UK: HELLER ON MANAGEMENT - WHEN DESIGN ISN'T THE ONLY FAULT.

UK: HELLER ON MANAGEMENT - WHEN DESIGN ISN'T THE ONLY FAULT. - There is no excuse for the poor showing of UK manufacturers in a recent study of design skills, says Robert Heller, but there are explanations - not least the lack of suitably qualified manag

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Last Updated: 31 Aug 2010

There is no excuse for the poor showing of UK manufacturers in a recent study of design skills, says Robert Heller, but there are explanations - not least the lack of suitably qualified management.

How infinitely pleasurable it would be to discover a survey in which British manufacturers emerged triumphantly on top. Alas, the surveys have sung the same sad song throughout the post-war years. Now IBM and the London Business School have jointly concluded that only four of 122 UK plants studied are world-class in design skills - and that German competitors are significantly ahead. Not that the Germans are paragons of design virtue. The study shows that their world-class count (this time from 123 plants) numbers only 10. That doesn't mitigate the severity of the findings; the seven ugliest sisters are all British. Their failure has explanations, but no excuse.

To match the best Germans, the survey suggests, UK managers should, for a start, design major cost reductions into the product. Moreover, they should view design as part of a seamless process, in which (to quote the Financial Times) 'product life-cycle planning, technology strategy, innovation culture and design for production' all fit together and are all equally strong. Readers of Management Today were forcefully told of these essentials from the magazine's earliest days.

Ignoring such good advice is a common failing - remember, 113 of the sampled German firms fall below the highest standards. It remains strange that negative British attitudes so strongly outweighed the positive thrusts of self-preservation and the competitive urge. Great swathes of British engineering managers seemingly preferred collapse to best practice.

Whole industries duly dwindled away - cars and machine tools among them.

Both have staged recoveries only because foreign competitors, having forced once-famous firms like Austin Morris, Triumph and Herbert to the wall, have chosen to develop British plants to serve their global ambitions: Giddings & Lewis of Wisconsin, for instance, has just picked its UK site, at the expense of Germany, to manufacture a new machining centre. Lower UK labour costs were a factor in the choice.

Better by far for British industries, rather than being reduced to non-competitive rumps, to entertain world-class entrants like Giddings, or Nissan, Toyota, Honda, Western Atlas (second to Giddings in the US) and Yamazaki. Yamazaki is the second largest machine-tool maker in Britain and is expanding output by a fifth over the next couple of years. Yet the lower labour costs that underpin foreign investment in the UK have also been cited to explain why these 'invaders', like the Normans in the 11th century, have come to dominate the natives.

Philip Hanson, IBM's manufacturing practice expert, notes that German companies are compelled by their own extravagant labour bills to concentrate on ways of designing out costs. If that's true, Britain's low costs, by the same token, would have discouraged managements from adopting advanced processes that raise standards to best practice levels. This postulates a general theory: that managers tend to optimise their processes only when forced to react by adverse economic pressures - by when it may be years too late. Both the general theory and its specific application to Britain make sense. Rover elevated abysmal standards near to those of its Honda mentors - but only after British Leyland faced terminal crisis.

Rover acquired virtue, but every time management boasts of radical improvements it implicitly confesses to earlier sin. Today, for example, Flymo trains employees for 19 days a year apiece - great. But three years ago, the days were only nine - why? Earlier in the decade, product development took Flymo double today's two years - again, why? And Flymo (Swedish-owned, by the way) is an exceptional competitor seeking to practise what the Germans teach.

Other worse companies probably fail to respond to the pressure of best practice for the simplest and worst of reasons. Their management is underqualified: they underinvest in new products and processes because of the most basic underinvestment of all - in management itself.

The current head-hunter's paradise in the engineering industry is one symptom of culpable failure to recruit and bring forward sufficient numbers of the best available talent. For the same reason, top level shortages are matched by lack of management in depth - by limited ranks of able people whose development has been planned, linked closely to tasks and targets, and accompanied by timely training which likewise has strong linkage to business results.

Like excellence in design, investing in management is a process in which all elements fit together and all are strong. Its ace practitioners also emulate German thoroughness. As IBM's Hanson says of German design practice: 'They're very methodical, designing things over and over again. So are the Japanese.' Britain's manufacturing need is clear and chronic - methodical combination of a low cost base with highest efficiency in design and everything else. Any fool can be a low-wage producer. The problem behind that latest sad survey isn't the management of design, but the design of management.

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