A degreeof successSpecial MBA section

‘Exportise’ andhow to get it

My war (on waste)

Pages six and sevenDefence procurement minister Philip Dunne

Forums: pages two and ten

Business Insight

Tuesday August 6 2013

DEFENCE REPORT

Tuesday August 6 2013 | the times

Business Insight2

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Welcome

Inside Cover profile‘Dunne deals’ in defence procurement Pages 6 and 7

The Times ForumsExportability theme gets them goingPages 2 and 10A degree of successFocus on Northern MBA offeringsPages 13-24

Tax incentives would reduce the risk of getting on out there, Northern businesses are glad to hear. Mike Cowley reports

While there are rays of hope piercing the storm clouds that have for so long hov-ered menacingly over the UK economy, there is still

a general sense of foreboding about what lies ahead.

Small and medium-sized enterprises (SMEs) in particular remain nervous about their prospects of being able to ride out the adverse trading conditions that are likely to prevail for some time to come.

Exporting is one route to resilience in a stagnant market – with statistics showing that 11 per cent of the companies making that choice are more likely to survive than those that don’t – but it is far from the automatic option,

For many UK companies – particularly the SMEs that remain preoccupied with keeping their heads above water – export-ing is still seen as a step too far.

To explore why this is the case, The Times Forum on Exporting was held at the offices of the Liverpool Chamber of Commerce.

The venue was chosen in part because Liverpool’s exporting activity made it the world’s richest port during the 19th century, and in part because the city remains a ba-rometer of what is happening to compa-nies throughout the North of England.

If Liverpool is to be taken as the yard-stick, the results of a survey among its chamber members show that businesses are still reluctant to dip their toes in the export market. Lack of market knowledge, limited expertise in export procedures, shortage of skilled staff – and, of course, cost – were all cited as reasons.

Add to this the concern of taking their eye off the ball of their day-to-day busi-ness and the survey showed that firms were not exactly falling over themselves to go down the export route, with over 50 per cent saying they didn’t feel they had a product or service suitable for export.

“They see exporting in terms of a huge cash flow risk, then there is the lack of skills and understanding, problems of access to finance, difficulty in finding agents and distributors abroad – bureau-cracy,” said Jenny Stewart, chief execu-tive of the Liverpool Chamber, the UK’s oldest. “Our members know the barriers and we are trying to address them by set-ting up an Export Hub.”

With three exporters, two key money men and four leading experts in the field of supporting exporters on the Forum panel, both the benefits and the potential pitfalls of exporting were given an exten-sive airing under the chairmanship of Al-asdair Nimmo of The Times.

Costs, as always, were the key issue – costs in terms of having to research new markets, costs of attending trade shows, costs of visiting countries without any guarantees of business at the end of it. This was a recurring theme during the Forum.

For despite the extensive help available from leading bodies such as UKTI (UK Trade & Investment) and the Chambers across the North, the result inevitably was that SMEs in particular have to put their hands in their ever-shallower pock-ets at some stage.

Lesley Batchelor, director general of the Institute of Export and International Trade, suggested an immediate solution to the problem in that her organisation is currently lobbying the Government to use the research and development (R&D) fund – which is tax-free – to enable firms to undertake research into export mar-kets. “We want to give them some tax breaks so it is worth doing,” she said.

She also pointed out that the UK lags behind France in the financial help that is available for new exporters.

“In France, research is done for them and they don’t pay for it until after the sale – so in France they have a better support system.”

But why should companies bother to consider exporting at this time of austerity – and what are the benefits? That was the first question posed by Alasdair Nimmo to open the debate.

First into the fray was Chris Eccles of ChargePoint Technology, as his company has been built solely on exporting.

“I’ve probably never known anything but exporting,” he said, “Without the ability to export to new and emerging markets, we wouldn’t have a business.”

Yet he was quick to point out that this was an approach best suited to companies with niche products for which there was a proven demand in global markets.

The case for Colin Turner’s SME Dan-Tech to export struck a chord with a much wider range of businesses.

DanTech manufactures high-value capi-tal equipment for the food industry, a mar-ket that has become stagnant in the UK with fewer manufacturers due to takeovers.

So the company turned to UKTI for as-sistance, with the result that 40 per cent of its turnover is today export-related. And now it is looking at the emerging markets – particularly South Africa and the Middle East – as stepping stones to increase sales by a further 25 per cent annually “once the cost barriers are overcome”.

But what are the main challenges to business exporting?

Paul Grover, associate director of Arup, a major global exporter of its services, was able to answer this authoritatively based on the vast experience of his company operat-ing in 30 countries through 90 offices.

“You need patience,” he said. “You only have a certain amount of time in business you can spend, and doing business in new areas takes time. You have to make sure your business in UK remains strong and profitable.

“Every time you are looking overseas, you are taking your attention away. It can’t be rushed.”

on global tradingForum

Patience isnot the onlyvirtue goodfor expertisein exporting

Case for the defenceWhat do we do well in this country, and particularly in its Northern parts? Whether approving or not – and it is a subject that sends opposing parties scuttling into facing trenches – few would deny that the invention, design and manufacture of sophisticated weaponry represent a conspicuous talent that stretches back across our conflict-strewn centuries.

But what of its marketing? Of course, the production of such punch-packing hardware (see pages 8 and 9) has been mainly for the benefit of our own armed forces – and that in itself has been contentious enough, with searching questions asked in recent times about dubious procure-ment decisions and wasted budgets.

We ask our own questions regarding these in our talk with Philip Dunne MP, minister for defence, equipment, support and technology, on pages 6 and 7. But in spot-lighting the defence industry, we see that its expertise on our own behalf is so advanced that it almost sells itself to much of the world.

Not so with everything great produced in the North. Through trade missions there and invitations here, it seems world markets must have the virtues of less-powerful potential exportables boldly and actively set before them.

How do you do that and is it always worth the effort? These questions are discussed in our Forum of leading business people reported on pages 2 and 3.

So is exporting something we do well? There are undoubtedly many Northern lights with winning world ways. But while our panel members agree that exporting can be a great stimulator of profit margins, they also suggest that a stretching exercise is needed by some to do a little better on foreign fronts.

The comfort is that they probably will. For, as we were saying, this is an area renowned for its sophisticated fighters.

Business Insightthe times | Tuesday August 6 2013 3

We aregoing tohave tobe a littlemore creative

Exporting is good for the local and national economy, but why is it good for the firm itself? Clive Drinkwater,

North West regional director for UK Trade and Investment (UKTI), the Government department that helps UK-based companies succeed in the global economy, has developed an acronym to explain: Exporting firms go FAR…

Flexibility: Firms that start exporting become more adept

at adapting their products and services to the various markets they serve.

Agility: As firms grow their responsiveness to change, they are able to move more quickly to chase down opportunities in diverse markets.

Resilience: Balancing capacity with more markets and spreading the risk over more customers leads to a stronger performance. Exporting firms are 12 per cent

more likely to survive through difficult times.

All of these factors increase profits. Finding new exporters is, consequently, good for the economy and for the firm itself. I have, therefore, challenged compa-nies and business support organisa-tions to help 1,000 companies in the North West to start exporting in 2013. It is a challenging target, but we are already well on the way to achieving it.

World business is set to come to Liverpool next year – with the Interna-tional Festival of Business,

a visitor-attracting showcase for UK business.

Philip Southward, its senior project manager, sees it as a chance for compa-nies to expand exporting or to consider getting into it – and, as a delegate, he told the Forum that related costs could be eased by bringing in “targets” to “the doorstep”.

He called for “serious research grants” to help businesses identify “just who they would most like to see there”, and promised then to “do our best to get them”.

The Festival was working to deliver “a cogent and attractive message” to attract overseas companies. So organisers were working closely with UKTI to arrange memoranda of understanding with overseas federa-tions – and there were already around 15 in place.

The Forum panel members agreed with him that the key to exporting suc-cess was in-depth local knowledge.

“Local knowledge is what it is all about,” Mr Grover said. “From this will flow everything else – tax, funding, eve-rything needed to make it happen.”

With the issue of funding now on the agenda, Nick Kindon, managing director of Bibby Financial Services, the leading source of funding for exporters, was in the frame.

“Finding someone with the confidence to provide you with the funding to go into the territory is what it is all about,” he said. “You need a financier who under-stands exports as opposed to understand-ing from a UK domestic perspective – as they are fundamentally different.

“You sometimes see financial institu-tions in the UK trying to butcher what they have into something they consider will do for funding export sales. As op-posed to tailoring something that is fit for purpose.”

But who is most likely to win financial backing for exporting?

“It all depends on what service or goods you provide and there’s really no difference to what you find in the UK,”

said Mr Kindon, whose company funds businesses globally, providing exposure to debtors in over 100 different countries.

“You can raise finance, cover the cost of the transaction taking place. We, and people like us, can also assist with trade facilities in the run-up to transaction. There is also funding for purchase prior to sale but people do need to look for it.”

Tim Grogan, director of equity capital markets for Deloitte, also took up the is-sue of funding – but this time from the perspective of his customer base, the larger corporate entities.

“Getting the right advice is really important,” he said. “We have offices throughout the world to provide the right contacts for the local market when peo-ple go there.”

He also took the opportunity to cite a new programme launched by Deloitte which looks at specific markets such as Brazil, India and China – with events hosted in the North West for companies looking to expand into these territories.

As someone at the export coalface, Colin Turner of DanTech laid out the challenges as he sees them.

“First researching the market is very time-consuming and costly,” he told the

Forum.” Small and new exporters have to invest vast resources breaking into new markets as their brand may be well known at home but unknown in the tar-get markets.

“We spend about 5 per cent of our turnover – or 20 per cent of our GP – on investing in trade shows and demonstra-tion machinery, which we’ve done to ex-cess in last 12 months.

“And we have to take all the risks. Appointing local distributors, sales and demonstration visits after trade shows, high travel costs – the list is endless.”

Nor was the risk-return issue lost on Chris Eccles, even though his firm survives virtually entirely through exporting.

“It needs confidence to make decision to do it,” he said. “We make mistakes. You can spend £20,000 or £30,000 on a trade show and it can be an absolute dis-aster. For people who aren’t exporting, if they can’t offset the potential risk, that’s the problem.”

With the question of risk came the issue as to whether the Government should underwrite firms entering the export market in the form of possible short-term tax allowances.

Nick Kindon of Bibby backed this: “If someone is successful and has got through the R&D, the marketing, the lo-cal research, paying the higher costs – if someone is still able to export despite all that – bearing in mind the difference it makes to this country, there should be something back.”

He went on to call for “fewer sound bites” and more action from the Coali-tion. “They want to see 100,000 more businesses exporting over next five years – let’s have some substance behind that.”

Tim Grogan of Deloitte agreed: “There needs to be some kind of sup-port with the start-up process,” he said. “Providing you’ve got a very good busi-ness case to export, then there is funding available – private equity, capital markets – but it only becomes available when the concept is proven. So we get back to the problem – how do we fund start-up costs, the research, the trade shows?”

One way is to make better use of the internet, with young entrepreneurs al-ready showing the way, according to Arup’s Paul Grover: “They see them-selves creating companies that are truly global and are using technology to en-able them to do that. It enables you to leapfrog in a way that hasn’t been pos-sible before.”

But young entrepreneurs face an un-precedented situation, noted Nick Kin-don. With more people likely to be rent-ing, this means they will no longer have access to the traditional route of raising business finance which involved putting up their homes as equity. “We are going to have to start to be a little more crea-tive,” he said.

While members of the panel agreed there was a plethora of help for compa-nies wishing to enter the export market – with UKTI being the trailblazer – del-egates accepted there was a need for a more joined-up approach.

“There is a huge amount of help,” said Lesley Batchelor. “The issue is get-ting all this joined up … then educating companies. The Government has no in-ternational strategy for exporting and we need one.

“We used to be a great trading nation, but I say used to be because we have lost it, and over next 20 years we have got to get it back.”

on global trading

�� Jenny Stewart, CEO, Liverpool Chamber of Commerce�� Lesley Batchelor, director general, Institute of Export�� Colin Turner, managing director, DanTech��Nick Kindon, managing director, Bibby Financial Services�� Tim Grogan, partner, Deloittes�� Philip Southward, International Festival of Business 2014�� Chris Eccles, ChargePoint Technology�� Paul Grover, associate director, Arup

AROUND the table, clockwise from lower right: Lesley Batchelor, Nick Kindon, Tim Grogan, Chris Eccles, Guy Griffiths (hosts’ team), Colin Turner, Mike Cowley (reporter), Philip Southward, Alasdair Nimmo (chair), Jenny Stewart, Paul Grover

But why is exporting good for you?Fest boost for exporters

THE FORUM PANEL

Tuesday August 6 2013 | the times

Business Insight4

Exporting

Boots on the ground – the only way it worksItchy feet really help too, says Mr Export – boss of a far-flung wine trade enterpriseBy Mike Cowley

David Thompson knows that Ho Chi Minh City is, outside of Paris, the best place in the world for baguettes – thanks to the presence of the French

there at one time. It is the sort of local knowledge that comes from his boots-on-the-ground approach to international trading, and which has enabled his fam-ily company – D G Thompson Interna-tional – to compete with the “big boys”.

