From adapting quickly to meet changing market demands, to acting decisively to protect your employees, managing a successful business today means being comfortable with change, uncertainty and ambiguity.
For many business owners and managers, their word of 2020 is likely to be change.
Ecommerce and direct-to-customer business models have become increasingly prevalent, as has flexible or remote working. In addition, rising numbers of manufacturers are looking to create lucrative new revenue streams by offering value-added services to products or even replacing products with a service.
In response to global shortages, numerous industrial businesses quickly turned their hands to producing hand sanitiser and personal protective equipment (PPE), and several have successfully spun out permanent new companies as a result.
Following decades of outsourcing production to lower-wage economies, predominantly in South and East Asia, many manufacturers are now reassessing their extended supply chains and exploring the benefits of reshoring lines back to the UK. A growing number of businesses have already started that process.
In short, it doesn’t matter where you look, the landscape bears little resemblance to how it did at the beginning of the year. And in all likelihood, 2021 is only going to bring further change.
What’s over the horizon?
Depending on how well the development of a vaccine goes, and how successfully flare-ups are dealt with, COVID-19 may well be part of our lives for years to come. Even if the virus were to disappear overnight, its economic impact will be felt for most of the coming decade.
On January 1 2021, the Brexit transition period will have come to an end. A new President may be residing at 1600 Pennsylvania Avenue. The upcoming UN Climate Change Conference may result in stricter regulations to help curb harmful emissions and more severe penalties for those who fail to meet them.
It appears as though uncertainty and volatility are going to be around for quite a while yet. But that’s always been the case, particularly for manufacturers. COVID-19 may be by far the most serious to date, but the pandemic is only the latest in a long line of disruptions to global supply chains and markets.
The businesses who’ve struggled to navigate these events successfully are those who followed the opening line to Billy Joel’s Just the Way You Are – ‘Don’t go changing’.
Success has been achieved by those who more closely followed the advice of Sheryl Crow in her 1996 hit single, A Change Would Do You Good.
Change and disruption are predominantly viewed in a negative light. Yet, change also breeds innovation and creates opportunities. That’s not to say change is easy, but having the right outlook certainly helps, as Kirkstall Precision Engineering perfectly demonstrates.
The impact of COVID-19 had an immediate and severe impact on the Leeds-based business. The majority of its products were related to elective surgical procedures, operations that were – and continue to be – postponed in the UK and worldwide.
With the order book falling by 50% almost overnight, the management team faced some difficult decisions, chief among them was whether to change and adapt or batten down the hatches and ride out the storm. They chose change.
The business supported the government’s call for assistance by producing components to manufacture ventilators, it diversified its portfolio to win work outside of its key markets, and it helped sustain the R&D efforts of several blue-chip customers.
Other areas of focus included improving its business management systems and ensuring its development was sustainable.
As Iqbal Bahia, Operations Director of Kirkstall Precision, explains: “You can sit there and see your glass as half empty, or you can take a more positive view and embrace the opportunity to focus 100% of your efforts on improvement, rather than the 30% to 40% you’re typically able to give when the operation is at peak volume.”
Crucially, Iqbal notes: “The journey we’re on means that whatever the future may bring, be that opportunity or disruption, we’ll be in a stronger position to address it.”
Bob Dylan was absolutely right; the times they are a-changin’ and show no signs of stopping or even slowing down. The question is, how are you going to respond?