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9575523281?profile=RESIZE_400xDigital Transformation in Manufacturing, or Digital Manufacturing for short, is a matter of survival now for manufacturing concerns.  Manufacturing companies desirous of survival have no choice but to hop on the Digital Transformation bandwagon, rapidly.

Business Transformation of any kind is not an easy endeavor.  Change Management of Digital Manufacturing is typically more difficult than any Change or Transformation Program that an organization may undertake.

Forming a strategy to leverage digital technologies is the 1st step in transforming a manufacturing concern towards Digital Manufacturing.  Bigger challenges are faced in strategy execution.

For Transformation execution to be effective, CEOs must reconsider almost everything about the way their companies work; for instance, establish new Business Models, reorganize their Organizational Design, and also rethink their Leadership style.

Specifically, there are 3 key pillars of Digital Manufacturing execution that need careful consideration for the Transformation to be successful:

  1. Business Model over Technology
  2. Independence of Digital Operations
  3. CEO-driven Digital Transformation

 Let us consider the key pillars a little more in detail.

Business Model over Technology

Shifting from old technology to new is easier than changing the Business Model of any concern, especially a manufacturing concern.  Customarily, manufacturers sell machinery, hand out software as complementary, and offer after sales repair and maintenance service for the machinery.

For Digital Transformation to be truly successful, the whole way of doing business has to change.  Manufacturers have to look at what they are selling i.e., outcome instead of a product.  What is important is manufacturers should be willing to do away with existing Business Models to create and capture new value.

Value creation is achievable in many ways using industrial Internet of Things (IoT) by manufacturers.  All of the avenues for value creation should be used in parallel so as to gain the largest impact.

Value created through Digital Manufacturing can be captured in 2 ways:

  1. Software as a Service and Subscriptions/Licenses
  2. Offering Success as a Service

Independence of Digital Operations

Digital operations can create a meaningful impact only when they are independent of the main business.  Independence is important but so is proper linkage with the industrial business.

Initially, understanding regarding value provided by Digital operations may be very limited in the manufacturing business therefore cooperation may be inhibited.  Finding ways to link Digital operations with the manufacturing business must cater to the requirement of understanding how the machines work.

Resistance from the manufacturing business is expected when the 2 forces combine, especially when the Digital operations grow.  Delineating who handles customer relationship and all factors associated with it, is also a question that may spring up in cooperation between manufacturing and digital operations.

Ways to obtain gains from linking vertical business and the horizontal digital function must be found.

CEO-driven Digital Transformation

Sponsor of the Digital Manufacturing initiative has to be the CEO.  Only the CEO has the influence to decide the divergences between the old manufacturing business and the new digital business.

CEOs have to drive the Digital Manufacturing shift.  Leading from the front to make everyone understand that Digital Transformation is a very serious and important endeavor.

CEOs must have the will and resolve to challenge incumbency, obliviousness, and existing state of affairs.  While remaining firm on the strategic direction, CEOs must be flexible enough to experiment, learn, and adjust course.

Interested in learning more about Digital Manufacturing?  You can download an editable PowerPoint on Digital Manufacturing here on the Flevy documents marketplace.

Editor’s Note: 

If you are interested in becoming an expert on Supply Chain Management (SCM), take a look at Flevy’s Supply Chain Management (SCM) Frameworks offering here.  This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  By learning and applying these concepts, you can you stay ahead of the curve.  Full details here.

Want to Achieve Excellence in Supply Chain Management (SCM)?

Gain the knowledge and develop the expertise to become an expert in Supply Chain Management (SCM).  Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  Click here for full details.

Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities.  It also captures the management of the flow of goods and services.

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become.  By April, many countries experienced declines of over 40% in domestic and international trade.

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM.  In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart.  Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.

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– David Coloma, Consulting Area Manager at Cynertia Consulting

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– Roderick Cameron, Founding Partner at SGFE Ltd

9564571461?profile=RESIZE_400xDigital Transformation in Manufacturing or “Digital Manufacturing” for short is not an optional decision for companies anymore.  Manufacturing concerns that want to survive have to jump on the Digital Transformation bandwagon hastily.  Digital Manufacturing has become a prerequisite for a profitable existence even for mere survival of a manufacturing concern.

Business Transformation of any kind is difficult—more so when it is a Digital Transformation in Manufacturing.  In fact, Change Management of Digital Transformation in Manufacturing is typically more difficult than any change or Transformation program that an organization may undertake.

