Responding to Global Risks

risk

 

 

My latest column in South East Business Magazine- the full article can be found here http://www.southeastbusiness.com/print-edition/july-2014

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Wishing IoD Surrey well for the future

surrey

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South East SMEs contribute to Britain’s maritime history

 

This week heralds an important event in Britain’s maritime history. On the 4th July, HM Queen will formally name HMS Queen Elizabeth at Rosyth Dockyard. This long awaited aircraft carrier will be the largest ship ever used by the Royal Navy with a displacement of 65,000 tonnes, a length of 265m, width of 120 metres and is 68 metres tall (that’s taller than Niagra Falls). Along with her sister ship HMS Prince of Wales, she is three times larger that the Invincible class carrier she replaces.

So apart from being a political football and a massive and sometimes controversial, statement projecting the UK’s power and influence in peacetime, wartime and humanitarian crises – what effect will she have on our economy?

Well a little known fact is that despite advances in technology and air transport 95% of our traded produce travels by sea, that adds up to £524 million of imported goods. Globally 90% of world traded goods still travel by sea. Despite us feeling we are in “modern” times, piracy with unsecure trade routes is still an issue in some parts of the world. A global strategic footprint is still important.

HMS Queen Elizabeth will have a range of 8-10000 nautical miles and will serve for 50 years. It’s highly probable that her final commanding officer is yet to be born!

However, as a manufacturing person the key thing to me is that this is an impressive example of how UK manufacturing can excel. Most will be aware that no single shipyard in the UK was big enough to build the ship by itself, so “modules” were constructed and transported to Roysth where the ship was finally assembled using a specially made crane that could lift over 1000 tonnes.

Frustratingly however this is just the tip of the iceberg in the sense of the overall value proposition. In terms of the South East some of the major ship modules were built in Portsmouth but many other high value systems and components were made by local companies such as Alfa Laval Ltd, based in Camberley, who made the heat exchangers for the fresh water system. Other components manufactured in the region include the communications system much of which was designed and made in Crawley, High Wycombe and Portsmouth and stores refrigeration which was made in Kent. The visual surveillance system and integrated navigation and bridge system was designed and made by two different companies in New Malden!

Not all of the systems are purely for military use either. Many have uses in the civil sector or utilise “commercial off the shelf” technology. It’s unfortunate that these things are never discussed by the media as they aren’t obvious and are sometimes difficult to explain. It’s easier to visualise the large steel fabrications!

Of course eventually the carrier will have it’s own air capability with both rotary and fixed wing aircraft. The carrier will fly F35B Lightning II “stealth” aircraft, of which 15% of the value and workshare will have been designed and manufactured in the UK, again much of which within London and the South East. These aircraft are the successors to Harrier and have vertical take off and landing capability- but with an infinitesimal amount of extra technology!

All of this design and manufacturing work is of very high added value, employing engineers and programme managers of the highest calibre. HMS Queen Elizabeth is a showcase of talent that enables these design and manufacture businesses to demonstrate their world class capabilities, export products globally to both military and civil projects and lead our a economy into export led sustainable growth.

For a full list of the companies that helped produce HMS Queen Elizabeth, follow this link http://www.aircraftcarrieralliance.co.uk/delivering-the-nations-flagships/representing-the-best-of-uk-industry.aspx  and to find out more about the ship go here http://www.royalnavy.mod.uk/QueenElizabeth

To see this article on the SME Rocket follow this link

http://smerocket.net/2014/07/03/sme_manufacturing_aircraft_carrier/

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How to Reduce the Risk of Future Failure by Using Effective Succession Planning

The recent debacle at Manchester United shows how important the need for succession planning is. The decision to allow Sir Alex Ferguson to anoint his “chosen one” successor, David Moyes in the role without a full and open recruitment process did not prove to be a success. Obviously there were other mitigating factors contributing to the failure but it does look from the outside that perhaps the wrong person was chosen.

 

Those with longer footballing memories will remember the debacle of Brian Clough’s forty four day tenure at Leeds Utd when he replaced Don Revie ( who in turn was not an amazing success in the England job!). It was clear now that there was a colossal clash of cultures with Clough going to Elland Road, so just choosing the then most successful manager, to run the then most successful club wasn’t as obvious decision as it appeared at the time. In fact Leeds lost their position of dominance as a result.

 

So it’s clear that either handing succession planning to the current incumbent or just grabbing what you think is the best candidate out there without a considered approach is probably not the best idea.

