Hadley Group – Never Let A Crisis Go to Waste
We learn how the Hadley Group is using a time of crisis as an opportunity for growth and development.
“Never let a good crisis go to waste” is a quote commonly attributed to Winston Churchill.
Shortly after March 23rd last year, as the COVID-19 infection rates were rocketing and the UK was forced to go into lockdown, the Hadley Group made that quote its mantra.
“We have a flat structure for fast and agile decision making,” says Ben Towe, Hadley Group’s Managing Director. “Culturally ideas are understood to be fragile; that space and usually resources are required to cultivate an idea into a proposal that can be more broadly communicated and sufficiently robust to withstand criticism and the misunderstanding common when exploring how to do things differently.”
It was an approach that was to prove instrumental in navigating the challenges of 2020.
Hadley Group is a family company that has become known for delivering market-leading products through in-house design and the creation of innovative metal profiles and systems since 1964. Today the Group is approaching sales of £200 million globally.
“We are constantly evolving our capabilities and searching for customers and partners unsatisfied with their current products or systems looking to embrace something different,” Towe tells us. “That can mean making subtle design changes through to full-scale redesign to deliver differentiation and competitive advantage for our customers.”
Hadley is one of, if not the largest, consumer of galvanised steel in the UK. This means it has the buying power necessary to continue its customers’ supply of products during the current global steel crisis and beyond at a time when many of its competitors are struggling. But this is just one of the qualities that make Hadley Group stand out in the market.
“We have existing and continue to develop more intellectual property that allows us to increase the performance of steel at no additional cost,” Towe says. “This gives our customers a choice to either reduce the amount of material in the product and retain the original strength or retain the amount of material while strengthening the metal and enhancing performance.”
Hadley processes also deliver a more consistent material and deformation performance can be more accurately modelled in fields such as impact, or crash testing. Its products can be found in vehicle crumple zones for this reason. Hadley’s material also gives products a unique look and feel which further enhance product differentiation.
The company has a wide international reach from sites in the UK, Europe, Middle East, Far East and now in the US too.
The Brexit Challenge
Hadley Group’s international reach, and agile decision-making capabilities, have been more essential than ever during an eventful year. Aside from COVID-19, 2020 also saw the advent of Brexit, which would have repercussions for Hadley’s international markets.
“We experienced anti-British sentiment as people outside of the UK have a view on the positives and negatives of Brexit,” Towe explains. “This has perhaps been the most challenging to address and provide reassurances when little guidance has been forthcoming. We responded to this by establishing manufacturing in mainland Europe over 5 years ago to give ourselves and our customers flexibility over production location and this has been well received, though that is not to say Europe is winning all the work as the UK can be extremely competitive.”
Brexit also meant additional paperwork and tax treatments, which Hadley has already been hard at work finding solutions for. However, Brexit has also introduced less surmountable challenges.
“This does not prevent the feeling from both suppliers and customers in Europe that the UK is simply not worth the hassle and all this change has in some cases been perceived as a risk,” Towe admits. “The EU/UK Steel quota is ludicrous. The Government view appears to be that because the UK is not utilizing the full tariff-free quota capacity that everything is working well when in fact the polar opposite is the case. Steel traders or anyone buying steel globally has no way of knowing how much steel the UK has purchased or will purchase within a quarter and so risks incurring a tariff of 25% of the steel price as an unforeseen tax or cost. This means any goods produced from that material at that cost will be effectively worthless because it is highly unlikely the buyer will pay an extra 25% above the market price for the same steel as their competitors are purchasing 25% cheaper.” For this reason, the Traders are avoiding this risk by choosing not to purchase these material categories for UK supply forcing supply substantially below demand.
Towe points to a particular unintended consequence of the tariff around Category 4a steel, a resource essential for a number of manufacturing applications.
“Category 4a steel is not produced in significant quantities within the UK with the existing supply chain incapable of meeting demand and worse, the only two places in the UK with the capability of producing category 4a are owned by TATA who prefer to produce category 4b material for the automotive industry,” Towe explains. “It remains unclear what domestic supply the UK Government, specifically TRID – the Trade Remedies Investigations Directorate, is protecting when there is no viable domestically produced steel market to protect.”
Towe tells us how the steel traders’ response of risk avoidance coupled with and consequently not enough steel is being imported to meet UK demand. The system is also too slow due to processing time.
Hadley Group has generated two responses to this crisis. Firstly, it has proposed enhancing the allocation system and speed of update hosted on the HMRC website where steel suppliers could register their tonnes and check to see if their products would attract a tariff and cancel the purchase if necessary. Hadley has also been lobbying the UK Government for a change to this tariff system that currently expires at the end of June 2021.
Never Shoot the Messenger
These responses have been generated through Hadley’s culture of open communication and where things do go wrong the focus switches to remedy, monitoring and early detection in future. In this culture, “Concealing the issue is the issue and subsequently, there is a higher degree of straightforward honesty,” Towe explains. “We do not have to settle for the status quo.”
This culture and structure are two critical elements that have stood Hadley apart when the pandemic struck, although that is not to say the firm was not badly affected.
“Across many sites, there were closures, both forced and voluntary, from which recovery has been slow. It has been our people that have carried the business through,” Towe says. “To each of them, I am eternally grateful to those who worked throughout the lockdowns and helped to navigate the company through these challenges driven by a sense of purpose.”
Towe tells us there is now a stronger understanding among Hadley Group’s staff that what the company produces is not just metal but an integral part of something much larger.
“For example, we delivered products and systems to build two of the UK Nightingale Hospitals and essential products and systems to rapidly scale up delivery of food and clothes from online shopping when all our shops were closed,” Towe says. “That value we bring is now more broadly understood by our teams and the wider population.”
Towe believes this new sense of purpose will carry the company towards great things in future.
“We have developed construction products that are increasingly winning Government support through the adoption of Modern Methods of Construction (MMC),” Towe says. “We are seeing growth in the construction market as traditional tradespeople and their skills become increasingly difficult to find and are unable to match our speed of build. We plan to protect and create UK jobs.”
To aid in this goal the Group has just received planning permission for the major development of an existing site, as well as the two sites adjacent to it. Hadley Group is working to create the capacity to accelerate quickly into the gap left by traditional construction.
As Towe tells us, “There will be an increased international growth agenda to augment existing capabilities and capacity working in partnership where we can add value and develop a leadership position.”