Not many manufacturing concerns had cognizance of the digital technologies until very recently.  Still, manufacturing concerns find it very hard to manage a successful Digital Transformation.

Digital technologies can disrupt businesses.  A Digital Transformation is not the Digitalization of an existing business.  Digital Manufacturing does not entail simply changing technologies, automating processes, taking aid of Artificial Intelligence in the process; in fact it means redefining the nature of work and productivity.

Starting a Digital Manufacturing project can be an arduous process.  Executives customarily approach this task with a lot of prudence and get caught in questions that are actually misnomers and myths, weakening the Digital Transformation process.  The 4 biggest myths about Digital Manufacturing are: 

Myth 1. Is outsourcing or partnering, to build digital capabilities, not speedier and less investment intensive? 

Myth 2. Why can the existing IT team and CIO not be used for this project instead of hiring new talent and creating a CDO position, both unaware of our business? 

Myth 3. Should each of our businesses not have individual digital capabilities tailored to their needs rather than a central digital unit that serves all businesses? 

Myth 4. Should not our approach to developing digital capabilities be phased rather than big bang?

More on these myths can be found in the PowerPoint presentation titled Challenges to Digital Manufacturing on Flevy.

Digital Manufacturing opens doors for many opportunities.  It allows the manufacturers to find ways of refining the performance and reliability of machines and increasing customer productivity through customer usage data gathered by sensors in their machines.

This approach allows manufacturers to sell outcomes rather than products.  Outcome delivery via Data Analysis and Performance Enhancement is a business opportunity worth trillions of dollars, according to a World Economic Forum study. 

Despite realizing the opportunities of Digital Manufacturing, companies find the process extremely difficult.  Digital Manufacturing has both structural as well as behavioral barriers stopping it from being successfully executed.

Manufacturers have to surpass the following 3 chief obstacles in order for them to be true Digital Manufacturers:

  1. Incumbency
  2. Talent
  3. Culture

Let us dive a little deeper into the obstacles. 

Incumbency

Rigidity is a major barrier in bringing about change.  Companies create capabilities and Business Models to succeed.  Overtime, when these capabilities and Business Models become critical for success and hard to imitate for the rivals, they transform into rigidities.  Success of such capabilities and models make the companies wary of bringing change in them.

Leaders refrain from touching projects with longer time periods as it may not show benefits during their tenures.  The reward structure in companies also encourages short-term gains to longer-term, capital intensive endeavors.  

Talent

Not many manufacturing organizations consider developing Digital Talent internally.  This leads to a dearth of key talent integral to build Digital Manufacturing capabilities.

The primary reason for this is the view that digital technology is an auxiliary function.
In-house capabilities are not developed because Digital Manufacturing requires an amalgam of personnel from the virtual sciences and the conventional engineering sciences. Both have a very different way of thinking and doing things, making it a great challenge to build them into a team.

Culture

Organizational culture at manufacturing firms is a significant hurdle in adopting digital technology.  Manufacturers have traditionally had long product-development lifecycles, long sales cycles, and a culture of constantly improving efficiency.  In order to be more digital, manufacturing concerns have to accept concepts used in the digital world e.g., agility, simplicity, and responsiveness.

Interested in learning more about the Challenges to Digital Manufacturing?”  “You can download an editable PowerPoint on Challenges to Digital Manufacturing here on the Flevy documents marketplace.

Want to Achieve Excellence in Supply Chain Management (SCM)?

Gain the knowledge and develop the expertise to become an expert in Supply Chain Management (SCM).  Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  Click here for full details.

Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities.  It also captures the management of the flow of goods and services.

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become.  By April, many countries experienced declines of over 40% in domestic and international trade.

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM.  In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective.  In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart.  Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.

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“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Change4With most Transformation initiatives people gradually revert back to their old habits of doing things.  Sustainable Change Management necessitates 4 key processes:

  • Chartering—defining the scope, rationale, and team for the change initiative.
  • Learning—testing and refining ideas before a full-blown execution of the initiative.
  • Mobilizing—using symbols and metaphors to engage people and gain their buy-in for the change program.
  • Realigning—redefining the roles and responsibilities and managing performance of the initiative and the people driving it.

These processes are critical to enable an Organizational Culture which encourages execution of lasting change.

In addition to these key processes, for the change to entrench into the organizational fabric, Leadership needs to put in place the environment necessary for the people to embrace and own the new processes, systems, and desired behaviors.

