Managing an Up and Down Economy

After 2 years of one of the worst economic downturns, where are machining companies today? Many have survived the crisis, and as 2010 began, many saw business increase. But is it real or is the economy experiencing a double dip recession? Most economists believe we will see this dip through the fourth quarter of 2010 and first quarter of 2011. The key message is that manufacturing will continue to see an up and down economy for many years to come and a constant fluctuation throughout the next 10 to 20 years.

Recently released figures show manufacturing in general is improving in the U.S. However, job growth data continues to be sluggish. At Harbour Results, we are positive about these results because it means companies are not hiring resources back unless they are sure they need them. Companies are thriving because they are doing more with the same. Many have figured out how to increase efficiency and continue to produce products as efficiently as any country.

The key to this shift among U.S. business is culture. Many companies realized it was time to do things differently. This meant address their culture and make changes necessary to handle this type of economic change in the future.

Another main reason for change is that customers will begin to demand the change. They will look for it as they evaluate your company, and they will expect to see leaders driving this change. Also, your competition will force the need for this change because it will implement change with vigor, and this may leave you in the dust. Last, ownership will or should demand the change because it will continue to see its bottom line erode without it.

Here are several key steps to follow when managing culture change within an organization.

Cast the vision for change and set appropriate goals. Leadership must cast the vision and set the appropriate goals. The goal is an organization that adapts to changes in the marketplace. This is the true sense of flexibility.

Create a sense of urgency. The leader must create a huge sense of urgency. People must understand why it is critical to get on board, and what it means to the organization financially, structurally and operationally. They must know without change, they may not exist.

Leadership to guide the team. Leaders must get the management team excited about driving the change. Often, teams fail to execute. Leaders must evaluate the management team, make changes if necessary to remove roadblocks, and empower them to drive the change.

Constant communication. It is often said that people need to hear things more than 30 times or more before something truly sinks in and becomes part of their daily lives. Leaders must communicate the vision and goals constantly and from all of the different people on the team.

Leadership must lead. Now the leader’s role is to guide the organization to the vision. The leader is not the executor, but the tour guide through this change. His or her role becomes one of removing roadblocks, getting nay sayers on board or making the necessary changes to get them off the bus. The leader sets the tone and the speed in which the organization will operate.

Celebrate the wins and gain more momentum. As the process moves forward, celebrate the wins and bring them forward to the whole team. It is critical for the leadership team to develop some type of performance-based program for the organization. These are critical to the culture change because it shows that the leadership is willing to share its success financially.

Build the foundation for the future. Leadership must continue to communicate the connection between people’s change in behavior and the success of the organization. This will solidify the need for change. Leadership must plan for the future by updating the goals and thinking about succession planning for each critical role.

Once these steps are implemented, people will begin to see, feel and smell a different culture throughout the organization. Ask yourself a few questions about your company. Do you have a culture by design or by default? How can you create an environment where people are happy to go to work every day?

It is proven that a focus on culture will generate increased revenues; company values increase by more than ten times, net income increases on average 700 percent, and job growth increases. Who would not want to see these results within their company?