When it comes to South East Asia in particular – Mr Thompson’s main stomp-ing ground these days, selling spirits and wine – there are few who can match his local knowledge, based on 30 years of trading abroad. Nor are there many small UK companies which can claim to have their own office in Vietnam’s capital, or to share premises with part-ner companies in neighbouring Laos and Cambodia.

It is a combination of Irish charm – David Thompson hails originally from Tipperary – plus flying some 60,000 miles in a busy year, which has trans-formed this former tax officer into Mr Export, operating out of his home base in Cheshire.

Having left technical college in Wal-lasey, Mr Thompson worked first for the Ministry of Pensions, then the Inland Revenue, before the travel bug hit him. This eventually led to work with a Ger-man trading company in Hong Kong in the 1970s, which saw him start to build up a network of personal contacts in far-flung countries and on which he eventu-ally established his own export business. Along the way, he picked up French and German and even a smattering of Man-darin – the latter allowing him to brief his Chinese taxi driver to turn right into his road during the journey home most evenings.

With an extensive network of overseas personal contacts in place, Mr Thomp-son set up his own trading company in 1988. Initially it was the Middle East which proved attractive – with chilled foods being his main products – but slowly, the business evolved into the sale of wine and spirits and the Far East be-came the most receptive market.

Mr Thompson has been able to draw on all his past experiences – for instance he once worked for British Leather, look-ing after export documentation, and this gave him his first taste of overseas ex-hibitions – to ensure that his operation runs smoothly and efficiently. This has been a prerequisite for his success in the Far East, where it is very much a case of

being seen to keep your word in terms of things such as delivery dates.

“With Asian businesspeople there is an element of trust required,” he says.

“They need to know you are reliable and you keep your promises – and deliver the goods. It isn’t a case of going there once and doing the deal. You have to go back

regularly to get the business, and eventu-ally over the years they change from cus-tomers to friends.”

The same applies to many of his suppli-ers – often small family companies them-selves – with whom D G Thompson Inter-national has built up close and personal bonds over the years. When Mr Thomp-son first set up his company, close to half the business was in the Middle East, sell-ing chilled and frozen foods to take the advantage of the tail-end of the oil boom. The competition was intense – so, to get it to work, prices had to be very keen.

Then whisky came into the equation, with demand particularly high in South East Asia in countries where there had been a US presence – and D G Thomp-son International evolved to meet the demand. “I would like to say I was fore-sighted enough to see what was going to happen in these emerging markets,” Da-vid Thompson says, “but, as always, a lot of it was down to luck.”

When wine began to appeal increasing-ly to the palates of people in the Far East, D G Thompson International was quick to spot the opportunity and to take this on board. Today, the company not only offers some of the leading brands, but also offers its own-label whisky – Bracklyn – made for them in Scotland, as well as own-label wines from Chile, South Africa, France and Australia.

The majority of the company’s own brands of wines – some 20 per cent of the current turnover – are marketed under the Plumley Moor label. David Thomp-son admits that the name was due to a lack of inspiration, Plumley Moor being the name of the road on which his fam-ily lives. Other own-label wines are Anna Davide and Cuvee Davanne – both of them a combination of his and his wife Anne’s names.

“When you are in competition with some of the global brands like Diageo,” he says, “it can be a bit of a struggle – but having your whisky brand sets you apart.”

D G Thompson International has managed to carve out its own specialist niche in the market in South East Asia – the duty free trade through government and private shops, supplying diplomatic, downtown and border duty free channels in their respective countries.

While some of these duty free outlets might import wine and spirits directly from their home countries, they call on the duty free shops in their base countries to meet last-minute demand – which, in turn, provides substantial trade for David Thompson.

The successful exporter has one piece of advice for people who want to follow in his footsteps. “It’s terribly important that you go to your customers’ country and are seen to be there,” he says. “Custom-ers won’t often say it, but they are want-ing to see you two or three times in the beginning to show you have stamina and are serious – not just to take an order and never see you again.”

David Thompson has just returned from a UK Trade & Investment (UKTI) mission to Burma – one of four

similar visits made this year to a country he is currently targeting for expansion. UKTI is a key platform used by the Cheshire-based international trader to build his business, and he is quick to acknowledge the importance to his success of the UK Govern-ment organisation.

Having undertaken “20 or 30 tours” with UKTI over the years, Mr Thompson believes it delivers both at home and abroad – ensur-ing that UK embassies are always on hand to help missions, and

even wheeling in ambassadors to speak at seminars in the UK.

“There is no doubt the UKTI has helped our business,” he says. “Whether it is providing prepara-tion booklets before you go on a mission or doing the research on who you should be seeing – and then arranging the meeting – they couldn’t be more helpful.”

The D G Thompson Inter-national director singled out in particular Clive Drinkwater, who heads up UKTI in the North West: “A really good guy, he’s been around a lot and can really advise you on what and what not to do.”

Mr Thompson is also a fan of the UKTI mission. “They are

excellent,” he says. “Usually, at the end of the day, everyone comes back and you have a drink in the bar and swap information – ‘Oh you should go and see this guy’ conversa-tions. This is real networking on the go.

“UKTI have already gone out into the market and matched your products with seven or eight different companies who would be interested. So when you get there, you are not wasting your time. When local companies in Beijing and places get a call from the British Embassy, it means a lot. When they ask if they will see you, they generally will.”

Next on David’s horizon? It’sBurma, with the help of UKTI

Cheers: Irishman David Thompson says modestly: ‘A lot of it was down to luck’

Business Insightthe times | Tuesday August 6 2013 5

Exporting Finance

Bibby Financial Services (BFS) is the UK’s largest independent invoice finance provider, currently providing upwards of £369 million to 4,000 businesses. It sup-ports businesses in the UK and overseas,

using expert knowledge from almost 30 years of experience.

A recent survey of SMEs revealed that a quarter of exporters don’t feel able to maximise their export business, citing lack of funding and resources as the main reasons. BFS’s Export Finance provides a sustainable funding solution, in addition to expertise in international trade to help businesses succeed in overseas markets.

Its Export Finance facility is designed not only to provide a flexible finance solution for these businesses, but also to give support in relation to new business development in foreign markets, ship-ping and logistics, cultural expertise, linguistic and multi-currency services.

Businesses are provided with funding against unpaid customer invoices, unlocking working capital and helping to bridge the gap between invoice and payment times. Also, the full invoice collections process is managed using multi-lingual credit controllers and overseas multi-currency accounts, enabling business to focus on fulfilling existing orders and generating new sales.

When Stuart Dunbar and Richard Harvey met while they were working for the Far East division of a trading company based in

Chester, they soon realised they had the necessary ingredients for a successful busi-ness of their own.

Mr Dunbar’s background was in con-tainer shipping starting out with P&O, while Mr Harvey had come from the food sector, having previously worked for Ross.

They mixed their talents together, added a pinch of experience in the Far East which meant they had spotted a gap in the market – and Oak Exports was born.

Now, 26 years down the road, the two Cheshire pals remain the driving force be-hind Oak Exports, a successful exporter of non-perishable British food and drink across 40 overseas markets including Asia, Austral-ia and the Americas.

Exporting well-known brands such as Cadbury, Walkers, Fox’s and John West, the North West-based business has built an in-ternational distribution network with offices in Thailand, Singapore and the US.

The secret of their success lay in the fact that they went out of their way to know their target markets better than the brand name companies themselves, so it became a “no-brainer” as to who should do the ex-porting.

However, exporting did not come without its own challenges. Mr Dunbar soon discov-ered there was a gap to be bridged between the 30-day payment terms he had with his British suppliers, and the 60-day payment term his overseas customers worked to.

“Differing payment terms across the world are to be expected, but we needed to address the problem quickly to maintain the excellent relationships we had built with our suppliers,” he says.

It was at this point Oak Exports turned to independent invoice financier Bibby Fi-nancial Services (BFS), and the business has now been using its Export Finance service for the past decade. During this time, turno-ver has grown by 60 per cent from £5 mil-lion to £8m.

Mr Dunbar says: “We were previously working with another finance provider but were unsatisfied with the offering available to us. When we were introduced to Bibby Financial Services in 2003, it was the start of a great partnership and we’ve never looked back.”

Using BFS’s invoice finance package was the perfect solution for Oak Exports, allowing the business to fulfill customer orders on time and as smoothly as possi-ble. Utilising credit control facilities from BFS has also allowed the business to focus on generating new business, something Stuart Dunbar sees as big help.

“The service means our cash flow is to-tally freed up by releasing a percentage of our invoice value providing a smooth, con-sistent source of funding that grows in line with our sales,” he says, “moreover, BFS has allowed us to grow the business with-out the usual headache of handling our own credit control and chasing customer payments, which is a huge advantage.

“Bibby Financial Services has a greater level of understanding of our business than any other finance provider out there. It is so refreshing to have a real person at the end of a phone and they are always on hand to talk through any queries.”

Just as BFS knows Oak Exports better than any other finance provider in the market, so Oak Exports continues to keep ahead of the competition by having an un-rivalled understanding of the demand for its products in South East Asia.

Business is going well for Oak Exports and this success looks set to continue with increasing orders and a busy year ahead.

Commenting on the Government’s tar-get to double UK exports to £1 trillion by 2020, Stuart Dunbar feels that there are good opportunities overseas but advises businesses considering international trade to research markets comprehensively and plan ahead. “Exporting offers viable growth opportunities for UK businesses,” he says, “but there are a number of chal-lenges which need to be managed, such as local trading cycles and seasonality, lan-guage barriers, currency fluctuations and the availability of working capital.

“We have built a global reputation for service excellence, which has and contin-ues to benefit us greatly. The funding sup-port we receive from Bibby Financial Ser-vices has been integral to our successful growth and we look forward to developing this partnership even further over the next decade.”

BFS’s Export Finance facility releases a continuous flow of cash for businesses to develop overseas activities. In addi-tion, BFS provides an overseas collection service for chasing and obtaining invoice

payment, with teams of multi-lingual staff responsible for preparing and issuing statements and telephoning overseas cus-tomers, conversing in their own language.

The service can also help businesses avoid issues with fluctuating exchange rates by offering multi-currency facilities, foreign exchange and forward currency dealings for protection against exchange losses.

“The wholesale sector in the UK is starting to pick up, which is good news,” Stuart Dunbar says, “but there are also op-portunities in abundance overseas, which is where we have found our success.”

Mr Dunbar also has a word of advice for companies looking to export: “Always look for a local partner. No one knows better what they want than the people on the ground – then all you need to do is fill that demand.”

Financial expertise on a global scale

The monetary roots of great Oak growth

Stuart Dunbar: special effort to embrace target markets

This North West exporter is celebrating ten years of overseas success thanks to a unique invoice finance package It means our

cash flow is totally freed up

Tuesday August 6 2013 | the times

Business Insight6

Profile: The procurement minister

Exportability is the watchword in developing a global defence industry, procurement minister Philip Dunne tells Chris Nelson

The British Government has a problem – it very much wants a vibrant and growing national defence industry, but supplying its own armed forces does not

generate enough business alone to realise that ambition.

The Government therefore aims to make it easier for British industry to get business from the Ministry of Defence (MoD), encourage the research and de-velopment and technical prowess which fuels the UK’s dominant position as number two among the world’s defence exporters, and support home companies as they fight for business in ever more competitive world markets.

Minister for Defence Equipment, Sup-port and Technology, Philip Dunne, is under no illusions about the tough task facing him as the man on the sharp end of procurement for Britain’s armed forces. The MoD got off pretty lightly in the lat-est round of spending reviews, and since taking office Mr Dunne has presided over a defence procurement system which is trying hard to get its act together.

There is no getting away from a legacy of huge overspends on major projects which continue to make the headlines whenever the National Audit Office pro-duces its annual report. But the minister is adamant that such costly miscalcula-tions and mistakes are now a thing of the past.

He is justifiably proud of the fact that last year the MoD was seen to balance its budget to provide some stability to the equipment programme, and in Janu-ary his department published a ten-year forward-looking equipment programme – the Defence Equipment Plan – which for the first time gave a realistic picture of the way ahead for the services and sec-

tors that develop and deliver their high-tech hardware.

Not that it is cast in stone: the plan will be subject to a rolling annual review which will tweak it annually according to operational requirements and the in-evitable consequences of living in a vola-tile and unpredictable world. However, at least there is a plan and it has been broadly welcomed.

“What that plan does,” Mr Dunne says, “is lay out – by year, by domain and by new equipment and support – what we are intending to spend. It gives a lot of certainty to industry about spending plans and where our priorities lie.”

He argues that his team has created a budget with greater granularity than ever before, both in terms of new kit and sup-port for existing equipment. He also be-lieves that the tough decisions and hard work of the current Government has led to much more robust MoD budget plan-ning. That, he says, has placed the UK in a better position than either the US or France, which are also facing constraints on spending.

The US and French governments are often held up by UK businessmen as be-ing much more sympathetic and support-

ive of their national defence companies. But Philip Dunne argues strongly that the UK Government is making it easier for home companies to deal with the

MoD through the ministry’s more open approach to procurement, its support for the defence sector supply chains, and its efforts to engage with businesses and cut down on the bureaucracy associated with MoD contracting.

“It is a misconception that the Govern-ment does not support its defence sector.,” Mr Dunne says. “Around 45 per cent of our defence procurement is undertaken through single-source non-competitive procurement which ensures that British companies get the largest share of the UK budget.

