Change programmes fail to win manufacturing’s hearts and minds

So says an Economist Intelligence Unit (EIU) survey commissioned by the consulting firm Celerant to look into business leaders’ views on the subject in Europe and the US. Of the manufacturing sector leaders taking part, two thirds said they were responding to the credit crunch by seeking greater efficiency through increasing spending on change programmes. Over a half of them put improving their company’s operational efficiency at the top of their agenda, followed by ‘creating a new organisational structure with new roles’. They believed reducing costs was significantly more important than increasing revenue. Despite the increasing number of change initiatives, the EIU survey suggests the majority will fail. Fifty-eight per cent of manufacturing leaders questioned said that half or fewer of the change programmes they have undertaken in the past five years have been successful. The most significant challenges faced by them included winning the hearts and minds of staff (53%) and a lack of buy-in from local management (30%). However, although they recognise the high possibility of failure, the survey suggests manufacturing leaders are still prepared to spend money on change initiatives. The average expenditure of $7.7 million (£3.9m) by manufacturers in the last year was roughly in line with the global average for all sectors. Celerant’s Mike Atkinson said: “Our survey shows that manufacturing companies fail in the execution of change initiatives because they are unable to win the hearts and minds of employees at all levels of their organisation. This happens when people do not trust their managers or understand what values the management team stands for. Too often a change programme is seen as an excuse to make people redundant. “The reason that over half of all these initiatives fail is that they do not have clear objectives at the start and their aim is to achieve change, not deliver results – too often it is activity for activity’s sake. “In order to successfully deliver change, leaders need to inspire people with a sense of urgency, have a clearly communicated vision and plan and continually motivate staff. As change management becomes part of day-to-day management, only those leaders who can successfully execute it will survive and flourish.” Professor John Kotter (pictured), of Harvard Business School, said: “In a typical large change programme, it is not a matter of sending out the new organisation chart or the new strategy with a few projects. It is about changing people’s behaviour, often a lot of people, and this is not trivial.”