Snapshot insight into broad ranging discussion at The Manufacturer’s most recent directors’ forum dinner debate.
With a loose agenda to gauge how guests identified with the concept of advanced manufacturing as a defining feature of their UK operations, and to share how they supported competitiveness, conversation at this industry-led debate was always going to be varied.
Darren Patterson, manufacturing director at BAE Systems Electronic Systems, Rochester, kick-started conversation with his observations on behavioural culture change. He found a need for leaders to honestly address how far their own behaviours reinforce or undermine company values or respect for process standardisation and optimisation methodologies like lean.
Say it like this: Key quotes from the evening
Is it easier for big company names/brands to attract talent?
“It is when it comes to the sexy engineering jobs. For those we have a stream of applicants from the top universities. But I own IT and this is a problem area for recruitment. Everyone wants to contract. This is exacerbated because we are quite close to London so – even though we have a strong brand and offer what we feel are competitive pay packages – people want to come and go, taking advantage of premium contracting opportunities in London” – Andy Myer, CFO, McLaren Group
“Times are changing. We maintained our apprenticeship programme throughout hard times. This year, for the first time in my eight years with the company we have lost two apprentices that we trained up to a higher level. They went to what they considered to be more attractive jobs with smaller, rapidly growing manufacturing companies” – Anonymous
Competition for a small talent pool is pushing engineering contractor prices up.
“This is a good thing. The first step is that wages rise and it is difficult and expensive to hire the people you need. But the second step is that manufacturing becomes a more attractive sector for engineers to work in. We are seeing a stabilisation now where before we lost too many engineers to financial services” – Karim Sekkat, chairman, KAS Technologies
How much time and resource should employers take when investing in workforce engagement and why?
“I am a great believer in gathering data and analysing it before concluding where it might lead. Across my companies there are some which have invested substantially more in time, money and resources for staff engagement than others. Statistically I have seen no difference in their ability to retain staff in the short term. What we have seen is that engagement programmes win us a lot of kudos with customers. They brought a commercial benefit we did not expect but made no difference to the employees themselves” – Karim Sekkat, chairman, KAS Technologies
“People pay a lot of lip service to values, culture and behaviour. But you rarely see leaders really addressing their own behaviours,” he said.
At BAE Systems, Mr Patterson shared that measuring behavioural performance has become a key element in balanced score cards and staff development or reward systems. “We reward people according to how well they do things as well as what they achieve,” he explained.
Patterson’s leaping off point struck a chord with most attendees, many of whom were at varying stages in the development of lean operating systems and cultures. But the relevance of behaviour, particularly at management level, was linked to wider issues than efficiency and productivity frameworks. Leadership behaviors in forming company strategy, reacting to regulation and recruiting skills were all presented as key factors impacting on competitiveness.
David Norman, managing director at Moog Components Group, for example, explained that the biggest limiting factor for his business, which is seeing strong demand, is coping with evolving EU legislation – specifically the chemicals control framework REACH. “It is not so much the legislation itself which presents a problem,” he observed. “It is how people within our business, in the supply chain and in regulating bodies, manage it.” In other words, their behaviour in response to the legislation.
John Atkin, finance director at Bisley Office Furniture described how past strategic behaviours now presented a challenge for the company to alter its outlook. “We have grown substantially in the last twenty years by continuous reinvestment of resources in order to create what is probably the best high-tech, volume furniture manufacturing facility in Europe – this was undoubtedly a very good strategy in a growing market. But now that the UK market is static, and we face more competition from low-cost countries, we need to be quicker on our feet while retaining our reputation for product quality.”
Atkin says the challenge now is to move on from a prime focus on efficient, high tech manufacturing to develop a more responsive commercial outlook. “We need to discover how to leverage the manufacturing capability we now have to open up new markets,” he said.
“We reward people according to how well they do things as well as what they achieve” – Darren Patterson, manufacturing director, BAE Systems Electronic Systems
Mark Johnstone, CEO of safety equipment manufacturer JSP was struck by the conversation about behaviours with relation to the company’s recent implementation of a new ERP system. Gesturing to his fellow guests he said: “What you are saying is that behaviour drives performance more strongly than process does. With relevance to our ERP implementation that resonates with me. As we introduced the new technology there were many people in the business who thought more about the new system in terms of old process, rather than try to understand the potential of the new tool. Understanding what is behind behaviours takes a long time but ultimately it’s what makes a successful business strong.”
The differing ways in which companies must recognise and realise their behavioural challenges was pinpointed by Karim Sekkat, chairman of KAS Technologies who cautioned fellow guests to “create an environment in which the right behaviours can emerge, but do not try and define too closely what those behaviours should be. The key is to create an ability to adapt to changing conditions, rather than set out a strategy that you will follow regardless of the environment.”
He emphasized that the ‘right’ behaviours for leaders would vary according to personality, nationality, market and more. “People will react, and need to react, differently depending on whether they have long term contracts or spot buying arrangements, for example. This is why I am careful across my group of companies to display what I believe is the right behaviour for myself but not to define this as a template. Leaders in each business must come to understand what are the right behaviours for their environment.”
These various behaviours may lead to the same outcome, summed up Mr Sekkat, but “the key to success is adaptability, not the road you take.”