The modern manager is swimming about in a goldfish bowl. Whatever he does, he is being watched, and under these stressful and difficult conditions, the major challenge is not to flounder about.
He must ignore the constant pressure to react to each and every article, every analyst’s report, and every environmental invasion. If he doesn’t if we don’t we shall be deflected from the fundamental long-term duties we have to our shareholders and to all our stakeholders.
I have no doubt that the UK chemicals business has the potential to remain one of the most successful industries not only in Europe but globally. If the critic can look in at us, we can equally look outwards, and hopefully judge the threats and opportunities.
Looking through the wall of the goldfish bowl, what are the main challenges we face in the UK if we are to realise the huge potential I think we have? What do we have to do if we are to remain a major force worldwide?
The first important challenge is to regain our technological pre-eminence. While the UK chemical industry’s inventiveness is very high, things do not look quite so bright on the development front. In the life sciences, we may not be the biggest, but we remain at the forefront worldwide. But in other important sectors we have slipped down the world rankings over the past decade. If we don’t nurture our seedcorn better than we have been doing, many of our competitive advantages will decline or disappear. It is not a question of investing in technology across all sectors, but in those in which the UK has inherent strengths.
I am not suggesting that we go back to the practices of the 1950s, when we allowed our research scientists to pursue whatever chimera they fancied. Instead, we need to increase the scale of effective R&D in areas where we can remain in the lead. As part of this, we must apply much more attention to the needs of customers and markets than our predecessors did in the 1950s. Our technology then was product-rather than market-driven. Today, the goldfish bowl does not allow us that luxury.
The second crucial challenge, not a million miles away from the first, is to win the freedom to develop technologies and products, particularly in the life sciences, which many of our unscientific and often myopic critics do not want us to develop.
There are powerful influences outside the bowl which are happy to enjoy the benefits which the chemical industry has brought, but will do everything they can to stop us taking what we consider to be acceptable and essential steps to ensure that the UK chemicals industry maintains its pre-eminence. There are Luddites who will take some convincing if we are to have the freedom that we need and which our competitors in countries such as the US or Japan are already allowed. We are going to have to learn to fight our corner a lot better by being more assertive in defending our industry.
My third challenge relates to corporate governance a topic which has occupied a good deal of my time over the past year or two. Business must become even more open and accountable.
There is already, I believe, a greater sense of public responsibility both in its operations and its management actions. But these must be spread further and must be universally visible.
We will also have to be more open, and to learn a new language: the language of our critics. We are going to have to change the image of the industry. This is the fourth challenge, and unless we meet it successfully, the first three will be unattainable.
Of course, we have talked for years about the need for greater openness and the need to explain to society exactly what we are doing. We have made come progress. Indeed, if I can compliment any organisation it is the Chemical Industries Association, which I think has done more than any other to explain the industry to the outside world. But the association would be the first to admit that we have a long way to go, especially among the young.
We have to recreate the exciting and inventive days of the 1950s and 1960s when we had no difficulty attracting the brightest young people.
I know it can be done, because I have seen it done.
Sir Ronald Hampel is chairman of ICI. This is an extract from an address he delivered last week to the Chemical Industries Association.