Future Proof: Mark Flanagan, operations director, Kirby Group

The downturn in the construction industry came as a sharp shock to the Kirby Group. At the height of the boom, the Limerick-based engineering firm had been generating an annual turnover of about €90 million with more than 600 employees but, as the commercial property sector took a nosedive in 2008, the company watched its revenue drop by a quarter in one year alone.

By the end of 2010, turnover had slid to €58 million and the number of staff employed had been reduced by almost 40 per cent.

It wasn’t the first time the firm had to recalibrate in the face of economic adversity, however, and its experience dealing with the 1980s recession provided inspiration to its directors who were determined to rise to the challenge.

"No one knew how it would end, it was like staring into a black hole," operations director Mark Flanagan recalls. "But it was a matter of get busy living or get busy dying, so we decided to sit down and plan our way through it, hoping for the best."

After slimming down to just 10 employees at the end of the 1980s, the company had rebounded by opening a head office in Dublin. Expanding during a recession had been a brave move that paid off, leading to contracts in the 1990s and early 2000s with some of Ireland’s biggest tech and pharma multinationals including Intel, IBM, Analog Devices and Janssen Pharmaceutical, part of Johnson & Johnson.

But this time it would have to look further afield for growth opportunities and, after participating in the Irish Management Institute’s Leadership 4 Growth programme, it set its sights on the UK.

Long-term structures
During the boom, the company had won several contracts to work on gas-fired power station projects in the UK, but there were no long-term structures to continue business there once they came to an end. Opening a dedicated office in London was the first step, with another then in Manchester.

“We have developed a strong client base over there now,” Flanagan says.

“We did this by building on existing relationships with clients like IBM, Pfizer and Eli Lilly who we were already working with in Ireland, winning projects with them based on the good name we had here. That was the easiest way for us to internationalise.”

The group has also developed significant connections with new clients across the UK, such as Hexcel, Victrex and GSK.

“Gathering blue-chip clients is a slow and steady process, and the key is keeping them when you find them,” Flanagan says. “We set a goal of acquiring two or three big clients each year, which has worked well for us.”

Last year, Kirby Group won a large design-and-build contract from brewer Molson Coors for a major new energy centre in Burton-on-Trent, and has just opened its third British office in Glasgow arising out of a framework agreement with Scottish Power. UK operations account for about 25 per cent of revenue.

The group is looking to expand into the Benelux region, where it sees opportunities for further growth.

“We have carried out work already in mainland Europe but it has been on a small scale,” Flanagan says. “We are hoping to put what we learned in the UK into play there now, rolling out on a project-by-project basis.”

The company has also focused on developing its mechanical engineering service, which now amounts to some 30 per cent of turnover. Its electrical division has also seen growth, with significant power generation, transmission and distribution contracts won in Britain and Ireland for companies such as ESB, Eirgrid, Siemens and Alstom. In 2012, the Kirby Group was awarded the contract for the electrical installation of the AC/DC converter station for the East-West Interconnector linking Ireland and Wales.

In Ireland, the company’s internal processes have been streamlined in an effort to reduce costs and improve efficiency. “We restructured to create individual business units headed by strong leaders with their own profit and loss responsibilities. Very strong teams emerged out of that process,” Flanagan says.

“We are very client-focused, and put a lot of effort into trying to understand what clients want, sitting down with them at the start of a project and asking them what defines success for them and then we work to fulfil that goal. What we’ve been working on lately is going back to them at the end of the project and asking how it went. We have learned a lot from that.”

A dedicated strategy and innovation director was appointed in the form of Jimmy Kirby, son of one of the two brothers who founded the company in 1968, demonstrating the company's dedication to new ideas.

While expansion into the UK has been the primary driver of growth, business in Ireland has also improved significantly. Turnover returned to pre-crash levels of about €90 million in 2013, which is expected to rise to €100 million this year. More than 600 staff are employed across Ireland and Britain.

Ireland's future
"The IDA is doing a great job at attracting foreign direct investment into Ireland," Flanagan says. "There has been some understandable concern in recent years over the patent cliff in the pharmaceutical industry, but we are seeing new medical device companies coming in, as well as some generic manufacturers, which is very promising for Ireland.

“A lot of our clients are busy at the moment, which means we’re also busy. But we understand it can be cyclical, and we are not complacent. We are looking at every opportunity to expand, and to safeguard the business for the future.”