Ireland's culture of looking on business failure as a black mark is one of the reasons so many Irish technology companies are acquired before they reach a significant scale, according to a leading US management expert.
"Irish companies need the confidence to keep on going and not sell out," said Prof George Foster, a director of Stanford University's graduate school of business in California. "Sometimes a CEO will get an offer of €20 million and, if he comes from a culture where failure is a black mark, he may just decide to take the money off the table. I want them to have the confidence to say no and grow to be a €50-€100 million company."
Last week, chief executives of 31 Irish technology and life sciences firms completed the first part of the 10-month Leadership4Growth Programme which is headed by Prof Foster.
Prof Foster says the aim of the programme is to raise the aspiration levels of participants and increase their confidence in their own decision making.
It is the second year that Irish chief executives have taken part in the course which is organised by Enterprise Ireland in partnership with the Irish Software Association, Irish Bioindustry Association and the Irish Medical Devices Association. Last year the course, which includes three one-week stints at Stanford as well as on-the-job mentoring and coaching, was solely for technology executives but it has been expanded this year to include life sciences. Chief executives spend 18 days in class as part of the programme but commit another 40/45 days around it, as well as paying €23,000 towards the cost of their place.
With Stanford located in the heart of Silicon Valley, the challenges faced by the Irish firms in building a global technology business were cast in stark relief. The challenges that Irish chief executives face are very similar to those based in Israel and Australia - getting funding to grow, attracting the right staff and developing a product that customers are excited about - according to Prof Foster.
"Silicon Valley has 50 years of a venture capital eco-system," he said. "There's a lot of knowledge here on how to set up companies and there's an infrastructure in place which is available for those companies."
He also points out that the valley has numerous serial entrepreneurs who have done two or three start-ups and are now angel investors. These people cannot only provide seed capital to local firms but, perhaps just as importantly, provide advice and contacts such as the ability to attract key employees to the start-up.
Three senior Enterprise Ireland executives are also taking the programme which runs until next October.
"The participants are committed to embedding the language and tools they learn with their management, so it is important that Enterprise Ireland is using the same language," said Jennifer Condon, director of software services with Enterprise Ireland.
Tony McGuire, managing director of System Dynamics, said participating in the programme last year enabled him to make the strategic switch from "working in the business to working on the business".
In Stanford last week, this year's participants were upbeat after a week examining how companies in their sector have expanded internationally.
However, in private and on blogs, chief executives of some other Irish software firms expressed concern over how thus year's participants were chosen. The Enterprise Ireland executives said the companies had been selected on the basis of their track record, their adoption of a business model that can scale and their ambitions for growth.