The 4 critical processes aid in creating the enabling conditions necessary for institutionalizing change in the organization.  These enabling conditions for sustainable Change take place in 3 settings:

  1. Structural Context
  2. Procedural Context
  3. Emotional Context

The environment for sustainable change must be put in place way before the actual execution of the Transformation initiative.  These enabling conditions encompass making changes to the organization’s structure, procedures, and sentiments / behaviors.

Let’s dive deeper into the 3 conditions critical to enable sustainable change in the institution.

Structural Context

The first element of the enabling environment requires the change leadership to work on reshaping the organizational structure.  The 4 key processes have a direct bearing on the organization’s structure.  Their effect pervades over:

  • The organization’s hierarchy and reporting lines.
  • Compensations, benefits, and rewards systems.
  • Monitoring and control systems.

The Structural Context significantly affects the way employees’ work and expend their time and their interest in certain types of projects.

The structural context is altered during the Realigning process of Transformation in the way new personnel practices are employed.  The Learning process informs the redefinition of linkage between the leadership and field staff.  The Mobilizing process informs the changes to be made in the roles and responsibilities of the management and front-line people—through storytelling and metaphors.  Whereas, the Chartering process helps instill a reformed, team-building culture in the organization.  Together, these changes in the structural context cascade down across the organization.

Procedural Context

The Procedural context pertains to a feeling of objectivity and authenticity of new processes and systems.  The Procedural environment involves the perception of people that their views are taken seriously and acted upon while designing and implementing a new initiative.

Procedural authenticity is critical in gaining commitment from the employees on initiatives that were not validated by them earlier.   It involves belief of the people that the change initiative integrates well with the philosophies of the organization and the way business should be done.  It makes the people feel heard, ensures trustworthiness of the change leadership through positive track records and effective decision making abilities, and alignment of the change initiative with the core values of the organization.

Interested in learning more about the other enabling conditions mandatory for institutionalizing change?  You can download an editable PowerPoint on Conditions for Sustainable Change here on the Flevy documents marketplace.

Did You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

DT2Accelerated pace of technological disruption has forced organizations to change.  It has triggered leaders to think of the ways they must adopt to survive in these challenging times.

Organizations are confronting this scenario by embracing digital technologies.  Traditionally, the focus of the organizations in these Transformation initiatives has remained on speed of change.  To get the most out of their initiatives, they are making drastic changes, to include:

  • Creating Agile Teams
  • Introducing Mobile Apps
  • Building Big Data and Analytics capabilities
  • Experimenting with creative Digital Business Models.

Digital Transformation programs are launched with huge fanfare, see success early on, but fail to keep the momentum going.  The issues that plague the sustainability of these initiatives are typically:

  • Aging Technology Infrastructure
  • Incompatible Operating Models
  • Archaic ways of doing business
  • Change-agnostic culture.

Drivers of change for the Digital Leadership have changed significantly over the years.  There is an increased focus on building scale when executing Digital Transformation.  Leaders have realized that quick Decision Making is not the only element required for successful Transformation.  To achieve its full potential, they need to create differentiated offerings and scale the most viable initiatives across the organization to create value.

Traditional organizations have started following the footsteps of digital disrupters like Amazon and Tesla.  They are implementing new digital services and adjusting their operations.  However, typical hurdles—e.g., old enterprise systems, bureaucratic red tape, delayed decision making, and segregation between IT and business units—make them slip back into the outdated ways of doing things.

Sustainable Digital Transformation involves building not only the technology infrastructure but also revisiting the operating model.  Successful Digital Transformations essentially involve embracing 4 key strategies to enable an ecosystem that encourages change to stick as well as scale:

  1. Create a strong Digital Foundation
  2. Integrate and consolidate the Digital Ecosystem
  3. Front-end to back-end approach
  4. Create a new Business Model

Let’s delve deeper into these strategies.

Create a Strong Digital Foundation

Manufacturing and pharmaceutical industries are the major sectors that employ this strategy.  The typical state of affairs in organizations implementing this strategy is such that they are in need of developing new digital capabilities from scratch to tackle nimble rivals who are churning out novel value propositions using digital tech.  These companies are burdened by dated tech infrastructure, sluggish decision making, and dated business models.  The risk of disruption to these businesses is growing but it hasn’t challenged them to transform drastically.

