“Any Leader that does not set out the context for change sufficiently and involve the workforce extensively at every level will simply not succeed.“  Liam Cassidy, President, LCL Ltd.

Liam Cassidy

Managing Change

In a career spanning over three decades working with major multinationals, change for me was never ending. Multinationals are marvelously constructed organizations where regardless of the economic environment, pressure for results is never ending, and relentless. If you are expanding, the bar simply goes up, if you are reducing, you align your resources to match that, which means shedding resources and trimming costs. In either situation, change has to be managed and although there are challenges with both situations, they are more difficult with the latter where difficult decisions must be made, communicated and executed.

For the last 15 of those years I have been implementing a formula that has been highly successful and provided great results. I have turned ailing and poor performing factories around, creating what is known within the manufacturing world as Benchmark sites. That is, they become a model for the rest of the organization to imitate.

This article is therefore written from the perspective of a Factory Manager. It is not an article with academic references. Rather, it is based on my own experiences witnessing and being part of both failure and success, and gradually evolving to a formula that has provided outstanding results even in situations when others said it would not be possible. I have learned much during that time, but one thing is clear: “nice” managers are not successful. Neither are they respected. By “nice” I mean those that sidestep sensitive and difficult issues. They give similar Performance Appraisal ratings to high and poor performers alike. Sensitive issues involving people are ignored. They conform and will not challenge or “rock the boat”. Managers that confront difficult issues, that challenge the status quo, which will not ignore people related issues, will be successful.

I have successfully managed factories in Ireland, USA, India and China. What I will describe here is what I do when I go to a site, how I engage with the workforce, how I deal with people who are going to slow down what needs to be done and the tools and techniques applied that has consistently provided spectacular results. Space does not allow me to go too deeply into detail, but I hope readers will get a good idea of what guarantees success, and what will ensure failure.

The Threat is Real – Communicate That!

In every case where I managed factories competition was fierce. Within multinationals each manufacturing source is constantly being compared. You fight to hold what you have, and try everything at your disposal to attract new investment. It is essential that this message is imparted to the workforce and repeated at every opportunity. Sometimes the threat is very direct, like when I was sent to a factory in the USA to prepare it for closure within two years, or in Ireland immediately after my then organization, Gillette, was acquired by Proctor and Gamble, and they had tentative plans to close our plant and move the business to their own legacy site in Germany and to a new one in Eastern Europe. In such circumstances it is easier to communicate as the threat is clearer. In other circumstances the threat is more indirect. I have seen many factories enjoy good years, get complacent, and lose their business to other sites that have become more competitive. Those stories are shared. Examples of factories that either no longer exist, or are losing business and therefore also losing jobs are shown. They are made aware of the ongoing pricing comparisons that are always taking place, so that a constant awareness of the competitive environment is being created.

Communicate the Vision

I begin by laying out the challenges, threats and also the opportunities if we implement necessary change. A vision is created of where we can go to. Usually this says something like: “We will be among the best in the world in which we compete” (In reality I mean “The Best”, but to declare so will create too much resentment from sister factories and the senior people associated with them). I tell them that I have a toolkit, which I can apply with their support, but before completing the formula I need their input. So I ask them 4 key questions: what is working, what is not working, what we should retain, and what we need to do to become a great plant. External facilitators are used to conduct this exercise with the entire workforce in groups no larger than 20, so that involvement and confidentiality is assured. The outcome of the consultation process is printed in booklet form and every employee gets a copy. This a wonderful tool to show everyone that their opinions matter, and provides the moral high ground when rolling out the change programs.

 ”The best leaders are those most interested in surrounding themselves with assistants and associates smarter than they are. They are frank in admitting that and are willing to pay for such talents.”  Amos Parrish 

Call to Action: iIentify the People Barriers to Change

Meantime, managers at all levels are being appraised, identifying who is going to embrace what needs to be done, and who will get in the way of the necessary changes. It is my experience that at least one third of senior, middle and front line managers need to be separated. Usually, I take on board a small team of consultants I know and trust to help me quickly identify those,  and to educate and train people in the various programs. It is absolutely essential that the people, particularly those at senior level who are not going to make it, are quickly removed. Otherwise, momentum will be slowed down and undermined by their presence. It must be emphasized that this is critical. The factory manager must be absolutely ruthless in driving this, because the greater good, perhaps the very survival of your plant, will be jeopardized.

Lean Toolkit – Making it Happen

In parallel with this, we set about putting our Lean tool kit in place. There is no more effective way to obtain better results than through the “Lean journey.” I like to have multiple programs working in parallel. So purchasing begins to work with key suppliers to get new working agreements in place. We establish Kanbans to our warehouse and then to our factory floor, and for the internal movement of work in process.  We train people in the art of Process Mapping and get people working throughout the plant on generating improvements. We start to get people thinking about Value Streams, (factories within factories) and usually within 3 months have an exemplar value steam emerging, with others identified to work on later. Meantime, all of our plant reports are being redesigned so that every work center has data that they can make sense of, enabling them to track their own performance. All data collected is analyzed, if it is not adding value and being used to inform and improve it is eliminated. We also get our entire staff, including office and factory personnel, involved in redesigning their work areas through the 5S Process. This is an outstanding tool for maximum involvement of people and when implemented will transform how the factory looks.

