There was a considerable increase (from 26 per cent in 2012 to 42 per cent in 2013 ) in the number of Best Managed Companies who cited raising capital for growth as one of their biggest challenges, according to an analysis of companies who took part in the awards over the last three years. The analysis also found that employee bonus/profit sharing schemes continues to rise as one of the main incentives used in retaining the right people to drive the business (60 per cent in 2011, 62 per cent in 2012, 85 per cent 2013 ).
Deloitte Best Managed Companies have total revenues of approximately €7 billion and employ over 5,000 people. The awards programme, now in its seventh year, recognises companies for outstanding quality, superior business performance and growth achieved. Westmeath’s leading companies are invited to submit their applications before this year’s deadline which is today, Friday August 8.
Applicants in 2013 also identified international expansion, maintaining good customer services and developing a strong marketing and sales force as challenges in growing the value of their companies. By comparison, the top challenge identified in 2011 and 2012 was cost reduction.
Encouragingly, across the three years analysed, excellent customer relationship management was identified as the most important differentiator from competitor companies. In 2011, just 15 per cent of applicants identified a strong sales and marketing programme as a key differentiator; however this rose to 21 per cent in 2013. On the contrary, investment in technology, which was identified by 45 per cent in 2011 as a key differentiator, dropped to 24 per cent in 2013.
In terms of funding growth, across all three years, most companies stated that they intended to use internal funding to support company growth (90 per cent in 2011, 91 per cent in 2012 and 88 per cent in 2013 ).
The Best Managed Companies application process also examines how companies ensure they have the right people to drive their business. Employee bonus and profit sharing schemes have increased in popularity from 60 per cent in 2011 to 85 per cent in 2013. Interestingly, while just over a quarter of applicants in 2013 identified succession planning as a challenge, down from 40 per cent in 2011, just 21 per cent had a documented succession plan.
Kevin Sheehan, partner, Deloitte commented: “It’s interesting that the number of applicants citing raising capital as a challenge is increasing. Based on our interaction with the companies in the programme, this is more indicative of companies’ shifting mind sets than a reflection on the availability of capital. Increasingly they are looking to invest in their business and drive expansion and so more companies are now looking for finance to drive this. Also encouragingly, the analysis demonstrates that companies are adapting strategies to reflect an improving marketplace. Increasingly, companies are looking to invest in their relationships with customers, their marketing programmes and employee rewards as a means of growing their business. This flexibility and commitment to reviewing and changing strategy as necessary has been one of the key characteristics of our winning companies over the last number of years.
“There are also some areas, such as investment in technology and indeed succession planning, that may need further assessment. These are criteria which the judging panel will be looking at closely for this year’s applicants. We are continually impressed with the calibre of Irish companies that are recognised in this awards scheme. We are encouraging companies who are also demonstrating sound management practices to apply for this year’s awards and so get the recognition they deserve.”
With registrations for this year’s awards programme due to close today, Deloitte, in association with Barclays Bank Ireland, is encouraging businesses from all over Ireland to log onto www.deloittebestmanaged.ie and register for the programme.
Companies which demonstrate superior business performance will be recognised at the end of the Best Managed Companies process in March 2015, with three companies specifically recognised for high quality submissions in the areas of strategy, capability and commitment, which are the cornerstones of the Best Managed Company assessment criteria. For the first time, at the awards gala in March 2015, ‘platinum’ winners will be recognised - these are companies that have been awarded Best Managed status each year since the programme began.