To them, building a digital foundation warrants acquiring novel foundational capabilities.  Their approach should be to start implementing and managing small changes one step at a time.  For instance, building a smart technology architecture with advanced Big Data, Analytics, and predictive modeling capabilities.  This should be followed by testing prototypes of the new model to prove their worth before implementing a full-blown execution.

Integrate and Consolidate the Digital Ecosystem

This strategy has gained traction most in organizations from the Consumer Products industry.  These organizations are typically marred by scores of fragmented IT systems running in different parts of the organization.  There is a general inability to prioritize the most viable projects and scale them.  The need to reform and rapid deployment of Digital Infrastructure is critical for survival.

The approach to Digital Transformation in these organization should be to establish a central management position to manage the initiative and streamline dispersed technology landscape.  This entails revising the technology infrastructure and operating model, deploying a unified IT platform for gathering and storing customer data, establishing a common data repository accessible to all units to recognize customers’ needs, and creating a culture that encourages innovation, acts on creative ideas, and refines them through experimentation and advanced tools.

Interested in learning more about the other strategies to enable Digital Transformation?  You can download an editable PowerPoint on Sustainable Digital Transformation here on the Flevy documents marketplace.

Did You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

change2Initiatives aimed at improving performance are often launched with great uproar, costing an organization significant investments.  Such initiatives necessitate extensive changes in the Organizational Culture and the way the enterprise systems and processes function.

However, most initiatives fall short of realizing success.  Decades of scholarly research on Change Management reveals that the issues that contribute the most to the failure of strategic initiatives are:

  • Incompetence in sustaining process improvement.
  • Lack of trust on senior leadership.
  • Failure to embrace new ways of doing business.
  • Performance relapse.
  • Inability of the initiative to produce any positive financial returns.
  • Skepticism towards the desired behaviors and return of impractical employee behaviors.

Researchers have carried out scores of studies to isolate the drivers of lasting change.  Research published in MIT SMR in 2005 discusses how leadership can design and execute Transformation initiatives that bring lasting changes in the organization.  The study entailed in-depth analysis of the strategic Customer Service Enhancement (CSE) initiative undertaken by a large clothing retailer, having franchises in multiple geographic locations.

The researchers conducted 20 semi-structured interviews with leaders, in-store operations and support function managers.  Detailed notes of the interviews were shared amongst the researchers alongside an exhaustive literature review.  A case study of the initiative was prepared using independent research to have an unprejudiced viewpoint, free from any bias.  Feedback from the organization’s management was gathered and incorporated throughout the study to seek clarifications or corrections.  Data analysis was carried out employing a coding scheme developed using Atlas.ti tool.  Comparative analysis was conducted and similarities and differences in conclusions were discussed.

The study brought to light 4 key processes necessary for change to stick in an organization.   These key processes assist in laying the foundation for successful institutionalization of change initiatives by creating a company-wide culture that encourages enduring change:

  1. Chartering
  2. Learning
  3. Mobilizing
  4. Realigning

Let’s delve deeper into the first 2 processes.

Chartering

Chartering is a process through which an enterprise classifies the purpose, scope, and the way people interact with each other on a strategic initiative.  Clear delineation of project boundaries, resources, responsibilities, and reporting lines are the elements integral for the success of a change initiative.

The Chartering process entails 2 critical components:

  • Boundary Setting
  • Team Design

Boundary Setting involves the key steps a team takes for accurate definition of change initiative’s scope.

The project team should clearly outline the problem(s) that the project is, and isn’t, going to tackle.  Ideally, while designing and executing a change initiative, the focus of the engagement should be on confronting the most crucial problem area.  The leadership should ensure not to confuse the core team by eyeing too many priorities to deal with through the strategic initiative.

The Team Design element of Chartering involves ascertaining the roles, accountabilities, and guiding principles for team’s collaboration.  Team design entails creating ground rules for team members to interact, devising mechanisms to manage conflicts.  The leadership needs to not only maintain diversity of the project team’s expertise, but also ensure they complement each other, and inculcate a standardized approach to decision making in project teams.  There needs to be fostered a culture of positive discourse and testing ideas amongst the team members.  Incorporating these guidelines helps spark thinking, learning, and decision making.