“At the same time, we have had to look at how the contracts were constructed to ensure we get good value for money with UK companies, and to ensure that contracts are delivered on time and to budget.“

The minister says that one effect of the financial constraints has been further pressure on the MoD to ensure that it gets the biggest “bang for its buck”. That has encouraged the MoD to look at exist-ing contracts and try to drive efficiencies within the equipment programme, which helps delivery on time and to budget.

“One of the things we discovered,” Mr Dunne says, “was that a lot of the con-

tracts signed up in recent years were not especially well drafted to focus on value for money, the classic example being the contract for the aircraft carriers where

to defend the realm, its budgets and its home-grown companies

we established that it would be cheaper to build two rather than one – which is a peculiar construct.”

The minister stresses the importance of working closely with companies to try and help them develop their exportabil-ity, which has been a particular priority for him since exports and procurement came back together as two functions within his ministerial responsibility.

“So one of the things I have done in particular,” he says, “is to work very closely with companies in helping them to drive their exports – introduce export-ability into our procurement. We are now changing systems within the approval processes so that an assessment of ex-portability is an integral part of our ap-proval process.

“Secondly, it is important to get out on the road to help identify and support ex-port campaigns. The Prime Minister has been absolutely at the lead of this, so has the Defence Secretary, and so have I.

“The cost of platform development and significant equipment programmes is only going up as technological innova-tion drives improved performance, but it obviously comes at a cost. That’s leading to two things: we need to work with oth-er nations to fund development of new technology, and it is leading to companies looking to export markets to extend their production runs to drive economies of scale into their pricing structures.”

The announcement of a huge rise in 2012 defence and security export figures - heavily driven by the sale of Typhoon and Hawk to Oman - was, Mr Dunne says, a huge vote of confidence in the equipment being produced here.

It is important to get out on the road to back export drives, says Mr Dunne

Philip Dunne MP laid the keel for the sixth Astute class submarine Agamemnon at BAE Systems’ site in Barrow-in-Furness. BAE Systems is the prime contractor for the Astute submarine programme, designing and building seven nuclear-powered attack submarines for the Royal Navy, and is also the industry lead for the design of a replacement for the Vanguard class submarines which carry the UK’s nuclear deterrent

We’ve had to look at contracts to ensure good valuefor money

Man with a plan…

BAE SYSTEMS/MikE VAllAncE

DEFENCE REPORT

Business Insightthe times | Tuesday August 6 2013 7

Philip Dunne’s busy schedule this year has thus far included visits to defence ex-hibitions in Abu Dhabi, India and Malay-sia. He was at the Paris Air Show when the contract was signed for the new Me-teor missile for the Typhoon, which will boost jobs at the MBDA facility in Lostock near Bolton, and he talks with enthusiasm about the 400 people employed there on the cutting-edge “beyond visual range” air-to-air missile.

Supporting companies both big and small at those defence shows falls to the UK Trade & Investment Defence & Se-curity Organisation (UKTI DSO), which moved across to the Department for Busi-ness, Innovation and Skills about five years ago while remaining a dedicated unit focused on defence and security. The minister cites the record numbers of com-panies now attending overseas defence shows as a demonstration of the fantastic job being done by UKTI DSO.

Those companies sit within a very pow-erful UK pavilion, giving exposure to small and medium-sized enterprises (SMEs) as well as larger, recognised more names. So British companies are aware of the op-portunities offered by emerging markets (which are the growth areas in defence sales), and those countries are aware that British companies are in the game.

“The most powerful demonstration of capability,” Mr Dunne says, “is where the British armed forces are using kit manu-factured in the UK. That is the best ad-vert for good, serviceable kit, because our armed forces are held in such high regard around the world. It’s one of the reasons why Britain is still the second-largest ex-porter of defence equipment, demonstrat-

ed again in the latest figures published last month.

“British defence exports rose by 62 per cent in 2012 – the largest increase in five years - and now account for £8.8 billion with a further £2.7bn of exports in the security sector, with the UK capturing 20 per cent of the global defence export mar-ket. Maintaining this level and growing se-curity and defence exports are key targets for UKTI DSO.

“Encouraging more procurement from SMEs is a priority for this Government, but it poses some challenges to the MoD because most of the major procurement is through prime contractors. By definition, the MoD can’t place a contract with an SME to build a helicopter because it would then cease to be an SME and probably has not got the capability anyway to build a whole platform.

“In 2012, we placed 40 per cent of our new contracts with SMEs – worth over £1bn to the UK defence industry.”

The Government’s overall target is to place 25 per cent of its procurement with SMEs across all fields – not particularly defence – but Mr Dunne fears that cannot be achieved in the MoD, with its require-ment for large-scale suppliers.

“However,” he says “we are doing a lot to work with SMEs. We have an SME forum which I co-chair with the MoD’s Defence Equipment and Support (DE&S) commercial director, and we have a big programme of trying to make the MoD more transparent as a customer for SMEs.

“Making contracts more accessible is a priority, so now every tender over £10,000 is published on the Government website as well as on our own MoD contracts

website, and we have removed the require-ment for prequalification questionnaires for any tender under £100,000.”

As a businessman himself, Mr Dunne particularly approves of improvements in the payment system to help cashflow and make funding easier. The target for pay-ment of invoices is now 30 days, but 92 per cent of MoD suppliers are paid within five days. Interim funding and staged pay-ments for contracts is also helpful.

Mr Dunne admits that they still have a long way to go. “I do hear complaints from SMEs about how challenging it is get ac-cess to the MoD. One of the things which was set up four years ago is the Centre for Defence Enterprise within the Defence Science and Technology Laboratory. It is a facility for innovative ideas coming out of SMEs to get fed into the system. About 4,000 ideas have come in so far, and around 700 have been funded – typi-cally, product innovations. Funding goes to SMEs, academics, inventors – often to develop ideas that are at very early stages.”

The minister endorses the view that research and development (R&D) is the only way the UK will maintain its leading position in the export market. The White Paper published last year committed to the science and technology spend being at least 1.2 per cent of the budget – a little over £400 million – and it is now ahead of that. Mr Dunne co-chairs, with the chief scientific adviser, the science and technol-ogy board which looks at how the MoD integrates its spend for big R&D projects with the Government’s science and tech-nology spend.

The MoD has now devolved primary responsibility for equipment capability

down to the services, to ensure it is aligned with the emerging requirements from the chiefs who can identify innovation oppor-tunities.

“Part of the purpose of the equipment plan,” Mr Dunne says, “is to work with companies on where we are directing spend over the next ten years and on prod-uct innovation and development, so that the combined Government and industry research effort is well aligned.”

The Joint Strike Fight (JSF) so-called fifth-generation stealth aircraft is held up by the minister as an example of where UK companies are seizing the opportunity for involvement in the world’s largest de-fence programme.

“The UK is Lockheed Martin’s only tier-one partner in the programme which gives a 15 per cent work share,” Mr Dunne says. “There are 100 companies in the first tier of the supply chain to the whole pro-gramme in the UK, and some 500 British companies in total supplying into this pro-gramme.

“A third of the supply chain for the JSF is in the North West, with almost 9,000 jobs at BAE Systems in Warton and Sam-lesbury. So it is very important in driving engineering jobs and innovation and par-ticularly driving apprenticeships and pro-viding opportunities for young engineers.

“It will be a source of high-quality engi-neering jobs for decades to come.”

It has been one of the few upsides of the current economic crisis – the rediscovery of engineering and manufacturing as

a vital part of a balanced economy and an engine for economic, employment, skills and export growth.

Integral to those engin-eering and manufacturing industries are many thousands of small and medium-sized enterprises (SMEs) with the potential to contribute ideas, innovation, technology and capacity to ensure that the UK remains a major industrial nation capable of competing globally.

But it is often not easy for a small company to engage with much larger customer organisations, or to navigate their way through the some-times complex accreditation and contracting processes that go with sophisticated high-technology industries.

Northern Defence Indus-tries Ltd (NDI) is a member-ship organisation which works with its member companies – mainly but not exclusively SMEs – to help them grow their businesses as part of the supply chains of higher-tier companies, prime contactors and their ultimate customers.

Established in 2001, NDI’s original mission was to help

attract more defence work to the North East, by working with the Ministry of Defence’s prime contractors to find com-panies in the region to be part of the supply chains for major defence programmes. Since it was founded, NDI has helped its members to secure business worth over £420 million.

“NDI’s focus has broadened to include the aerospace, space and security sectors,” says exec-utive director David Townsley. “While its heartland and head-quarters are still proudly in the North East, NDI’s membership now includes companies in 32 counties across the UK.

“They value the hands-on support provided in identifying potential business opportuni-ties, facilitating engagement with potential customers and sourcing the kind of services and advice that small compa-nies need to grow in a highly competitive environment.”

NDI is a member of the Ministry of Defence’s Defence Suppliers Forum SME group, and works closely with other Government organisations, trade bodies and major companies across its four sectors to promote the interests of its members, and to ensure that, as a significant national resource, SMEs have the opportunity to realise their potential.

Mr Dunne’s schedulethis year has thus far included Abu Dhabi, India andMalaysia

The helping hand that pulls in moredefence business

Tuesday August 6 2013 | the times

Business Insight8

BAE Systems

Ordersstand at700 andprojectsupports40,000UK jobs

The Typhoon Eurofighter is the company’s latest success story

UK defence giantis rising to big global demand,says Chris Nelson

Few companies can demonstrate a pedigree in leading-edge engineer-ing and manufacturing to match that of global defence and security company BAE Systems. Its Mili-

tary Air & Information (MAI) business re-mains at the forefront of the industry, pro-ducing advanced aircraft and unmanned aerial vehicles (UAV) for a truly worldwide market.

The business now employs some 13,500 people, including more than 1,000 working on servicing, support and upgrades at RAF bases, and in 2013 BAE Systems MAI will recruit more than 80 apprentices and up-wards of 40 graduates.

Its headquarters at Warton in Lancashire is home to Typhoon fighter design and as-sembly, UAV development and assembly of the Hawk trainer. Typhoon component manufacture is nearby at Samlesbury, where a revolutionary monorail system for the F-35 assembly line now extends to the manufacture of tails alongside the aft sec-tions currently using this process. Hawk components are manufactured at Brough in Yorkshire.

TyphoonThe Typhoon Eurofighter is the latest global success story for BAE Systems, and proved itself to be an incredibly accom-

plished aircraft when flown by the RAF during Operation Ellamy as part of the 2011 military intervention in Libya. The aircraft’s swing-role capability provides the widest possible range of air-to-air and air-to-surface mission profiles, and total orders now stand at 700.

The Typhoon European partnership of BAE Systems, Cassidian (Germany), Alenia Finmeccanica of Italy and Cassid-ian (Spain) operates through Eurofighter GmbH. The latest major order for the Typhoon saw Oman become the seventh country to operate the aircraft, with an agreement to buy 12 Eurofighter Typhoon fighters and eight Hawk 128 advanced trainers in a deal valued at £2.5 billion.

The Typhoon is expected to be in ser-vice well into the 2030s, and the pro-gramme currently supports 40,000 UK jobs through the supply chain, with more than 400 suppliers in the North West alone.

Hawk In addition to being the choice of the Red Arrows, the Hawk is the world’s most suc-cessful and proven advanced jet trainer air-craft, with 998 sold or on order. The Hawk is currently producing highly trained pilots for 21 air forces around the world.

The latest Hawk, the Advanced Jet Trainer, is at the heart of an integrated training system featuring the very latest in advanced simulation for radar, weap-ons and defensive aids training. In-flight simulation of sensors, state-of-the-art pi-lot-vehicle interface and the ability to use simulated weapons provides pilots with a realistic environment for training. It also

cuts the time needed to convert training into flying fighter aircraft such as the Ty-phoon and F-35 Lightning II.

F-35 LightningThe F-35 Lightning II Joint Strike Fighter is a fifth-generation fighter, combining advanced stealth with fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment. Cutting-edge in every re-spect, the F-35 multi-role, all-weather at-tack aircraft operates from land and sea in three forms: conventional take-off and landing, the carrier variant and the short take-off and vertical landing variant.

It is the world’s largest single defence programme, and the military aircraft ex-pertise from BAE Systems is critical to the F-35 Lightning II airframe, systems and sustainment. It is also a truly collaborative project, teaming BAE Systems with Lock-heed Martin and Northrop Grumman.

Collectively, more than 500 UK compa-nies are involved in the F-35 Lightning II programme, building 15 per cent of every F-35 produced. Over the next 40 years, UK industry will continue to play a vital role in global production of the F-35, along with follow-on development and sustainment. This will bring strong economic benefits to the country and generate tens of thou-sands of jobs

Unmanned aircraftUnmanned aircraft are seen by many as the future of the military air sector, and BAE Systems is taking a leading role

The keel for the sixth Astute class submarine was laid on July 18 by Philip Dunne MP, minister for defence equip-ment, support and technology

(see page 6), who used the event at BAE Systems’ Barrow-in-Furness site to also announce the handover of the first and second submarines in the class – HMS Astute and HMS Ambush.

Mr Dunne said: “The keel-laying of the sixth submarine, Agamemnon, and the handover of HMS Astute and HMS Ambush to the Royal Navy are huge milestones reflecting significant progress in the programme.”

John Hudson, managing director for BAE Systems Maritime-Submarines, said: “These are highly effective submarines, engineered and built to provide the Royal Navy with unrivalled underwater capability. I would like to pay tribute to the highly specialist engineering and manufacturing skill

base at BAE Systems, in the submarine enterprise and across our supply chain.”

