The Scottish Government

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Nurturing Wealth Creation

Increasing business effectiveness

Global competitiveness is increasing at an incredible rate as more countries are embracing the free market model and opening up their borders for investments and trading.

For a company to get ahead and stay ahead in today's competitive climate, there are some fundamental business strategies that need to be embraced.

Quality of management and leadership

The quality of management is absolutely essential to the creation of better companies, which lead to more effective wealth creation.

In order to remove the dependency culture in an organisation, good quality and talented management is required. There is an urgent need for management to remove inward-looking and negative attitudes. Management should concentrate on devolving and encouraging responsibility within its organisation to empower all levels of staff to achieve greater success.

This type of empowerment can generate huge business benefits, including reducing companies' cost base, encouraging ownership of internal issues and instilling a "can-do" attitude within the organisation.

Lean Management, for example, is a philosophy that creates a more efficient company through the best use of resources and the elimination of non value-added waste.

The Lean Management Thinking programme, sponsored by Scottish Enterprise Glasgow, and other schemes such as the Scottish Engineering Excellence Network, based on the European Business Excellence model, can support such activity, but require a strong commitment from the top.

The benefits of such a programme are that the company gains feedback from all levels of the organisation to reduce waste and increase efficiency, costs are reduced and everyone is involved, improving the overall culture of the company. This leads to a more competitive company with a more positive and imaginative mindset and a lower cost base.

Investing in skills and training

Training needs to focus on continually improving the skills of the workforce and the management all the way up to the Chief Executive and Board, with an emphasis on performance management, business growth and system improvements.

Training is often seen as more appropriate to the workforce than to the management, particularly members of the Board and Chief Executive.

While the Scottish Executive has a role to play in encouraging businesses to invest in their people, ultimate responsibility lies with the Board members, Chief Executive and senior management of the individual company.

Investors in People (IiP) is a national quality standard which sets a level of good practice for improving an organisation's performance through its people and should be a fundamental building block of any lifelong learning strategy.

Where properly applied, IiP contributes not only to improved earnings, productivity and profitability through workforce development, but also to improved personal development opportunities and helps instil a culture of lifelong learning. There is, however, some concern that IiP is perceived as being more relevant to large organisations that to small businesses.

Scottish Enterprise and Highland and Islands Enterprise, through their networks of local enterprise companies, are responsible for promoting Investors in People (IiP) in Scotland. They should ensure that promotion of the standard is accompanied by greater relevance for smaller firms and for those who have been accredited by IiP for some time.

Board members, Chief Executives and senior managers must take responsibility for their own lifelong learning and make a commitment to continually improve their knowledge and skills.

Although there are a number of business schools throughout Scotland providing management training, none has an international reputation comparable to such institutes as the London Business School in England, INSEAD in France, IMD in Switzerland or either Harvard or Wharton in the US.

While one can argue whether there is a need to create such a school in Scotland, it is clear that the bulk of Scottish manufacturers are unaware of not only what is available in terms of management development outside Scotland, but also what is currently available here within the country.

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