Valuable lessons

With many companies still enduring shorter hours, redundancies and all-round belt-tightening, it is understandable if management training has spent the last 12 months on the back burner. Now, however, there are signs that the recession is lifting. Provided the dreaded double dip doesn't manifest itself, manufacturers are looking to the future with cautious confidence. For many, it may now mean managing a business that has changed shape in line with the shifting fortunes of key customers. What's more, some are now running with fewer employees or need new lines of business to support a return to full-time working. The managerial skills and outlook that served the company well in the past may simply not be adequate for these changing times. Jack Matthews, chief executive of Improve, the food and drink sector skills council, points out that the recession has meant consumers are spending more carefully. Food and drinks companies need to adopt more advanced manufacturing techniques to cut costs and to develop a more skilled workforce to apply them. But, equally, it means that strong, effective leadership and management skills are more important than ever before. Yet he says: "We know there is a shortage of leaders in the industry; between 2007 and 2017, 35,000 management and supervisory roles need to be filled across the UK, plus a further 9,000 professional and technical positions." Admittedly, the food and drinks sector has probably suffered less than others. Food retailers across the UK are reporting increased sales of prepared foods as hard-pressed consumers swap restaurants for their own microwaves and buy more 'feel-good' foods. Even so, this is a fair indication that industry as a whole is still finding it tough to fill the more demanding positions. Growing your own talent is still the best option. So are manufacturers stepping up to the plate? Not according to Eilish Henry, head of consultancy and education for the Manufacturing Institute: "While manufacturers recognise the importance of developing their leadership talent for long-term success, the recession has forced many to pursue short-term business planning where every cost comes under scrutiny, no matter what the longer term return on that investment will be. In downsized organisations, there are also barriers to releasing management time for education. As such, the Manufacturing Institute's LEAD programme for owner-managers, which is substantially funded by the Northwest Regional Development Agency, has achieved full attendance, but numbers attending other full-cost programmes have been lower than previous years." It's a vivid illustration of the economic realities: the appetite for management development is clearly there but it needs external funding to turn wishes into action. Interestingly, the only boom appears to be happening at the very top of the tree. Virtually every business school reports huge increases in applications for MBA courses. This, however, could be misleading. There will always be companies taking a far-sighted view by enrolling their future leaders. But the rising numbers are more likely attributable to graduates delaying their entry into an unwelcoming job market, those using recent redundancy as an opportunity to change course or strengthen their CVs, and individuals willing to invest to short cut their progress up the career ladder. The costs of MBA programmes - which generally run for between 15 and 21 months - range from around £23,000 for the also-rans to nearly £50,000 for the top UK performers. It's not a prospect likely to appeal to the cash-strapped right now. So what are the more manageable options? Dr Martin Clarke, director of general management programmes at Cranfield School of Management says he has still seen a fairly constant stream of people enrolling before and during the recession. "Manufacturing in the UK has been hit fairly hard but many are still sending their senior people along." He accepts it is a reflection of their expectation that they will need to manage a different business model once the recession is over. "The nature of manufacturing can drive managers into becoming activity junkies. The continual processes they have to look after often means they are operating at a level below the one they are paid at. So they get too involved in operational details and resolving crises. What these programmes do is help them get a better balance between thinking operationally and thinking strategically. It helps them differentiate between managing and leading." Clarke explains that these programmes are focused on personal development at four different stages of a career: the bright younger managers needing to improve their leadership credibility; senior technical manufacturing managers who need to be able think outside operations to take a wider view; advanced development programmes to fast track people to business leadership roles; and then the business leaders programme. This last stage is for those at the top of a business and is all about answering the big question 'where do I take it next?'