Despite decades of economic decline, all is not lost for UK business.
Innovation combined with leadership vision is needed, argues Andrew Seth
Over the next few weeks, Andrew Seth will be contributing to Marketing
on how to rekindle the competitive spirit of UK business, the kind of
positive approach which is desperately needed if brands are to succeed
Ours was the first industrial revolution. In the nineteenth century we
were the workshop of the world, dwarfing France, Germany, Russia and
dominating world manufacture. Our economic prowess helped put us on the
winning side in two world wars.
The perceptions of success were all around as 1945 new Labour was swept
on to power vowing to build New Jerusalem, with ‘the 1945-style proceeds
Eh? The country, Keynes pointed out, was bankrupt.
We needed an industrial Dunkirk and the boats never set sail. General
Marshall’s American money saved our bacon: but we used the cash not, as
our German and French neighbours, to refit an exhausted industrial base,
but on housing, a uniquely impressive welfare state, and - unforgivably
- to maintain a redundant imperial presence
End of empire
Nobody worried, least of all the thinking middle classes. They had never
liked making money from trade. Land, the law or foreign service were
respectable avenues. Competition was repugnant - didn’t we have an
empire and allies? Hadn’t we just fought virtually alone to protect the
free world - were these people now to start competing with us? It wasn’t
Recognition dawned. A seminal work arrived: Le Defi Americain written
not by a Britisher but a Frenchman. A macabre picture of a Europe
overrun with Chevrolets, Coca Cola and Xerox copiers. Sixties optimists
were confident it would never happen, believing our cultures to be too
iconoclastic and discerning to buckle to the American juggernaut. They
were partly right.
What’s new? Forty years on discussions are better informed. There is
concern about our position (18th) in the table (WEF, September 1995: see
panel opposite), though we contend the criteria are spurious.
We slipped several places this year, ironically as the DTI
competitiveness initiative rumbled into top gear, but the casual visitor
to the British pub or restaurant is pressed to detect the remotest
suggestion of a fundamental national problem.
Thirty years observing, from parts of the world where they seem to have
got more things right, has given me one message - ‘physician heal
thyself’. To keep it simple, the blessed Margaret was right, government
can’t do it.
Businesses must lead long-term cultural change. They will instil a new
attitude to people, their prime weapon a pre-emptive strike on life-long
learning - by, with and for the people.
The way of the Samurai
We don’t lack incentives. Stark role models in the global village stare
us in the face. Le Defi Americain has given way to the Samurai, or
Eastern menace. Here the gap between us and them, in outlook, attitudes,
process and performance is unmistakable. To match these standards, we
need nothing less than revolution.
The revolution must be business-led and committed to long-term consumer
marketing focus to give it the best chance of success.
This is big ‘M’ marketing : not a single business function, but
Drucker’s definition: ‘the whole business of business’, or what Tom
Peters called marketising.
Why marketing? First, it’s relevant - we want consumers to lead change.
Second, it accords with the free-market ethic. Finally, it’s an area
where Britain and the West have experience of being first and doing
And, if marketing is to drive change, it is brands that will lead the
charge - because the brand is a uniquely broad, flexible and strategic
weapon. It has obvious physical presence but it can be conceptual -
about relationships, feelings, experiences, places.
Consumers want the vitality and challenge of brands in their lives. The
brand provides the vehicle to drive genuine business initiatives. It
requires powerful innovation to differentiate it from competition.
Once again, it’s an area where British skills, in this case
communication skills, can lead.
Once the business elevates the brand to long-term importance, it’s
axiomatic the whole business then owns the brand, and its aspirations -
Drucker’s marketing pre-eminence - becomes a reality. Brand
differentiation, the search for significant advantage, will be the total
business driver, as it always has been in the best run enterprises.
Our Lever was like this 15 years ago. Honda was like it when it
developed the Honda City. The brand, owned by real practitioners,
becomes the demonstration of corporate intent.
The revolution won’t just happen because it should. It places enormous
demands on us. Marketing talks about adding value and doesn’t do it.
Expertise is presumed, but companies allow leading edge marketing
philosophies to wither as they succumb to the bleak wind of cost
Information as a strategic ally
We will need, with strategic intent, to use information as marketing’s
constant ally, and treat new communication opportunities (direct
marketing, the brand/customer category alliance, interactivity) as core
competitive advantage, not dilettante alternatives to mainstream
Innovation needs a root and branch overhaul, with proper priority and
recognition attached. R&D must play the guiding role. It’s unthinkable
to fight a world-class innovation contest without it. And, though
business must lead, we must concede that we need a thought-out strategic
national consensus on priorities.
This time, unlike previous occasions, it will be important for UK PLC to
be counter cyclical to competition, to back present and future winners -
for example sports motor engineering, theatre and cinema, key leisure
industries - to choose our own strategy, rather than match a world
outlook and practice.
Creating consensus that builds advantage will test our appraisal and
selection process to its roots.
Ultimately, there is a single, abiding message. It is that people and
their willingness to engage in committed personal and team-learning
initiatives make the difference.
The business-school revolution, which has swept the country since the
80s, helps. Getting the right vision, responsibilities, and linkages in
companies needs real leadership.
But making the key cultural change - the move to knowledge-based teams,
where tacit as well as explicit learning is valued for what it is,
namely the root of all advantage - is today’s job for each and every one
The world competitiveness scoreboard
1 USA 25 Iceland
2 Singapore 26 Thailand
3 Hong Kong 27 Egypt
4 Japan 28 Spain
5 Switzerland 29 Argentina
6 Germany 30 Italy
7 Netherlands 31 Portugal
8 New Zealand 32 Peru
9 Denmark 33 Indonesia
10 Norway 34 China
11 Taiwan 35 Philippines
12 Canada 36 Colombia
13 Austria 37 Brazil
14 Australia 38 Czech Republic
15 Sweden 39 India
16 Finland 40 Turkey
17 France 41 Jordan
18 United Kingdom 42 South Africa
19 Belgium/Lux. 43 Greece
20 Chile 44 Mexico
21 Malaysia 45 Poland
22 Ireland 46 Hungary
23 Israel 47 Venezuela
24 Korea 48 Russia