How a legacy manufacturer moved the needle on its organizational mindset.
Manufacturing companies are essential to both our economy and communities. And because of that, many smaller and mid-sized businesses have been able to coast on the ways they have always done things. They have been successful for decades doing what they have always done.
In the past five to seven years, however, we have seen new CEOs being brought into many of these sleepy older companies to help wake them up—and, in some cases, turn them around.
In other cases, the change is not that dramatic. The company just needs to adopt some new ways of thinking and working to keep pace with the change happening in the world around them.
Such was the case with one of our manufacturing clients in the Midwest, a mid-sized family-owned business (850 year-round employees plus 1,000 seasonal) that has been around for more than 100 years and is a leader in its market. Why change?
They had successfully implemented a number of innovative initiatives to upgrade their operations beyond many of their competitors’. They had created a world-class continuous improvement function, got creative in how to streamline operations, and were accelerating their growth beyond what normally would have been possible.
However, employee interviews found that the culture of the organization was not keeping pace with the growth that leadership aspired to in the next five to seven years. New employees found their ideas were not being considered. They often heard, “That's not how we do things around here."
It also took a long time to make decisions. Everything had to go up the chain of command. And it was difficult to work across boundaries to get what you needed to do your job, especially if you were new. The organization was not operating in an agile or nimble way, turnover was increasing and the talent pipeline was slowing to a trickle.
The leadership team was split on whether culture was the issue. The long-timers felt that the culture was one of the best parts of the company. The newer senior leaders, however, felt the culture was getting in the way. They decided to embark on a multi-month project to see whether they could build, and align on, a business case to shift the culture or in some other way address the gaps that were emerging.
Through interviews and virtual focus groups, the evidence became clear that there were four primary issues that needed to be addressed:
· Capability for change: Actively building skills and capabilities for leading change to support growth and innovation. Includes shifting mindsets to be more open to new ways of doing things
· Collaboration and empowerment: Making it easier to succeed together. Includes being able to problem-solve and work through conflict constructively
· Accountability through continuous improvement: Building a process for clear, shared, tracked and transparent goals, with reviews and feedback to drive top- and bottom-line results
· Work-life balance and staffing: Establishing better work-life balance with the right talent in place to do the work efficiently, while creating greater capacity for growth and change
Taking Action; Leading for Growth
To address the first two—capability for change and collaboration and empowerment—the senior leadership team decided to embark on a process they called Leading for Growth. This was a custom-designed program for building the capabilities needed to accelerate growth and change. It was led by the leaders of the organization and designed in a modular fashion to make it easy to sustain overtime.
Through a series of three hybrid learning modules and a virtual action lab, delivered over six to eight weeks, the top 160 leaders in the company learned the new capabilities the organization needed and were positioned to train the rest of the workforce. It was a self-reinforcing approach that created deep ownership and commitment within the leadership team for the content that was being delivered. The leaders deepened their own experience and understanding of key concepts, such as how do you:
- Increase the willingness to speak up at all levels of the organization
- Drive alignment within the leadership team and at the next levels of the company
- Increase the culture of accountability
- Leverage breakdowns to produce innovative solutions
- Coach each other toward shared commitments that will drive growth
It takes courage to take on a program such as this. It took about a year and a half to develop and roll out. Early indications are that it's making a significant difference. For example, the capital allocation process was redesigned in six weeks to better meet the needs of the organization and the speed with which decisions needed to be made. More local projects, such as inventory management, warehouse culture,
,and attendance monitoring were also tackled as part of the process. Hurdles were overcome to help growth occur, whether it was in a manufacturing plant or in a corporate staff function.
Leading by Example
Whether or not your organization needs a wake-up call, the capabilities inherent in growing adaptable organizations allow companies to work across boundaries quickly and efficiently and enable their people to get what they need from each other.
What companies can learn from this manufacturer’s experience is that it is important to do the following:
· Take time to get the senior team aligned on the need—and reason—for change, and how best to tackle the necessary strategic capabilities.
· Use leaders to train leaders and role-model new capabilities; bring relevance and vibrancy to the stories and examples; create an internal cadre of skilled champions.
· Build a targeted set of strategic capabilities through a custom developed program to tackle the company’s unique organizational challenges.
· Work on real-life projects throughout the program; create results while learning; use action-lab methodology where they put their new learning into action to more firmly embed new practices.
· Integrate the culture work with the running of the day-to-day business; don’t make it a separate initiative.
Instilling manufacturing companies with critical capabilities for growth and change is a worthy pursuit. It benefits employees, the business and ultimately our communities and the economy at large.
Does your organization, or do parts of it, need to “wake up”?
Written by: Carolyn Hendrickson, CEO of Tandem Group, Inc., a firm that works with CEOs and senior executives to grow their businesses and their people, for IndustryWeek.