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Thursday, 25th April 2024 |
| Aidan Pender reviews Sole Survivors - How Exceptional Companies Survive and Thrive at the Edge by Anto T Kerins (DIT), Oak Tree Press, 1999 |
As well as representing a welcome addition to the growing number of business books written by Irish authors, the text provides an intriguing glimpse into the background and work practices of nine European firms operating in the relatively unglamorous footwear industry. This particular industrial sector has been deliberately chosen by the author in order to provide a working context which - in current European terms - is both challenging and frequently unpromising in terms of its long-term business prospects.
In order to explore this theme of survival in a hostile business environment, Kerins identifies nine footwear companies operating in Ireland, Sweden, Finland, and the United Kingdom. The smallest of these companies is Lundhags (Sweden) with 47 employees and a turnover in 1998 of SEK70.4. The largest is Start-Rite (UK) with a staff of 798 and a 1998 turnover of stg27.7. A more specific Irish interest is provided with the review of Dubarry in Ballinasloe. In all nine cases, Kerins is concerned to discover how these companies have arranged their design, marketing, and production processes so as to remunerate the capital invested in them and so remain in business. Interestingly, although the book is written by an economist, the author does not attempt follow the perspective of the financier or investment analyst and evaluate performance solely through the retrospective prism of the P&L and balance sheet. Rather, the reader is reminded that a firm’s capacity to remunerate its capital remains essentially a function of its ability to identify and exploit value-enhancing opportunities. As the author notes - ‘the most important asset a footwear producer had was the coming year’s product range. In an ideal society, this would be accorded greater consideration by a bank than all other assets’.
One of the declared concerns of the book is to log the survival stories of nine ‘ordinary’ firms. The point is made that the business literature is adequately served with comment and analysis by leading gurus on the performance and prospects of large global corporations. What is less often commented upon, and therefore what may be less well understood, is the extent to which these prescriptions for success carry across in any meaningful sense to smaller and medium sized companies. This in turn has implications for investment analysts who need to select winners across a diverse range of business sectors. As an academic Kerins also offers some interesting observations on the supposed dichotomy between the intellectual modelling of the business academics, and the allegedly more practical and focused approach of those engaged directly in business.
Interestingly, the author finds no textbook entrepreneurs in his sample of nine. Nor does he find evidence of the application of any magic formulae for survival from the latest business school literature. No glib prescriptions are offered for implementing and managing change in a hostile business environment. Rather, there is some significant comment on the contribution to survival of key qualities such as leadership, organisational learning, and an evolutionary and incremental approach to change. These it seems are more typically the characteristics of surviving firms. There is also much discussion of the introduction of world class manufacturing techniques, and the cultivation of a workplace culture where the separate but related contributions of both physical and human capital are carefully understood and equally carefully managed.
The book is written in an informal style where personalities and circumstances are fully sketched out. The result is a business book which provides an impression of real people struggling with real business problems, rather than a superficial re-fashioning of those conventional wisdoms already established in the academic literature. |
Aidan Pender is a managing consultant at PA Consulting Group.
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| Article appeared in the April 2000 issue.
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