Be the best

Nigel Stein delivered the morning keynote presentation at EEF’s 2014 National Manufacturing Conference yesterday sharing lessons from his organisations growth and strategy experience.

Best the best and think globally

Fundamentally, Mr Stein showed his colleagues and peers the value of maintaining focus on key competencies and refusing to be distracted by opportunities to diversify before the moment is ripe.

Drawing on GKN’s own story he showed how rationalisation of business activities will bring greater clarity of purpose and maximise the potential in a company’s resources.

“Twenty years ago, GKN was a rather out-of-fashion UK conglomerate.

“We had a broad range of businesses, which included making the Warrior armoured vehicle, renting Chep pallets, Cleanaway waste disposal, Sankey Vending machines, Kwikform scaffolding, even making BT telephone boxes. We had just completed the purchase of Westland helicopters, our very first move into Aerospace.

“But GKN’s history is one of constant evolution. In the next ten years all those businesses I just mentioned were sold or de-merged. The Group refocused around four, core engineering businesses and supported by some subsequent targeted acquisitions, grew into the strong focussed global engineer you see today.”

To put that strength into perspective Stein highlighted some key statistics and contributions made by GKN to global industrial ecosystems.

He claimed that

• Around half the world’s cars carry GKN driveshafts
• GKN aerospace components are in 90% of the world’s large commercial aircraft

Meanwhile, three billion GKN powder metal parts a year are built into cars, domestic appliances and hand tools and GKN Land Systems components are on many of the world’s agricultural equipment and yellow goods.

Stein hammered home a message that leadership in GKN’s focus sectors now means global leadership – not regional or local pre-eminence.

“Being leaders in our chosen markets and having a global approach are the first two cornerstones of GKN’s strategy today.”

The next three pillars of GKN’s strategy are technology, operational excellence and an ambition to outgrow its markets shared Stein.

Perhaps controversially for more ‘PC’ listeners, Stein openly advocated a win or lose business proposition in a competitive world.

“I believe in today’s competitive world you’re either a winner or a loser. There is no standing still,” he proposed.

Focus

Reiterating the lessons in his speech for the wider manufacturing industry Stein said that focus was foremost.

“[Be] the best at what you do. Which also means recognising you can’t do everything. Just as GKN had to do.

“It’s amazing how successful British companies have been when they’ve followed that formula.

“Rolls Royce in aero engines, Weir in pumps, Renishaw in measurement devices, to name but a few.”

Adding nuance to his message, Stein clarified that he was not promoting monocultured manufacturing.

“Being the best doesn’t necessary mean being restricted to doing just one thing.

“Some in the City of London prefer that – it makes their spreadsheets much simpler – but taking the skills and technology that gained one leadership position and leveraging them into adjacent markets, brings further opportunity.”

However, Stein returned to the need for focus with a cautionary note that diversifications should not distract from “being the best at what you do, or lead to a proliferation of initiatives”.

Government lessons

This led to a message for government to curtail its imitative creation spree as it swings around to support industry and to rationalise and improve existing approaches.

“Could I please ask that we restrict the number of initiatives!

“I know it’s done with the best intent, but every new activity, every new policy, every new report, is diverting resources from the ones we already have.”

Returning to his dissection of GKN strategy and what manufacturers can learn from it, Stein touched on the reasons why investment in technology is a key tenet.

He swiftly moved on to connect ability to exploit technology with UK skills gaps however and reprimanded peers who do non pro-actively engage with schools to inspire young talent and direct the development of relevant engineering skills.

Stein showed firmly that he believed engagement and inspiration are the responsibility of industry – not government.

However, he did issue a plea for real action to mandate an increase in quality STEM teachers = particularly for physics.

“Recently The Institute of Physics reported that at least 500 state schools in England lack any science teachers with a qualification in physics and half of all new physics teachers are leaving the profession within four and a half years.

“Although it may be unpopular and may mean we have to spend less elsewhere, the system has to be adjusted to provide more STEM teachers and more STEM pupils from an early age.”

Europe

Drawing his speech to a close, Stein briefly touched on the unglamorous but fundamental importance of upholding operational excellence within GKN.

He also squeezed in a message on Europe, clearly defining why an exist from the EU would be bad news for business.

“From a GKN perspective the prospect of the UK talking itself into an exit from the EU would be deeply harmful to our industries, where we are part of a European footprint, not a country in isolation.”

He spoke of the importance of free trade and supporting pan-European collaboration for Airbus and for much of the car industry which not only forms a key market, but is also a base for competition which would readily try to leverage uncertainty to usurp the position of UK companies in global supply chains

“If there is one thing investors hate, its uncertainty. Be sure, even now the uncertainty over the UK’s position in Europe, is being used against us.

“Do we want to lose all influence in policy and setting standards for our industries?

“With less than 2% of the world’s car output and with no British made large commercial aircraft, we cannot expect much UK influence on standards or policy in either Automotive or Aerospace!

“If we don’t like some aspects of the EU, let’s try and change them. Operate the rules the way others do, not in a peculiarly British, ‘gold-plated’ way.”

Stein closed with a recap of his key messages and a rousing call to arms for peers and industry supporters to actively broadcast the successes of industry and to vocally reject and tear down suggestions that “Britain doesn’t make anything anymore”.