It is natural for business people to be cautious when it comes to dealing with competitor companies, but the world is not entirely dog-eat-dog; sometimes a bit of friendly rivalry, co-operation or mutual support can pay handsome dividends.
Here Thomas Marks, Secretary of the Association of Electrical and Mechanical Trades (AEMT), speaks to some members about their experiences and concludes that there is more to be gained than lost by keeping in touch with others in your industry.
Trade associations, such as the AEMT, exist to serve given markets, both supply-side and demand-side. Their membership consists mainly, often exclusively, of the companies serving the market.
As such, it is inevitable that competing companies come together in trade associations and are required to interact with one another at certain levels. Naturally, the more they interact and co-operate, the better the trade association can function to provide services benefiting its members, the market and the wider economy.
Most trade associations have an executive committee (although it may operate under a different name, such as a board of management or council) that directs and drives their operations. People on the executive committee tend to be senior or relatively senior managers of the member companies, who naturally tend to be sophisticated and worldly. They are able to recognise activities that are worth pursuing and to avoid those that are not; the fact that they give time to their trade association suggests that there are beneficial effects to be gained.
So, what are these beneficial effects and who do they help?
In short, they can be separated into two categories: development of the market, meaning there is more business around to keep the suppliers active and to contribute to the general economy, and benefits for individual member companies, such as the opportunity to form alliances, share knowledge and develop joint strategies.
AEMT member Tom Beatson of Beatson Fans & Motors Ltd in Sheffield, has given an overview of one of the most common advantages of co-operation: “One of our core values is to always help people. Our customers need a service they can rely on and we endeavour to do our best for anyone we can. If we can’t help we’ll refer them to someone who can. Hopefully they will remember us for helping them find what they needed and the company we refer them to will be grateful for the work. One day they may have the chance to repay the favour.
“Further, when potential new customers contact us asking about rewinds or repairs, we will make a judgement. If they are too far away for us to offer our full support and provide a professional service, we will have to think about it and see if there is anyone nearer at hand that we would be happy recommending.”
Naturally one wants to recommend capable and helpful companies, so actually knowing them is a great advantage. Membership of the AEMT, or other trade associations, is an effective way to get to know other companies in your field. You will meet representatives in both formal and informal settings, such as in committee meetings, at golf days, on visits to members’ facilities and at gala dinners.
Beatson is the fourth generation of a longstanding member of the AEMT and has served on many of its committees. So, how has that effort assisted in the development of his own company?
“The market is always changing, and we all have to keep up with developments. For instance, it seems that there is always some new legislation that we have to get our heads around. Formal and informal discussions with other AEMT members are great for this; we get to hear other peoples’ perspectives and to talk through our own ideas.
“Being a small company, we can adapt and change as we need fairly easily, but it is invaluable knowing how the rest of the market is adapting. As an example, there is a drive to increase the use of condition monitoring techniques. Through the AEMT we will be able to develop industry-wide universal standards that we can all operate to, which means our customers won’t have to spend time and effort working with different systems from different suppliers.”
On a human level Beatson stated there is comfort in meeting fellow travellers. “It’s always interesting to hear that the challenges we face on a daily basis are challenges many others, if not all, in the industry face as well.”
Meeting of minds
Another AEMT stalwart, Matt Fletcher, MD of Fletcher Moorland in Stoke on Trent, also values the chance to meet industry colleagues, he explained: “Being on the AEMT council means I regularly get to network with directors and senior managers in companies similar to my own. I often find that what starts as a casual conversation over a cup of coffee ends up being really valuable. I might gain a useful insight or hear an alternative view on a current issue, pick up the germ of an idea that I can adapt and develop for my own use, or begin to form a close relationship with a company that we will eventually work with.”
He said he has had many experiences of informally sharing knowledge or experiences that have allowed him to build and improve his company. Meeting representatives of companies that are not local to him in and around Stoke is particularly valuable.
“The simple reality is that we do not compete with companies from outside our catchment area. This means we may get the opportunity to co-operate with relatively distant companies without compromising our own market position. Further, we may pass work to them that is not within our remit. For instance we often work with a company in the North East which does formed rewinds and complements our random wind capabilities.”
Fletcher Moorland is renowned as one of the country’s foremost rewinders and repairers of high performance servo motors and is happy to share its expertise with other companies.
“We regularly provide a ‘white label’ service to AEMT members, whereby they sub-contract the specialist servo elements within their major contracts to us,” explained Fletcher. “In a broader context, through the AEMT, Fletcher Moorland has helped set and raise standards for servo work and other specialist repairs right across the industry.”
Fletcher was keen to point out that just as other companies have learnt from Fletcher Moorland, he has learnt from others too. For example, he developed a clear strategy for improving his company’s job control software after a visit to an AEMT member who had created its own simple, yet effective, system.
“We have had similar experiences with other key functions such as safety and quality control, too,” he added. “On one visit to a large organisation I noticed that they had two workshops, one for large jobs and one for small works. Mulling this over it was clear that this produced some very attractive advantages, so now Fletcher Moorland has its main workshop plus dedicated workshops for small motor repairs and pump overhauls.
“There is one ‘borrowed idea’ that I see every time I walk onto our shopfloor, simple cleaning stations, they make cleaning and cleanliness a separate but key task, rather than an afterthought that can easily get brushed over. They have helped us improve our cleaning standards no end and it is notable and gratifying that many of our visitors comment on them too.”
