Monday, October 13, 2014

Collaboration: Many Firms Are Playing Catch-Up

By David Brousell
Global Vice President, Research, and Editorial Director
Manufacturing Leadership Community | Frost & Sullivan

For a number of years now, manufacturing companies have been trying to act more collaboratively with their employees, customers, and partners. The theory is that by unleashing the creativity of every individual and better ensuring their full participation in the business, innovation will increase, productivity will rise, and the enterprise will become more efficient.

As theories go, few have questioned the soundness of the collaborative idea, or at least the value of a properly-balanced collaborative model. More brains concentrated on generating new ideas or on solving problems would seem to offer a greater likelihood of success in either case, as long as decision-making along the way isn’t compromised.

But theories sometimes don’t match reality. And the reality today in manufacturing companies is that, while collaborative intention is strong and much informal collaborative activity is underway, many companies’ organizational structures haven’t yet caught up with a way of working that is becoming increasing preferred by all of the constituents in today’s manufacturing business eco-system.

Survey: Few Organizations Are Truly Collaborative

This is one of the key findings of a new Manufacturing Leadership survey on Next Generation Leadership in the manufacturing industry.

The survey reveals the broad outlines of a profound change in how manufacturing companies will be organized in the future and how they have to be led differently as a result. Although most respondent companies continue to be organized today in a centralized fashion to one degree or another, a seismic shift to flatter structures in which collaboration is the main operating principle is underway.

This year, about 63% of manufacturing leaders report that their companies have some degree of centralization, with nearly 20% saying they are highly centralized, up several points from last year. Only 18% say their companies have in place today a truly collaborative organizational structure in which traditional hierarchies, such as command and control management forms, have been eschewed in favor of flatter ways of working. Within five years, though, 62% of respondents say they want the collaborative model, up slightly more than six points from the number saying so last year.

But what’s happening on the ground right now in many companies is that collaboration is becoming a prevalent day-to-day method of operating regardless of the current status of manufacturing companies’ organizational structures. When asked to describe their companies’ relationship to its employees today, for example, 86% of respondents report some degree of collaboration already under way, with just over one-third of that number, 34.8%, saying that the relationship is “highly collaborative and respectful” and that employees are strongly engaged in the day-to-day affairs of their companies.

The big task now before many manufacturing companies is to re-think their organizational structures to align them better with the collaboration already happening on the ground and reduce or eliminate friction that may be occurring between their current organizational model and the growing collaborative model. If they can do so, they may be able to harness the collaborative movement far better than they are today and enable their companies to close the gap between one of today’s most popular theories and reality.

This article was originally posted on Manufacturing Leadership

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