. He cites the large US manufacturer Precision CastParts Corporation which uses a mix of Cranfield's general management programmes. It actually prefers its managers to attend open courses where they end up sitting alongside people from different sectors like finance and tourism. "These programmes are focused at helping them to think outside the box and compare themselves with people outside their own industry in order to develop their own leadership capabilities in a wider perspective." By benchmarking themselves against other sectors, he feels they unlock their real potential for innovation. Clarke points to the example of one manufacturer who, with his sector in recession, was facing the common customer demand to cut costs. "Because this guy had been through the development process here and because he had a very good external view of what was going on in his industry, he actually increased prices." He knew his competitors well and was able to convince his customers that price-cutting could only affect the quality of the end product to the detriment of their own businesses. Shortly after this successful round of negotiations, he was actually approached by one of his competitors who said: "We are struggling here. Have you thought of a joint venture?" Clarke maintains that these programmes, which run part-time in modules over a year, attract smaller manufacturing businesses as well as the international players. "It's very easy for their companies to justify the cost. The most expensive of them is around £14,000. And how easy is it for a good manager to recoup that money in one business decision?" Over that year participants can also call upon the resources of their Cranfield director or tutorial team to support them in business decisions and the personal challenges they face in developing their own leadership qualities. If £14k is still too large a mouthful to swallow, there are a few bargains around, especially for owners and managers of smaller companies. Last year funding for Train to Gain was extended to leadership and management programmes. Don't get too excited - it only amounts to £1,000 but it is accompanied by a free in-depth skills analysis for owner/managers. The start point is Business Link, your local college or training provider who may also be able to suggest other sources of funding. The Business Link website also provides a very useful online tool to help people identify and assess their existing leadership skills and to build a personal development plan. Improve has also begun putting the tools in place for companies to identify and develop future managers. Late last year funding from the Welsh government allowed it to establish the Grow Your Own Manager project which gives employers the chance to put employees through a subsidised introductory management course to give them a head start in developing their skills. They take a Level 3 Introductory Certificate in Management, covering subjects like personal development, planning and monitoring, quality and continuous improvement and change, as well as information and communication, customer focus and working with others. The subsidy means each place costs only £50 and companies - including Rachel's Organic and Burton's Foods - have been quick to take it up. The National Skills Academy for Food and Drink is also piloting management training programmes in the north west with Manchester Metropolitan University. They are being designed specifically to meet the demands of employers, offering a work-based approach to training. Courses are delivered in bite-sized chunks so learners can accrue credit over time. The programme is intended to provide progression routes into management that have not previously been available in formal training. Some of the first companies to get involved in the project include Butt Foods, Goodlife Foods and Richard Whittaker. The Academy is also working with Improve on developing a network of training providers specifically for leadership and management programmes. But food manufacturers on the wrong side of the Severn might still feel a little aggrieved. So is it all worth it? What do companies get out of a sustained focus on finding and nurturing future leaders? Take a look at Spirax Sarco which makes steam and condensate control equipment at its Cheltenham site. Its achievements provide compelling evidence that effort pays dividends; so far its leadership development programme has yielded over £2.5 million in realised and potential project savings, ten times more than the sum invested in it. It has been working with the Manufacturing Institute (TMI) at both its Cheltenham and French supply bases to create the leaders needed to carry forward a lean strategy aimed at transforming its business. It realised that people and cultural factors make the biggest contribution to business improvement. Without the right leadership and focus on people, even the best tools for driving out waste and raising productivity will not succeed. Team leaders and board directors alike are fully involved. Initially, Spirax Sarco worked with TMI to develop a 'leadership for lean' event for all senior managers. It followed up with an 11-module programme for first level leaders. It was a significant investment, involving 13 days' off-site development. In all, 120 people are in or have completed the programme. It not only teaches the technical aspects, philosophy and principles but also reinforces their knowledge through work-based projects, encouraging them to feed back the results for discussion with their peers. Significantly, the programme is helping them develop the cognitive leadership skills to engage the whole workforce of over 600. They deliberately created a supportive environment. A colleague visits teams on request to resolve difficulties and 'buddy groups' of four peers meet every two weeks. Said business improvement manager Mike Hart: "Previously, the message wasn't coming down - now we have this groundswell doing wonderful things with people at the processes." In one area of the business, lead time has come down from an average 5.5 days to a guaranteed 3 hours and 15 minutes. Even more tellingly, continuous improvement work and home-grown kaizen events have yielded millions. Hart says there is now an embedded culture of continuous improvement. He is adamant that only 20% of lean gains actually come from tools and techniques. The other 80% is derived entirely from developing people. "We don't all come up at the same pace - that's true of any company in my experience," he explains. "You have to let people seek and understand for themselves and you need a management culture that is responsive to that."