fred’s work laid bare the link between loyalty and profits. eNPS measures employees’ willingness to recommend the organisation to others as a great place to work. It indicates engagement levels, motivation, and intent to remain with the company. It also uncovers the likes and dislikes of employees as they pertain to the company. How do you calculate it? The genius of eNPS lies in its simplicity. In an era of survey fatigue, it provides an incredibly easy and efficient way to survey employees. First, they are asked one quantitative-based question: “How much would you recommend working here to a friend or colleague?” The employee uses an 11-point scale from zero (not at all likely) to ten (extremely likely). Follow this up with an open-ended question: “Why do you feel this way?” Those who score between zero and six are detractors. They are unhappy, disengaged, and could be looking for roles elsewhere. Those who score seven or eight are passives. They don’t love working for you, but nor are they entirely disengaged. Those who score nine or ten are promoters. They love their work and won’t hesitate to tell everyone. The eNPS score for a period – typically a month – is calculated by subtracting the percentage of detractors from promoters, omitting the passives from the calculation. The score is then displayed as a number rather than a percentage. eNPS: a worked example There are ten employee responses in ‘Improve Your Workplace Inc.’: 3, 4, 5, 6, 8, 8, 8, 9, 10, 10. This equates to: • Four detractors (3, 4, 5, 6) = 40% • Three passives (8, 8, 8) • Three promoters (9, 10, 10) = 30% The calculation: 30% – 40% = -10 What is a good score? Jennifer Willy, Editor at Etia.com, says that anything above zero is generally acceptable: “Different companies and organisations have different standards and benchmarks to measure their performances. But generally, a score between 10 and 30 is considered good while anything near 50 is excellent.” Why is eNPS important? A State of the Global Workforce report published by Gallup in 2017 showed that 85% of employees worldwide are either not engaged with their work or are actively disengaged. Disengaged staff are less productive and are more likely to make mistakes. Worse, negative attitudes can contaminate an otherwise positive workplace culture. Conversely, employees engaged in their work are more productive and tend to positively influence their teammates. Consequently, employee retention rates will improve, and your team will produce better results for your clients. To put it simply, happy staff means happy clients. Customer net promoter score (cNPS) Successful scalers are obsessive about delivering value to customers. They are consciously tuned into why they do what they do and how that impacts their customers’ lives or businesses. Assessing the customer’s engagement with you is critical. It helps guide and inform loyalty initiatives and overall brand-building, and it forms the third area of focus in the Magic Diamond of Performance. How do you calculate it? cNPS is calculated the same way as eNPS. It is defined as the willingness of customers to recommend a company’s products or services to others. Like eNPS, customers are asked a single question: to rate on an 11-point scale (zero to ten) the likelihood of recommending the company or brand to a friend or colleague. Based on their rating, customers are classified into three categories: detractors, passives, and promoters. As with eNPS, cNPS is found by subtracting the percentage of detractors from the percentage of promoters. The result will be a number between -100 and +100. A cNPS score above zero is considered good, as it indicates that your audience is more loyal than not, and anything above 20 is considered favourable. Bain & Co., which pioneered this methodology, suggest that above 50 is excellent and above 80 is world-class. These are general guidelines, however. A good cNPS will depend on the industry and country in which the business operates. Sustainability (aligned to purpose) MCI’s purpose is as simple as it is profound: “when people come together, magic happens”. This purpose permeates every part of the business and is the slide-rule for all decisions. The company may have pivoted several times in its evolution, but that core purpose – bringing people together to build communities and create experiences – has remained. Sebastien explains that with growth came a consciousness of the company’s impact on the world. As MCI’s reach became global, it began to understand that it could accelerate change and promote a more sustainable and inclusive society. Anchored by its purpose, the company’s goal is to encourage an active culture of care and responsibility, backed up by concrete actions. This forms the last area of focus in the Magic Diamond of Performance. Why is sustainability important? A view common in SMEs is that sustainability issues are for governments and larger corporates, as smaller entities are simply too busy wrestling with the day-to-day demands of the business. Sebastien, however, sees sustainability as an enabler of company growth. “I don’t think we have a single under-25-year-old candidate that hasn’t asked us about the sustainability programme. I don’t even think it’s an option for any business. You just have to have an answer when the question is asked.” Sebastien is not alone in this view. Marga Hoek, author of The Trillion Dollar Shift, puts it like this: “Business for good is good for business”. What do you measure? Sebastien’s mantra is “think big, start small, scale fast”. It’s all about learning as you go. MCI used the UN Sustainable Development Goals (SDGs) to guide their sustainability initiatives, picking a small number of the entire 17 to make a start. “We give a lot to the community as a business – doing volunteer work, helping kids, working on cleaning projects… and then, over time, we became more sophisticated. Now, we have a large community of what we call sustainability leaders. They cover a range of areas – environmental, social, diversity, inclusion. Belonging is a big topic right now. I give them a budget, I give them approval, and I rely on them to give me recommendations. They communicate to the company and engage the people.” MCI’s sustainability journey, which started with a single small step, has become a hugely impactful sustainability strategy based on four SDG-aligned pillars: people, planet, profit and governance. For example, under the ‘planet’ pillar, the company successfully reduced its carbon footprint by 20% in 2020. And as Sebastien points out, the most sustainable companies are the least wasteful. Waste is tangible in some industries, but how do you reduce waste in a knowledge-based company? In my previous business, we put our pre-sales function under the microscope and found that only 7% of sales leads converted into sales orders at our worst. That’s 93% wasted effort in customer calls, follow-ups, budget quotations, design drawings etc. So we zeroed in on our customer conversion ratio and, over time, increased our conversion rate to 20% – not by generating new leads, but by becoming more efficient in processing the leads we already had. Have fun with this aspect of the Magic Diamond of Performance. You don’t need headline-grabbing initiatives or noble sustainability targets, not at the start at least. Instead, look for an area of your business where you generate waste and aim to reduce it. In so doing, you will leverage your people’s time and creativity. In time, this process will compound to greater employee engagement and productivity, customer advocacy, and an improved bottom line. Conclusion Sarah Kennedy is Vice-President of Global Marketing at Adobe Experience Cloud. She says: “The companies that will excel long-term are the ones that know it’s not just about shareholder value… it’s also about focusing on the customer and employee experience, and how those, in turn, contribute to society”. If you’ve found yourself drowning in the vast sea of performance measurement options, then the Magic Diamond of Performance could be the lifeboat you and your business need. Brendan McGurgan FCA is Co-Founder of Simple Scaling, a company dedicated to inspiring, connecting and enabling ambitious leaders of SMEs to scale with purpose.

