The Manufacturer caught up with Andy Page, CEO of the £250m business transformation programme, Sharing in Growth, to discuss how to drive competitiveness within UK aerospace.
What do you believe are the core strengths of UK aerospace?
First and foremost, our legacy. We have a huge and rich history of high value, high technology aerospace in this country, and that’s fed through to having several of the key Tier 1 ‘primes’ here.
The presence of Rolls-Royce, Airbus, Leonardo, Safron and many more flows down into supply chains made up of hundreds of manufacturing and engineering businesses.
The challenge now is primes have become ever more internationalised and the market for their supply chain has followed suit.
Therefore, even at Tier 2 or Tier 3 level, companies are having to compete globally. As we move forward, and as the UK becomes a higher labour and higher energy country, then clearly the suppliers are going to have to do something to ensure what they are offering is both attractive and competitive.
That has several nuances to it. If suppliers decide to just carry on making the same widget as they made before, they’re going to end up knuckle-fighting on price. There needs to be a dual activity, one around fundamentally becoming more productive, the second around evolving their company to make something that will truly differentiate them and appeals to a high cost market in the UK.
What about potential weaknesses?
When we set up Sharing in Growth (SiG), it was fundamentally a recognition that the UK aerospace sector is growing, we talk about the doubling in size within the next 10 years, on both the commercial and defence side, and obviously as fleet sizes increase so too does maintenance, repair and overhaul (MRO) activity.
There are plenty of opportunity out there, but what we’re seeing is that parts of the UK aerospace supply chain aren’t necessarily capturing them. To determine why, SiG looked at what good suppliers around the world look like and four key attributes became clear: lean manufacturing, sub-tier management, business planning and leadership. Each of these centres on creating competitive capability in a sustainable way.
If UK aerospace is to leverage global opportunities and create more world-leading competitive companies, it needs to do something relatively intensive over the long-term and that was the origins of SiG.
How important is addressing the UK’s much discussed ‘productivity puzzle’?
It’s of paramount importance. We can see that since 2008, national productivity has flattened alarmingly compared to many other countries. That’s not to say that productivity growth hasn’t slowed in many other countries, but not to the extent it has in the UK.
Underlying that is this idea of a company being either a ‘zombie’ or a ‘gazelle’. Zombies are those which may be growing, but have struggled to realise any productivity gains; whereas gazelles are companies which are achieving dramatic and accelerating productivity growth.
We need to get more companies to drive productivity growth, to recognise that is an investment in the future, as opposed to riding on the surf of growth – which isn’t a strategy fit for the long-term.
What is the difference between employee engagement and employee involvement?
The heart of what SiG tries to create is a vision for an organisation, which then needs converting into a tangible, time-bound mission for what the company needs to become. This vision and mission is essentially leadership setting the direction, but to truly harness the power of your workforce, everybody needs to be involved and commit to improving their own behaviours. That’s engagement.
Employee involvement is being told what to do and getting on with it, employee engagement is centres on contributing new ideas, the 1,000 ideas from the entire organisation, as opposed to the 10 from the top. When you look at successful companies, there is an extremely high correlation between high engagement and success and growth. However, it’s not a simple thing to create; true engagement requires a relentless, consistence approach.
How does a member company effectively manage their own internal objectives with those of Sharing in Growth?
If it’s dealt with on that basis, quite simply they won’t. The size of this is too big to effectively manage that which you want do as a business separately from what you have to do. These two objectives must be integrated, something which SiG is a proven catalyst in achieving.
We spend a lot of time going through the extension of the vision-mission values, the strategy and the strategy deployment to ensure that when you get into the physical activity and training, both are very clearly aligned to the incremental improvements and overall objectives of the business.