The Effects That Austerity Has On Leadership In Manufacturing Businesses

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The Effects That Austerity Has On Leadership In Manufacturing Businesses

The affects of the economy and leadership on Manufacturing organisations

Having spent a lifetime working in manufacturing industry but latterly working with the service sector as well, it’s been interesting to observe and compare the leadership styles, attitudes and techniques of the two sectors.

This is the first in a series of blogs on how I view the differences and how I think the sectors could learn from each other. The disparities in performance of the sectors and within the sectors shows that there’s a lot to learn. Perhaps globalisation has adversely affected manufacturing to some degree but increasingly the service sector has to cope with these pressures too.

Perhaps to start with the differences are more fundamental. I know from my time in manufacturing that there has always been some tension between the two sectors, with manufacturers seeing themselves as the producers of value adding products and creating real tangible wealth.  Many see the services that service companies provide as costly and a “necessary evil” that in some ways drag them back with unjustifiable costs. Allied to the fact that many SME manufacturers see themselves as “piggy in the middle”, facing huge cost down pressures from their customers allied by strategic intent to move to suppliers from so called low cost economies. It’s not surprising that there’s some antipathy towards service businesses who in some ways look protected from this.

In fact, this constant grind for survival can put a huge amount of pressure on the leaders of a business making them ever  more introspective as they try to cut costs, remove non- value activity, keep staff with core skills from leaving and wait for the upturn.

It’s very easy for leaders to fall into this trap.

So how do we prevent this happening and encourage business leaders to break out of a potential downward spiral and start to show dynamic leadership?

My next blog will explore this and also what lessons can be learned, good and bad, from the service sector. Make sure to follow Ramsey Hall on LinkedIn to discover how your organisation can get the best from its people.

David Seall - Chairmen of the Board of Practice for Ramsey Hall

David Seall is well known to many businesses across London and the South East as an Independent Director and Chartered Engineer specialising in the Manufacturing and Engineering sectors. David worked for many years in the Aerospace and Defence industry and was Chief Executive of the Engineering Employers Federation for London and the South East (EEF South) for over 10 years, working with hundreds of companies.


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