Marilyn Rosa-Green, MSHR, M.Ed.
Executive Leadership Coach | HR Manufacturing Strategist | Mental Health & Well-being advocate | Founder of Manufacturing Success Accelerator Method
In the fast-paced world of manufacturing, the pursuit of expansion is often synonymous with meeting escalating production demands. Surrounded by the complexities of operations and logistics, the human aspect is frequently overlooked when employees' needs are ignored. Curious to delve deeper, we embarked on a journey to dig up insights from seasoned professionals across various sectors within the industry. Through illuminating interviews spanning Operations, Engineering, and Human Resources across food and beverage manufacturing companies in the U.S., we've uncovered three issues frequently underestimated or ignored amidst the expansion endeavors of manufacturing companies.
Issue 1: Immense pressure that comes along with rapid expansion
Picture this: a company hurtling towards growth without firmly rooted foundations. It's a scenario that strains resources and infrastructure. According to a study by the National Center for the Middle Market, a staggering 54% of mid-sized companies identify rapid expansion as a top challenge, signaling the immense pressure it exerts. The repercussions are multifaceted, from plummeting productivity due to overwhelmed employees to rampant communication breakdowns during the frenetic pace of change. We spoke with a General Manager overseeing a vertical hydroponic farm in Texas who emphasized the paramount importance of maintaining open communication channels during innovative changes and business development. He emphasized the significance of understanding employee concerns and fostering a culture aligned with the organization's strategy.
Issue 2: Lack of effective change management strategies
Change management practices play a pivotal role in the development and expansion of businesses, ensuring smooth transitions and maximizing the potential for success. Effective change management is essential for guiding employees through periods of transformation, fostering buy-in, and minimizing resistance to change. Studies have shown that companies that prioritize change management practices experience significant improvements in their bottom line. For example, according to a study by Prosci, organizations with excellent change management practices are six times more likely to meet project objectives and three times more likely to stay on budget compared to those with poor change management.
In a conversation with a Corporate Reliability and Engineering Professional, it became evident that while his company had successfully acquired and expanded multiple locations, they neglected to implement comprehensive change management strategies. Metrics to track employee retention, satisfaction, and the overall employee experience were overlooked, and feedback collection often resulted in no actionable changes. The focus remained primarily on operational and logistical aspects, with little consideration given to the impact of changes on company culture. This oversight underscores the importance of integrating robust change management practices into expansion plans, emphasizing communication, employee engagement, and proactive feedback mechanisms to navigate the challenges of growth effectively.
Issue 3: Capacity and its effect on turnover
Perhaps the most critical issue identified through our surveys is the myriad of people management challenges that arise during expansion. High turnover, absenteeism, and grievances were frequently cited as pain points affecting both front-line employees and management. Lack of training, support for front-line supervisors, and burnout were identified as root causes of these issues. "The biggest pain experienced was related to people's issues," remarked one respondent. "High turnover was the biggest issue or result of other pains."
During our interview with the CEO of a multi-location manufacturer, who possesses over 20 years of experience in leading business growth and expansion, an insightful observation emerged. He highlighted a potential disconnect between capacity planning and readiness to execute based on that capacity. In simpler terms, merely having the required equipment and workforce outlined in the plan does not guarantee that employees are adequately prepared and trained to fulfill their expected responsibilities. This discrepancy suggests that there may be a tendency to overestimate operational capacity prematurely.
To support this perspective, consider a statistic from a study conducted by McKinsey & Company, which found that 70% of organizational change initiatives fail due to resistance from employees and lack of readiness to adopt new practices. This statistic highlights the importance of ensuring that employees are adequately prepared and supported during periods of expansion and change.
Building robust organizational foundations, nurturing effective communication strategies, and prioritizing people management are pivotal for sustainable growth and long-term success.
Expansion or Significant business development presents both opportunities and challenges. As we explore the often-overlooked issues hindering growth, effective solutions are needed. Our four key systems—Leadership Development, Talent Acquisition & Selection, Training, and Career Development—offer practical solutions to address specific pain points and drive growth. Through insights from industry professionals and a deep dive into expansion complexities, we'll uncover how each system can tackle identified challenges and pave the way for success in manufacturing expansion.
Our 4 Key Systems
Leadership Development
The Leadership Development System plays a crucial role in addressing the issue around the lack of organizational foundations. By cultivating confident decision-makers and enhancing leadership identity, this system ensures that leaders are equipped to establish strong organizational foundations. Through personalized development plans with accountability, leaders can foster a culture aligned with the organization's strategy, emphasizing open communication and employee engagement.
Just like our client, a Production Supervisor of a food processing company. Initially disengaged, he blamed his employees and was not taking accountability. We worked on his Leadership identity, recognizing his strengths, areas of growth and values. We then coached him to improve his relationship-building, decision making, planning, and problem-solving skills. His mindset was renewed, and the result was a positive impact on operations and team morale.
2. Talent Acquisition & Selection System
High turnover rates often stem from a lack of training, support for front-line supervisors, and burnout among employees. The Talent Acquisition & Selection System addresses the challenges of limited capacity and high employee turnover by streamlining recruitment processes and implementing engaging onboarding programs. By performing comprehensive job analysis and creating clear job descriptions, companies can minimize role confusion and clarify expectations, thereby reducing turnover and improving employee satisfaction and success.
Similar to our client, a landscape construction company, who aimed to achieve full staffing with skilled workers in preparation for a bustling sunny season, we crafted a strategy to meet their capacity and staffing requirements. By conducting a thorough job analysis to review job descriptions, role expectations, and compensation packages, we identified any existing gaps and implemented necessary adjustments. Our efforts were focused on streamlining processes to enhance the efficiency of job application submission, assessment, interviewing, and selection of new hires. Integral to our approach was the implementation of an engaging onboarding process, ensuring that employee satisfaction remained high, and expectations remained clear from the outset.
3. Training Plan & Communication
Effective change management is essential for navigating periods of transformation and minimizing resistance to change. The Training System is instrumental in addressing the issue of change management by ensuring that employees are adequately prepared and supported during times of expansion. By analyzing production objectives and identifying training gaps, this system enables companies to implement comprehensive change management strategies that prioritize communication, employee engagement, and proactive feedback mechanisms.
Just like my client, a manufacturer who acquired a new facility. Their goal was to establish training guidelines before reopening the facility with a new team and equipment. We reviewed capacity then identified skills and training gaps. We then created a training plan with SOP’s and a system to evaluate and coach employees. One supervisor retained all new hires beyond the critical 90 days, achieving 100% retention and high-performance evaluations.
4. Career Development System
One of the main reasons for low retention and employee satisfaction rates is the lack of opportunities for our team members to grow within the organization. Without a structured Career Development System, employees may feel undervalued and stagnant, leading to disengagement and higher turnover. According to research by Harvard Business Review, 75% of employees cite lack of career advancement as a reason for leaving their jobs. To address this, we've implemented a comprehensive approach that includes transparent internal job postings, community building, internships, and apprenticeships. This not only attracts top talent but also ensures the continual development and retention of our existing team, fostering a motivated and engaged workforce poised for long-term success.
These four systems combined– Leadership Development, Talent Acquisition & Selection, Training, and Career Development – address the overlooked issues faced by expanding manufacturing companies. By implementing these systems in tandem, companies can build robust organizational foundations, navigate change effectively, and address people management challenges, ultimately fostering sustainable growth and long-term success.
Want to learn more about our method? Join us on Tuesdays for our “Empower to Inspire / Leadership Insights & Coaching” Live Event. Last week we talked about 3 Strategies to increase productivity by overcoming procrastination and perfectionism. Link in the comments.
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