Digital proved to be a vital tool in helping businesses navigate the upheaval during COVID-19. But now, it needs to move from a tactical response to a key pillar of strategy, writes Cormac Hughes. Businesses crave certainty. After the past year, however, that precious commodity is in short supply. So how can organisations be ready for and respond to uncertainty, both to make themselves less vulnerable to risk and to be prepared to take advantage of opportunities that emerge in unpredictable times? The answer is digital transformation. However, those two simple words disguise a more complex readjustment. Going digital is not just about building a new website. That would be like applying a fresh coat of paint to your organisation’s existing building when in reality, it is a fundamental restructuring from the floorboards to the ceiling. It is a wholesale realignment that touches every part of an organisation and puts digital at the heart of its strategy. In this article, I will outline the benefits of this approach, identify the areas of your organisation most impacted by the change, and provide practical advice on the steps to take wherever you are on the journey. From survival to strategy The first thing to say is that we are not at the starting line for digital transformation; the race is already underway. Many organisations had to rapidly hit their full stride because they had no other choice: the COVID-19 pandemic turned the digital agenda from a marathon to a sprint. The move to remote and distributed workforces at scale was only possible with digital technology. In many cases, online channels became the default means of interacting with customers and suppliers. That so many managed the change so effectively without dropping the baton is a testament to people’s incredible spirit and collective effort. But the swift onset of that crisis meant that many of the solutions put in place were short-term and tactical in nature. Now, as we can all catch our breath and start looking to the future with some optimism, we have an opportunity to evaluate the lessons learned. And the biggest lesson of all is that digital is not an enabler of strategy but a driver of it. We can say this with confidence based on a global study of 2,860 executives in the commercial and public sectors, which Deloitte carried out earlier this year. This research concluded that digital is fast becoming the norm across all sectors. Nearly two-thirds of respondents believe that organisations that don’t digitise in the next five years will be “doomed”, so having the right strategy that takes advantage of digital possibilities and capabilities will ultimately differentiate the winners and losers. Digital maturity confers advantage Deloitte’s research showed that the more digitally mature an organisation is, the better able it is to navigate rapid change and the better it performed financially. 78% of leaders surveyed said that their organisations’ digital capabilities played a significant part in helping them stay resilient as the COVID-19 crisis evolved rapidly. A similar percentage reported that their digital transformation initiatives were already having a significant positive effect on their businesses. Against this backdrop, digital spending is increasing. This might seem counter-intuitive because many organisations came under financial pressure during the pandemic. Yet, according to a CEO survey by the technology research company Gartner, over 80% of organisations planned to boost their investments in digital transformation. The firm forecasts that spending on enterprise digital transformation will grow at a 15.5% compound annual growth rate from 2020 to 2023. The Deloitte study supports this finding: 69% of the leaders surveyed intend to commit more spending to digital transformation in response to the pandemic. Our figures also show that their budgets for digital transformation represent a higher percentage of their annual revenues than in prior years. The agility to react to new opportunities Digital transformation also changes the competitive field and creates new opportunities for organisations to differentiate themselves. With the experience of the past year, it is now clear that digitally sophisticated companies are especially well-placed to react to new customer trends or buying habits. At the same time, our study found that many commercial leaders believe that their main competitor in five years will be an emerging start-up or a ‘digitally native’ company that hasn’t needed to shed the legacy of older technology (more of which later). Fewer than one-third of our respondents believe that their biggest threat will come from a current competitor. It is worth emphasising here that the window of opportunity for embracing digital remains open. For example, several Irish retail banks recently announced plans to form a consortium to develop a money transfer app to compete with emerging fintech providers. The findings above hint at the extent of the dynamic situation, so we dug deeper into leaders’ perceptions of change. More than three in four leaders anticipate that their business will “change significantly” over the next five years and more so than the previous five. Instability, by its nature, brings uncertainty, and it is not surprising that more than half of respondents believe that the fast pace of technology change is “not good” for their organisations. In our opinion, this makes it even more important to take a proactive approach to digital transformation rather than just letting it happen. Against this backdrop, how do organisations further embed digital across the business? We have considered this question across several areas: talent, finance, operations, and customer. Let us look at each of these in turn. The talent opportunity The past year has had an enormous impact on how we think about the nature of work. Business leaders need to consider this from a multifaceted perspective: who does the work? What kind of work do they do? And where do they do it from? From our engagements with clients, many will need to assess the skills they have in their workforces today and map them to the capabilities they will need in the future. This could involve identifying candidates for training so they can take up new roles. The ability to work remotely could be an opportunity to recruit talent that would previously have been unavailable because those people lived beyond a commuting distance to an office. It is also a chance to re-frame HR practices, such as moving to a more flexible team-based model rather than having people work in fixed roles organised along rigid departmental lines. The finance opportunity The finance function plays a vital role in a digitally transformed business, but it too must change to carry out this newly expanded remit. Traditionally, the job of finance was to report on what had already happened. Now, finance must look forward and spend most of its time and resources on planning and forecasting. To do this effectively, it must be able to use powerful analytics tools that can sift through data and deliver the insights the business needs to drive its decision-making. When this is in place, finance can become a strategic business partner