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It’s Time to Re-Evaluate Manufacturing Culture

March 8, 2021
Deeply ingrained ways of doing things that have worked in the past can be one of the biggest hurdles to staying competitive.

Time studies, quality circles, continuous improvement, Six Sigma, Lean and all of the other manufacturing best-practices have always had a strong cultural component. Understanding the mindsets, behaviors, and ways of working – the culture – that produce the best quality products, efficiently and reliably, is the holy grail of manufacturing organizations.

In addition, manufacturers are at the front lines of global macroeconomic trends. They are first to feel the effects of commodity price changes, tariffs and trade agreements, overseas competition, and the global war for talent. They need to be flexible and adaptive organizations, but they can easily get stuck in old ways of doing things and mindsets that limit creativity and change.

“Leaders have to constantly reflect on culture,” explained Ed Magee, EVP Operations at Fender Musical Instruments and former general manager of the Harley-Davidson York plant. “They need to take time to step back from the day to day and think about it. Leaders unplugging to contemplate employee development and culture, and specifically what needs to change, is what’s missing, especially in manufacturing.”

Why is this important? While the global pandemic has required all businesses to re-evaluate how they think about and do their work, manufacturers face unique challenges that lead to the need to re-evaluate their ways of thinking and working.

One of our clients, a family-owned vegetable business, has difficulty recruiting the talent it needs for the packing season. Younger seasonal workers don't want to put in the extreme hours needed over the summer months to pack vegetables. The pride felt by longer-tenured workers in “doing whatever it takes” is not shared by the younger generation, who have significantly higher expectations for work-life balance, even during the intense pack season.

The management style needed to lead manufacturing workers is shifting. At Fender, employees are talked about as “value-adders.” Automation is not structured to replace people, Magee explained, but to make systems more efficient so people can focus on the work that adds the most value. That work is their craft – in contrast to some plants where people feel overworked and underappreciated.

If the management style and culture don’t evolve along with the workforce’s values and expectations, manufacturing organizations will not be able to staff their factories in the future.

In The Opposable Mind, Roger Martin espouses the benefits of holding two opposing ideas at once, and using that tension to generate solutions superior to solving either challenge independently. What does this “both/and” thinking mean for manufacturing?

Manufacturers increasingly face challenges that cause this kind of tension: produce more but spend less; be efficient and reliable, but also flexible to run new product testing; think global but act local. Operations leaders are bombarded with these seemingly contradictory demands and that can cause divides between the plants and other parts of the business, especially corporate.

These tensions, when not addressed effectively, can create an “us vs. them” mentality. Former CEO of Delphi Technologies Rick Dauch says, “It is important for management to understand the workforce is not your enemy; it is your partner.”

Plant managers and supervisors increasingly have to build the skills needed to deal with the paradoxical challenges inherent to the manufacturing system. At Fender, the CEO’s motto is: “We need to grow and develop our people at the same rate as the business.”

In the “old days,” a general manager’s main concern was to ensure the plant performed at peak efficiency and profitability. Companies used leader boards and friendly competition to motivate higher performance across plants. Now, typically plants are part of a larger global supply chain. Actions taken by each plant serve a larger enterprise, not just the plant itself.

One manufacturer in the road construction industry comprises 20 smaller businesses acquired over time. Their strategy had been to let them run independently with light support from the parent company, and they were very successful. A few years ago, they brought together the 20 presidents for a weeklong strategy session, to share best practices and set the future direction of the enterprise. Now, the CEO has overturned the historic value of decentralization and is integrating the system even more, because the market and customers are demanding it. Plant managers and employees are seeing themselves as part of a greater whole and making decisions accordingly.

Many companies have underestimated the impact of this cultural shift on the workforce. Often plant employees have pride in their plant, so asking them to do things differently for the “good of the whole” can bring about a unique change-management challenge.

This is not about “fixing” manufacturing. This is about continuing to unleash the human potential and value inherent in manufacturing. It starts by recognizing these challenges and having the courage to look for shifts in mindsets, behaviors, and ways of working that companies need to be successful.

Carolyn Hendrickson, Ph.D. is CEO and founding partner of Tandem Group, specializing in strategy, organization, and leadership. She works with senior executives and their boards on planning, senior leadership team alignment, and cultural transformation.