MANAGERS ON MANAGEMENT:IRISH SOFTWARE pioneer Luke Nestor knows what it's like to build up a successful technology company and then watch while the bottom falls out of the global market.
Nestor set up Rockall Technologies in the late 1990s, on the cusp of the internet boom. "One of our first big projects was to develop a bespoke piece of collateral management software for National Irish Bank. But as more and more businesses began adding dotcom to their names and wanted an internet presence, that's where the business was and that's the direction we took."
Not for long, though. Just as Rockall was becoming established, the dotcom bubble burst and the new millennium opened in a flurry of closures, lay-offs and recruitment freezes.
"We had a handful of important clients in the States who were supplying us with as much work as we could handle. But two of those went out of business in the same week, and suddenly we went from doing very well to wondering how we were going to pay our way. We were on our knees, to be honest."
Rockall Technologies survived, but not, says Nestor, without "thinking outside the box" - something he believes far too few managers are inclined to do.
"In my experience, too many managers like to keep themselves and their companies well within their comfort zones, particularly when it comes to selling. They rationalise it by saying, 'We're good at what we do and everything will work out in the end.' But it usually means they're afraid of failure." It's an attitude that could leave many younger managers, inexperienced in coping with a downturn, dangerously exposed, he warns.
"I wouldn't want to generalise, but I think that most people - and that includes managers - want an easier life these days. I'd anticipate that for a lot of younger managers - whose rise to senior positions has been a succession of good times and big bonuses. The current business climate will be a real test."
As chief executive of Rockall, Nestor successfully managed the company out of its dotbomb crisis by taking the difficult decision to switch its emphasis as rapidly as possible away from the internet. It didn't seem like the ideal solution at the time - but it worked, and better than he anticipated, ultimately. "When I took a hard look at the business I realised that the software we'd developed for National Irish Bank a few years before was now really our only asset. So I picked it up and through being either very fortunate or very persistent, managed to sell it to three new customers in a short period: AIB, Bank of Ireland and EBS. That's how we survived."
Next came the job of rebuilding the company. Their first move into the US - they now have offices there in New York and Jacksonville, Florida - came in 2006 when they were contacted by Wachovia, then the fourth-largest banking chain in the US.
"Obviously, we wanted them as clients. But we knew that the software they needed was not something we were in a position to offer immediately. So instead of saying yes, and pretending we had the solution - which does happen in business - we told them we had a system which could be adapted to meet their needs and that we'd work with them to achieve a perfect fit, which we did."
It was a risk, but it worked. "Wachovia have since told us that what impressed them most was how we managed our dealings with them: our honesty and our willingness to work with them on the ideal outcome. And it was yet another example of a workable alternative becoming the ideal by default."
Next week: Dr Mary Hogan of the IMI on managing cultural diversity to improve your competitive edge.
Name: Luke Nestor
Company: Rockall Technologies (www.rockalltech.com)
Job: chief executive
Management advice: There are many alternatives to the ideal solution - always examine those alternatives