Mr Dunne also announced the signing of the eight-year Founda-tion contract between the Ministry of Defence and BAE Systems, which underpins an existing arrangement between the MoD and industry, known as the Submarine Enterprise Perfor-mance Programme (SEPP). It aims to improve performance, reduce costs and develop a sustainable submarine enter-prise, delivering overall programme savings of £900 million. BAE Systems’ target is £386m.

“By ensuring the UK’s submarine pro-gramme remains affordable,” Mr Dunne said, “this new contract will help deliver the Astute class and pave the way for the future Successor nuclear deterrent submarines, and secure around 5,000 jobs at BAE Systems and thousands more who work in over 400 suppliers across the UK submarine supply chain.”

�� Contributes £3.3bn to the UK’s GDP.�� Exports nearly £4.9bn of equipment and services every year.�� Raises £653m in tax to the UK’s coffers.�� Spends more than £4bn annu-ally with around 7,500 suppli-ers in the UK, and more than £400m annually with SMEs in the UK.��Helps to sustain 125,000 jobs in the UK.�� Employs 32,800 in the UK including 18,000 skilled engi-neers – more than any other UK company (2009) – and is the UK’s largest manufactur-ing employer.��Has a presence at 60 loca-tions in the UK including RAF bases.

�� Invests some £83m in educa-tion and skills activities on an annual basis.

��Works with over 30 universi-ties in the UK.

��Has 1,000 apprentices and 870 graduates in training.

��Gives more than £3m per year to support armed forces chari-ties and events.

�� Provided engineering know-how and technologies worth £1.5m to support British sport in the run-up to the 2012 Olympics.

�� Is committed to preserving its heritage and that of the armed forces, having made major donations to the Imperial War Museum and the Tank Mu-seum at Bovington.

�� Creates 12 jobs in the supply chain for every 10 jobs directly within the company.�� Records productivity levels 85 per cent higher at £78,175 per employee than the UK economy average of £42,200.�� In 2013 is recruiting 361 gradu-ates, 183 of whom will be at BAE Systems Detica, which delivers information intelligence solutions to Government and commercial customers, and develops solutions to strengthen national security. �� Is this year recruiting a further 396 apprentices across the UK business, including an addition-al 31 A-level trainees or higher apprentices going into Military Air & Information.��Has shown its engineering road show to 250,000 students and teachers.

Did you know that BAE Systems...Subs join the Navy

in their development. The Mantis is a twin-engine unmanned aircraft designed as an advanced technology demonstra-tor for the UK Ministry of Defence by a BAE Systems-led industry team including Rolls-Royce, QinetiQ, GE Aviation, Selex Galileo and Meggitt. The Mantis was de-veloped in just 19 months, from concept to its first flight in October 2009.

BAE Systems continues to push technol-ogy boundaries with the Taranis concept, designed to test whether a stealthy un-manned aircraft (with a human operator in the loop) is capable of striking targets with real precision at long range. Initial ground testing commenced in 2010, with flight tri-als planned this year.

Proving the technology needed to allow the safe and routine flying of unmanned aircraft in UK airspace is the aim of the £62 million ASTRAEA (Autonomous Systems Technology Related Airborne Evaluation and Assessment) programme. BAE Systems is one of a consortium of companies – along with AOS, Cassidian, Cobham, QinetiQ, Rolls-Royce and Thales – undertaking the groundbreaking work.

The first flight of an “unmanned” air-craft through all classes of UK airspace took place earlier this year, when a BAE Systems Jetstream research aircraft – spe-cially adapted to fly in unmanned mode – successfully completed a 500-mile trip from Warton to Inverness under the com-mand of a ground-based pilot and con-trolled by National Air Traffic Services.

Packing apunch witha pedigree

DEFENCE REPORT

Business Insightthe times | Tuesday August 6 2013 9

Manufacturing

Chris Nelson tours the North’s sophisticated missile-makers

It might seem difficult to find the connection between ultra-high-tech missile systems and the industrial revolution that flourished in Lanca-shire 200 years ago, but a combina-

tion of innovation and engineering un-derpins the development of both.

At MBDA in Lostock near Bolton you can find workers demonstrating extraor-dinary levels of expertise in electronics design, assembly, integration and testing which would baffle the pioneers of two centuries ago – but they share the same DNA, according to manufacturing direc-tor Bernie Waldron.

Like many of his 400-strong work-force at Lostock, Mr Waldron began his career as a craft apprentice. He now oversees UK production for weapons systems which serve Britain’s air, land and sea forces as well as more than 70 other armed forces worldwide.

MBDA has been involved in missiles since the 1950s, when it was De Havil-land Propellers manufacturing the Fire-streak, a British first-generation, passive infrared homing air-to-air missile.

As the weaponry has evolved so has the business, focusing on ever more complex systems while dealing with changing defence threats and deploy-ment capabilities along with increasing global competition.

The total UK workforce numbers around 2,700, with a further 4,500 in France, 1,200 in Italy, 1,200 in Germany, and 100 in the US: a truly multinational roll-call for the first properly integrated European defence company.

MBDA has three major aerospace and defence shareholders – BAE Systems (37.5 per cent), EADS (37.5 per cent) and Finmeccanica (25 per cent). In 2012, the group recorded a turnover of €3bn eu-ros, produced about 3,000 missiles, and achieved an order book of €9.8bn, with new orders totalling 2.3 billion.

MBDA has succeeded in becoming the prime contractor for a series of stra-tegic multinational programmes, and has a range of 45 products in service with another 15 in development. These include the six-nation Meteor “beyond visual range” air-to-air missile which equips the latest Typhoon Eurofight-er, the Franco-British conventionally armed cruise missile Storm Shadow/Scalp, and a family of air defence sys-tems for France and Italy (for ground and navy-based air defence) as well as

the air defence of the Royal Navy’s Type 45 destroyers.

In parallel to these large co-operative programmes, MBDA’s name is on a number of other systems such as Dual Mode Brimstone (DMB), which have strengthened its reputation as an unri-valled leader.

Incredibly complex and also incred-ibly smart, DMB and other MBDA weapons carry electronic brains and circuitry which would put your average computer to shame, and of course must be capable of withstanding the harshest of operational environments while still performing at the highest level. Looking to the future, the company is working on the next generation of such missiles, including their proposed SPEAR air-to-ground missile for the Joint Strike Fighter.

There is also the small matter of pro-ducing technical capability which fits within the sleek body of a modern mis-sile, and that means pushing the bound-aries of innovation and micro-circuitry.

On a tour of the Lostock facility, Mr Waldron proudly shows everything from circuit board condensers which are literally the size of a grain of sand, to the latest 3D printing capability, technology now used to manufacture prototype

product parts but which could one day replace conventional machining.

Of course it is not enough to sim-ply innovate and engineer the systems: they must be maintained through what could be a lifecycle of two or three dec-ades. Bernie Waldron points out control systems for onboard Sea Wolf missiles which date back 20 years but are still used on some Royal Navy ships. Along-side them is a computer originally pur-chased as part of the development of the system and still working – although looking like an antique alongside mod-ern hardware.

The tour also reveals the stringent testing of thousands of components in “shake and bake” test rigs which subject them to extreme temperatures – from a searing 70C above zero to a chilling 40C below – while at the same time they are battered to simulate war-flying condi-tions. At the end of all that they must still be capable of functioning faultlessly and hitting their targets with surgical precision, because lives depend on it.

And those targets are not just moving – sometimes at greater than the speed of sound – they are also evolving to become harder to destroy, with sophis-ticated counter-measures to throw off RF (radio frequency) missile guidance

or laser targeting systems, which means that the weapons must also evolve to out-think an enemy.

But, says Mr Waldron, the most valu-able asset at Lostock is the workforce – who design, develop, assemble and test the electronic systems.

Lostock takes care of its workforce, because they are irreplaceable. The av-erage age at Lostock is around 45, and with experienced test engineers in this stratospheric field as rare as hen’s teeth, MBDA finds maintaining its expertise by in-house mentoring, training and de-velopment is easier than recruitment.

“The great challenge is in creating a broader, more experienced skill base,” says Mr Waldron. “We put a huge amount of resources into bringing peo-ple into the business – at apprentice and graduate level – then work hard to de-velop them so that we can build the flex-ibility we need to operate at the highest levels.”

That flexibility also means being pre-pared to up their game when required: it is a contractual requirement that MBDA must be able to respond to urgent and unscheduled operational change.

So in the last two years, MBDA has streamlined its systems, cut lead times by up to 50 per cent and created new production facilities to meet the ex-traordinary demands for DMB during concurrent RAF operations in Libya and Afghanistan.

That flexibility also extends to the MBDA supply chain demonstrating huge commitment for the extraordinary requirements of the MoD to support their frontline forces.

Mr Waldron is the first to admit that the primes have no monopoly on good ideas, and MBDA encourages SME part-ners to explore innovation and develop technology to meet its requirements. “Our supply chain is an integral part of our business strategy,” he says, “and we must continue to develop it if we are to continue to develop our own business.”

Tomorrow’s super-systems take off from the launch pad of yesterday’s skills

Our supply chain is an integral part of ourstrategy...we mustcontinue to develop it

In action: the MBDA finished missile released in a combat simulation by the Joint Strike Fighter

In construction: by refined skills

DEFENCE REPORT

Tuesday August 6 2013 | the times

Business Insight10

Top guns speak outForum

We’ll need more small business input and more young talent, say the industry chiefs. Chris Nelson reports

Manufacturing in the North of England has survived numerous onslaughts – overcoming technology change, market slumps, and

Governmental indifference to set the benchmark for innovation, skills and en-terprise.

It is the heart of the UK defence indus-try, producing the high-tech hardware that sea, air and land forces across the world rely on in the heat of battle and in the safeguarding of peace.

Generations of aircraft, ships and sub-marines, battlefield weapons and equip-ment have been produced, and the work-ers and their families have suffered for it – targeted by Luftwaffe bombers, en-during decades in the cross-hairs of Cold War ballistic missiles, and buffeted by the ebb and flow of spending tides.

The equipment being produced is recognised globally for its excellence – from Typhoon strike aircraft and Astute submarines, through advanced missile systems and armoured construction ve-hicles, to instant runways that roll out to launch unmanned aerial drones (also de-veloped and manufactured in the North).

Long production lead times and mar-ket uncertainties give the industry unique problems. New products take years to get from computer screen to battlefield, and yet the requirements of the armed forces

can change from one conflict to the next, making business success a moving target.

There are always new threats and chal-lenges to keep this leading-edge business sector on guard. Now it is not bombers but shrinking budgets that threaten its exist-ence, and the threat of nuclear strikes has been replaced by the shadow of gaps in skills and a shortage of qualified manpower.

To get the measure of the challenges ahead for the defence sector, The Times assembled a panel of representatives from leading manufacturers, small and medium-sized enterprises (SMEs), trade organisa-tions and pressure groups at the Preston offices of the Northwest Aerospace Alli-ance, chaired by Alasdair Nimmo. The is-sues that prompted their responses are in italics…

The Government is one of their biggest, if not the only, customer, for most UK defence companies; but does it do enough to support the industry?

Steve Timms: “We have seen a shift with the Government understanding the economic benefits for the country from the defence sector. There is now a defence partnership and there is more emphasis on advanced manufacturing and engineering than there has ever been. It is a vital in-gredient in rebalancing the economy. The UK equipment plan is a good indicator of future requirements, but only for the UK.”

Terry Waiting: “With the Government’s commitment to a four-boat solution for the Successor nuclear deterrent, we will have work in Barrow up to almost 2040. But our supply chain must also be match-fit. The Government talks a good story about engaging the supply chains, but it has to deliver.”

David Townsley: “Let’s get the primes doing business with SMEs, and get the

next tier down in the supply chain to open its books to the SMEs. We need to put the SMEs in front of the lead engineers and the guys leading the projects, not just the buy-ers, and the Government has a role to play in this.”

Martin Wright: “The problem is we want companies at the SME level to think strategi-cally, not tactically. But they are not investing in technology at the right rate to give that strategic view. We have this issue where an SME will grow to a 150-strong workforce then seems to stall. We don’t get companies emerging at a 500- to 1000-man level, with more financial integrity and stability to take on more risk and bigger work packages and employ more people and invest in technol-ogy.”

The Government’s defence equipment plan provides a vision for the industry over the next 10 years, but is a vision for a decade long enough?

Steve Timms: “Ten years is not necessarily that long, as it relates to some of the systems platforms for Typhoon and Hawk. However, we will need to refresh our IPR [intellectual property rights] beyond the 10-year mark if we are going to continue to be relevant. The challenges of the next five years will be dif-ferent from those of 10, 20, or 30 years ahead.

“Our offerings will be beyond the core of a product or service, it will be about the infor-mation set that wraps around those. There will be innovations on materials and also the electronics and infrastructure to exploit those.”

Martin Wright: “Zero to five years is a done deal. Looking at 10-15 years, you start to get into: How do I respond to technology shift and how can I ensure that I have the right skills at the right time?”