and apply analytical thinking to solve challenges. The operations opportunity Operations is the through-line connecting every part of an organisation, from the customer-facing online channels to support, order processing and fulfilment. When the customer engages through a website, online store, app, or chatbot, they judge the success of that interaction on the seamlessness of the experience. How swiftly can they complete a transaction? When is the product or service ready? What updates do they receive about the progress of their order? Data is the glue that binds all parts of an organisation together. Every aspect of the operation needs to be digitally enabled and connected to have the data it needs, in real-time, to fulfil the order and share relevant information with the customer. Then, operations can analyse this data to identify areas where it can continually optimise. These improvements can be internal (streamlining processes that employees must use) or external (delivering a more efficient service to customers). The customer opportunity This leads us neatly to the customer: top-performing digitally-enabled organisations realise it’s not all about them. They put the customer first, delivering an experience that’s easy, convenient, and secure. This helps strengthen customer loyalty and trust. At the same time, they also dig deeper to understand their customers’ needs. They know that although digital may be the default means of engagement in today’s world, there are nuances to different customer segments and groups. Looking closer at the behaviour of those groups uncovers distinctions that enable businesses to target their offerings more effectively, identify up-sell and cross-sell opportunities, and stay competitive at a time when the customer has never had more choice. The cloud imperative The four areas outlined above have one element in common: the cloud. This is fast becoming the dominant model for organisations to avail of IT services. Delivering technology and services through the cloud equips people to work from anywhere. It also enables finance to get data faster and move from historical reporting to forecasting while empowering all elements of operations to work together more effectively and deliver a seamless customer experience. Cloud offers a consumption-based pricing model that links IT spend to the demand for that service. It also offers speed: unlike legacy infrastructure, the cloud enables businesses to test new products and services far faster than before. And when an organisation’s IT platform is adaptable, that means its business is adaptable too. With no data centres or servers to maintain and run, leaders can focus purely on the business and reduce the need to ‘mind’ the technology. Cloud also makes it easier to access the latest technology such as artificial intelligence, machine learning and robotic process automation, and high-powered analytics that can identify new areas for improvement. This is a very wide-ranging agenda for any organisation, so it may be helpful to think of it as follows: first, set the strategic direction for operations, finance, talent, and customer-facing functions from one direction. In parallel, begin a managed transition from the business’s siloed and legacy technology systems today to cloud platforms that provide the agility and flexibility the business will need. Moving to the cloud provides the basis for the strategy to come to life, but it can be complex in an organisation with a lot of existing IT. When creating a roadmap to move to the cloud, four useful stages are: Step 1: Identify the business problem Determine where the biggest burning need exists in your business today, as this will have a strong technology element. Find a problem that is a priority and will let you cut through all the decisions you have to make in your cloud adoption journey. Step 2: Start small and target quick wins Start with a small project, work to tightly defined parameters, and measure business value as you build support at all levels of the business. For example, this might be a non-critical application or a legacy system nearing the end of its support contract. Use cloud’s agility to your advantage. The ability to launch new systems quickly shortens the typical procurement cycle to days. This means you can identify a project that will deliver quick wins, act as a proof of concept, and build momentum from there. Step 3: Apply lessons and expand Use the proof of concept to identify what has been learned, build a business case, and bring stakeholders on the journey as they become familiar with the cloud. Starting small also allows the enterprise to develop the people and process aspects necessary to succeed in cloud adoption. The technology alone is not enough; there needs to be a change in culture and skills in addition to transforming processes in the business to embrace agile ways of working. Step 4: Build capability in the business in parallel to IT As the cloud project develops, ensure that those in charge have identified the necessary skills in the team, whether they exist in the business today, and whether you need to supplement the team with external expertise. That can be achieved by recruiting or working with a partner that can supplement your resources. Bear in mind that the skills for successful cloud projects go beyond technology alone. Your cloud team should also cover governance and operating models so that you implement suitable structures that can evolve as your cloud adoption matures. What’s next? When the cloud underpins digital transformation, scaling becomes easier because the organisation no longer relies on the capacity of technology it acquired at a moment in time. It can be more agile by quickly identifying and responding to customer needs. Growth is returning, and tomorrow’s world is one of expanded skillsets, a workforce that’s no longer tied to one place, and a wide range of opportunity. No matter what change awaits, the digitally transformed business can be ready. Cormac Hughes is Head of Consulting at Deloitte Ireland. Prepare now for the next disruption Despite the COVID-19 pandemic, digital spending is still on the rise. Deloitte’s 2021 Digital Transformation Executive Survey reinforces this expectation of growth, with 69% of surveyed leaders globally planning to increase their financial commitments to digital transformation in response to the pandemic. This vigorous growth in digital transformation investment makes it even more critical for   enterprises to make digital transformation a foundation of their strategy. Organisations should assume that their competitors are just as committed to developing their digital capabilities right now. The winners will be those that successfully move digital from a tactical response to a key pillar of strategy. To do this, CEOs must make explicit choices about their strategy across several areas, including talent, finance, operations and the customer. Doing so will help improve efficiency, power new products and services, enable new business models, and ensure that the customer experience is easy, convenient, and secure. Ultimately, it is about being as ready as possible for what may be next as further disruptions will come.

