JJ Churchill Ltd. is a 72-year old precision engineering business. Looking forward, as a family business of 100 people, perhaps the most straightforward course of action during the recovery would be to either to not take too many risks by continuing in our current markets (aerospace, diesel engines, defence and cutting tools), or to give-up and sell-out.
But neither of those options would see the company getting close to what it could achieve with a little investment, vision and decent strategic planning.
So instead, we’ve recognized what were good at – innovation – and are using it to our advantage. On the one hand, SME or not, we compete in a global environment and our customers usually have choice of supplier, but at the same time we operate in a high labour cost economy and are not about to re-locate to China. So unless we know we can be the cheapest (we aren’t), innovation is our only way forward.
Of course, as a sub-contractor it would be easy to assume that as the designs we manufacture to aren’t ours, we can’t innovate – but this is lazy.
We’ve made massive strides forward in process improvement, we’ve identified the markets in which we really have an advantage and we’ve invested aggressively to move up both the technology and value-add curves. To have the confidence to do this – and that’s meant substantial counter-cyclical capital investment – we needed a rolling strategic plan that looks forward 5 years and sets our stall out.
This, I think, is what makes the difference: a good plan gives management confidence and clarity of purpose, it is the standard to which all investment decisions are assessed.
But just as important, it provides the foundation for regular communication with the bank (through good times as well as bad). After all, the banks are also a business, and for them, a credible business plan is a lower lending risk – and that should equal a lower interest rate.
My plea then is that every manufacturing business, no matter how small, should invest real effort ensuring they have a decent strategic plan, that it has resonance with their stakeholders and that it really is going to take them to where they should be aspiring.
JJ Churchill Ltd