Bernie Waldron: “Without that visibility and commitment from the Government

In defence of a safe future

The biggest threat to the future survival of the aerospace sector in the North West is a failure to make the strategic investments which will enable companies to claim a larger

share of major projects.That is what keeps Martin Wright awake at

nights. As chief executive officer of the North West Aerospace Alliance (NWWA) since 2004, he has seen it change from a traditional trade organisation representing members to taking a primary role in sustaining and nurtur-ing the supply chain, encouraging its develop-ment to meet the demands of customers.

He welcomes the Government shift back to recognising the importance of manufacturing: “Those companies still around have survived through determination and hard work, and

represent the best of the UK’s technology and know-how. They are making a vital contribution to major defence projects such as Tornado, Typhoon, Joint Strike Fighter and the development of unmanned aerial vehicles, as well as civil projects such as the Airbus family of aircraft.”

The Government has pledged £1 billion over seven years to develop key technologies through initiatives such as the Aerospace Technology Institute, and Mr Wright believes it reflects the serious turnaround in Whitehall attitudes.

“Aerospace and other prime sectors for advanced manufacturing can’t complain about attitudes in the current environment,” he says. “The Government has woken up to some of the realities of the benefits of a balanced

economy. Working with organisations like NWAA to make it easier for SMEs to secure slices of major contracts run by the primes is useful, but the Government needs to do more.”

However, the challenge now for the SMEs that make up the bulk of the NWAA mem-bership is to invest, develop and grow those businesses to take up the opportunities ahead.

“Many SMEs are still run on a tactical basis,” Mr Wright says, “not strategic and they are naturally reluctant to make big invest-ments. There are lots of companies employing under 150 people, but too few employing 750 people with strong balance sheets able to take a major share in long-term programmes. That sort of expansion requires planning and investment.

“Major companies are now talking about repatriating work and close coupling of supply chains. Our business cluster can take advan-tage of that change using the know-how and experience gained from generations of building aircraft and high-tech engineering.”

Going forward, the most important role of the NWAA will be to help shape the supply chain to ensure it is fit for the future. “Major contracts depend on delivering the quality customers need when they need it,” Mr Wright says. “Those customers also need to know that their supply chain partners are going to be around in five or ten years’ time – which again comes back to planning carefully for the future, to training, to investment in quality and skills. Focusing on technology, capability and strategy is the message to the supply chain.”

Investment: key to winning the aerospace race

Companies at the SMElevel haveto invest intechnology at the right rate

Bernie Waldron: Visibility and commitments wanted

Tony Cross: It can be difficult to talk to the primes

offices over 10 years our capability and re-source and investment plans will always be subject to large change and the consequenc-es of that change. Getting government as-sistance to work with Europeans and the broader global community to reinforce that 10-15 year vision is absolutely key.”

The importance of commitment by the Government and prime contractors to help the SMEs was agreed by the all panel members.

David Townsley: “Primes and others need to help SMEs to know where the op-portunities are, where the investment and research and development needs to be – so that they can start aligning their business strategically to the primes.”

Tony Cross: “It is very difficult to grow your business from 150 to 250 and beyond, because you have to know where the orders are to come from to fit your business plan for growth. We put in for a large grant but

DEFENCE REPORT

Business Insightthe times | Tuesday August 6 2013 11

we could not do it on our own – we did it through three companies. Alone, we did not have enough people lobbying behind us. But it is very difficult to talk to primes like BAE. You get told to fill in the questionnaire on the website and you don’t hear anything more. Twelve months on you go back and they tell you to fill in the questionnaire again.”

David Townsley: “The experience of our members with these supplier portals is that you register but the chances of receiving anything back are very slim.”

Martin Wright: “The defence growth partnership is taking shape, and the focus is now shifting to the supply chain to deliver a manufacturing strategy, but it might contain stuff we will not be comfortable with – too many small companies – and we need to have a mergers and acquisitions policy to create a more critical mass.”

Terry Waiting: “It takes nine years to build a submarine, but if you make one element for a submarine you are not going to wait for nine years for the next order. I have walked into an SME and thought the boss was on the verge of suicide because he couldn’t get the cash flows. There has got to be some better way than driving people to those situations.

“The submarines business has orders for £20 billion over the next few years. That provides vital work here in the North West, where we have the biggest defence sector in the United Kingdom – and we need to make sure it stays here.”

Martin Wright: “I have been up to Bar-row and theirs is a very traditional supply chain. But autonomous systems technolo-gies are the next-generation supply chain. New equipment coming forward draws on the technologies predominantly outside our current sector – information systems and electronics.

“An SME company in the future could be a very high-science company of perhaps 20 people – £150k per man gross value added – that’s the sort of economy we should be

trying to create, and the traditional engi-neering supply chain company may have to evolve to take account of power engineering, fracking, or nuclear build… emerging supply chains.”

Bernie Waldron: “There are SMEs that can link into the primes from an innova-tion point of view and there are others that are more suited to being a key supplier with second to third tier manufacturers. As an in-dustry, we are doing a lot to support SMEs and the best example is SC21 trying to bring the SME community together to improve their capabilities, their profitability and un-derstanding, working practices. But there is more we can do.”

With spending in the UK limited by the fi-nancial situation and Government policy, the discussion turned to how to make the most of international opportunities.

Steve Timms: “If you look at the BAE Systems model, we usually generate more products and services local to home. That may change as more emerging markets want to invest in our co-development. We have already worked with India, Australia and other countries to generate new IPR. We now see more future demand coming from internationals, and must look at what international needs are.”

Martin Wright: “Defence industry man-ufacturing has not gone global – but it has certainly changed shape, close coupling is moving slowly and surely outwards, and protection of core technologies and core processes is becoming the name of the game. Joint Strike Fighter is multi-nation procure-ment and the next generation of armoured vehicle is going to be the same.”

Bernie Waldron: “Our meteor product is a six-nation joint development and produc-tion programme, and so when we go to the SMEs, it is SMEs in all nations, not just in the UK.”

The future of the defence industry inevita-bly lies with technology – but developing new products requires costly research and develop-ment (R&D).

David Townsley: “The Government is to be applauded with the money it is putting into R&D and involving small businesses. Look at the ‘Edge’ facility at General Dy-namics, initiatives at Lockheed Martin and the Centre for Defence Excellence. Where do SMEs go to access those facilities, and what sort of hoops do they have to jump through?”

Tony Cross: “You can put together a perfect business plan to receive grants, but unless you tick certain boxes, and get lo-cal MPs pushing your company to get the grants, you are just another SME. We want to create an apprentice academy to bring in more young people because the skill short-age level out there is a real struggle.”

Bernie Waldron: “It is difficult to get access to R&D sponsorships, but working with your customer on long-term equip-ment plans is a key enabler. MBDA aims to work collaboratively with Government of-fices on research and technology, establish-ing core technology sets that we can either take within our own industry or develop through our relationships with certain SMEs. Our strategies have to be capable of flexing across a variety of solutions.”

Martin Wright: “We have an autonom-ous systems programme worth £9 million with BAE Systems and six or seven univer-sities, and we pair SMEs up with universit-ies. We do a lot of work aimed at collabor-ation for SMEs – lots of scope to get that critical mass for a way forward to de-risk the process for smaller SMEs.”

The challenge of engaging young people and ensuring the future population of capa-ble workers with the right engineering and science skills is a worry across the industry.

Steve Timms: “If we don’t get it right in our younger generation, we won’t have the skills and capabilities fit for purpose going forward.

“At BAE Systems in Warton we have an engineering roadshow to engage with young people and inspire them to get in-volved in STEM subjects (science, tech-nology, engineering and mathematics) and also create resources to engage with 2,500 teachers, but it is not enough. I have a 13-year-old son who can’t get access through school to software engineering, and a four-year-old daughter who shows me how the iPad works. Software skills en-gineering should be part of our schooling system now.

“Diversity and inclusion is another issue: there is a limited number of girls in our in-dustry – how can we make it more attrac-tive for them?”

Martin Wright: “There has to be more effort balancing the male and female input into the system – it is an untapped wealth of good intellect that we need in the indus-try. We also need to work at bringing more of the ethnic communities into advanced engineering. We have not presented the

case for engineering and science employ-ment in the past. Young people must see the facilities at Samlesbury [BAE Systems] and MBDA as an environment in which they want to work, and the rewards offered by the industry. Kids can choose what-ever they like, so we have to change their minds.”

Bernie Waldron: “I think we can attract female entrants by doing some very simple things. For example, we insist on a 50-50 split when we go into schools and 50 per cent of our apprenticeship population is female. This is an untapped resource that is not simply an opportunity – it is a neces-sity.”

Terry Waiting: “We need around 1000 more engineers to complete the Successor submarine programme. BAE Systems Sub-marines in Barrow takes on 130 apprentices and trainees each year and gets in excess of 1,000 applicants. We need people with the proper education in engineering and sci-ence, and with the ambition to go forward.”

David Townsley: “It’s not just about go-ing into schools – we need to take them out into industry; take them on a racetrack in a Formula 1 car, or take them to the Space Innovation Centre at Harwell. That’s what gets them interested.”

Time and again the discussion came back to the relationship between the prime con-tractors and the SMEs in the UK supply chain.

Tony Cross: “SMEs must be encouraged and allowed to play in the larger projects. We get very little feedback from the ma-jor primes about what technologies you are developing over the next 10 to 15 years. That’s what SMEs need, guidance from the primes that are involved in all of the de-fence projects – MoD, Rolls-Royce, BAE.”

Bernie Waldron: “We are now seeing more commercial solutions than ever and we are not capitalising on SMEs’ innova-tion in the world of commercial solutions. These are opportunities for SMEs to en-gage with the primes to find out where we are going.”

Martin Wright: “We have a strategy in civil aerospace for the next 15 years which will define what technologies will be viable. There is scope for a national supply chain body to capture knowledge of that type for SMEs. There is scope for better SME en-gagement. But there is also a responsibil-ity for SMEs to look forward and see what might be happening in the supply chain.”

David Townsley: “Having a strategy is great, but we need real practical day-to-day things to happen. Even approaching a prime – to get some time with their lower-tier suppliers – is very difficult.”

Tony Cross: “The only SMEs which will be available in 10 or 15 years are the ones that have done something now. Because if they have not invested in change, they will have gone the way of the dinosaurs.”

We want tocreate anapprenticeacademyto bring inmore youngpeople asthe skillsshortage isa struggle

Terry Waiting: We need around 1,000 more engineers Steve Timms: We have to look at international needs

Martin Wright: Focus now shifting to the supply chain David Townsley: Chances slim of getting anything back

Members of the panelwho addressed some of the key issues facing businesses in the defence sector:�� Bernard Waldron: MBDA – manufacturing director UK.��Martin Wright: North West Aerospace Alliance – chief executive officer.��David Townsley: Northern Defence Industries – executive director.�� Tony Cross: Merc Engineering UK Ltd – business development manager.

�� Steve Timms: BAE Systems – managing director, Defence Information, Training and Services.�� Terry Waiting: Keep Our Future Afloat Campaign (KOFAC) – chairman

CHAIR�� Alasdair Nimmo: The Times Business Insight – Forum chairman

Tuesday August 6 2013 | the times

Business Insight12

Showtime

Delegates and visitors from across the globe will descend on the North West next year for the UK’s biggest ever series of business events – the two-

month International Festival for Business (IFB) 2014.

The event, hosted by Liverpool, will be a global showcase for British industry, designed to promote economic growth and to double UK exports by 2020. Some 250,000 people are expected to visit the former European Capital of Culture dur-ing 61 days of activities in June and July, with an estimated £100m investment im-pact.

Highlights of the programme include a Global Leaders’ Summit, when the civic, political and business leaders from the world’s 50 leading cities will gather to dis-cuss the challenges facing cities, regions and countries.

UK Trade & Investment (UKTI) will also be showcasing the best of British business over two days when it stages the British Business Embassy, which was a hugely successful part of Britain’s 2012 Olympic business legacy. More than 100 other events are likely to be held, along-side an international cultural programme expected to attract hundreds of thou-sands more visitors.

The festival will coincide with the stag-ing of The Open Championship at Royal Liverpool Golf Club, Hoylake, which will

attract millions of global TV viewers and see hundreds of thousands of spectators arriving in the Liverpool City region.

Organisers say there will be a focus on key business sectors and themes, in-cluding maritime, logistics and energy, higher education, manufacturing, science and technology, professional and finan-cial services, low carbon and renewables, along with creative and digital. It is an-ticipated that events will also be held in other parts of the North West, includ-ing at one of the UK’s two national sci-ence campuses – Sci-Tech Daresbury, in Cheshire – and in Manchester.

“The IFB will be the most important international business event for Britain in 2014,” said Max Steinberg, chair of IFB 2014. “It will be a showcase of everything that is brilliant about international and British business, bringing 250,000 visitors to Liverpool next year.

“Through partnerships with the Con-federation of British Industry [CBI], UKTI, British Chambers of Commerce and the Federation of Small Businesses, IFB 2014 will appeal to businesses across the UK and beyond, from small firms to large corporates, and from public to pri-vate sectors.”

The IFB was launched in January this year when the Prime Minister, David Cameron, met Liverpool business and civic leaders. “We are in a global race,” Mr Cameron said. “There is no more

important time to bring together inter-national businesses to promote innova-tion and knowledge sharing to increase growth, exports and prosperity.

“Liverpool is a fantastic city, with great people and a dynamic business com-munity, who I am sure will come together to make the festival a great success.”