A recent C-suite barometer showed a surprising level of optimism among international business leaders. Mark Kennedy deciphers the findings to explain why short-term optimism will need to be buttressed by business transformation plans and long-term investment strategies if organisations are to thrive in a post-pandemic world. A report detailing over 500 global C-suite leaders’ views on their outlook for 2021 during a worldwide pandemic always had the potential to surprise. Despite the current economic uncertainty, the most surprising finding was the consistent presence of optimism globally, with 71% of respondents assessing the outlook for growth in 2021 as positive. At the beginning of the pandemic, we witnessed resilience and consistency as some business sectors adapted reasonably quickly. For established companies, there was a kind of ‘muscle memory’ approach to the crisis that unlocked lessons learned and business continuity measures that were initially adopted following the global economic crisis of 2008. Despite the unique nature of the pandemic, businesses that previously invested in crisis management strategies appeared to exhibit more resilience. The state approach to the pandemic was also a big differentiator, as tax and legislative aid mechanisms created a profoundly different context for business. Countries in Western Europe mostly saw the benefit of this approach. In contrast, other parts of the world, such as Africa, received noticeably less business aid, which resulted in less optimism for the future. Business transformation plans Confidence in managing and mitigating risk during the pandemic was undoubtedly a factor in respondents’ forward-looking business transformation plans. Economic and technology transformation trends scored highly, with 90% expecting to respond to technology and innovation trends and 78% confident in managing upcoming economic trends. Technology transformation was the most likely focus overall for large companies ($1 billion plus), with 54% of executives indicating a more-than-50% chance of implementing technology transformation plans. While the need to digitally transform businesses has been on the agenda for some time, the crisis appears to have accelerated plans. If we take the retail sector as an example, the need to meet the demand for online shopping during lockdown has added an urgency to prioritising digital strategies. Perhaps more surprising than what was high on the list of business transformation plans was what respondents considered a low priority. While the travel ban during lockdown highlighted the vast potential to reduce carbon emissions, only 20% of respondents said they expected climate risk to have the most significant impact on their business: the lowest on the list. This figure is slightly higher among Western Europe companies (25%), suggesting it is higher on executive agendas in that region. However, it is less than 20% in Latin America, Africa, Central and Eastern Europe and the Commonwealth Independent States (CEE/CIS), and the US.  One potential reason for climate risk attracting such a low score is the current lack of bottom-line accountability. Despite the growing need to mitigate climate change risk for business sustainability, leaders often treat it as an intangible business issue. They see it as being driven by regulatory momentum rather than a tangible business goal to be approached in the same way as technology or new service transformation plans. However, climate change will become a matter of profit and loss for many companies over the next ten years, either because it will influence how capital is obtained and the cost of infrastructure, or it will become an opportunity to do more business. It is a similar story with cultural change, which scored equally low on respondents’ business transformation plans. As mandatory reporting on environmental, social, and governance (ESG) issues becomes more widespread in both cases, businesses will need to consider these developments in business transformation plans. What is driving the business agenda? While technological transformation is the overarching theme, how businesses approach plans is often driven by regional and industry factors. In financial services, a high level of regulatory and compliance demands in Western Europe and the US is the driving force for banks and insurance companies launching digital strategies to automate and manage data management and reporting costs. In manufacturing, meanwhile, technology transformation drives improvements in efficiency and productivity. These regional differences were also evident when looking at investment plan timeframes. Businesses in Africa, for example, are looking at short-term transformation plans to drive profitability. In Europe and Asia, investment plans are put in place as strategic building blocks for the next decade and beyond. While this is not surprising when looking at the maturity of business development in each region, it also reflects the lack of state aid available to prop up economies and businesses in times of crisis. A further factor driving the business agenda is confidence in a company’s ability to respond to trends. In general, the barometer shows that businesses are optimistic in their ability to tackle most trends, with 90% either ‘very’ or ‘fairly’ confident in tackling challenges involving technology and innovation. Businesses in Asia-Pacific are more positive in their ability to respond to technology trends than in Western Europe, with 92% confident there compared to 85% in Western Europe, reflecting the vibrancy of the region’s technology start-up scene. However, executives are less confident in their businesses’ ability to respond to some other trends. 