Trust and respect are the key components Fletcher looks for when forming alliances with other companies. “You have to be aware that the future will always bring change, and this may alter the nature of the relationship you have with another company: you want to know that you will be able to address such matters in a sensible and professional way.”
Perhaps the biggest advantage of such trust is that it allows you to build a person-to-person business relationship from which new services can be developed. “We are now looking at rapid turnaround electro-mechanical work on a national and international basis,” he says. “We can only do this because we have trustworthy partners in all the main industrial areas, so can get an engineer on site very quickly.”
Legislation is promoting co-operation
Current and expected future anti-trust laws are encouraging companies to develop their willingness to co-operate with other organisations, believes Shaun Sutton, a director and co-owner of Merseyside’s Central Group.
“Some industries are increasingly dominated by giant global groups, which is not good for competition and could have a stifling effect on innovation,” stated Sutton. As a result many countries are introducing anti-trust laws that enable smaller companies to flourish and compete in their markets. At the same time, technology is becoming more complex and more integrated so that smaller specialist organisations must work together, finding synergies and complementary strengths.
As an example of this, Central is a registered partner company with both Siemens and ABB, as well as several other global organisations. It also has interests in three local companies: one drives and automation company in Scotland and another in the North East, plus a compressor company that serves similar industrial markets to Central.
“To make this sort of arrangement work we have to be both trusting and trustworthy,” noted Sutton. “It seems both daunting and open to abuse, but the reality is that everybody respects their respective boundaries and understands that there is a lot to be gained from working with the system and a lot to be lost by abusing it.”
He also added that the industry was not always like this. When he started his career in the 1980s there was much less openness. “You’d go to an AEMT meeting and everybody was wary of saying too much or giving away a valuable secret. There were even some cases of deliberate misinformation, which may have produced a short-term gain for the perpetrator but ultimately did more harm than good to the industry as a whole.
“Over the years we have seen the industry evolve into a much more open and honest body. We have realised that often the competitive overlap with other members is minimal and that we have far more in common with each other. We can work on our common ground together without compromising our commercial positions. This has allowed the AEMT to do its job better and thus provide more benefits to the industry and to its individual members.”
As with his AEMT colleagues, Sutton observes how much members can learn from one another without being commercially indiscreet. He illustrates this by recalling how basic record keeping was computerised, then production processes became digitised, then these were integrated together to create a cohesive and efficient operational environment.
“Now all of this is moving online and the AEMT is helping to define standards and establish common processes so that the industry benefits as a whole.”
He also drew a parallel between membership of the AEMT and staff at Central Group. “My dad set the company up before I was born, and he always nurtured his people. He strove to create an atmosphere where everyone was happy to speak; this prevented minor issues from developing into major ones and encouraged people to suggest new ideas. He could usually see the value of other peoples’ ideas and encouraged their development. The results, efficiency gains, workflow improvements, quality control, wastage reduction – were often appreciated very quickly.
“In many ways the AEMT is like that nowadays. Any meeting or event is likely to include a discussion (planned or off the cuff) that challenges the status quo and leads to some genuinely new ideas ,it can be really exciting!”
The fact that the AEMT enables members to meet colleagues in related but different markets means they can use each other as sounding boards and share best practice ideas freely.
Sutton went on to say, “our home turf is the North Country, and we have a great relationship with an AEMT member company deep in the Home Counties. We share ideas, set up joint training opportunities for our respective people and together form a strong voice within the AEMT.”
Strengthening the bonds
Networking with people in similar businesses but different catchment areas is the key benefit of AEMT membership identified by Andrew Savage of Mid Kent Electrical Engineering in Sittingbourne. He was twice President of the Association, in 2003-5 and again in 2012 and sees his legacy as being a strengthening of the bonds between individual members.
“A trade association creates value by encouraging its members to participate in events and contribute something positive each time. So, as President I encouraged people to speak out and generally join in at every level. In a word, I promoted networking, but this can be broken down into various parts.”
Savage stated that as he comes away from AEMT meetings he runs through what he has achieved. This typically includes creating and strengthening relationships with fellow members and potential suppliers, acquiring specific information and getting a general overview of issues and industry developments.
“Time spent with the AEMT is always a learning opportunity,” he continued, “so a mental review is a good discipline to follow. It is usually worth hearing how other people think the industry is going to develop in the short, medium and long term, and discuss the justification for their ideas.”
Absorbing such information and views is vital to the forward thinking and proactive actions that have characterised Mid Kent’s management decisions. Over the years, many local competitors have closed down, but Mid Kent keeps ahead of the curve by constantly investing in new resources and developing new skills.
“As other companies have fallen away, we have steadily expanded our catchment area to a radius of about 50 miles. We work hard to offer the same levels of service to our furthest customers as we do to our nearest. Membership of the AEMT helps with this as we can, informally at least, benchmark ourselves against other companies all over the country.”
Savage added that Mid Kent also trades with other AEMT members, both as a buyer and as a supplier. “If we need some specialist work doing I often know off the top of my head which members could do the job, and one quick phone call will set everything up for a speedy outcome. Naturally this works the other way around too: AEMT members come to us when we fit their bill.”
It is not surprising that each member identifies slightly different benefits to belonging to trade associations such as the AEMT. Overall all the benefits are available to all the members, but each moulds them to their own particular needs.
To sum up, it can be said that AEMT membership offers an industry overview, learning opportunities and networking events. This motivates everyone and helps them lift their bottom lines, while setting standards and bringing people together in a common cause to address things like standards, legislation and emerging technologies. Perhaps above all it shows that an industry has many opportunities, so there is room for everyone.