The Irish Times
21 Dec 2010
By Suzanne Lynch
CORPORATE IRELAND’S lack of management skills is one of the main reasons behind the State’s lack of competitiveness, a report from the Irish Management Institute (IMI) has found.
The report entitled Closing the Gap, which draws on research from the London School of Economics and McKinsey, found that, compared to other states, Ireland’s underperformance in terms of efficient management practices could be costing the State €2 billion a year.
Small to medium-sized firms are particularly weak in terms of management standards, the report found.
It focuses on the impact of management practices on performance by using a specific metric developed by LSE and McKinsey over the past 10 years which assesses management practices and compares this with economic measures of performance.
More than 150 Irish manufacturing firms were surveyed for the research. The study found that Ireland lies far below the global average and below Britain, ranking just ahead of Portugal, Greece, China and India. The US was the best performer.
IMI chief executive Tom McCarthy said improved management skills were crucial to improving Ireland’s growth prospects.
He said that, while Government efforts will most likely focus on low-skilled unemployed workers, it is vital that measures are taken to improve management.
“The evidence we publish today, shows that, by doing this, we will preserve and create jobs for the low-skilled unemployed and will drive productivity growth.”
The report found there was a solid link between how well managers adopt proven best practices, such as lean production methods and techniques for tracking outcomes, and how well a company performs.
According to the report, Irish SMEs are underperforming in terms of management skills in comparison with their multinational counterparts operating in Ireland.
Among the suggestions for encouraging better management practices outlined in the report are the introduction of a mentoring scheme between multinationals and SMEs; the design and administration of a survey implemented by Enterprise Ireland which would highlight for SMEs how they compare in their industry; and the suggestion that SMEs take a certain number of days out of the normal working schedule to engage in a proper recruitment process and to strategise for long-term planning.