The director-general of the CBI, John Cridland, said: “Britain punches above its weight around the world – but we are only 60 million in a 7 billion world, so we have to make ourselves well known, we have to shout pretty loud and I can’t think of a better place to be doing that than Liverpool.”

Mr Steinberg added: “This is emphatic-ally not a Liverpool event. It is a national and international event being hosted by one of Europe’s most popular visitor des-tinations and a city which just happens to have the fastest-growing economy of any regional city in the UK.

“IFB 2014 is an opportunity for enter-prises from across the UK to make new connections, seek new partners and find new customers and suppliers. It is an urban festival of commerce, bringing to-gether cities from the North to the South and the East to the West. We would urge businesses from across the country to come to us and tell us how they want to get involved.”�� For more information, visit www.ifb2014.com

Property and ports giant Peel has launched its first-ever flexible office offering in Liverpool. The Quay is located at the company’s Princes Dock development on

Liverpool’s stunning UNESCO-listed waterfront, next to the city’s cruise liner facility and the Leeds and Liverpool Ca-nal.

Princes Dock, situated within the £6 billion Liverpool Waters redevelopment scheme which received Government ap-proval for planning permission in March this year, is currently home to some 2,500 employees with tenants such as Coutts Bank, PricewaterhouseCoopers, KPMG and Atlantic Container Liners.

“There is currently a growing need for flexible office space which new and small businesses can take without being tied into long contracts,” said Ian Pollitt, devel-opment investment surveyor at Peel. “The Quay is the next generation of our offices and plugs this gap perfectly – we are al-ready seeing a lot of interest in the suites.”

Liza Marco, property manager at Princ-es Dock, said: “We already have a num-ber of large international organisations at Princes Dock and we are pleased to now be better equipped to cater to the needs of smaller and start-up companies too. The Quay will add to the already impressive

office offer at Princes Dock and we look forward to welcoming more businesses”.

The Quay will be available for occupa-tion from September this year. The Liv-erpool Waters vision involves regenerat-ing a 60-hectare historic dockland site to create a world-class waterfront quar-ter in central Liverpool. It is based on a long-term programme and will include mixed-use development of residential, visitor attractions and supporting uses, office/commercial and local shops and services.

Peel hopes it will accommodate city centre expansion while further stimulat-ing economic and social regeneration and integration with the adjoining areas of the city centre, north Liverpool and the wider sub-region.

The Peel Group is one of the leading infrastructure, real estate and investment enterprises in the UK. Its business inter-ests range from ports to airports, land to leisure, media to hotels, windfarms to shopping centres and a portfolio of invest-ments in major public companies.

Global business Olympics to be staged in North West

Peel launches flexi-space

When two intoone goes well

Two of the UK’s lead-ing asset management firms have combined to create one of the biggest independent

businesses of its kind in the UK. The newly formed Quilter Cheviot will be one of the country’s largest independently owned providers of bespoke investment management, with more than £14.2 billion of assets under management.

The company has 176 investment managers based at 13 locations across the UK, including in Manchester, Liv-erpool, Birmingham, Leicester and North Wales. It also has a strong presence in Scotland and the South West of Eng-land, along with head offices in London.

In the North West, the merger sees the creation of a 40-strong team with offices in Manchester, Liverpool and North Wales and some £1.2bn of assets under management. The company’s Midlands offices – in Leicester and Birm-ingham – will have £1.74bn of assets under management.

The company believes its independent ownership struc-ture means it is able to offer non-conflicted advice to clients and is properly free to take a personal and bespoke approach to investment solutions on behalf of clients.

The new business will focus on the structure and manage-ment of bespoke portfolios for private clients, professional intermediaries, charities, trusts and pension funds.

Martin Baines, the Quilter Cheviot chief executive, said the company integration had progressed smoothly, and added: “Looking to the future, the new brand and combined business provides scale and re-sources, allowing us to deliver greater value for our clients, as well as providing a tremendous source of advice, experience and security in today’s uncer-tain financial markets.”

Simon Walker, the com-pany’s executive director in Liverpool, said: “Cheviot and Quilter are complementary businesses. We share a com-mon investment philosophy

and approach to the way we work with clients. Our scale, breadth and depth of expertise and experience make for a compelling proposition when we talk to potential clients and IFA [independent financial adviser] partners, while our extensive regional footprint enables us to build professional intermediary and private client relationships right across the country.”

Mr Walker added that because Quilter Cheviot was an independent business, there was no pressure on advisers to offer or sell particular invest-ment products which may not be suitable to the client. This was in contrast to some larger corporate investment manage-ment companies and banks, where targets on particular off-the-shelf products had to be met.

“We combine a traditional approach to relationship management – one that is personal and bespoke – with an innovative and contemporary approach to fund and invest-ment management,” he said.

“Our growth plans for Manchester and the wider North West region are very ambitious,” added David Rothburn, the Manchester office executive director. “We are already experiencing fast organic growth because our investment record is such an attractive proposition for staff and clients. The merger en-ables us to build on some very solid foundations and to bring the best performing aspects of both businesses together and to capitalise upon significant additional resource.”

Simon Walker: big growth plans

Showing that flexible office offering: Liza Marco and Ian Pollitt

Business Insightthe times | Tuesday August 6 2013 13

Before selecting a business school to study for your MBA, ask yourself a few crucial questions:��What is the school’s reputation? Is it recog-nised among MBA employers? Reputation is key when it comes to choosing a school. Employers not only ask whether you have an MBA, but where you studied, as some programmes have better reputations

than others. You can measure the quality and mark of a school by checking that the MBA programme has the right accreditations.��What are the school’s links with business and industry? Check that the school has good links with local and international companies and find out the employment details and locations of the alumni.��Do you want to study locally or overseas? If you’re looking to study full time, it’s worth thinking about a school in another country to boost your international exposure. If you

speak more than one foreign language then all the more reason to make this life choice. To study part-time, you may prefer to be closer to home or work, whereas geography might not be so important for distance-learners, where technology plays a key part in the delivery of the programme.��How is the MBA programme structured? The first thing to look at is the focus of the programme. You might want to specialise in a particular area or maybe you would prefer a more general qualification. A good MBA course will cover the core management subjects and offer a good range of electives as well.��Do you want to study full-time, part-time or by distance learning? There are lots of ways to study and it is up

to you which one best suits your situation, lifestyle and needs.��How much does the MBA cost? It’s important to remember that cost does not necessarily mean quality. Lots of factors deter-mine price, including the type of institution, the local economic situation, the reputation and calibre of the faculty and the delivery of their courses. Before making a financial decision, ask the business school how it prices its MBA.��How flexible is the MBA programme delivery? If you are looking to study over a few years, it’s likely that your situation and expecta-tions will change, so you may need to switch between different courses of study. Opt for a school that lets you do this.

Introducing a special section on where to find your business futureBy Barry McDonald

Taking on the challenge of a Master of Business Administra-tion (MBA) degree is considered a serious step in enhancing your life prospects, as it is an interna-

tionally recognised passport to a success-ful career in business management.

Designed to broaden your horizons and build on your strengths, it takes into ac-count all the major aspects of business. As well as marketing, finance, accounting, quantitative methods, IT (information technology) and organisational behaviour, students will study a variety of modules including human resource management, operational and strategic management, research methods and consultancy.

Work experience and diversity play an important role in an accredited MBA course, and a typical group will consist of mature students with five to ten years of relevant industry experience, from several different markets and sectors with varying cultural and geographical backgrounds. If you are interested in an MBA but do not yet have enough work experience, you might want to think about a Masters in Business and Management (MBM).

Thanks to the internet, globalisation and a change in lifestyles, many schools

now offer more flexible ways to study, either through distance learning or part-time programmes. According to Vincenzo Dispenza, deputy director of the MBA at Leeds University Business School, it puts you in an environment where the normal rules of business do not always apply.

“You can experiment with different behaviours and play with ideas in a safe but challenging environment among high-level colleagues who are not there to compete with you but to help you and challenge you,” he says.

“When you’re working, you don’t al-ways have time to think; you’re in a very political environment in which you have to compete against other people to better yourself, whereas in this environment you can share and take time to reflect on the task rather than the process.”

As well as good numeracy and literacy skills, potential MBA students should have an openness to change and be will-ing to rethink the conventions of their business background. “You need to em-brace change, uncertainty and ambigu-ity and become more reflective,” Mr Dis-penza says, “because at the more senior positions in business you’re not making structured decisions based on absolute data, you’re making leaps of faith and es-timating risks.

“It’s about not having absolute certainty all the time but being confident to make decisions on incomplete data.”

So what does an MBA mean for your career? The advantages are many, includ-ing a salary increase. Taking on the chal-lenges of an MBA means a certain level of investment, so it makes sense to weigh up

the long-term benefits before choosing a course and making a commitment.

The increase in salary that you will receive following your study is an impor-tant deciding factor. In the Association of MBAs’ 2010 Career Survey, the average median salary was £64,000 and the mean was £73,000. Those surveyed were earn-ing, on average, 33 per cent more imme-diately after their MBA, 92 per cent more three to five years later, and 151 per cent more six to ten years after graduation.

The survey also found that 79 per cent of MBA graduates made the decision to go into training for their professional stud-ies to improve their career opportunities. The majority of survey respondents were either senior managers or board directors.

Studying for an accredited MBA also gives you an exceptional platform for net-working at the highest level. You will be part of a diverse and experienced group of professionals, studying with people who have been carefully selected, while ben-efiting from top-quality connections with the alumni of some of the world’s best business schools.

As one graduate explained: “After what you go through together, the partnerships

Where should I study?

Rising to the MBA challenge

A DEGREE OF SUCCESS

you forge during your MBA are for life – you can find a business partner, a mentor, a friend, and endless career opportunities.”

When considering whether to study for an MBA there are a few things to consider, including: Can you manage the workload? Can you make the personal commitment? and Is this the right time to start an MBA?

Workload is a vital consideration, and you need to be able to set aside at least 20 hours a week for a distance-learning pro-gramme. Full- and part-time courses will, of course, take up more of your time. Hav-ing the full understanding and support of your family is one of the essential factors when choosing to study for an MBA.

Deciding if you are ready to study an MBA can prove tricky ground. It depends on the amount of experience you have al-ready built up in your career. Most institu-tions will expect at least three to five years of industry experience and if you don’t have this it’s worth considering a Masters in Business and Management.

One thing is certain, however. If you do have the skills, experience and dedication to take on the MBA challenge, it is a giant leap towards a successful career in busi-ness.

Here you can shareand taketime to reflect on the task ratherthan the process

Work experience plays an important part in an accredited MBA course

Tuesday August 6 2013 | the times

Business Insight14

Horizons

How globetrotting professors deliver Manchester MethodBetter by air miles? This MBA course is exported in anextraordinary way, writes Mike Cowley

A name like Xavier Du-ran Martinez surely demands an interna-tional job – and that is ex-actly what the Barcelona-

born associate director of the Global MBA (Master of Business Administra-tion) offered by Manchester Business School (MBS) has.

For his role sees him as one of Manchester’s Flying Experts, the globetrotting team of MBS academ-ics who can be regularly found jetting round the world to deliver what they describe as the “Manchester Method” – applying theory to solve real busi-ness challenges, the learning by doing approach.

The Manchester Method is central to both the full-time MBA and the part-time Global MBA – which gives executives the opportunity to study at any of seven MBS satellite locations while they continue to develop their careers. The Manchester Global part-time MBA is designed to fit around work and personal commitments, with world-class teaching delivered in blocks at residential workshops and by online activity to enrich the learn-ing experience.

At regular intervals, Professor Mar-tinez and his academic colleagues simply pack their bags, not forget-ting their passports, and fly off to six Global MBS locations – Hong Kong, Singapore, Dubai, Miami, São Paolo, Shanghai – well, in fact seven in total counting Manchester, which most can easily reach by bus.

Professor Martinez, who teaches managerial economics, doesn’t even come near the top of the air miles league for the academics on the Global MBA programme, despite hav-ing already this year been to Dubai (twice), Hong Kong, Miami, São Paolo and Rio de Janeiro. He is scheduled to return to Dubai, then Miami and Houston, before the end of the year.

The Global MBA benefits from the same MBS academic ethos from which the full-time programme evolved, only the way it is delivered is different – it uses blended learning, a combina-tion of intense residential workshops, lasting on average six days every se-mester of the two-and-a-half-year programme, and online learning.

“Typically, a workshop would be three days – getting 24 to 25 hours face-to-face per module,” says Profes-sor Martinez. “Basically what you are getting is our MBA programme, but we have compacted it.”

Backed up by periods of research and online activities, the MBA programme is delivered in bursts, enabling the stu-dents to participate meaningfully with-out serious interruption to their careers. And which workshops in which country is left entirely up to them once they have reached the second semester. So a student who has joined the course in Manchester or Miami can opt to go to workshops in Singapore or São Paolo.

The seven centres not only attract people from their own catchment areas, but also recruit from around the world. While there are no limitations on where people join the course, initially a student from Beijing would most likely head for Shanghai, someone from In-donesia or Malaysia would probably go

to Singapore, whereas Canadians could well head for Miami.

With recruitment handled regionally, the tendency is for students from Africa and Europe to head for Manchester, while those from North America see Miami as a natural entry point, and

students from South America gravitat-ing towards Brazil. But there is no hard and fast ruling to any of this. Some students are enjoying to the full the benefits of academic tourism, ensuring that each semester is spent in a differ-ent country.

