Manufacturers: how to lead in an upturn

Jerome Bull | 29 June 2021

After an undeniably difficult period, the latest productivity figures from the CBI and Purchasing Manufacturing Index (PMI) have indicated that manufacturing is well and truly in recovery with data showing a surge at the fastest pace on record. Whilst undoubtedly positive news, this upturn will present renewed challenges for many leaders who have become accustomed to dealing with crises and managing in a challenging market over the last 12+ months.

The pandemic has led to periods of down trading for many companies, which places significant pressure on manufacturing leaders to consolidate and cut costs quickly. This is usually achieved by remodelling and restructuring the organisation to align overheads with falling demand, whilst seeking ways to protect margin and cash by eliminating waste in other areas. Managing during a crisis requires a particular ‘needs-must’ style of leadership often characterised by directness, limited consultation, urgency and unrelenting drive focused on the achievement of what are typically relatively short-term objectives.

Whilst this approach can be perceived by some as negative, it is certainly effective in certain circumstances. There is no doubt that this controlled management approach is responsible for the survival of many UK manufacturers since the arrival of COVID-19.

However, is this approach sustainable over the medium and long-term?

As companies emerge from a downturn and prepare for growth, the leadership team will be required to adapt its behaviour in order to reflect the new operating environment. For leaders of manufacturing businesses, this means adopting a more expansive style, generating and implementing business plans through consultation and involvement. Success is dependent on the ability think and act strategically, to engage extensively with stakeholders across the business and to contribute from a broader commercial (as opposed to a purely cost-focused) perspective. The horizon shifts to the long-term with an emphasis upon delivering sustainable change by developing capability and seeking ways to differentiate and create value. Managing for growth, therefore, requires creativity, innovation and fresh-thinking along with the ability to generate support and buy-in from others to a clear and compelling vision.

Given the demands associated with leading at different points in the economic cycle, is it realistic to expect those leaders who have excelled in lean times to be as effective into the upswing?

Our experience suggests that, although some leaders can become set in their ways and do find it difficult to break out of the siege mentality, many more accomplished executives are able to flex their approach to suit both sets of challenges.

Absolutely essential, however, is the need for such leaders to consciously recognise that their environment is changing, and to take a step back and review their own leadership style, in order to determine which particular behaviours need to be continued, and which they should stop.

So, what new skills and behaviours do they need to demonstrate in order to succeed in the new organisational context?

This can vary very much from organisation to organisation. Leadership assessment is a great place to start to identify strengths and development areas. From this, strategic actions aligned with commercial objects such as workshops, development centres or new hires can be considered to ensure the business is equipped with the right skills to ride the wave of the upturn. At New Street Consulting Group, we have extensive experience in delivering such projects within the manufacturing sector, helping leaders develop the full repertoire of skills and helping organisations align their talent strategy to drive growth objectives.

Jerome Bull is a director in the executive search team at NSCG. To learn more, please get in touch.

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