Visible Results

With all of these programs in play, credibility for the new programs becomes well established. What has been promised is being delivered upon. The challenges facing the plant have been laid out backing it up with clear evidence. The workforce has been asked to answer the 4 key questions I referred to earlier, therefore taking their views on board. Those not delivering are being separated (workforces always know who those are and this further increases credibility). The factory is looking much better through the 5 S programs, and painting and refurbishment. Data that was not being used has been discontinued, new reports from every department have been redesigned and now both inform and add real value. Communications processes are in place, and as much as possible this is done through Visual Management, with results and key messages posted throughout the plant. Space has been freed up in the warehouse and shop floor through the introduction of Kanban and implementation of 5S. Value Streams are being created to drive out waste with allocated people being decentralized so that they sit and work together.

 Usually after 3 months great excitement has been generated, with many programs already in place. Improved results are already visible. After 6 months a very substantial change is visible in both the atmosphere of the plant and its appearance, and of course its results. After 1 year it is truly spectacular, and then just keeps getting better as people become more familiar with the new way of working and with the various tools and techniques.

This is what works for me. I have achieved spectacular results by using this formula. The plant I was sent to close in the USA was declared a Benchmark site by Gillette within 2 years. The Ireland plant survived and still thrives as a Benchmark site. They continue to see off threats from Eastern Europe and Asia. In fact, they have just recently leased an adjoining factory.  In my last assignment in Shanghai, I also left a Benchmark site behind. With this formula, applied without compromise, there is no failure, only spectacular success!

 ”The only definition of a leader is someone who has followers”  Drucker

Operating Principles – Without Compromise

Twelve years ago, in frustration with the lack of urgency and engagement of the management team and workforce at the plant I was then assigned to, I wrote what I called; 10 Operating Principles – Without Compromise©, that I have used then and since to summarize and help communicate my thinking, and to focus the workforce on what it needs to concentrate on. The language used is deliberately clear, direct and unambiguous. They are posted all over the plant, everyone is educated on what they really mean, and regular surveys are arranged so that we remain on track. They have worked wonderfully well for me.

1. Create an open honest environment where good communication is treated as an essential part of the process and in which everyone has a genuine voice.
2. Maintain high awareness of the competitive environment and a constant focus on cost reduction and continuous improvement.
3. Build urgency and speed of response into all processes through the empowerment of people and elimination of bureaucracy.
4. Acknowledge people as our greatest asset and invest in their education and development on a continuing basis.
5. Clearly communicate goals and objectives to employees at every level and hold each person accountable.
6. Nurture an organization that is in constant touch with developments in technology, the markets, the wider organization and that anticipates and prepares for change, rather than reacting to it.
7. Design transparent financial reports so that managers and people at all levels have key cost measures as tools and can be held accountable for effectively managing their areas.
8. Develop an effective Performance Appraisal system so that every employee is given an assessment of their performance, strengths and opportunities, with follow up plans to address and monitor their needs.
9. Take swift action to deal with employees, regardless of level, who obstruct or do not sufficiently contribute to change that is necessary for the ongoing development of the business.
10. Empower people, by creating a team based matrix organization that allows for fast decision making and where occasional mistakes are treated as opportunities for learning.

 Why do so Many Attempts at Change Management Fail?

If what has been written so far is about how change works, what about failure? For me it is clear. If success is down to Leadership, then we are also responsible for failure. Any Leader that does not set out the context for change sufficiently and involve the workforce extensively at every level will simply not succeed. They must establish a communications process that is 2 way with comments and questions listened and responded to. They have to provide the necessary education and resources to ensure successful implementation of the various programs. Managers and employees that slow down or block the changes must be removed. It is within these critical areas that too many leaders compromise, and subsequently fail.

Recently, the Massachusetts Institute of Technology (MIT) has confirmed that over 60% of attempts at change fail. Personally, I think the figure is on the low side. From what I have seen over 3 decades it is much higher than that. I would have put it at around 80%. However, organizations are understandably reluctant to admit to failure, with very good reason. So I suspect that always getting the real data is not so easy. Acknowledging failure means shattered careers, lost bonuses, and perhaps even a share slump. Divisions and departments close ranks and partial success or even downright failure is often celebrated as success, or the program quietly dumped soon to be superseded by the next new flavor of the month. (Those readers working in large organizations will understand exactly what I mean!)

Over my career, I have been able to tap in to people’s natural instinct for survival, and natural desire for meaningful work.  Workforces have the same needs all over the world, regardless of where they reside. They want to be respected, and to be acknowledged by having a voice that is listened and responded to. They want opportunity for education and development, and to be fairly remunerated so that they can provide security for themselves and family. The wonder is why so many organizations struggle to see that, or to implement programs putting them in place!

Finally, I conclude with one of my favorite descriptions of the organization that I believe provides an essential basis for success!

 ”The old rules of traditional hierarchical, high external control, top down management are being dismantled; they are simply not working any more. This has changed the role of manager from one who drives results and motivation from the outside into one who is servant leader, one who seeks to draw out, inspire and develop the best and highest within people from the inside out.” Stephen Covey 

 Liam Cassidy can be contacted at email: liam@consultlcl.com.cn or: cassidyliam8@gmail.com  visit: www.consultlcl.com