With the same Manchester academ-ics flying around the world to deliver the same content, only the venue is really different. Unlike many other MBAs that tack “global” on to their programmes, this is truly a worldwide course.

Logistically, scheduling the part-time programme can be complex – with the planners catering for 3,000 executives (another way of describing students) on the Global MBA and hav-ing to factor in such events as Rama-dan and official Chinese holidays. In all, 120 nationalities are involved, with only 13 per cent of students being Brit-ish, so it is a virtual United Nations of the business education world. Anyone

and everyone who either wants to pro-gress in their current career or who is looking to eventually take up another challenge can be found.

Every walk of life is represented. There are engineers looking to get into the boardroom, there are bank-

ers looking for possibly even bigger bonuses. Then there are journalists – a top reporter from Japanese televi-sion is on the programme, looking to move into management – and medical doctors planning to move up from the clinical area.

The military are very prominent, as most of the Global MBA centres are close to giant US Air Force bases. Faced with relatively early retirement, the officer class is keen to march suc-cessfully into another career when they leave. And there is even a fair sprinkling of sportsmen and women hoping for that move into manage-ment when time is inevitably called on their careers.

It didn’t take long to discover via an internet search that the captain of Manchester City FC, Vincent Kompa-ny from Belgium, is on the course. Un-fortunately, insurance considerations have precluded him from playing for the MBS football team.

The appeal to all the students is, of course, the ability to take the pro-gramme at whichever of the seven centres they choose. “Many other MBA programmes use the prefix ‘glob-al’, meaning students might eventually go to America or China for a short module and, more often than not with no choice of location,” says Professor Martinez. “However, we allow our stu-dents to go wherever they want, when-ever they want, and crucially to study at our own centres.”

But which are the most popular centres? “Just about anywhere,” says the professor. “It depends on personal preferences, cultural background. Lots of people from the Middle East want to go to the US, whereas people from the Far East like to come to the UK.

“When they join, we try to persuade them to take a bit of a walk on the wild side – to get out of their comfort zone and many do. But even if they don’t, with the MBS Global MBA pro-gramme, the world comes to them.”

First-year students on the full-time MBS MBA programme on an induction bonding exercise in Brathay in the Lake District

High flyer: Professor Martinez, associate director of the Global MBA offered by Manchester Business School

We allowstudentsto gowhereverthey want

Business Insightthe times | Tuesday August 6 2013 15

You don’t get to work for BMW – the German manufacturer of the ultimate driving machine – unless you know what

you are doing. The fact that BMW has chosen to allow students on the Manchester Business School MBA programme to handle a project on its behalf is a level of endorse-ment that few other schools can match – and this was not to work on something of little import, but to make a significant contribution to some real-life supply chain issues that the company had.

The MBS team chosen had to successfully bid against other teams at MBS to win the project, then deliver to a very tight timescale and budget.

“An MBA team worked with BMW to harness the wealth of knowledge about suppliers that already existed among its employ-ees, outside stakeholders and

research institutions,” says Norbert Rabauer, project manager, purchas-ing systems, BMW Group. “They designed a platform to engage with internal and external agents, crowd-source knowledge and enhance collaborative work and research.

“The team developed a global roll-out plan for the platform and provided a range of methods to analyse and maintain it once launched. Working with high-level BMW employees on developing a solution which could have far-reaching implications, they were able to give the company a business rather than an IT perspective, with the emphasis on user needs.”

And how successful were they? “The project showed efficient possibilities for better communica-tion and collaboration within the supply chain. The MBS team also offered a clear recommendation for next steps in implementation and roll-out”

Manchester’s full-time and Global MBA programmes both give executives the opportunity to take

their international learning a step further by immersing themselves in specific economies. “Doing business in China” and “Doing business in Brazil” are two of the most popular.

In China, students meet experts from different sectors, and chief executives of local companies provide an insight as to the way their companies do business. The Brazilian event is very much on the same lines, but has the added appeal of being held in the vibrant city of Rio de Janeiro.

Understandably, then, Rio is the favourite destination for students who might choose to explore Brazil after the five-day intensive business briefings.

Meanwhile, back in Manches-ter, the full-time MBA pro-gramme is also flying high, but with its academic feet firmly on the ground.

For 50 years the MBS MBA has been accepted not only as a leading player on the UK circuit but also globally – with an international seam running through its entire academic offering.

According to Dr Heather Spiro, the As-sociate MBA programme director, they will maintain their ongoing success story

through the correct mixture of constancy and change.

And change is happening. Come Sep-tember, and the new intake of students, there will be a major shift towards negoti-ation strategy and tactics to underpin the usual courses such as finance, marketing, people management and organisation. Negotiation is to become then a significant part of the curriculum – a core subject, a recognition that the skills are increasingly important in all business situations. “This is an example of remaining constant but changing the programme,” says Dr Spiro.

But what is MBS actually going to teach students about negotiation? The academ-ics involved will look at providing the stu-dents with a full range of skills – starting from when someone enters a meeting, as-sessing who else is in the room and their reason for being there, both from what they hear in discussions and from what is not being said.

“This is very much a life course as well,” says Dr Spiro. “It is very practical in that it will help students throughout the whole of the MBA.”

The applications of negotiation skills are endless. With an emphasis on teamwork in the MBA programme, this involves negotiating not only their involvement in the team but what the team actually does.

This isvery much a practicallife course as well

Doing business in…

Driving out theultimate project

With students being offered an intern-ship between years one and two, they need to negotiate a salary. And when it comes to that all-important job inter-view, they will be taught not only how to negotiate their way into the job but just as importantly how to secure the salary that is commensurate with their experi-ence and ability.

Dr Spiro and her colleagues are also hoping that the negotiation skills will have a significant impact on the Interna-tional Business project held at the end of the MBA course, where students need to confront the client company on sensitive subjects such as budgets and expenses.

“Negotiation skills then become key to the whole programme,” she says, “in terms of liaising with your colleagues, your clients, the academics.”

But where does the MBS MBA pro-gramme hope to find the academics who can teach these skills? “Manchester Business School now has well over 250 experts,” Dr Spiro says, “a combination of academics and practitioners – it is that mix that gives our MBAs a unique perspective.”

MBS not only has some of the top ac-ademics in the business field, but – often through them – it has forged strong links with household names in the global eco-nomic community. BMW is just one

company for which students have han-dled projects. (See case study.)

Again with BMW and others of that ilk, there is a need for the students to negotiate and refine the brief, to agree a budget – with the MBA students having to give a good account of them-selves at all stages of the project.

Projects have always been a signifi-cant part of MBS. The premise – “you can only learn by doing” – was even-tually translated into the Manchester Method. “The programme was deliber-ately designed to have projects at the core, rather than tag them on at the end, which you often find with other MBA programmes,” says Dr Spiro.

Students do three compulsory pro-jects in the first year, then the final project in the final year which is the International Business project. Work-ing in teams – carefully chosen to mix different nationalities – they have to bid for the right to handle each project.

“I liken it to doing your piano exams: start at grade one and finish at grade eight,” says Dr Spiro. “It is like a spiral, really, start with easier problems, then as you gain more knowledge, the prob-lems and the projects become more complex – and the clients become more demanding.”

The first project is always not for profit and local – recent ones have in-cluded helping the National Football Museum in Manchester and a horse-riding charity for the disabled, both of which were looking for help with de-veloping marketing strategies. Come the final year, the International Busi-ness project means – according to Dr Spiro – “that they have now entered the really messy world of business, not only business but international busi-ness.

“This is a real programme – never think of this as taking time out to do an MBA. It is not time out, but time in that will stand people in good stead for the rest of their lives.”

Dr Heather Spiro

Mixing change and constancy

Tuesday August 6 2013 | the times

Business Insight16

The University of Salford already offers one of the most flexible, AMBA-accredited and enter-prise-led MBA programmes in the world, with students able to

join the programme at any one of five starting dates throughout the year.

It is now introducing new MBA path-ways to enable students to specialise in sports business or digital business as part of their programme.

These developments reflect the ex-pertise at the University of Salford’s Business School, home to the Centre for Sports Business and the Centre for Digital Business – both of which have internationally recognised profiles.

The introduction of the innovative new pathways, which will be available to students who begin their studies from January 2014 onwards, expands the unique features of the Salford MBA. This has been developed to meet the de-mands of today’s aspiring global business leaders and involves intensive teaching blocks, followed by customised, blended learning resources and online support. MBA students can join the programme

in September, November, January, March or June, with full-time students completing their programme in a year and part-time/executive students typi-cally taking two years.

Each MBA module can be studied ex-clusively, addressing time-critical busi-ness needs, developing innovative think-ing and providing solutions to tackle complex business issues and leverage market opportunities. All MBA students will study a range of three core modules, with specialist modules then available for those taking the sports business or digital business pathways.

Those students on the specialist path-way will also focus their MBA Business Innovation Live Project on an aspect of sports or digital business. The project enables businesses to benefit from pro-fessional consultancy services at no cost, as MBA students work with organisations for up to 10 weeks, helping to resolve business challenges or problems. The company and MBA student agree objec-tives, scope, deliverables and timeframe, and then work on a consultancy basis, providing innovative ideas and solutions.

Dr Marie Griffiths from Salford’s Cen-tre for Digital Business says a better un-derstanding of the digital environment is essential for businesses to flourish. “The ‘digital skills’ gap is a growing concern both globally and locally,” she says, “and the Digital MBA pathway will provide participants with a hybrid skill-set of technological knowledge and manage-ment administration, developing leaders able to navigate emerging technologically based business environments.”

Manchester has recently announced its strategic goal is to be the premier digital city on a global scale by 2020. Greater Manchester is already home to Media-CityUK, where the University of Salford has its latest campus and is the home for Salford Business School’s MBA pro-grammes. One of the most popular MBA modules is Search and Social Media Mar-keting, which was designed through close collaboration with local digital agencies, and reflects how Salford Business School can support the city’s ambitions to be a digital leader.

Sport is unarguably an obsession with the North West, home to numerous top-

Specialising

Having left school at 16, Susan Mawer of Stockport longed to test her potential – and chose the

challenge of an MBA degree at Salford Business School.

It was a totally new experi-ence for the mother who had been a long-term partner in Credibility, a learning and development consultancy.

Studying for an MBA allowed her to consolidate all her practical and operational experience. “By choosing to study after years ‘in the field’, I felt I was finally putting all the pieces together,” she says. “It allowed me to look at my business in a new light. I use the knowledge I gained almost every day, I’m far more strategic in my thinking, and have a better idea of how all the business elements can work together.”

Following graduation Susan had the opportunity to return full-time to Credibility but took a slightly different route. “After I graduated,” she says, “I secured a post as a graduate teaching assistant at Salford Business School, which means I can combine doing a PhD with teaching business school students.

“I’m using my business experience and the insight of the MBA to carry out a PhD in corporate social respon-sibility. For me, this is the

perfect combination of work and study.“I’m even going to a management confer-

ence in Florida this month to present a paper on corporate social responsibility. I would never have dreamed this was possible until I took the MBA. It has opened up a whole new, wonderful world.”

Pathways to career successSalford Business School is celebrating 25 years of delivering management education by continuing to innovate and develop its flagship MBA programme, reports Robert Collins

Rami Al-Awartani was the customer services manager at

Jordan Ahli Bank when he decided it was time for a change: “I was looking to do something that would open up new opportunities for my career”.

After reflection and research he applied to study for an MBA at Salford Business School. “I had read some great things about it,” he says, “a good location, well priced and highly respected. Having decided early on that I wanted to study in either the UK or the USA, I went for the UK and Salford as a degree from a British university is very attractive to potential employers.”

During his time at Salford Business School, Rami was impressed by the curriculum and struck by how much he learned from other students. “The open discussions the lecturers encouraged really helped me to learn from both the professionals and my fellow students,” he says. “There were people from all backgrounds – the commercial sector, Govern-ment and charities.

“Doing the MBA has really paid off for me. It has totally

changed the way I think about business and helped me develop the skills to work in a much more strategic role as a project manager at Omnix International. I am cur-rently based in Jordan but working in Dubai, Saudi Arabia, Oman and Iraq, so it has led to many new interesting experiences.”

‘I learned so much from others’ ‘A wonderful world has opened up’

flight football teams as well as the county cricket ground, venue for one of this sum-mer’s Ashes test matches.

Football, in particular, is a multi-bil-lion-pound industry, and with lucrative commercial deals available for individual sports personalities, clubs and venues, managing sport and the business side of sport has never been more important.

Professor Chris Brady, from the Cen-tre for Sports Business, says Salford is the natural home for a pathway in sports business: “The North West of England is synonymous with sport. BBC Sport is our neighbour at MediaCity, two of the biggest brands in world football are on our doorstep and numerous big industry leaders have their headquarters here, in-cluding Adidas and Umbro.”

Whichever route an MBA student takes, he or she is guaranteed a degree of the highest quality, accredited by the Association of MBAs (AMBA). This in-ternationally recognised kitemark is only awarded to programmes of the highest standard, after rigorous inspection and evaluation.�� www.salford.ac.uk/mba

This will develop leaders able to navigate through emerging technology

Bright Salford lights...to a brighter future

Business Insightthe times | Tuesday August 6 2013 17

The Salford MBAOne of the most flexible MBA programmes in the worldOur MBA modules address time-critical business needs, developing innovative thinking and providing solutions to tackle complex business issues and leverage market opportunities in the business, sports business and digital sectors.