Learning

Learning aids in anticipating and dealing with hurdles during implementation of Transformation initiatives.  Learning enables the managers to improve the quality of the new processes.  it is a process through which managers develop, test, and refine ideas before full-scale implementation.  The process entails 2 critical components:

  • Discovery
  • Experimentation
For more information on Learning and Development and how to elevate your organization into a Learning Organization, check out the frameworks and tools on Flevy here: https://flevy.com/business-toolkit/learning-organization

The discovery element involves gathering data to identify the objectives of the change initiative and outlining ways to achieve those objectives.  Before rolling out a complete implementation of a change initiative, testing and refining the individual elements of the initiative immensely assists in the success of the initiative.  Gathering adequate information relevant to the initiative, setting up baseline metrics to measure performance, and identifying issues hampering customer satisfactions are the key aspects of this phase.  The team should learn from the failures of prior initiatives, introduce change in a systemic fashion rather than piecemeal, and encourage people to change rationally as well as emotionally.

Interested in learning more about the other processes critical for change to stick?  You can download an editable PowerPoint on 4 Processes of Sustainable Change here on the Flevy documents marketplace.

Did You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

8543198671?profile=RESIZE_400xReorganization becomes essential at some stage in the lifecycle of any organization.  In order to emerge triumphant through this tumultuous challenge, it is necessary that the focus remains on the challenges impeding the organization, thorough Strategic Planning to tackle the challenges, and prioritizing strategic initiatives to deliver effective Business Transformation.  Strategic Restructuring has the capability to deliver these results.

When the word “Restructuring” pops up, the foremost idea that comes to mind is achieving Cost Reduction by minimizing payroll costs—predominantly by cutting back on the headcount.

Scores of organizations have suffered because, in the melee of headcount reduction, the most competent employees quickly found opportunities elsewhere, leaving inappropriately competent employees behind, resulting in a crippled organization.

The purpose of Restructuring is to make the organization profitable, efficient, and effective.  Headcount reduction should be a consequence of the Restructuring initiative and not the prime objective.

To avoid an outcome that debilitates the organization as a result of Restructuring, it is absolutely essential to keep an eye on the Critical Success Factors (CSFs) while the organization moves through the 4 phases of Strategic Restructuring.  Strategic Restructuring’s 5 CSFs include:

  1. Strategic Focus
  2. Continuous Communication
  3. Participative Focus
  4. Positions before People
  5. Focus on Competency

Experts suggest envisioning a “Future State” for the organization, to be achieved through a robust Strategy that includes Change Management, implemented by the most competent employees who are redeployed.  The rest of the employees either severe ties voluntarily or are laid off—ideally with a good severance package or a job placement, with the organization’s help, somewhere else.

Leadership has to ensure firm resolution in employing these Critical Success Factors in order to establish its role and build a constituency among employees who believe in the need for change.  Let’s dig deeper into the 5 CSFs of Strategic Restructuring.

1. Continuous Communication

  • Communication is a decisive factor in Strategic Restructuring. Pitfall in this factor is the “need to know” approach.  Top-level leadership should be communicating with the whole organization quite frequently.
  • Immediate and full disclosure of information builds trust in the management’s actions.
  • Repetition is key in getting the message across. Believing that enunciating once is enough, will be erroneous on the leadership’s part.

2. Participative Focus

  • Redesign of structure is a bottoms-up job because the information and expertise are dispersed throughout the organization.
  • Employees in the thick of the action are in the best position to undertake this effort.
  • The management develops the organizational framework and keeps apprising the employees regarding the overall strategy in order to keep the direction true.
  • A participative approach to Restructuring assists in building employee morale and engagement levels.

Interested in learning more about the Restructuring’s Critical Success FactorsTransformation Phases, and a Case Study on Restructuring?”  You can download an editable PowerPoint on Strategic Restructuring: Critical Success Factors on the Flevy documents marketplace. 

Want to Achieve Excellence in Business Transformation?

Gain the knowledge and develop the expertise to become an expert in Business Transformation. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

“If you don’t transform your company, you’re stuck.” – Ursula Burns, Chairperson and CEO of VEON; former Chairperson and CEO of Xerox

Business Transformation is the process of fundamentally changing the systems, processes, people, and technology across an entire organization, business unit, or corporate function with the intention of achieving significant improvements in Revenue Growth, Cost Reduction, and/or Customer Satisfaction.

Transformation is pervasive across industries, particularly during times of disruption, as we are witnessing now as a result of COVID-19. However, despite how common these large scale efforts are, research shows that about 75% of these initiatives fail.

Leverage our frameworks to increase your chances of a successful Transformation by following best practices and avoiding failure-causing “Transformation Traps.”