28% of companies are ‘not very’ or ‘not at all’ hopeful in dealing with the impact of climate change. This lack of confidence in responding to some trends may be down to the fact that, as discussed earlier, it is positioned lower down on the business transformation priority list. A further worrying response is executives’ lack of confidence to deal with social/political changes and public health challenges. While many businesses expect both trends to impact them in the next three to five years, a quarter of respondents are not confident in their ability to address them. Western European businesses are the least confident in dealing with social/political, climate and public health trends. Less than 65% declared themselves ‘very’ or ‘fairly’ confident for each. Asia-Pacific companies were much more optimistic than their Western European counterparts in responding to public health challenges – 77% of the former looked forward with optimism. This regional difference may reflect Asia-Pacific societies’ longer experience managing epidemics, like the SARS outbreak in 2003. Longer-term investment strategies It is important to recognise that the pandemic’s impact on investment plans is critical in moving from a short-term to longer-term outlook. The change in business priorities and how business is conducted since the crisis started has given CEOs across a wide range of sectors a clearer picture of why making long-term and sustainable investments is a sensible business decision. Interestingly, female respondents were more inclined to opt for longer-term investment strategies. Female leaders represent less than one-third of respondents, but with the number of female business leaders rising, the shift to longer-term investment planning is likely to increase. It signals a much-needed focus on long-term business sustainability. This shift to longer-term sustainability was highlighted by the number of respondents who consider investing in sustainability initiatives to be a relatively long-term business activity. It was rated the fourth longest-term out of 23 activities, behind external growth opportunities, corporate strategy, and research and development (R&D). However, company size and sector had an impact. For manufacturing companies, sustainability initiatives are the longest-term activity of all. This reflects the transition away from fossil fuels and towards more sustainable business models. Sustainability is seen as a long-term activity in the financial services sector, but sourcing new talent, government engagement, R&D, and maintaining IT systems are higher long-term priorities. It is interesting to note that sourcing new talent is seen as a long-term priority, particularly as the financial services sector is in a phase of disruption driven by technology and new entrants. While this may suggest that the industry sees sourcing new talent as increasingly difficult, it may also hint that financial services companies still see themselves as people industries first and foremost. The responses from technology and telecoms companies indicate that sustainability initiatives are viewed as one of the shortest-term activities in those sectors. External growth opportunities and regulatory issues are the two longest-term categories for this group, which considers acquiring customers as a longer-term activity than maintaining customers. It paints a picture of an industry that sees high growth as the key to its long-term and short-term future and one that is less concerned about its physical footprint and managing long-term external risks when compared to other, older industries. Of course, as new EU privacy laws become even more embedded, the technology sector may see regulation as both a short-term and long-term priority. Company size is a further factor. Larger ($1 billion plus) companies are most likely to consider sustainability as a longer-term business activity, reflecting that they have the resources to build a sustainability programme and the more significant external pressure on large and recognisable businesses to address sustainability issues. Executives from small- and medium-sized enterprises (SMEs) still regard sustainability as a relatively long-term activity, but R&D, corporate strategy, and external growth are viewed as higher long-term priorities. Framing a reset strategy What can we learn from the barometer results, and does it help frame strategies as companies look to reset? Looking at differences as well as similarities can give CEOs some bell-weather trends to consider. Take the fact that the barometer portrays businesses as generally optimistic. This helps provide momentum and confidence for the growth outlook, even though executives will consider different growth strategies and action pathways. It is then a question of looking at that growth landscape in more detail, so plans are more robust. Another key takeaway from the barometer is that businesses across the spectrum are prioritising driving technological change in one form or another. This could be implementing technology to transform and improve productivity, reduce costs, capture a business advantage from, say, increased online demand for products and services, or using it to enrich and enhance marketing strategies. Again, it is about capitalising on specific trends within the business sector. One aspect of technological change to keep in focus is the need to mitigate risk. With increasing complexity in the data and privacy regulatory landscape, it is crucial that – similar to technology transformation plans – risk mitigation remains high on CEOs’ agendas.   With the barometer also highlighting a growing appetite for ESG themes, it is essential to keep track of sustainability issues – particularly when reporting. ESG reporting is still not a high enough priority for CEOs, but it will demand greater focus from a risk management perspective in the future. Also not to be overlooked is the opportunity for businesses to create strategic business advantage by becoming an early adopter of, for example, environmentally friendly solutions or applying ESG as a business differentiator. Finally, a more oblique takeaway from the barometer’s high level of business optimism was the importance of investing in resilience. As we saw from government and company reaction at the beginning of the pandemic, lessons of the last economic crisis appeared to have been learned, particularly on the importance of continuity and making businesses more resilient to shocks. There are many examples of companies achieving business continuity success, whether through the ability to add flexibility in the supply chain or rapidly adapt products to meet changing consumer and business needs. It is clear that, where CEOs take the time to fully understand business and regulatory trends and invest in forward-looking strategies such as resilience and sustainability, charting a course out of the crisis will not be driven by short-term optimism alone but a realistic long-term growth strategy. Mark Kennedy is Managing Partner at Mazars in Ireland.

