How does the way Spectris is structured add value? Our business model is based on a flat structure of semi-autonomous operating companies, whose managements have a high degree of responsibility. Each company is responsible for all aspects of its business, from new product development to marketing and personnel. Clear lines of command and straightforward control systems mean that the companies can focus on the priorities and react quickly, without the confines of a complex organisational structure to delay their decisions. Knowledge sharing between the companies is also key to transferring best practice and speeding up processes.

But how does this structure add value? To find out more about how the way we work helps our operations to serve their customers better, I asked freelance writer, Stacey Tanner, to talk to some of the people who head up our operations so that she could get the "inner perspective". The following article is a summary of her views, illustrated by comments from the people she spoke to in our operations around the world.

Hans Nilsson
Chief Executive, Spectris plc

Talking to the management of the operating companies the same messages come up time and again: the high degree of autonomy, coupled with real responsibility, which devolves to the individual companies; the refreshing absence of a blame culture, which enables problems to be aired and addressed fast. The overriding impression is of enthusiastic, lean organisations carrying no excess weight of management. These are companies with confidence in their products and their people: confidence, too, in an equally lean group HQ which demonstrates a reciprocal trust and a detailed understanding of the dynamics of each marketplace.

So how does this add value for customers and shareholders, at a time when the economic climate has been difficult?

First, the open culture of the operating companies, with their lack of hierarchical structure, means that they can react quickly. The management teams are responsible for delivering against their business plans and need to be able to respond swiftly to any change in conditions, in particular in the economic environment. "No one likes surprises - if we see issues arising, we flag them up, and we're expected to come up with a plan to address them. It works both ways, of course: as a late cycle business, we benefited from feedback from HQ on the approaching downturn, which early cycle companies were already hitting."

"We can get better products to market faster"

The flat structure also fosters a genuine synergy between the companies. "Within the group, there's a universe of people we can call on at all levels - marketing, technical, administrative. It means we can get better products to market, faster - and you can't really put a value on that."

"All the companies are very individual, so it's the sharing of ideas that adds most value. But when joint ventures do happen, you can be sure they're generated from the bottom up, for real business reasons - and we don't have some horrible matrix imposed on us, to make it work."

"The sharing of ideas adds most value"

The value of the Spectris synergy is particularly important when entering new geographical markets. Group members with a country presence will bring new arrivals swiftly up to speed on local procedures and the pitfalls to avoid, and cooperation may well extend to sharing buildings and administration. For example, this was of real benefit to many companies when moving into Europe, and, more recently, to Japan and China. The recent acquisition of PANalytical also has great potential for opening up direct channels in new territories.

Spectris in Asia Pacific is of course a major topic in its own right. The Spectris approach is characteristically practical and sensitive to local needs. It also demonstrates a high degree of commitment: "for many organisations, 'our man in Asia' is just a tick in the box. They think they can put one person in and see how he or she gets on before they expand. But you really can't expect to just put a toe in the water and succeed. You have to commit and invest. Spectris understands that, and the approach is already showing returns." (For more information on Spectris in China, see separate article in this issue)

The clear lines of command fostered by flat company structures are also key to the "bad news comes early, good news can wait" concept that lies at the core of Spectris philosophy. This is a culture in which companies are measured against their own plans. "In Spectris, we don't have to waste time second-guessing someone else's decisions. That's crucial to the feeling of ownership." Having taken actions early is serving Spectris well in improving positions against its competitors.

"We become experts in our customers' processes. That enables us to respond faster and more effectively."

No one underestimates the role of staff in adding value. These are highly-qualified scientists and engineers who have direct contact with customers and understand their problems - "you can hear the relief in customers' voices, when they're talking to someone who speaks their language." This focus on the customer permeates the culture of the organisation, and it's not simply a matter of good intentions: "We take a lot of pride in improving our knowledge and understanding, to the extent that we become expert in our customers' processes. That enables us to respond faster and more effectively."

Getting good people is one thing, keeping them is another, of course. "We've been able to hold on to very good people through difficult times", reports one of the companies. "Because there's very little in the way of a hierarchical structure here to worry about, people really can enjoy working together. They do work extremely hard but in a good-humoured environment."

Excitement about the products also plays a key role in energising staff: "our products go into environments with a high cost of failure. Our people like that - they know we make great products that make a difference, so they support them with all their might. It's a lot more fun than selling paper clips."

Despite the distinct niche markets in which the Spectris companies operate, the model of the Spectris operating company is evident throughout. It's flat and it's lean and nimble. It preserves the best aspects of its entrepreneurial origins, while benefiting from the combined skills and wisdom of a multinational group. But, most importantly, it delivers against its commitments.

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