Learn about our Business Transformation Best Practice Frameworks here.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

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Virtual Work 2COVID-19 has forced organizations to adapt to the new norm of Remote Work.  Many people consider telecommuting as the future of work.  Employers who allow Remote Work have seen enhanced employee morale, output, and efficiency.

However, Remote Work setting is far from business as usual.  Management needs to understand and manage the intricate differences between in-office and remote teams.  To make Remote Work successful and to manage remote teams, leadership needs to follow 5 guiding principles:

  • Assemble a group of people— skilled in Remote Work setting—to supervise and support other employees to work remotely, assess any challenges, and create workable solutions in real time.
  • Develop and share (across the organization) a comprehensive reference guide—e.g., a repository, manual, or a web page—documenting exhaustive information on process changes. This will keep all stakeholders informed and prevent any uncertainties.
  • Communicate with the employees transparently and frequently, foster informal communication, and provide easily accessible video conference facilities for people to adjust to and incorporate change.
  • Keep the number of tools to handle documentation and communication to a minimum.
  • Manage the Remote Workforce by establishing candid, ongoing communication channels, trust, and shared objectives. Transition from an in-office setup to a remote environment takes time.

Likewise, remote employees need to follow certain guiding principles to undertake their responsibilities effectively and deliver on their tasks efficiently.

  • Establish a dedicated workspace.
  • Make their families understand the significance of their work—that they perform from their virtual offices—and respect their work hours.
  • Set alarms to remind when to take a break or end work, so as to work in a healthy routine. Use breaks to recharge your brain or to do errands.
  • Communicate informally with your team.
  • Try out unconventional workdays and routines that work best for you.
  • Adopt this transition

Conventional on-site work settings have clearly defined processes, team structures, interactions, and Organizational Culture, which are lacking in most virtual environments.  The transition from on-site work to work-from-anywhere demands concrete steps to make it viable.  It is critical to adopt Virtual Work mindset and best practices since every organization today, in one way or another, is a virtual company—e.g., global operations, sites and offices across different locations.

This necessitates dedicated efforts to nurture and promote a virtual-work focus and Culture, rather than managing Remote Work with a traditional mindset.  Organizations need to incorporate these 5 best practices to make the transition from conventional to work-from-anywhere environment smoother.

  1. Document everything
  2. Have more structured meetings
  3. Align values with expectations
  4. Create ergonomic home offices
  5. Adopt a self-learning mentality

Let’s delve deeper into these best practices.

Document everything

In office settings, people can run into other colleagues easily to ask queries or just to communicate with them.  This is at times disturbing and counterproductive.  Work-from-anywhere environment demands documenting every critical piece of information, creating guidelines and manuals, and implementing documentation best practices.   This facilitates in:

  • Creating a reliable, primary source of information for everyone to seek answers to their queries.
  • Building successful Virtual Work environment.
  • Clearly outlining organizational objectives.
  • Visualization and clarity of teams’ collective goals and performance results.
  • Orientation of new hires by providing answers to everything that comes to their minds.
  • Offering more inclusivity, as the information is not confined only to the ones present at the physical water cooler, but is available for the entire organization.
  • Precluding a sense of exclusion in the ones who are not part of a physical office.
  • Gathering more diverse ideas.

A handbook culture is even better than “water coolers”—as it saves time by eliminating the need to bother other teammates and ask questions from them.  It enables learning, finding answers or information more readily, and curtailing rework arising out of gathering and updating information over and over again.  Documenting everything instills a sense of ownership, courtesy, and concern for others in virtual teams.

Interested in learning more about the other best practices to transition from in-office to work-from-anywhere environment?  You can download an editable PowerPoint presentation on how to transition from In-Office to Virtual Work Setting here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro LibraryFlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

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“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

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Behavior2Product managers, marketers, and designers are often confused as to what they should do to increase the chances of customers’ engagement and uptake of their offering.  Changing individuals’ behavior to enhance engagement, productivity, innovation, and happiness isn’t straightforward.

It takes a lot of effort, time, and resources to execute initiatives aimed at transforming behaviors and Organizational Culture.  However, most people aren’t interested in changing and like the status quo to prevail.  This is where Behavioral Economics can help to know how customers behave, interpret their decision-making methods, and create solutions targeting those behaviors.