Neil Gibson predicts fast growth, both for the Republic of Ireland and Northern Ireland. But lessons must be learnt, he warns. What a year 2020 was across the island of Ireland! Both economies faced severe disruption from the twin pressures of Brexit and COVID-19 that few could ever have imagined. Citizens, businesses and governments were tested and reacted at pace, with little planning. We saw amazing displays of resilience, adaptability and ingenuity as firms pivoted to new ways of working and into new products and services, while our public services responded to both the health and economic crises swiftly and effectively.Looking purely at the economic impact, it is heartening to see areas of real progress. The pandemic experience created skills and attitudes that will hopefully drive the economy forward in new, inventive ways. But before we get to those positives, let us first review economic conditions across the island at the start of 2021.How is the island economy performing now? Remarkably, the Republic of Ireland could end up being the world’s fastest-growing economy in 2020. That depends on Q4 data due in March, but with growth of 8.1% in the year to Q3, income tax receipts down just 1% on the year and corporation tax receipts up 9%, this suggests a high level of insulation from COVID-19 impacts. No such table-topping performance is evident in Northern Ireland, sadly, where the economy is expected to contract by around 12% in 2020, on a par with the UK and towards the more severe end of recorded contractions. Why the divergence? There are technical reasons, notably the way real government spending is measured. Also, Northern Ireland is predominantly a consumer and public sector-led economy, while the Republic of Ireland is more export-oriented. Key exports in the Republic of Ireland include pharma, ICT and food – the best sectors you could wish for during a pandemic. It is more accurate to say that the Republic of Ireland had a level of off-setting growth that Northern Ireland did not, rather than saying it was insulated. The domestic effects were very similar. Perhaps surprisingly, the labour market data look weaker in the Republic of Ireland than Northern Ireland. The published COVID-19 adjusted unemployment rate in the Republic of Ireland peaked at 30.4% and stood at 20.4% in December 2020. No equivalent measures exist for Northern Ireland. This measure is likely to be an over-estimate (again, for complex statistical reasons), but the true rate may well be north of 10% in the Republic of Ireland. Today, an estimated 460,000 people   are in receipt of the Pandemic Unemployment Payment (PUP), with 323,200 on wage subsidy as of 31 December in the Republic of Ireland. In Northern Ireland, more than 68,000 were on furlough as of 31 October. EY analysis shows that if we include self-employed support, the level of disrupted jobs (jobs lost or falling under full or partial government support) has been very similar, peaking at close to 40%. Government support has protected incomes to a large extent, and limited spending choice has created a considerable build-up in savings. Savings ratios for the UK and the Republic of Ireland (roughly speaking the amount of income available to save) rose to a historic high in the Republic of Ireland of 35.4% and 27.4% in the UK during 2020. Will this money flow back into the economy in 2021 when restrictions ease? The data from last year suggest that it will, but there may be a desire to save more and spend on imports like foreign holidays. However, the potential for a consumer boom is very real, a subject to which we will return.A word for the busy Much commentary in 2020 focused on those unable to work and the sectors most disadvantaged by the pandemic. It is important to also remember the sectors under colossal pressure, and for whom 2020 was one of the busiest ever – health workers, delivery drivers, agri-food workers and the pharma sector, for example. These workers are suffering different challenges, fatigue being the obvious one.A boom coming? There are many reasons to expect a very strong economic recovery in 2021. Government supports have protected incomes for many and there will be a surge back to eating out, sport, hairdressers and gyms when it is safe to do so. The evidence of last summer and autumn supports this hypothesis, which should be further bolstered by the vaccine rollout. The build-up of savings means there will be money to spend. The resilience of both stock markets and housing markets further support the consumer boom theory. Though both governments will need to address the escalating deficit, that will not be a major priority in 2021. There is plenty of global capital seeking good businesses to invest in, and many firms are looking to upgrade their systems and equipment – more positives for economic growth. Residual Brexit-related problems are impacting the island economy. Although many are expected to ease over time, disruption to supply chains and increased paperwork also produce opportunity and demand that will spur a degree of growth in 2021. Projecting the level of growth is something of a fool’s errand without knowing the length and depth of restrictions or the scale of fall in 2020. A growth rate of 5-7% is expected in Northern Ireland, which may well be higher than in the Republic of Ireland. However, that is simply a feature of the scale of 2020 contraction from which Northern Ireland must recover. Forecasters previously predicted unemployment rates settling at above 10%, but now the consensus appears to be moving closer to 8%. This is encouraging following disruption of such scale.Does every cloud have a silver lining? It is often joked that economists can find the cloud in every silver lining. Sadly, the prospect of a consumer boom does cause economic alarm bells to ring. My main worries for 2021 surround prices, debt, discipline, and inequality. A consumer boom, along with a fixed supply of products or services, could lead to price increases. In a high-debt environment, this is not necessarily bad if it does not become endemic (i.e. people start demanding pay rises to meet rising costs), but it does create inequality issues. Rising prices can be very damaging for those outside the labour market, and could exacerbate the ‘K’ shaped recovery, widening the divide between the ‘have’ and ‘have-nots’. There may be difficulties getting the same output for a given spend for both governments with ambitious plans for infrastructure spending and a clear need for health spending. Rising oil and commodity prices are further reasons to suggest that the end of very low inflation may be near. The Republic of Ireland deficit is projected to be around €19 billion. This is much lower than expected, but will nevertheless act as a headwind for spending. In the UK, the deficit could rise to £400 billion, an eye-watering amount creating much stronger headwinds for UK spending decisions in the March budget. Emerging from the last recession was very difficult across the island; austerity took a severe toll on citizens, public services, and society. However, what it does bring is a sense of discipline and focus on budgets and spending. The concern of the pandemic experience for longer-term prospects is the perception that money can be borrowed or, in the UK’s case, printed in any quantum for any issue. The Republic of Ireland’s fiscal council has already warned of several spending increases that are hard to trace back to ‘emergency need’. A consumer boom leading to rising prices and