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Why transformation remains elusive for Manufacturing companies?

Driving transformation and change in manufacturing companies is harder compared to service firms. Fixed capital investments, limited systemic flexibility of operations and higher propensity for incremental innovation restrict the canvas of change manufacturing companies can pursue. Most distressing to management is that goals and changes that be must be realized seem unattainable. Change or transformation remains elusive despite the best efforts, rich experience and high investment.

The reasons that hamper success vary based on type of company, culture, level of automation, products manufactured and so on. In my consulting experience there are a few common elements which limits manufacturing companies realize the fruits of transformation.

  1. Jumping without clarity on Purpose, Outcomes and behaviors

The company has to ideate why there is a need to change, what is the higher purpose of the change, which behavior(s) has to change and prepare a road map on broad prioritized actions to be taken to achieve this change. Very often,manufacturing companies recognize the need to change but focus only on “change to realize which benefit (increase bottom line/ improve growth /improve sales etc)” but not on “what needs to change” to reach there.Time has to be taken in the beginning to not just identify pain points but also why these pain points occur, what should be done to correct them. Otherwise we are just treating the symptom and not the underlying disease.

Also it is very important to not just make a list of “what to do” to aid the transformation, but also make a list of “what not to do”.  To realize better outcomes companies & management has to let go certain behaviors that have imprisoned them to realize their potential.

  1. No buy-in from senior and mid-level management.

Leaders at CXO level are eager to bring in change the next levels may not be as enthusiastic or committed to change. Mid management buy-in is critical as they are the ones who will actually be affected during the process of change. It could mean more work, more documentation, more time dedicated to enforce the change, questioning of processes followed for a very long time – which can all be every discomfiting. It then comes back to “What is in it for me?”There will be no buy-in if people don’t see a benefit for them in their execution of work. Hence change elements should be clearly listed with benefits to all stake holders and possible short term negative impacts.

Time and effort must be taken to work on this human aspect of change.

  1. Too much dependence on change agents or few star members

Companies bring in external consultants or hire consultants or nominate a change management team to drive changes. What these agents can bring in is an “outside-in” perspective and suggest what processes must be implemented for management planning, reviews and follow up. Manufacturing companies invest in IT and other systems to drive efficiencies and transparencies, but many suffer from “people dependent” change programs. A change management intervention fails if the changes are not institutionalized in the company. When these key agents are moved elsewhere, for whatever reason, the whole change process is derailed. Change cannot be accomplished by few star players. Behavioral change, to adopt the new process, has to be present in each and every member of the organization.

  1. Not celebrating small victories

Change management often is a psychological experiment. Positive behavior need to be recognized and not-so-positive behaviors discouraged. Small victories have to be celebrated. Spot awards can be given to individuals, teams or at project level to maintain enthusiasm and positivity in the uncertain times of transformation.

  1. Failing to iterate

Seemingly good ideas do not work sometimes. Manufacturing companies understand the PDCA cycle What worked once may not work again. The transformation process must be agile and able to quickly reboot if one approach is not working. Sometimes we are so invested in one approach that we fail to accept that it is not working. Similar to financial investments, the correct approach is not just to choose the correct investment but also to cut your loss and get out of wrong investments before it is too late.

To sum up, when a manufacturing company is in the midst of unsuccessful transformation effort, pause a little, take one step back and plan course correction and realize success.

** Pic – Web

Ranjani Sitaraman,

Associate Consultant Operations