Product designers and marketers aspiring to drive acceptance of their products can make use of the 3 Bs of Behavioral Change to change understand consumer behavior. The 3 Bs of Behavioral Change classify the 3 elements essential to change behaviors, i.e.:

  1. Behavior
  2. Barriers
  3. Benefits

Understanding and employing these 3 Bs helps the designers and product managers instill change, inspire design and strategy-related decisions, increase the acceptance of new products / features and product engagement levels, and build new behaviors in people.

Let’s discuss the first 2 elements in detail.

Behavior

People have an inherent tendency to maintain the status quo.  Behavioral change necessitates:

  • Identifying individuals’ existing attitudes.
  • Assessing and tackling psychological biases affecting individuals’ decisions.
  • Carefully tracking behaviors that need to be changed.
  • Ascertaining the most important desired behavior and exact action that is imperative to drive results.
  • Getting the buy-in from all stakeholders on the key behavior.
  • Deciding if the behavior should be permanent or transient.

Examples of key actions to change behaviors include spending 30 minutes thrice weekly doing cardio exercises and consuming salad at lunch daily to stay healthy.

Barriers

Understanding the barriers in behavior adoption assists in creating effective solutions to improve uptake of key behavior.  The second step to induce behavioral change is to reduce barriers in its adoption.

  • Every decision that a product user has to make, no matter how negligible, increases resistance in the likelihood of completing a specific behavior.
  • These actions and decisions an individual has to take in order to achieve the desired behavior create points of friction in embracing key behaviors.  For instance, people often find it difficult to decide when presented with complex choices. They tend to procrastinate or become a victim of decision paralysis.
  • Removing the points of friction and resistance from any key behavior necessitates documenting and streamlining all decisions. The path of least resistance leads to desired key behaviors.

Examples of barriers include the thought process involved in the decision to select where to have dinner.  This thought process is, in fact, a psychological barrier in actually going out and having dinner.  Likewise, the decision to walk or drive to a restaurant is a logistical barrier and a point of friction that warrants making a decision.

To eliminate these barriers, we can either remove barriers entirely or just simplify the decision.  For instance, elimination of a non-critical, open text field from a sign-up form—that probed the users about their business, which requires significant time to think and answer—can increase page-over-page conversion.  In case choices are helpful for the users and cannot be eliminated, then it is best to simplify the decision process by giving fewer options instead of many, or by suggesting “recommended option” to the users.

Interested in learning more about the details of the 3 Bs of Behavioral Change?  You can download an editable PowerPoint presentation on 3 Bs of Behavioral Change here on the Flevy documents marketplace.

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Stock Image 2 - Digital Facilitation PrimerIn the wake of global pandemics when meeting face to face is not possible, it’s about facilitating workshops digitally, designing a formal agenda, and utilizing digital tools to ensure a productive virtual meeting.  Digital Collaboration Platforms have been pivotal in the current scenario.

As a matter of fact, Digital Collaboration platforms have become a new norm and have forever transformed business work environment.  Digital Facilitation tools are extensively used by facilitators, Change Management consultants, Organizational Development practitioners, and learning professionals as a way to collaborate on workshops, events, change initiatives, and learning programs.

Digital Workshop Facilitation can be categorized into the following 3 major types:

  1. Virtual Facilitation

In this type of Digital Facilitation, a group collaborates remotely in real time but from different locations.  Common tools used are Zoom, GoToMeeting etc.

  1. Asynchronous Facilitation

In this facilitation method, a facilitator leads participants remotely at a different time and place. Common tools include Email, Slack etc.

  1. Face-to-Face Facilitation

In Face-to-Face facilitation, a facilitator interacts with a group of people in the same workshop space, in person.  Digital tools can be used in such a setup instead of flip charts and sticky notes.

The new scenario brings forth new challenges in workshop facilitation that necessitate robust principles, methods, and tools for the future work environment to run smoothly.  Understanding and adhering to the following best practices and principles in Digital Workshop Facilitation helps in attaining effective results just like face-to-face workshops:

  1. Specify well-defined guidelines and expectations.
  2. Form an assured environment to enable discourse.
  3. Ensure effective interaction before, during, and after a workshop.
  4. Ensure all voices are heard.
  5. Document the conversations.
  6. Alter the moderation approach based on the participants’ level of understanding.
  7. Seek comments and iterate.

Let us delve a little deeper into some of the principles:

1. Specify well-defined guidelines and expectations.

The remote nature of digital workshops limits the element of reacting to audience’s lack of attention.  This warrants clear instructions regarding ground rules, both in writing and orally to compensate for this disadvantage.  Participants need to use precise language in asking questions and answering them.

