Antony Brown, the winner of IM's annual essay competition, talks to the chief executive of IMCO, Graham Stanford, about the firm's philosophy.
Manufacturing company IMCO is poised to become one of the global giants of the 21st century. It started its rise to world prominence in the late 1890s and early 1900s through its strong corporate branding, global product strategies and progressive management principles. Today IMCO is a multi-billion ecu company with interests throughout the world. It has a strong presence in many countries including Spain, Czechoslovakia and Ukraine. I talked to Graham Stanford who was recently appointed as IMCO's chief executive.
AB: How do you account for IMCO's success?
GS: Looking back, the most critical phase of the company was the 10-year period starting in the late 1980s when the company and its culture underwent many changes. One of the most significant was the change in attitude and strategic thinking of top management. A genuine global vision was articulated: to make the company recognised and respected worldwide as a brand of high quality giving total customer satisfaction. It was envisaged that this could lead to a global competitive advantage.
AB: Why was the vision of a global company so important?
GS: It was obvious even before this time that an over reliance on one geo-economy for either supply or demand was no longer sustainable. After all, our core market at the time - the UK - had slipped into recession twice. More importantly, competition was becoming increasingly global. The management strategy was to build a strong corporate base in Europe as a launch pad for the global operations of IMCO. The management challenge was to establish the right organisational structure and develop the management skills necessary to integrate business activity across many countries and overcome the difficulties posed by the different cultures, languages and business practices. The arrival of the single European market proved to be a catalyst.
AB: But the single market didn't have a big impact, did it?
GS: Well, not in the short term; it was an evolutionary step. Even today there are still individual member states with different languages, cultures and national mentalities. There is never likely to be a complete homogenisation of Europe. The single market only affected the supply-side factors in the EC. It harmonised standards, provided the single regulation of competitive practices and allowed the free movement of labour, capital, goods and services. In essence, it has ensured that demand within the EC can be more easily and efficiently met.
AB: The single market provided similar opportunities for most European companies, so why has IMCO become so successful?
GS: IMCO management took a long-term view of the prospects of Europe after 1992. It was thought that eventually most national economies in the EC would tend to converge in terms of performance. Therefore we adopted a holistic approach to Europe but our strategy was definitely not to enter a pan-European market with the sole objective of achieving volume sales and scale economies. Our strategy was based on the knowledge that European markets would remain fragmented and converge into Eurosegments - similar consumers requiring the same benefits and product positioning regardless of their nationality and cultural environment. The educated, mobile and high-earning professionals across Europe were the first consumers to converge in this manner. Many IMCO products were targeted at them. Thus, spurious product diversity could be eliminated and the principles of the marketing strategy could be implemented with minimal change from country to country. Today, resources are allocated to identify emerging global segments and to attune our product range to meet the needs of the target customers. Our goal is to deliver such products to the market before our competitors.
AB: How important has the IMCO management style been to the success of the company?
GS: It has been vital. We are rightly regarded as having an open and flexible management system. A lot of this is due to the creation of a parallel board in the early 1990s. We believed that to compete successfully as a pan-European corporation we had to move to a more Continental management style based upon the approach of some contemporary German companies. Our secondary board consists of non-executive directors responsible for specific issues such as employee interests, the environment, community programmes and so on. Its purpose is to advise the executive board and provide an interface for effective two-way communication between top management and the workforce.
AB: Finally, how do you account for your rise in the company?
GS: I have always believed strongly in continuous self-improvement and education. When I graduated in the 1980s, English was a more dominant business language than it is today. However, by the end of the 1990s it was apparent that competition for promotion in a European-based organisation centred on Continental candidates who spoke not only their own language, but mine as well. I therefore placed increasing emphasis on the ability to speak more than one language.
At the same time I started to broaden my cultural understanding by working for the company in different countries and roles. A modern, global corporation requires managers with a multi-disciplinary background and multi-cultural outlook. Indeed, education and training are essential tenets of IMCO's philosophy because competitive advantage is derived from a superior skill base. Nowhere is this more telling than in the deregulated market of Europe.