Accountancy & Management: Industry must learn to cope with change: Roger Trapp reports on the need for managers of manufacturing companies to organise better planning, implementation and communication among staff

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The Independent Online
NOT so long ago manufacturing looked like a thing of the past in this country. But now that the service mentality that dominated much of the Eighties has had its credibility dented by the recession, manufacturing is raising its head once more.

This is not so much due to a nostalgia for the glories of Britain's industrial past as to a realisation that the country's economic future depends on an ability to - in that well-worn phrase - make things that people want to buy. It is not enough just to promote a greater awareness of industry; the companies must be capable of competing. And the single European market and other factors are likely to create such a harsh environment over the coming years that this will be a mighty challenge.

By common agreement, management of change is the issue facing industry in the current decade. The pace of change is accelerating, and increasing competition, advancing technology and economic and environmental uncertainty will test companies' ability to manage it. So how well placed is industry to respond?

Ingersoll Engineers, an international management consultancy with 30 years' experience of manufacturing strategy, sought to answer that question in its annual survey, just published, Commitment: Implementing the Vision; the management of change in manufacturing businesses.

The 200 managing and manufacturing directors surveyed, representing a range of industrial sectors, were in general agreement that vision, strategy, implementation, communications and behavioural issues were all 'success factors' in the drive for competitiveness. But there was much less support for Ingersoll's hypothesis that there should be equal emphasis on the five factors.

For managing directors, in particular, there was a clear differentiation between vision and strategy, which were rated 'very important' by more than 80 per cent, and planning, measurement and implementation, which rated scores in the 50s and 60s.

This variance is made worse by the delegation of responsibility for implementation to skilled line managers who would be learning on the job rather than to change managers. In practice, only 55 per cent of programmes use task forces or specialist resources - despite a clear perception among respondents of the importance of project management skills.

It is, said Brian Small, managing director of Ingersoll Engineers, 'perhaps little wonder that the second greatest difficulty for any change programme is keeping to schedule. Or that the most commonly selected methods are the tuner's 'continuous improvement/phased introduction' and not the shaker's 'step change' often required by the initial vision.'

This lack of commitment at the top of the organisation to the detail is made even worse by delegation to those perceived as most resistant to change. There was found to be great support for change in the inner circle of senior managers and the outer rings of customers, suppliers and shopfloor workers, but serious reservations among those in between, particularly among supervisors.

Changing people's behaviour was identified by most in the survey as the number one difficulty in change management. Ingersoll regards this largely as a question of communication: using more effective techniques, such as team briefings rather than newsletters and noticeboards; introducing feedback; and initiating the faster and earlier dissemination of information.

Another problem highlighted was customer satisfaction. Ingersoll attributed this at least in part to the fact that only 13 per cent of companies actually involved customers at the beginning of the process of change, while half would delay consulting them until implementation began.

In short, manufacturing companies are facing accelerating rates of change but do not yet appear to be fully organised to manage it effectively. 'Detailed planning and implementation is not yet a high enough priority nor a sufficiently developed skill while communication still leaves much to be desired.'

The firm is encouraged that 'UK industry's potential for a major transformation' is impeded not by something as fundamental as lack of investment but by 'soft' - correctable - issues. 'My greatest fear for the future is that MDs will continue to come up with the right answers on vision yet abdicate them to those most resistant to change, those who have heard too late, not participated in strategy development and, most crucially, lack the all-important project skills,' Mr Small said. Whether this means that, as he says, 'there is much here to defy the doomsters and to encourage the view of a coming virtuous circle for industry', remains to be seen.

In the meantime, companies are urged to follow Ingersoll Engineers' 'six pointers for managing directors facing a management of change programme'.

First, managing directors must acknowledge that, since their teams are learning new skills, they will need the MDs' help, and not just with vision and strategy. Second, they must recognise the need for sophisticated project management skills. Third, communication is a priority. Fourth, encourage dialogue to ensure that everybody absorbs the changes. Fifth, before starting implementation ensure that those charged with carrying it out are fully committed. Sixth, to get the commitment, make sure that there is a meticulous plan that demonstrates the vision, strategy and route, sets demanding targets that can be used to quantify success and demonstrate tangible benefits, and applies relevant measures as a way of monitoring progress.

In other words: 'Communication, planning, commitment - then go for rapid implementation with strong leadership.'

Copies of the report are available from George Illingworth, Ingersoll Engineers Ltd, Bourton Hall, Bourton-on-Dunsmore, nr Rugby, Warwickshire CV23 9SD. Tel: 0926 427088. Price pounds 35.

(Photograph omitted)

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