Invest your way out of the mire

Anyone can make money when times are good, but only the fittest survive a hard winter. Continued investment in R&D, products, technology, people and support is the only sure way of coming out on top through a period of recession.

This was the message that Clive Lattimer, managing director of Omron Electronics, had for British industry in the wake of a CBI report underlining the woeful state of British investment, and in response to the latest spate of personnel layoffs by technology companies. `If our attitude towards investment doesn’t change radically,’ he warned, `in ten years time there might not be any British industry left to worry about.

`The trap too many companies are falling into is competing on price instead of on design advantage. Companies which are embracing new technologies, investing in design excellence and building for the future have already taken the hard decisions that will see them through recession. Those UK companies that have not taken these steps are finding themselves increasingly vulnerable to overseas competition.

`Process re-engineering is talked about by many as a solution, but too often this is translated into nothing more than rationalisation. This quick fix in response to outside pressures like recession is all too easy and can be hard to resist, but we must understand that it is, at best, a one-time solution. And the opposite process of rebuilding is far from quick – it can take anything up to a decade of implementing the reinvestment process before you perceive any visible success from it.’

Outlining a way forward, Lattimer continued: `Maintaining, or even increasing, investment levels when orders are dipping can seem hard to justify, but it is essential. The trick is finding the right areas at which to target investment. A prime target has to be investment at the front end of a business, to find elegant means of simplifying processes, both to make it easier to do business rather than serve bureaucracy, and to improve customer support. At Omron, for example, we have been investing very hard and, if anything, this investment is accelerating, despite the uncertain conditions outside. As a result, we have no need for short term measures that could affect our long term growth.’

On an optimistic note, Lattimer observed that the potential for innovation is ripe within the UK, and stated that a key role of a company like Omron was to provide not only leading edge products but also design support to help customers achieve a good competitive advantage. However, he warned: `The Western attitude that shareholders come before customers at all times is one we must change if British industry is to survive.’