Business And Leadership, Ireland's Business News Service

Paul Haran’s CV is, by any yardstick, an impressive one. His current list of directorships includes Bank of Ireland, Glanbia, the Mater Private Hospital and Edward Dillon & Co, which he chairs. He also chairs the National Qualifications Authority of Ireland and is a member of the Road Safety Authority, the Forum of the Economic and Social Research Council and the Council of the Irish Taxation Institute. As well as this, he is a trustee of the Millennium Scholars Trust. And if that were not enough, his day job is principal of University College Dublin (UCD) College of Business and Law and chairman of UCD Michael Smurfit Graduate Business School. Haran was the first outside non-academic to head up a UCD college. This is another busy year for him, as the university celebrates 100 years of business education.

As former secretary-general of the Department of Enterprise, Trade and Employment (DETE) he is one of the few who walked the walk, retiring after seven years at the top. “Seven years is an optimal time. You can achieve a lot in seven years. After that, you are reducing the value of your contribution,” he tells me when we meet. “You move from leading and managing to administering and reaffirming your own decisions in the past, which may have been mistakes. You can become captured by the system. We all need to move on, and there is always someone better to replace you,” Haran says modestly.

A Drumcondra native (he attended the same national school as Bertie Ahern, albeit a few years later), Haran joined the Revenue Commissioners after leaving school, working in the actuarial and software divisions. “I was a nerd and loved it,” he says. He went on to study computer science in the evenings at Trinity College Dublin (TCD), before returning to Revenue. However, the education bug had bitten and he soon managed to get himself on a scheme, allowing him to return full time to TCD to study a master’s degree in statistics, finance and economics. “It was liberating, a real luxury and gave me the confidence to ask questions and challenge. That is really important for everyone.”

Returning to the Revenue, Haran became an adviser to the chairman, before being poached by Des O’Malley, for whom he acted as adviser in the 1989 and 1992 governments. “O’Malley was magnificent, very bright, very committed and, of course, very exposed to the political world. It was great to work on that. I was involved in talks on Northern Ireland, for example, and met a lot of brilliant and committed people. And it taught me how the political world worked. It was a very fractious time.”

Haran returned once more to the Revenue in his role as adviser to the chairman, before moving to become assistant secretary to the DETE, when Ruari Quinn was its minister. By 1997, Haran had been appointed secretary-general under Richard Bruton and was involved with cutting the corporation tax rate to 12.5pc.

Haran was soon working with the Progressive Democrats again, this time under Mary Harney who he describes as a “very powerful person to work with”. One of his proudest moments while there was opening the doors on 1 May 2004 to all workers from across the EU. As he says: “It was a great testament of our coming of age.” Haran was also involved with the setting up of the financial-regulation system under the Regulator and the Central Bank.

Principles-based rules
“It was the right thing to do,” says Haran. “The problem is how it is implemented. You need rigour and the right skill sets, as well as transparency. I would be wary of creating more and more loops. I have been a bureaucrat and it is very easy to come up with more boxes and more regulation. Principles-based rules that mirror our legal system is what we should be abiding by. It’s when we neither abide by the principles nor the rules that we are in trouble.”

It is also, he stresses, critical that directors have the right skill sets to know what should be done, as well as the right personal traits. “Directors are not pseudo managers; they are there to provide a certain tension as well as support, and should not just be watching the rule book. They need to help set strategy and ensure that management delivers that strategy. But values are also crucial and directors need to be very aware of the type of person they bring in as CEO - which has a huge demonstration value - while keeping an eye on remuneration, which must incentivise sustainable long-term values.”

Haran was also instrumental in the setting up of Enterprise Ireland, yet he is captious about the value of simply grant-giving. “I am wary of Government taking money from the poor and passing it to the wealthy. It is all too easy to destroy a business by chasing grants.”

Public-sector reform
Asked to identify measures that will help Ireland out of the morass in the coming years, Haran says, firstly, there is a need for a radical attitude to performance management in the public service. However, he is more in favour of cutting numbers than salaries. “Lean operations perform better and it is fairer to each worker. However, there should also be a focus on entrepreneurship and risk-taking in the civil service.”

The OECD Review of the Irish Public Service, of which he was also part, talked of empowering managers by giving them a job to do, the money to do it and then judging on performance. Crucially, it said they should then be judged on outputs, not inputs. Institutions such as the Comptroller and Auditor General and the Public Accounts Committee contribute to the maintenance of the status quo and to the fear of making mistakes, and are both in need of reform to focus on outputs, argues Haran.

“I would love to see a more holistic view of performance. We need to become pro-competitiveness and pro-enterprise, to stop benchmarking within and start benchmarking against. Ask where are we behind, why are we behind and what can we fix? It’s a dirty job and every element needs to be looked at.”

Getting Ireland back on track
Second, he says, is to concentrate on export-led growth. When we speak, Haran has just returned from Singapore, which, like Ireland, is suffering a huge fall in GDP. “They are seeking to fix it by asking what they can do even better.”

Specifically, he believes that more could be done to encourage
 holding companies and ensure Ireland is an attractive place for them, with coherent suitable supports in place. We also need to encourage entrepreneurship, he says, although Haran admits that is a little like “motherhood and apple pie”.

“Entrepreneurs need to be given every encouragement with facilities such as additional incubation space and hot desks. We need to reduce the hurdles at the start and help grow markets externally; crucially, we must be blind to the nationality of the entrepreneur.”

He points out that someone joining a firm will have  tax, pension, sick pay and so on all looked after, while the entrepreneur will have to do all this themselves, while also suffering cultural impediments.

On social partnership, Haran expresses some caution, saying it should be a way of life. “I do not believe that it is a good idea that the interests of the social partners should be an end in itself. In the early years we made sacrifices and worked together, it was about a shared vision and was a major driver of our economic success.”

Third on the list is continued investment in education. “It is crucial, but we must demand performance. In Ireland our raw material is our people and we still have a very high GDP per head. Education, of course, has an enormous impact and we need to grow intellectual capacity in order to outperform the globe. In the Nineties, we put resources into second and third level; now we can focus on the next level. “Countries with a great business school nationally tend to outperform globally.”

Fourth, we need a resounding ‘yes’ to the Lisbon Treaty. “This is of vital interest to the continued welfare of our people, we need a resounding vote of affirmation of membership of the union.” Haran is passionate about the EU, believing it is “not an independent entity, it is our union. It has changed the way we think about ourselves”.

Finally, we need to get the fiscal balance right: we need revenue raising and a reduction in spending. The next budget needs to be very balanced, he says. A tall order then but, if the man himself has anything to do with it, I would have to be a little more optimistic about the outcome.

This article first appeared in Irish Director magazine