Instructions on technology and tools usage should be reiterated from time to time.

2. Form an assured environment to enable discourse.

Trusting participants in a virtual setting is difficult if you do not know them.  It is the digital facilitator’s job to create conversation security in different ways.  Spending time on icebreakers or other pre-engagement activities may ease the discomfort.  Providing quick and positive feedback to those who actively contribute encourages shy participants and creates a positive environment.  Informing the participants on how meetings are being documented and information on who has access to this documentation can reassure participants.

3. Ensure effective interaction before, during, and after a workshop.

Digital Facilitation platform can be used ahead of a meeting to help participants familiarize with each other, disseminate the agenda, initiate discussions, or obtain helpful information from the participants, such as questions, skill levels, ideas, etc.  Digital Collaboration Platform should be the center of post-workshop activities, e.g., sharing documents, closing agendas, answering additional queries, and extended discussions.

4. Ensure all voices are heard.

Digital Workshop tools can facilitate participation of people who in a traditional workshop setup will not be able to participate due to dominance by a few individuals.

Interested in learning more about the Digital Workshop Facilitation principles, methods, and tools? You can download an editable PowerPoint on Virtual Work Digital Facilitation (Primer) here on the Flevy documents marketplace.

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Time for change

Business environment has transformed drastically from what it was a century ago.  It has become immensely challenging due to competition, disruptive technologies, laws, and globalization.  These challenges warrant better performance to address customer needs and to survive—and outpace—intense competition.  Consequently, organizations have become complex.

The work that individuals perform in an organization has also shifted from manual labor and clerical jobs to knowledge-based experiential tasks.  Traditional workforce was required to adhere to commands and stick to routines, whereas today’s workforce needs to be more empowered, innovative, able to adapt to varying circumstances, and render sound judgment.

Adapting with the constantly changing business environment is essential for organizations aspiring to succeed in today’s competitive markets.  In order to stay competitive, more and more organizations across the globe are undertaking Business Transformation programs to reorganize their businesses.  However, a large percentage of such programs fail to achieve the desired outcomes.

For the Organizational Design to be successful, leaders need to be mindful of the revolutionized work settings and business environment of this age.  One of the major factors attributed to these failure rates is utilizing traditional approaches to reorganization, which are proving ineffective in this digital age.  These traditional approaches appreciate “level of control” and power, and underestimate the significance of employee autonomy and innovation. 

The Smart Design Approach to Organization Design

Today’s Knowledge Economy necessitates the employees to be more empowered to decide on their own than merely following commands.  People act in ways that are best for their own interests.  The new approach to reorganization—termed Smart Organizational Design—aligns the workforce’s best interests with the organizational mission rather than seeking control over the employees.  The focus is on changing the environment (context) and mindsets of employees willingly and instilling team work and cooperation, thereby enhancing organizational performance considerably.

The Smart Organizational Design approach entails classifying the existing workforce behaviors, ascertaining the desired behaviors critical to improve performance, and providing environment (context) favorable to develop new behaviors.  The approach encompasses 3 main steps:

  1. Define why reorganization is necessary (objective)
  2. Determine the behaviors critical to support reorganization
  3. How to execute the Smart Organizational Design

Let’s dig deeper into the second step.

Determine the behaviors critical to support reorganization

The next step involves the leadership to determine the “what” element of the Smart Organizational Design approach—i.e., definition of certain behaviors critical to achieve the transformation purpose.  Determining the desired behaviors necessitates thinking through the following 4 critical Smart Organizational Design aspects.  These 4 design aspects work in tandem to shift the environment (context) for the workforce and motivate them to embrace the new behaviors crucial for improved performance:

  • The Organizational Structure aspect—pertains to management reporting lines, spans of control, and layers of hierarchy.
  • The Roles and Responsibilities aspect interprets individual and shared accountabilities to cultivate teamwork and cooperation.
  • The Individual Talent aspect specifies the right skill set and motivation to perform responsibilities of each role effectively.
  • The Organizational Enablers aspect outlines the elements necessary for creating the right context (environment) for embracing the desired behaviors, i.e., decision processes, performance management, and talent management.

Interested in learning more about the other step of the Smart Organizational Design approach and the factors critical for its success?  You can download an editable PowerPoint on Smart Organizational Design here on the Flevy documents marketplace.

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