 

Interestingly most organisations don’t succession plan very well. This probably goes back to the fact that many don’t do thorough risk management. Within a process of evaluating risks the issue of what happens to key staff should loom large. The chance of this happening, the effect of it, plus the proposed solution and who is responsible for carrying it out is essential as part of the risk management.

 

This risk management is essential both in owner managed “family” businesses and particularly charities, where all too often the Director or Chief Executive leaves and the Chair is left holding the baby after the notice period has been served and before a new incumbent can be found. This places even more pressure on the recruitment process and the temptation to “cut corners”. In a family business it’s key to be developing family members over along period of time so that they can build up the knowledge and experience to be a success in the roles they and the owner would want them to do. It’s also essential that they are supported by the right cadre of senior staff to make their appointment a success

 

Risk management should be part of the “Management Review” system that is built into the processes and procedures that determine the operation of the enterprise.

 

So the key to start with in succession planning must be to have evaluated the risks to the enterprise of key staff leaving and have a plan in place both temporary and long term to manage it. Both the Chair and The Chief Executive should discuss this at regular intervals to determine strategy.

When a key member of staff leaves it’s not always straightforward that the individual is replaced by a “clone”. It could be an opportunity to change the management structure or bring in someone with a different set of skills and approaches that will help develop the enterprise strategically. Aligning the recruitment to strategic direction is key. “Buggins turn” or promoting from within or grabbing someone quickly from outside will not do.

In summary

  • Have key staff positions as an integral part of the risk management process
  • Evaluate and quantify the risks of losing key staff
  • Have a plan in place to deal with those risks that is in alignment with the strategy of the enterprise
  • Regularly review that plan
  • If it happens take the time and effort to manage the recruitment (or promotion) process properly
  • Make sure that the definition of the role and the experience and personality of the person to do that role aligns with the strategy
  • Use external help or opinion to test and evaluate your thoughts and approach
  • Consider restructuring your team as part of the process. A person leaving can be an opportunity not only a threat.
  • Make sure that the person recruited fits the dynamic of the team and the way you want the team to develop.

 

The full article can be found here

http://www.ramseyhall.com/2014/06/26/how-to-reduce-the-risk-of-future-failure-by-using-effective-succession-planning/

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Joining the team at G&B Electronics

I’m very pleased to be joining the team at G&B Electronics Designs as Business Strategist.

G&B Electronic Manufacturing Services (EMS) specialise in supplying competitive electronic manufacturing services. Working closely with their customers G&B develop a bespoke electronic manufacturing outsourcing plan with the aim to drive down manufacturing costs and optimise the commercial benefits of outsourcing.

G&B have over 30 years contract electronic manufacturing experience and are strategically supporting a growing number of customers to increase their market share and enhance their reputation for quality by using their UK based manufacturing facilities.

I am retained by the company to help create and implement business growth strategies and develop strategic partnerships.

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A sense of proportionality?

bounus

 

 

http://www.southeastbusiness.com/print-edition/june-2014

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The Business Growth Fund

bgf edit   http://www.southeastbusiness.com/print-edition/may-2014

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What Manufacturing and Engineering Businesses Can Learn from the Service Sector

It’s been interesting for me over the last four years to see how my career has continuously intertwined with the service sector.

It’s surprising how often the deep divide is between manufacturing and service although I do see some companies bridging that divide. Some enlightened manufacturers have realized that they can add value, and significant margin, by offering more services to their customers as opposed to just simply delivering the product. Some have added through life support, some the ancillary supply of consumable materials. Others have cone the whole way and amortised the delivery and servicing of their products so that the customer pays for the product on a usage or “annuity” basis.

The key thing manufacturers can learn from service businesses is that most service companies deliver what is essentially a commodity service. Think of lawyers and accountants doing their daily work. The customer has a multitude of options and there’s little IP to differentiate anyone. The service company frequently has to ask itself “why me?’ why would a customer choose me over my competitor? This creates an essential tension that makes a service company work harder to retain customers or to win new ones. One often sees service companies looking at different delivery and pricing models, models that improve the customer experience.