governments’ inability to switch quickly into countercyclical mode are the main risks for the second half of 2021.What should the approach be? There are counter views around policy plans – cut spending, raise taxes, or grow fast to balance the books? More radical solutions are being mooted about writing-off COVID-19-related debt, but this proposal faces reluctance given the precedent it sets for future challenges. Rapid cuts in spending would be unwise given the number of people either out of work or relying totally on government support to remain in employment. Cuts in public services would be counterproductive. That said, a serious national conversation is required in both economies regarding the cost and funding of public services. What can be done more efficiently? Who will pay? And who is best-placed to deliver the services? Encouraging consumer spending is unlikely to be needed, so I would not advocate any further cuts to rates or VAT reductions except, perhaps, for focused and time-specific local spending incentives. Investment will be required in re-training and re-skilling to ensure that the digital revolution creates more than it destroys, particularly for retail and other negatively impacted workers. As such, unemployment levels will still require policy attention. Supporting fast, tax-generating growth would be the most sensible approach. However, careful attention will be required for signs of escalating prices. To paraphrase a famous US economist: “Don’t worry about inflation until you can see the whites of its eyes”.Resetting, refreshing and refocusing In an era of bad news, it seems churlish to focus on problems in a boom that has not yet happened, so let us end on a more upbeat note. The experience of being shocked by the outcome of votes and elections should be a lesson that citizens (voters) do not view the world through the same lens as economists. P&L to a citizen means something very different from what it means to a corporate. It is as much planet and lives as profit and loss. The last year further focused the mind on what really matters: family, health, safety, and an understanding of what can be done. Rapidly developing vaccines, pivoting to new ways of working and living, lowering emissions and congestion – these are trends we will likely want to keep. There will be a reset in how we think about governments and the choices they must make. Perhaps now, the conversations about affordable childcare or healthcare reform and funding can happen in a less adversarial way. We must all realise that, although the saying is that the best things in life are free, the sad truth is that some are not. We may have to pay more or consume less, but we can now better understand what is at stake. The plan for both the UK and the Republic of Ireland will be to grow rapidly to solve budget problems, rather than revert to tax rises or spending cuts, so getting out and spending may be both a public duty and fun. We accelerated digital progress by a decade in certain organisations, and we can see its potential for ways of working. Equally, we have felt the importance of human contact as the period of isolation for many has been extended. A digital and personal future is in store, a hybrid model that will see many office workers adapt how and where they work. The outlook is for a strong rebound. As Brexit frictions settle and COVID-19 hopefully becomes less disruptive, 2021 will feel very different from the terrible year we have just endured. There will be fresh challenges to face – there always are – but somehow, dealing with fast growth and excess spending seems rather more pleasant.Neil Gibson is Chief Economist at EY Ireland.

Chartered Accountants in practice have had a lot to contend with over the last six months. Here, they share the lessons learned from the challenges faced during the COVID-19 pandemic.Chartered Accountants and their skills have been at the forefront of business during this pandemic, ensuring that businesses across the island of Ireland – including their own – continue to stay afloat. In this feature, three Chartered Accountants describe what challenges they and their clients have faced during the COVID-19 crisis.Members in practice, Conor Woods from Woods & Partners, James Kelliher from Kelliher O’Shea and Wendy Merrigan from Williams Merrigan share their insights on current business challenges, the lessons they have learned during the pandemic and what the future holds for SMEs. Meeting adversity with growthConor Woods FCA, Managing Partner at Woods & Partners, outlines how technology and innovation have enabled him and his staff to keep the business running through the COVID-19 crisis.QHow has your business been impacted by the COVID-19 crisis?Initially, it was a shock to the system for everyone. However, we have invested heavily in our cloud platform over the last five years, so we were able to adapt to remote working relatively seamlessly. The greatest initial challenge was not having a ‘physical' closing meeting with our clients nor being able to have team meetings in the same format we were once familiar with. What is the most challenging aspect of leading a practice in this environment?On-boarding new staff is the most challenging aspect of growing a firm in the present environment. We have hired 12 staff in the last three months and it's challenging to integrate, train and induct them into an organisation where ‘normal office conditions’ do not prevail. The strength of our profession is in the quality of the training that our articled clerks receive in practice, so we must ensure that this training continues to the highest of standards in the current social distancing climate. We have been lucky our size enables us to continue this training which has proven to be a key attraction for high calibre graduates to come to our firm.What business changes have you made to ensure that you continue to deliver for your clients?Due to growth across our practice, we have recently opened new offices in Laois and Cavan to meet client and market needs in these locations. Clients want premium advisory, audit and taxation services close to their businesses without having to travel to Dublin and so we see this as a key opportunity. Additionally, more and more of our staff do not want to commute, so having regional locations helps us with staff retention and attracts a high calibre of staff from the city and larger firms. If you could make one change to the supports available for your clients, what would it be?We would like to see an expansion to the Local Enterprise Office Business Continuity Voucher scheme for another six months for SMEs. This proved to be a hugely supportive and popular scheme for them. What does the future hold for small- and medium-sized accountancy practices, in your opinion?The future is bright and exciting for firms who innovate and continue to re-invest in people and technology. It’s critical that firms maintain financial liquidity and strength to enable them to hire the best and invest in technology within their practices. The firms that have strong technology platforms have found it easier to adjust to the enforced changes in work patterns. I see smaller firms engaging in more collaboration with each other due to increased regulation and, perhaps, more consolidation in this space. As a practice leader, what has been your most important lesson to date?It’s just as important to work on the business as it is to work ‘in the business’. Practices must manage working capital, lock up, and liquidity