You can join our MBA programme at any one of five starting dates throughout the year, on a full-time, part-time, modular, in-company or international basis, and on multiple specialist pathways:

❚ The Salford MBA ❚ The Salford MBA: Digital Business ❚ The Salford MBA: Sports Business

Our MBA enables you to:

❚ Receive an MBA that is AMBA accredited – an internationally recognised guarantee of quality demanded by the highest calibre management graduates and employers

❚ Study in state-of-the-art facilities at MediaCityUK; one of the most exciting, innovative and creative locations in the UK, home to the BBC, ITV and many creative and digital businesses, and close to some of the biggest sporting brands in the world

Whichever route to an MBA you take, you are guaranteed a degree of the highest quality.

Meet Salford MBA tutors at our Postgraduate Open Evening, on September 4, at MediaCityUK. Book your place at: www.salford.ac.uk/visit

Or contact Dr. Brian McGarrie, our Director of MBA and Executive Programmes

e: b.mcgarrie@salford.ac.uk t: 0161 295 4305

www.salford.ac.uk/mba

Tuesday August 6 2013 | the times

Business Insight18

Application

Head-down practical application is key to this school’s winningMBA approach, saysBarry McDonald

In a harsh economic climate and a fiercely competitive jobs market, you need to do all you can to maximise your chances of success. A degree from a top business school at one

of the country’s best universities could make all the difference between success and failure.

A Masters of Business Administration (MBA degree) at Leeds University Busi-ness School is a well-recognised academ-ic degree for managers and professionals with work experience. Employers want more from their managers – knowledge and strategic thinking are expected, but so too are leadership skills, commitment and creativity. The Leeds MBA can help hone these skills and give you the boost you need to succeed.

Don’t consider an MBA at Leeds if you simply want to be taught. This is a highly valued qualification tailor-made for people who want to challenge and be challenged through a rigorous leader-ship development experience.

The credentials of the University of Leeds speak for themselves – it was ranked in the UK’s top ten and world top 100 universities by reputation in 2012, according to The Times Higher Educa-tion, and the Leeds Executive MBA is the top-ranked programme in the North of England.

Leeds is a hugely international uni-versity. Students study alongside, and are taught by, people from all around the world. Recent MBA students have gone on to work in countries including the US, Germany, Turkey, Russia, China, Japan, Vietnam, Thailand, Singapore, India, Iran, Ghana, Nigeria and Mexico.

Students can study for an MBA part-time or full-time, depending on their commitments. The part-time Ex-ecutive MBA programme is taught in modular blocks and can be completed in two years. You can keep your profes-sional and personal life in balance, as well as being able to immerse yourself in your MBA away from the distrac-tions of work.

Around 25 students enrol on the Ex-ecutive MBA each year. Many live in the region, with some travelling from London or further afield. They have represented the public sector and also private sector organisations of all siz-

es, including some of Britain’s and the Continent’s biggest companies.

Core modules include subjects such as Strategic Management and Business Accounting, as well as selectable op-tion modules that allow you to focus on specific areas of interest, whether that is marketing, innovation or sus-tainability. At Leeds, there is also the opportunity to take part in live chal-lenges. With these, you will practise how to develop a new business, be-come a more effective leader, provide consultancy to a real business, make decisions at board level and become a global professional.

How they make leaders in Leeds

Like the city itself, Leeds University Business School is a thriving community of talented professionals. Many are engaged in world-class

research, applied to the major business challenges facing society today. The school was ranked in the UK’s top ten for business research in the latest Research Assessment Exercise.

Given Leeds’ position as a financial services hub, it is not surprising that the Business School’s finance academics are among the highest-rated in the UK.

It boasts the UK’s premier research centre in international business – the Centre for International Business at the University of Leeds – led by Professor Peter Buckley OBE. It also oversees the work of two other centres focusing on the major emerging nations – China and India – as well as doing research for governments and businesses seeking to expand internationally.

Marketing is another area of excel-lence here. The Global and Strategic Marketing Research Centre – led

by one of the UK’s foremost profes-sors of marketing, Professor Costas Katsikeas – specialises in global and strategic marketing, and consumer behaviour, branding and communica-tions.

The school is committed to creat-ing new businesses, led by the Leeds Enterprise Centre. In partnership with Goldman Sachs, it hosts one of the UK’s largest initiatives to support and encourage small business growth – the Goldman Sachs 10,000 Small Businesses programme.

School that means business

Vincenzo Dispenza, executive director of the MBA at Leeds Business School, believes the key to studying at Leeds is praxis. “We’re a research-led university and everybody who teaches on the pro-gramme is an active researcher in their own particular field of expertise,” he says. “However, the focus of the MBA is very much on practical applications through the various challenges. It’s a real mix of up-to-date research but with the focus very much on the practical application of the person.

“Students are encouraged to reflect. When they come here they have the ex-perience but they may not necessarily have evaluated it in a structured and crit-ical way. It’s about getting them to reflect and not only learn new things but also to unlearn some of the things they know.”

Oke Maduewesi, an entrepreneur from Nigeria who recently completed a full-time MBA at Leeds, says: “Before com-

ing to Leeds I was a manager at one of the leading banks in Nigeria. I embarked on the Leeds MBA to enhance my pro-fessional skills and progress my career. But it completely changed my thought processes – it transformed me from an employee to a successful entrepreneur by building one of the fastest growing cos-metic brands in Africa.

“The skills, management capability and knowledge acquired from the Leeds MBA definitely got me to where I am to-day.”

A major part of the Leeds MBA pro-gramme is to develop students as leaders, and group-working is a key part of this. Students will participate in challenges. In the New Venture Challenge they identify an idea for a new organisation, product or service, and develop a business plan. The Boardroom Challenge allows students to develop a board-level strategy for an organisation and learn from experienced board-level coaches. The final challenge, the Consulting Challenge, is where they apply their skills and knowledge to an or-ganisation to address a live problem.

The Leeds MBA will teach the student to learn differently. Students will live and work among the best, boost their career prospects and grow personally and pro-fessionally. Recent MBA graduates have gone on to work for a variety of compa-nies, including BT, BP, Arup, Deloitte, Deutsche Bank, IBM, Microsoft, Pruden-tial, PWC, Tesco, Santander and Unilever. �� Find out more about the Leeds MBA at: www.business.leeds.ac.uk/mba

Ranked in UK’s top ten Oke Maduewesi: transformation

Skills andknowledgeacquiredfrom theLeeds MBAdefinitely got mewhere Iam today

Business Insightthe times | Tuesday August 6 2013 19

THE LEEDS MBA

Give direction to your ambition.Ranked number one in the North of England (The Economist) the LeedsExecutive MBA is an unparalleled learning experience. Combining the latestmanagement thinking with practice we develop motivated, experienced managers into the leaders of tomorrow.

To �nd out more about the Leeds MBA, come and meet us and discover howwe can help you can become part of our ever-growing global network.

OPEN EVENTTuesday 3 SeptemberTo register for a place at one of our open events visit

www.business.leeds.ac.uk/the-times/mba

Tuesday August 6 2013 | the times

Business Insight20

Early days

That new Nottingham MBA already gets impressive feedback, reports Mike Cowley

Dr Richard Martin, assistant di-rector of public health for Der-by, was named the 2013 NHS Leader of the Year for his work in designing services for some

of the hardest to reach people in his city – those involved in substance abuse and crime.

With the NHS continuing to dig itself out of what appears to have been an all-consuming avalanche of criticism, here, for a change, was a good news story. Dr Martin, however, seems equally proud of another award he received this year, one which didn’t generate the same amount of publicity: he was named Executive MBA Class 2011-13 winner at Nottingham Busi-ness School.

What is pertinent about this education-al accolade is that Dr Martin’s success at work also reflects – in part, at least – the impact of the new part-time Executive MBA programme at Nottingham Business School, where he was in the first cohort to graduate.

One person more pleased than most that Dr Martin received both awards was Professor Roulla Hagen, who designed and launched Nottingham Business School’s experimental MBA programmes in 2010, as the success of graduates is the first clear indication of how effective her ground-breaking work has been.

As MBA programmes need to be run-ning for three years to obtain formal ac-creditation, it was arguably more impor-tant than usual in Nottingham’s case that the first wave of graduates from the part-time and full-time students – now only their third year – provided such positive feedback.

Another graduate in the first cohort, Kamaniya Banerjee, an operations man-ager for Ritz-Carlton, won the Dean’s Prize for Excellence for the full-time MBA course and boosted Nottingham Business

School’s case by describing her course as “pivotal to a robust career trajectory”.

Others in the same cohort have put their newly learned skills to a range of activities, including setting up a political party, participating in management buy-outs or simply gaining promotion. While these success stories cannot be attributed entirely to Nottingham Business School’s MBA courses, they provide a clear sign that something is going right for what is effectively the new kid on the MBA block.

Professor Hagen arrived in Nottingham in 2009 to lead the review of the MBA pro-grammes. With a formidable track record, she faced the daunting task of designing programmes appropriate for a constantly changing world. She had previously held the position of programme director of MBA curriculum development and inno-vation at Durham University, leading the MBA into the FT Global 100 and gaining recognition with the 2006 award for “ex-ceptional contribution to the university”.

In recent years, the MBA world has be-come increasingly competitive due to the emergence of top-class schools in the de-veloping countries. Add to this visa issues for students and it being known that many MBA programmes in the UK had become somewhat stale, and the need to come up with attractive and relevant programmes has never been greater.

At Nottingham Business School – which had previously run a part-time MBA course – this called for virtually a complete redesign as the previous format was con-sidered out of date. Professor Hagen was up for the challenge. Underpinning her ap-proach to the new MBA programmes was her “strong pedagogic background” which started when she trained as a teacher at Homerton College at the University of Cambridge, and saw her add social science degrees during her career. “That informs the way I design programmes,” she says. ”Nor was it in this case simply a matter of modifying a programme – here it was rede-fining and launching an MBA.”

As a starting point, Professor Hagen looked at the strength of Nottingham Business School, now one of the largest in the UK. Among the assets she found – and built on – were the historic strengths of

the parent university (Nottingham Trent) in general and the business school in particular. In turn, this enabled her to tap into the rich seam of academic talent available for the MBA courses – replicat-ed at both part-time and full-time level.

In addition, strong international links forged over the years provided a platform to develop the all-important consultancy projects which see students enter the complex and demanding world of global business.

“These are the sort of strengths that other business schools are still trying to gain to meet the international standards required,” Professor Hagen says. “They were already here at Nottingham.”

Neither was there dismissal of eve-rything about the previous MBA pro-gramme at the university. “I kept the important threads, the consultancy pro-grammes,” she recalls. “I was very care-ful not to throw the baby away with the bath water.” Knowing that her students increasingly live in a volatile world, Pro-

‘Our students aren’t here just to get a bit of paper’

fessor Hagen chose to build the MBA programmes on what she describes as “ac-tionable knowledge”. In other words, eve-rything they learn will be relevant to their professional and personal development. “Too much superficiality is extremely damaging,” she says.

A former assessor for MBA programmes, Professor Hagen had already seen at close hand the bits that worked and those that didn’t. “I do have a problem about some debates around the MBA,” she says. “There is still confusion out there about how a curriculum should be designed. I start from what needs to be done for an inno-vative programme, what is going to attract students. And everything they learn here, they can pull on the knowledge and actu-ally apply it in their world.”

She admits that going out and enrolling students for a new course has been a chal-lenging time. “Yet seeing the underpinning of this philosophy working its way through and hearing from the people who come out the other end saying they are achiev-ing things in their organisation they have not been able to achieve before, that’s what it is all about.

“Our students don’t come here just to get a piece of paper, they come here to make a difference to their organisations. And to hear that is what is happening, that’s all we need.”

The last word on the new Nottingham Business School MBA goes to Dr Rich-ard Martin. “I would recommend the Nottingham Trent University Executive MBA for its excellent teaching staff and contemporary programme content,” he says. “It’s very difficult to describe the rich, value-adding experiences gained via con-sultancy and the international aspects on this course, but without a doubt the MBA is an essential tool for managers in any dis-cipline.”

Already making a difference to the world around them

The Nottingham Business School MBA students find themselves making a differ-ence to the world around them even before they

graduate. One of the series of key consultancy projects they are called upon to undertake is to find and fulfil a strategic project in any country other than the one from which they come.

With 14 different nationalities making up the first cohort – a figure

that will rise dramatically in the future – this saw some serious networking to identify and negotiate consultancy projects in countries as diverse as New Zealand, Malaysia, Singapore, Ghana and Switzerland. One group ended up in Jamaica, helping a sports television station to plan its international expansion.

Each of the projects is self-funded by the students, but the Nottingham Business School MBA programme does provide each of them with £800

to ease the issue of air fares. “One of the things it teaches them is how dif-ficult it is to get business abroad,” says Professor Roulla Hagen.” Another is the need to co-operate with each other.”

So with the emphasis on attracting international students, how does Not-tingham Business School play? “They always ask how close it is to London,” Professor Hagen says. “But once they hear about what we have to offer as a city, they soon forget that.”

Professor Hagan: co-operation

Everythingthey learnthey can apply in the world

The business school had great university strengths to build on

the times | Tuesday August 6 2013 21

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