If done right with enough resources, change management can make the difference in whether or not a manufacturer succeeds with digital transformation, writes Lisa Clark of BitCadet.

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Lisa Clark

Change management is one of the most talked-about subjects in business. There are over 4,000 book titles alone on change management in manufacturing and countless articles, podcasts and training programs that support why this topic is so important.

When a formal change initiative is left out of a major digital shift, things go bad—and most companies blame the technology.

The very definition of change can be interpreted as challenging. Good change. Bad change. Both can be equally daunting, especially when it comes to embracing digitization in manufacturing. Look underneath the hood of any major change and you’ll find the true culprit—fear.

That’s why any company that undergoes a significant digital change should include change management in their process.

Why? Because there are serious consequences to doing nothing. According to McKinsey and Company, 70% of projects fail as a result of limited or no change management. In manufacturing, the numbers are even higher. McKinsey senior partner Harry Robinson says that change fails when the leadership does not build conviction within the team about the importance of the change or craft a change narrative that convinces people they need to make the transformation happen. If not, he suggests that people will not buy-in, and will not invest extra energy to make change happen.

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Reaping more benefits of digital sales

I recently followed up with a manufacturer that started working on digitizing sales and customer service processes three years ago. When it started that project, the company was excited to automate many of their manual processes and held a number of training sessions with employees to ensure that everyone was on board with the changes. While the company was reaping the benefits of the digital sales and services processes, a few of its teams had reverted to their original processes—collecting and recording information in hand-written notebooks.

It’s human nature to resist change and regress back to comfort zones. The longer people do things the “manual way,” the harder it is to introduce change. U.S. manufacturers are notorious for having huge amounts of manual administrative processes ingrained in their employee culture.  For many employees—especially those with a decade or more at the company—a new way of operating can be downright stressful.

What’s underneath all this fear?  Many people fear technology will make “them” and their “jobs” obsolete; all to save their employer money. Most do not see it for its true purpose—to augment and improve their day-to-day job functions. 

When a formal change initiative is left out of a major digital shift, things go bad—and most companies blame the technology. Change management in digital transformation projects fails for two reasons: bad change management processes; and a failure to understand the employees’ comfort with technology. Without employee buy-in, a company is destined for failure.

Allocating critical resources

A company needs to allocate resources for working directly with employees from implementation to execution. These resources are critical if the client wants to get the most from their overall project investment. It’s critical to engage all staff from the onset—to share the overall vision and positive impact this technology will have on the company and every employee. This opens the lines of communication and gives employees a forum to share their concerns.

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A company’s management must realize the importance of empathy. It’s a critical skill that needs to be incorporated into every aspect of change management. Executives must have empathy across the board—with employees, colleagues, customers, vendors, and, sometimes, even competitors.

Another McKinsey study reports that more than 75% of buyers and sellers say they now prefer digital self-serve and remote human engagement over face-to-face interactions. This means more manufacturers will have to undergo a digital change to meet their buyers’ expectations. The companies that embrace change management will be successful.

Lisa Clark is a co-founder of BitCadet, a digital technology services firm that helps manufacturers sell through ecommerce. Clark started her career in the veterinary business, where she helped a pet therapy company digitize and streamline its entire operation. To this day, she takes pride in building customized wheelchairs for dogs. Clark is also a founding partner of Seedzi, a digital incubator where she coaches start-ups on how to grow their business. Connect with her on LinkedIn or at [email protected].

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