relentlessly. This is now more important than ever before. This can be difficult as our clients, may want more leniency in terms of credit, support, and time in the present environment, so there is a fine balance to be achieved. Managing client expectations and our own business performance is a pivotal aspect of our own practice strategy.Adapt and be flexibleJames Kelliher FCA, Partner in Kelliher O’Shea, Chartered Accountants, has found that flexibility with staff and clients has been key to navigating business changes that have cropped up because of the pandemic. How has your business been impacted by the COVID-19 crisis?As a small accountancy practice, we offer a wide range of services. We provide bookkeeping services to a number of businesses in the hospitality sector which was impacted severely. We have a diverse client range across many sectors from hospitality, media, motor trade, retail, nursing homes and agriculture who all had various challenges and continue to do so as we work through the crisis. Our workload, in terms of dealing with client queries, increased dramatically, especially around the introduction of the Temporary Wage Subsidy Scheme (TWSS) and other government supports. What is the most challenging aspect of leading a practice in this environment?There has been a level of disruption to both the practice and client business which has had a knock-on effect on the timing and delivery of work. The business disruption will have an impact on filing deadlines being met later in 2020 and this will be an issue for our staff and clients in an already demanding year. What business changes have you made to ensure that you continue to deliver for your clients?Although our office was closed for a period, we were still very much accessible throughout for our clients by phone, email and Zoom/Microsoft Teams. We also facilitated some of our staff with young children to work shorter hours. Our audits have been conducted remotely this year; previously, we would have carried out the fieldwork for our larger clients on-site. We have had to be flexible with our clients and cognisant of the fact that some of their finance personnel were also working shorter hours with an enhanced focus on their short-term cashflow management.If you could make one change to the supports available for your clients, what would it be?For many small businesses, funding during the current crisis has not been easily accessible. While the TWSS and Restart Grant were successful, many small businesses failed to secure additional short- or medium-term facilities from their lending institutions as a result of the uncertainty surrounding the crisis and the impact it was having on current trading levels. We would have liked to have seen a simplified, low-interest government loan or capital grant made available for PPE expenditure, which was significant for many SMEs in reopening. What does the future hold for small- and medium-sized accountancy practices, in your opinion?We believe there will be further consolidation within the industry among small- and medium-sized practices. This trend had started pre-COVID-19. The talent pool for small practices was at an all-time low because of the larger firms attracting the majority of graduates to the cities. Consolidation should enable practices to attract better people and possibly offer a more attractive work-life balance that people crave. Smaller practices need to continue to invest in technology and their people, and use technology to move towards a paperless environment. The current crisis has highlighted how reliant we are on technology.As a practice leader, what has been your most important lesson to date?The ability to adapt and be flexible is key to leading our practice and being able to advise our clients. This has never been more prevalent than in the current COVID-19 climate where guidelines that impacted on both decisions that needed to be made for the practice, as well as advice given to our clients, were evolving on a weekly and sometimes daily basis.Focus on positive actionWendy Merrigan FCA, Co-Founder and Director at Williams Merrigan, has seen the workload in her practice increase in the last six months, but believes opportunities are there for accountants who concentrate on serving clients’ needs.How has your business been impacted by the COVID-19 crisis?We have a small team and the level of queries regarding COVID-19 issues has been overwhelming. This has led to a slower turnaround time for some work which has its own impact as we approach large filing deadlines later this year. While working remotely was used by our practice for several years, COVID-19 meant some staff no longer had childcare facilities and had to home-school children for a period. Ensuring staff did not take on too much work and balanced their homelife with their need to provide ongoing quality, timely service to clients, specifically regarding tax filing return deadlines, was a specific challenge. Right now, it is unknown what will occur during winter months regarding schools and this is stressful for staff. What is the most challenging aspect of leading a practice in this environment?Staying on top of the ‘normal’ workload as well as managing client queries. A serious challenge has been planning and scheduling work while also finding time to keep up-to-date with Government and legislative changes as they arise to ensure clients are kept informed. This increased workload has meant I have had less time as I would like with staff members.What business changes have you made to ensure that you continue to deliver for your clients?Responding to email and telephone queries proved highly challenging. For some queries that arose, it became more practical to share information generally by way of email or, in certain circumstances, on social platforms. This has meant less time repeating answers to queries that many clients have. Sharing knowledge with other accountants and making new connections to discuss the impact of COVID-19 on our profession has been beneficial also.If you could make one change to the supports available for your clients, what would it be?Grants have been made available to review cashflows and financing, yet necessary ongoing compliance costs for accountancy services were not included. I would have granted subsidies to businesses to allow their usual monthly or yearly fee to be included in the grants awarded. Ensuring clients have tax clearance for subsidies and grants mean accountancy services were vital for all businesses yet not provided for.What does the future hold for small- and medium-sized accountancy practices, in your opinion?Regardless of size, I believe we are fortunate to have a qualification whereby our services, expertise and advice are continuously sought and needed. Our practice is small yet, as I mentioned, there are always opportunities to be found when you are laser-focused on serving client’s needs. I believe services will always be sought from proactive accountants with good communication skills.As a practice leader, what has been your most important lesson to date?I've realised uncertainty can be positive and have learned to let go of the need for control. Inspiration and creativity come from not being rigid in views or practices. It's important to move with the times and learn to embrace new working environments and social networking platforms to serve client needs efficiently. Above all, the most important lesson has been the realisation that uncertainty is neutral; we can continue to focus on positive action.