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Change Management in the Industry – What You Need to Know

Published: · Last updated: · 11 min reading time

The only constant is change. This wisdom applies to businesses as well, especially in the face of rapid digital transformation. It is wise to actively embrace and remain agile in the midst of change through systematic change management. Only this way can growth be ensured, and opportunities, risks, strengths, and weaknesses constantly monitored.

For manufacturing industry companies, technological progress with smarter production methods is the central challenge. Competitiveness and cost-efficiency can only be maintained through smart processes in the future.

Digital transformation of manufacturing is critical today, and change management is the appropriate project tool. Every project, including change management, needs two wings to fly. In the case of manufacturing industry, both Technology 4.0 and Transformation Culture 4.0 are required. A smart change management process addresses both aspects. This blog focuses on the fundamentals of change management.

Change Management Definition

Change management aims to enable transformation processes in organizations and companies to bring about significant changes. Successful change management is measured by whether the transformation opens up new growth opportunities for employees, leaders, and the entire organization.

In the best case, change management generates a self-sustaining dynamic within the company because the majority of those involved understand the opportunity for change, actively participate in it, and leverage its benefits at the earliest possible stage.

Whether changes are in the business model, value chain, or in areas like production, it can be initiated from the bottom up or top down.

Triggers for Change Management

According to market research company CEB, specializing in technology-related change management insights, the most common triggers for changes in companies include:

  • Culture change
  • Leadership change
  • Market expansion
  • Mergers or acquisitions
  • Restructuring

According to research, only a minority of change processes are successful, with CEB reporting a success rate of only 34% out of over 400 examined change initiatives. A majority fails. A popular saying among managers is, “Culture eats strategy for breakfast,” meaning that existing corporate culture often consumes the desired new strategy for breakfast.

To ensure the success of change processes, change management processes should be actively initiated and controlled.

Why is Change Management Important?

  • To remain competitive
  • To replace or modify old processes
  • To align management methods with desired strategies and structures
  • To timely and profitably implement digital technologies
  • To increase resource efficiency
  • To establish a positive corporate culture

Elements for Successful Change Management

Successful change management fosters a “change mindset” within the company. This is easier said than done, for several reasons: Regulatory requirements often limit flexibility, and there are often resistance and fears associated with impending changes. Employees must bid farewell to what they have been familiar with for years and adapt to new processes.

In general, a change management process can be divided into different phases. Some models will be presented below because they provide structured action plans.

The Iceberg: The 3-Phase Model by Lewin

Kurt Lewin’s 3-phase model is widely used. He compares the situation of changes in social communities to an iceberg:

  • Unfreeze – thaw
  • Change– change
  • Refreeze – refreeze

While Lewin’s theory has been supplemented by numerous other change management phases and models, it remains a powerful image. (See also the Q&A section below).

Progress is a nice word. But change is its motivator. And change has its enemies.

Robert Kennedy

The Change Management Process

The success of change management depends on whether a proper process is established from the beginning. Three questions should always be kept in mind:

  • What is being changed?
  • How should the process proceed?
  • What measures are required?

The dimensions that provide clarity about the exact profile of the change process are:

  1. Speed of implementation
  2. Size of the change project
  3. Predictability

The Right Approach

What is being changed?

First, it’s important to have a clear understanding of the changes required in various areas. One methodology for change management, used at FORCAM, is called “iterative process prototyping.”

At the start of the change management process, a complete “gamebook” or process playbook is created. It captures all the requirements of those involved in the change management process, from the workers to the management and individual departments. This creates a blueprint of all the requirements.

The process playbook encompasses four perspectives:

  • Executive View – Strategic goals from the perspective of senior management
  • Management View – Process flows and components from the perspective of department heads
  • Blueprint View – Management modules and specific processes
  • Technical View – Technologies and interfaces

How Does the Process Work?

Three things are important for a clear overall picture of the change process within change management:

  • Scope – Questions like: Is it a small, process-specific solution within a department, or is it about standardizing operations management across multiple plants?
  • Maturity – Define whether it is merely migration, implementation, or updating of ongoing processes, or if there is a fundamental change to the business model.
  • Time and Phases Plan – When does the project need to be fully implemented? When can it start? In what steps should it proceed? The answers to these questions affect how the process is managed and controlled. It’s important to build in time buffers for unforeseen events.

How to Identify the Right Measures?

Finally, concrete measures for change management must be decided upon. Helpful in defining these measures is considering the following dimensions:

  • Team: Which departments must be involved? The team aspect considers the degree of buy-in, meaning how high the acceptance of change is among management and employees. Are there enough incentives for a culture of change?
  • Scope: What project size aligns with the company’s mission and strategy? What skills and resources are already available? What is still needed?
  • Speed: How quickly must the project start and finish? The appropriate speed must be found. According to Kurt Lewin’s field theory, it’s assumed that performance and productivity initially decline significantly. This is due to learning curve effects.

Measures in change management should be defined along a clear phase plan. A commonly used guide for the stages of a change management process is John P. Kotter‘s 8-step model. In a graphic, we have compiled steps and measures according to Kotter, as well as tasks and challenges based on our own experience.

For planning and creating appropriate measures in a change management process, Wilfried Krüger’s 5-phase model has also proven effective.

  • Initialize: Identify the actual need for action and communicate the necessary change to key leaders and employees, mobilizing them.
  • Conceptualize: Develop a clear strategy with specific goals and formulate appropriate concepts. What is planned with what outcomes?
  • Mobilize: Inform the workforce and involve them in a suitable way. Employees should be actively engaged so they recognize the benefits of the change, accept the process, and ideally, actively participate in it.
  • Implement: Now it’s time to make changes, ideally in manageable and clearly prioritized steps. The results of the measures should be regularly reviewed and adjusted.
  • Sustain: Successful changes should be embedded in daily work. This requires that work becomes easier, more pleasant, and more self-responsible.

Measures for User Acceptance

  • User Participation Involving users in the development and implementation process (“User Participation” or “User Involvement”).
  • Management Support Providing support from top or middle management in their change efforts (leadership style and communication).
  • Incentive Systems Implementing modified or new incentive systems within the company.
  • Training Empowering employees to work effectively and efficiently with the new system.
  • Organizational Support Additional measures provided by the company.
  • Peer Support Employees can be supported by colleagues and do not need to rely solely on the project team (appointing “ambassadors”).
  • Design Features Ensuring user-friendly design for new systems.

Q&A – Change Management in Manufacturing

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