Three traits that can make your company number one
Collaboration, technology and a sense of purpose drive the fastest-growing firms
Dennis Agnew, corporate partner at Pinsent Masons in Dublin: “While the UK and Ireland’s fastest-growing companies are both large and small and found in disparate industries and areas, our research reveals that they share these three traits”
No single formula can guarantee success, but research among some of the fastest-growing companies in the UK and Ireland has uncovered a number of common traits which set them apart from their slower-moving rivals. The survey, carried out by law firm Pinsent Masons, found innovation, collaboration and a sense of purpose to be key ingredients in their recipe for success.
“While the UK and Ireland’s fastest-growing companies are both large and small and found in disparate industries and areas, our research reveals that they share these three traits,” says Dennis Agnew, corporate partner at Pinsent Masons in Dublin.
There is a very strong focus on collaboration, with the research suggesting that 36 per cent of this fast-growing cohort of companies regard alliances and joint ventures as one of the top three drivers of their growth over the past three years. In addition, a quarter say that M&A has been one of the most powerful sources of growth in the past three years.
“Collaborations and alliances can enable Irish companies to quickly seize opportunities for growth and experimentation in new markets and new products or services without having to make irrevocable decisions,” says Agnew.
In Ireland, alliances are being forged across sectors, with technology, R&D and education to the fore. “For instance, we’ve seen the culmination of many years of collaboration on the education front with the recent announcement of the formal coming-together of a number of institutes of technology into the Technological University Dublin, ” says Agnew.
In terms of regions, there has been a particular focus on Asia, which can be a difficult market for companies to gain entry into when acting alone. “There are about 400 Irish companies currently investing in China, and Enterprise Ireland can be very helpful to companies seeking out alliances there,” he adds.
Investment in innovation and disruptive technology is seen as the ley to unlocking new opportunities. A third of the businesses surveyed say investing in and utilising technology effectively was one of the top three drivers of their growth over the past three years. Moreover, 48 per cent believe that acquiring IP or technologies was one of the most important ways that M&A and alliances have contributed to their growth.
Not all of these companies are in the technology sector, yet they recognise that technology and innovation can be powerful enablers of growth
When it comes to the type of technologies being prioritised over the next three years, nearly half (48 per cent) say automation – a full eight percentage points above the overall average for all European companies – and 40 per cent say cloud computing.
“Not all of these companies are in the technology sector, yet they recognise that technology and innovation can be powerful enablers of growth and are investing heavily in product and service development, R&D and operational efficiency,” Agnew notes,
“In Ireland, the Government-sponsored Disruptive Technologies Innovation Fund supports the use of disruptive new technologies, with €90 million to be made available between 2019 and 2021. It will be interesting to see what impact the fund makes,” he adds. “Within Pinsent Masons, our Irish office has used our own deal hub technology to manage cross-border deals and due diligence more efficiently, and this has been warmly embraced by our clients.”
The other shared trait is a strong sense of purpose. “They are driven by broader motivations than simply increasing sales or profitability,” Agnew explains. “In many cases, these businesses possess a collective spirit: they are non-hierarchical, with employees working together towards a clear vision. Our research reveals that 33 per cent of the fastest-growing companies in the UK and Ireland think a sense of collective purpose is one of the two most important features of their corporate culture. Just 7 per cent say that an inspirational leader or founder has been important to their growth over the past three years. If a company is to be successful, it has to be very clear about what it’s doing and why. The fastest-growing companies are the ones that have this focus and don’t get distracted from it.”
While these characteristics cannot be taken in isolation, they do provide a useful indication of the core features shared by successful high-growth companies, according to Agnew. “These three characteristics of a fast-growing company provide a powerful recipe for success. The businesses surveyed by Pinsent Masons share these core features – and it is these drivers that underpin the growth they have achieved to date.”