In September 2021, fire ripped through the Glenisk yoghurt plant in Co Offaly destroying everything in its path. For the family-run business which had been nurtured by the Cleary family for over 30 years, the loss was devastating. So, too, for the company’s 95-staff and the farmers supplying it with milk.
At the time Glenisk director Gerard Cleary said “basically everything was lost [but] we’re resilient and we’ll fight back”. Less than two years on and Cleary has been proved right. Within a few months, limited production recommenced in a newly built unit and today Glenisk is back to about 75 per cent of pre-fire production levels.
Glenisk is a good example of what Celina Smith, associate professor of entrepreneurship at France’s Emlyon business school, calls “organisational fortitude” or the ability to weather major crises – something that doesn’t happen overnight she says. Resilience and fortitude are not innate in people or organisations. Both are built up slowly with what doesn’t kill you making you stronger, as the old adage goes.
Smith has recently co-authored a piece of research that studied how a family-owned SME in the UK, employing roughly the same number of people as Glenisk, survived three challenging events: a fire, a flood and a pandemic.
“We found that there are three key components that need to operate together to create fortitude in an organisation,” she says. “The first is ‘resoluteness propensity’ or all stakeholders having the motivation, determination and desire to do all they can to ensure the firm survives, even if it involves risky choices.
[ Production resumes at Glenisk yoghurt plant after devastating fireOpens in new window ]
[ Glenisk fire led to ‘very heavy losses’ after record 2020Opens in new window ]
“The second is ‘resource reserves’ which means having sufficient resources to deal with shocks whether that’s money, materials, knowledge or connections, and ensuring these are available when needed. The third is ‘shared values’ which is everyone believing in the same ideas and principles. They tend to agree on what is right and important and are able to take active, collective steps to move forward.”
Few SMEs have the time to sit around shooting the breeze about how to build these qualities into their operations manual and Smith emphasises it’s about more than just talk. In a nutshell, if a business is living its values there’s a good chance it has already built up component credits with staff, customers and other stakeholders.
This turned out to be exactly the case at Glenisk, where managing director Vincent Cleary says he was “blown away” by how employees, business contacts and the wider community rallied around in the company’s time of need. Local businesses offered practical help such as office space (but wouldn’t take payment for it), staff came in to help with the site clean-up, and contractors and suppliers worked long hours over the Christmas period to get the business back up and running.
“The generosity we experienced and the letters received from thousands of customers – some with money inside from kids and pensioners – was incredibly heartening,” Cleary says. “Nearly all of our employees had come to work the morning after the fire and were all standing around looking shell-shocked. I suddenly realised that this was their life as much as it was mine and that we had to get ourselves together fast. I remember gathering a few people in the yard and deciding on the spot what needed to be done to get us back into production by Christmas.”
Smith says that when a company has heritage, a network of relationships and a brand all built up over time, those involved are likely to be determined to fight for what they have and it’s this that builds commercial fortitude.
[ Fire destroys Glenisk yoghurt plant in OffalyOpens in new window ]
“Fortitude is a process so its development has implications for how a business is managed,” she adds. “A strong or empowered leader is an important element but, on its own, it won’t transform organisational fortitude. You still need the other elements such as staff, stakeholder and community support.
“It helps when a business has clear values and they’re easily identifiable and supported by experience. So, if you articulate one set of values for public consumption but don’t put them into practice in private, that would weaken the case.
“In family firms, staff and family often work cheek by jowl and employees see what the company actually does. If at the first sign of trouble, they are laid off rather than having an employer who’s prepared to fight to protect their jobs, that will undermine trust and loyalty.” (Glenisk laid no one off due to the fire, something Smith says was an important signal to the workforce that they were valued.)
“It’s similar with other key stakeholders,” she adds. “How does the business deal with them? Does it treat them with care and consideration or does it always try to grind them into the dirt on a deal? If it does, that gets noted.”
Vincent Cleary wants to have everything back to normal within two years of the fire. It’s an ambitious target and one he accepts he’ll probably miss but not by much. Glenisk hasn’t completely reinvented itself in the intervening period but it has used the opportunity to make positive changes to the business.
“There are no magic bullets in a situation like this. It’s hard work and the recovery is gradual,” Cleary says. “The next target is to break even and then return to profitability. But for now it’s all about putting a silver lining into a very dark cloud.”
