It's not the Program that matters

We see it in quite a few areas of our research:

      • Sustainability

      • Quality 4.0

      • EHS 4.0

      • Digital Performance Excellence

      • Analytics

      • IX Readiness

Improvement in Key Performance Indicators (KPIs) litter our research. What is interesting to me about this is that the KPI improvement is seen in areas that are not typically the expected areas for improvement of a targeted initiative.

Results Across Transformation Initiatives

Figure 1: Regardless of the initiative, leaders get results

For instance, the cost of poor quality or the number of customer complaints is expected to improve out of a Quality 4.0 initiative.

What isn’t expected but seen in our research is that the Cost of Goods Sold (COGS) and Revenue also improve out of a Quality 4.0 initiative.

Even further, our research across several disciplinary areas shows that the more identified best practices a company adopts, the better its KPI performance, as shown in (Figure 1).

The question is…Why?

First, it is excellent news that we are seeing a dramatic improvement in business results from our research on Industrial Transformation (IX) programs. That means some of these programs are achieving their goals. But still, why? More precisely, why do we see similar business improvement results from programs with different focuses?

In short, Change Management. One important aspect of transformation, regardless of whether it is an overall Industrial Transformation or a Quality 4.0, Digital Performance Excellence (DPX), EHS 4.0, ESG, or Analytics initiative, is that you must bring people along on the journey. LNS Research has long advocated a three-pronged program focused on:

      • PEOPLE (capitalized for emphasis)

      • Process

      • Technology

There are specific practices focused on bringing people along on the journey that fall under the grouping of “Change Management.”

Change management is about companies stewarding people along on their journeys through change. Everyone experiences change at their own pace. However, there are practices that a company can employ to help individuals navigate their own personal journey through the jungle of change. Those practices are grouped into three buckets:

      • Communication

      • Create Pathways to Success

      • Reinforce Desired Behaviors

LNS Research Change Management Framework

Figure 2

The LNS Research Change Management Framework (Figure 2) depicts the personal emotional journey through a change in work, and overlaid on top are the three categories of practices that an organization can adopt to nudge people along on their personal journey from old to new ways of work.

The individual emotional journey looks a lot like grief, and in many ways, it is. Many change management frameworks address change from the company perspective only. This leaves the individual’s reaction to change out of the equation.

Companies that execute on stewarding individuals through their own journey of change have higher engagement, lower turnover, and make more progress towards their goals for transformation than those who leave change to chance instead of managing it.

Recommendations for Manufacturers on Change Management include:

      • Communicate, communicate, communicate, then do it again. If you have a corporate internal communications team, partner with them to develop branding, communication messaging, look, and feel. An exemplar of this can be seen here. It is vital to communicate the why and the what, and then the how of transformation in the form of the burning platform with the vision story for change, giving people time to absorb and internalize the change to their own experience and ask questions for clarification as they progress on their journey.

      • Plan pathways to success. You want your people to come out the other side of the change into their new reality. Don’t leave it up to them to find their own path through the jungle. Creating pathways to success gives the roadmap to those who are ready early, and those early adopters show the way for the laggards.

      • Recognize where individuals are on THEIR change journey. Not everyone is in locked step when it comes to a change in the way they work. Different individual psychology adapts to change differently. Recognize the signs that individuals are struggling with the change, and remember, you have been thinking and preparing for this change for a long time, they have not.

      • Patience is a virtue. No one is an expert in the first hour, first day, week, or even month of a new way of working. Adopt a coaching mentality towards those who stumble. Show it as a learning opportunity rather than a performance management opportunity.

LNS Research Spotlight Report: Advanced Industrial Analytics, Building a Next-Gen Operational Architecture with a Data Hub Strategy

All entries in this Industrial Transformation blog represent the opinions of the authors based on their industry experience and their view of the information collected using the methods described in our Research Integrity. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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