Pride and politics: Sage CEO Stephen Kelly is backing SMEs all the way
9 min read
06 January 2017
We spoke with Sage CEO Stephen Kelly, who opened up on current developments at the accounting software firm – including where pride and politics fit into the operation.
Just before Christmas, Real Business flew to Dublin with Sage for the company’s Sage Ireland Debate. The event brought SME leaders and government heads together to discuss the specifics of what’s preventing business growth locally. Ahead of the proceedings, we had some one-to-one time with Sage CEO Stephen Kelly, who opened up on everything from Brexit to philanthropy.
But why Dublin for the debate? Kelly called the city a “fantastic economy of entrepreneurs”, with 70 per cent of new jobs locally created by SMEs.
“Effectively, Sage is part of the digital heartbeat of Ireland’s nation of business builders,” he said. “Half of Ireland’s companies use Sage within their businesses, typically to pay employees and for accounting.”
Last year, Sage reached 600 employees in Dublin, a place it’s had a presence in for 20 years. As such, Kelly declared a “big commitment to Ireland”, adding that the country is a “great nation of business”.
In terms of differences with the UK, he said that Irish entrepreneurs are more likely to export than British counterparts.
“After the 2008 downturn, there were a lot of Irish exports. This year Irish businesses are 53 per cent more likely to export than they were previously,” he detailed.
“A lot of British businesses do brilliantly and they share the same issues, but they don’t typically export as much as some of the Irish entrepreneurs, so I think there’s an opportunity there.”
On the similarities, Kelly added: “The struggles are very similar. There’s an incredible level of consistency in terms of getting in the way of growth, whether it’s bureaucracy, taxation or red tape.
“Our mission is to help businesses with policy makers in government to smash the walls in terms of impediments getting in the way of businesses.”
This will be tackled with the launch of the Forum for Business Builders. It’s a body that will allow global entrepreneurs to have voices heard by the political powers that be. As a result, Kelly elected to avoid Davos, home to the World Economic Forum, last year.
“I was invited to Davos and didn’t go. Honestly, flying in a private jet and taking four days out of your busy schedule at about €50,000 of cost,” the Sage CEO said.
“Which small businesses, if you’re a grocer in Wexford or tech company down in Galway, can afford to take four days to influence the world’s policymakers. It’s all big business and lobby groups.”
He declared that while policy makers are hitting the slopes, SMEs are home cracking on with business as usual.
“With our Forum, we thought it would be nice to do something inclusively with the small businesses and industry groups, so their issues that stop growth and prosperity really get air time with politicians,” said Kelly.
Sage experienced a 6.1 per cent revenue growth for the year ended 30 September 2016, which he attributed to continued tech innovations. These include artificial intelligence, machine learning and chatbots, more of which will come throughout 2017. He added there is a passion for looking after customers too.
“All of those factors combined have led to our strong results. For the first time in a decade we’ve recorded double digit recurring revenue growth and we’ve gone past a million subscription contracts,” the Sage CEO explained.
Building on what he said about continued innovation in 2017, we can also expect to see the Sage Summit hit the road. Traditionally held in one major city, this year’s outing will see the showcase visit the likes of Melbourne, Johannesburg, Singapore, Atlanta, Toronto and London.
“It’s such an exciting year. The other massive thing is a slew of product launches we’re making all around the world, in places including France, Germany, Spain, UK, US and Canada. We know what impact smartphones have had for consumers and we’re seeing a similar revolution for business builders,” said Kelly.
While SME exports have been discussed, Sage’s own overseas operations have been successful also, with revenue growth in Europe and Asia. It was at this point Kelly stressed British businesses should look beyond the borders.
“Sterling is 20 per cent cheaper. It means SMEs can be a lot more competitive. I think we’ll see a great pick-up in terms of UK exports. It’s a golden time for UK businesses to focus externally and outside of the domestic market to go overseas,” opined the Sage CEO.
Amidst ongoing Brexit complaints, the latest of which has seen Jamie Oliver close a handful of restaurants, Kelly said businesses have a role to set a confident tone.
“If you look at what’s happened since the vote on 23 June, the only material thing in the real economy is that sterling has gone down by 15-20 per cent. The implication is that imports have got more expensive, but exports have got cheaper,” he said.
“In terms of business, we’ve got to crack on, be the engine room for job creation and leave the politicians to sort out Brexit.”
While the firm has experienced growth over the past financial year, it is the Sage Foundation CSR effort which Kelly is really pleased with.
“The Foundation is amazing. It’s probably the thing I’m proudest of. I’m very proud of a lot of things, and it’s a real honour to lead Sage, but the Foundation has really lit up our colleagues and a lot of communities,” the Sage CEO admitted.
“I believe companies absolutely have a primary responsibility to have a really active role in their communities to help the disadvantaged. Through the Sage Foundation, we give five days of free paid volunteering time to all colleagues around the world to do what they love, working in charities or not-for-profits that make a difference in the communities.”
With the equivalent of 13,000 days of volunteering completed by colleagues so far, over 110 charities globally have received grants.
Using the UK as an example to discuss the inspiration, Kelly pointed to government debt and said: “Governments haven’t got the firepower to do the investment to support the vulnerable, the sick, the elderly; to give youth opportunities.
“The wealth and prosperity creators, which are the businesses, need to step in with two feet and take responsibility for it – I think it’s the new age.”