UK: Management training - the great divide. (2 of 2)

UK: Management training - the great divide. (2 of 2) - The root problem, in the opinion of Alastair Nicholson, Professor of Operations Management at the LBS, is that top management takes a profitability model of the business - not an operational one. In

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Last Updated: 31 Aug 2010

The root problem, in the opinion of Alastair Nicholson, Professor of Operations Management at the LBS, is that top management takes a profitability model of the business - not an operational one. In other words, it concentrates on the hoped-for result rather than the process by which that result is to be achieved. Some of Professor Nicholson's students - 20 to 30% of aspiring MBAs elect to take operations management courses - spend a week in line management "ankle deep in a steelworks". Then the professor asks them: "Are there too many shell plates on the floor?"

They do not have a clue how to work it out, yet the technical issues involved in recognising efficient manufacture and detecting bottlenecks are something that any manager can and should understand, Professor Nicholson claims. The problem is rather one of interest and motivation. "Thousands of operations managers go on financial appreciation courses, but virtually no financial people go on OM appreciation courses." The way to build bridges, he argues, is to push commercial responsibility down to middle management levels. He also advocates a further step: to tackle, head on, the largest and most influential group in British management - the accountants.

There are more than 120,000 qualified accountants in the UK, twice as many as in the whole of the rest of the European Community, and dwarfing the number of MBAs. Although many are in professional practice, finance or consultancy, they may nevertheless have a wide, and in some views unnecessarily constricting, influence on manufacturing.

As with the engineers, the training of accountants has been seen as too narrow. Students aspiring to membership of the English and Scottish Institutes of Chartered Accountants have to follow the prescribed syllabus, and until recently could do this only while employed by one of the professional practices. Now "there's a strong feeling that the ICA is moving towards manufacturing", says one insider: topics like organisation and people management, marketing and operations management have been added to the examination syllabus - although only at foundation level. But training is no longer the exclusive preserve of the professional firms.

The forces of reaction in the accountancy profession will ensure that progress is slow. Nonetheless, any moves to secure a fundamental improvement in Britain's manufacturing management have to include the accountants, even if they are not cut out for a pioneering role.

For manufacturers with international aspirations and a strong constitution it is clear that the global marketplace acts as a stimulus as well as a challenge. Vickers' chairman and chief executive, Sir David Plastow, says: "What I preach is international awareness. The demise of the truck industry was because they didn't maintain that awareness. I've said to my operating managers 'You've got to be effective in Japan. If you can perform there you're ahead of the game elsewhere.'"

TI Group similarly expects overseas experience to season its managers. Chairman and chief executive Chris Lewinton thinks that "the biggest challenge facing TI today is changing it from an engineering to a marketing culture". With its Crane and Bundy global businesses, TI is using foreign assignments for its managers, and multinational project teams, to promulgate "best practice" throughout the group.

Developments like these have given a new attraction to manufacturing. TI director Mark Radcliffe points out that "City opportunities are not what they were. Industry is now more exciting, and the reward profile is gradually righting itself." The business schools, too, report a recent quickening of interest. The director of the LBS career management centre, Michel Azaria, finds that while financial institutions and consultancies paid around a 25% premium to MBA recruits last year, and took 54% of the graduates, the proportion of manufacturing and service companies recruiting MBAs has been rising over a five-year period, from 20% to the present 35%.

"The more active people get frustrated with consultancy," Azaria points out. "They want to get into line jobs, aiming for general management positions." Whether current graduates still have sufficient understanding of manufacturing may be doubted. But the will is evidently there and employers have a better understanding of what MBAs offer. In another 20 years' time perhaps we shall see the results.

(Tom Lester is a specialist writer on business.)

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