I often see service companies attending events to learn from what’s going on in the real world and forge relationships that could benefit their business in the future, either by partnering or even acquisition. Service businesses seem more than happy to share business prospects and customers too if this adds value to their customer. The term “networking” is often overused and abused but many individuals in service companies have significant networks to hand which they can use to grow business or help their customers by referral. They realize that they must get out of the business as often as possible to be able to learn and to grow. This is often outside of “normal” working day. In contrast some manufacturers seem unconcerned with what’s happening outside of their key relationships with customers or the daily machinations of producing products on time. I know from personal experience that life on the shop floor can be all consuming and it’s tough to find time to take opportunities outside. In the end the businesses that are introspective will lose out to the enlightened ones that have embraced the approach used in the service sector and correspondingly have achieved greater and faster business growth.

The original article is here

http://www.ramseyhall.com/2014/04/15/what-the-manufacturing-and-engineering-businesses-can-learn-from-the-service-sector/

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Latest blog on the SME Rocket “Exceeding your client’s expectations”

 

 

I often write about how manufacturing businesses innovate to survive and thrive in the tough economic conditions we have faced and continue to face.

The common assumption of a manufacturing business in the South East is that they must be high tech to be successful. However in our report on IP (Intellectual Property) we demonstrated that IP could take many forms and need not be confined to technology.

I recently visited Spirit Circuits, one of three businesses privately owned by Steve Driver that manufactures printed circuit boards (PCB) in the electronics industry. For those that haven’t examined the internal functioning of electrical equipment, it’s the green or brown board that the electronic components are mounted on to with conductive tracks, electrically connecting the components together.

Spirit Circuits employs 65 staff and has invested and grown in every year of the recession. In December 2013 they acquired Lyncolec in Poole, taking its total employees to over 100. This acquisition further endorsed their commitment to UK manufacturing and enabled them to broaden their product range.

One would imagine that this is a highly competitive sector and one would be right. Low cost manufacturers from overseas dominate the market and because of the volume, they can often make the finished component for less than the material cost to a UK manufacturer.

So how do Steve’s businesses compete? The simple answer is that they offer exceptional service and think of the customer first. They offer several innovative services that delight their customers and ensure repeat business. Alongside a passion for “lean manufacturing” following “lean” principles throughout the business, their Innovation and IP is in customer service and “lean” is one of the main enablers.

Amongst their services is “Ask Dave” a fast turnaround service which offers guaranteed delivery of the PCB within either 48 hours or 72 hours at lower cost. If they fail to deliver on time they give the customer their money back and £1000 in compensation. In six years of offering this service they have only failed to deliver three times and on each of those times they were only a day late but still gave the customer their money back and the cheque of £1000.

“Rescue Me” is a service built around the problem that often faces customers when they need more of an order that’s already been delivered due to a stock shortage or an urgent customer demand for a small quantity. Instead of charging a premium for these items the customer can order them online and Spirit Circuits will expedite them quickly at a REDUCED price!

Finally the intriguingly named “Go Naked” offers free fully functional and tested PCBs for those embarking on prototype products. The only caveat is that these PCBs are NAKED, they do not have the protective solder resist coating. That’s the green stuff for the non-technical readers.

The company has also now branched out into China to help customers obtain great deals on very large order requirements.

When visiting Spirit Circuits I found an exciting vibrant business determined to delight its customers and break the traditional mould of customer-supplier relationships. This has led to them being successful in a massively competitive market, securing wealth creation opportunities and employment for their staff. Their example is surely one for similar businesses to follow.

 

the full article can be found here    http://smerocket.net/2014/04/30/exceeding-your-clients-expectations/

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Regional Chairman IoD South

I’m very pleased and honoured to have been appointed Regional Chairman at IoD responsible for the South East.

It is a great privilege to have been chosen for this role and I am looking forward to working with colleagues across the region to promote the work of the IoD and represent the thousands of business leaders who choose to be members of the IoD in the region.

I’m looking forward to working with Rodger Broad and the team and slightly nervous of filling the big shoes of Chris Dodson! We will do our best to promote great leadership, provide informative and quality events to members locally and take our rightful place in influencing policy and the business agenda.

The result of this appointment is that I will be standing down from my role as Chairman of Surrey branch at the AMM in May.

I will miss working with the team at IoD Surrey immensely and I would like to record my heartfelt thanks and gratitude for the support they have given me, not to mention the incredible amount of hard work the Committee and supporters do on behalf of the branch and members.None of our activities would happen without their energy and commitment.

It’s also been a very enjoyable role too and hopefully we have had some fun on the way. Personally I have learned an enormous amount about how the local business economy works and how innovative, talented and hard working local businesses are in such a competitive environment.

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