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Terry Gallagher

To stay competitive in today’s market, industrial and manufacturing companies must constantly respond to rapid change. Change comes in many forms — the positive changes associated with emerging technology, new product developments and company growth — and the more disruptive changes resulting from recalls, accidents or failed product roll-outs. Regardless of the nature of the change at hand, when an organization is looking for a new leader, he or she should be carefully vetted for crisis and change management skills.

I help companies in the industrial and manufacturing industry recruit leaders, and in nearly 90 percent of the searches I conduct the client specifically asks for change management skills. A number of market conditions have combined to make change management and crisis management even more critical than they were a few years ago. As our economy becomes more global, industrial and manufacturing companies aren’t just up against regional or national competitors — they’re competing with companies worldwide. The increasingly competitive market means that companies must relentlessly pursue methods for producing superior products at a better cost. Companies are continuously searching for ways to automate, streamline, innovate and attract customers who are savvier and more educated about their choices than ever before.

Internally, companies are dealing with the impending retirement of baby boomers and a widening manufacturing skills gap, which, according to a 2015 study by Deloitte, could result in 2 million unfilled jobs over the next several decades.

Needless to say, companies need strong leaders with a proven track record of change management in order to propel business growth and retain and recruit top talent. To ensure that prospective executives have the required skills, companies should consider applying the following best practices:

  1. Ask the Right Questions During the Interview.

    An open-ended question, like “Can you tell me about your change management skills?” will not provide the insight decision makers need to properly evaluate the candidate. Instead, ask a more pointed, metric-based question. For example: “What is the most significant change management situation that you have led, why was it important to the organization and what were the results in terms of revenue cost saves and  enhanced customer service?” These questions leave no space for vague answers of ambiguity. If the candidate can’t fully provide a response, he or she likely does not have the necessary change management skills.
     

  2. Confirm That the Candidate’s Broader Skill Set Aligns With an Ability to Manage Change.

    Managing change or navigating a company through a crisis involves a suite of skills that will come into play long after the initial communication of the situation. The ideal candidate should have experience in new product development, changing product mix, and overall project management skills. The candidate should also be able to effectively hire and retain new talent. For example, if a company is entering a new market or introducing a new product, the new leader will naturally need to hire new talent for the R&D and sales team.
     

  3. Consider Looking Outside of Your Specific Sector.

    When a company is in a transition period, considering a candidate from another sector can seem risky. Bringing in an “outsider” can fuel uncertainty among employees, board members, and shareholders. However, a leader with a different perspective and experience in another industry may be exactly what is required. I recently worked with a company (a major producer of consumer goods in the Northeast) that had a product suite consisting of both low-tech and high-tech products and processes. The company wanted to move away from the low-tech (and low-profit, low-margin) work and focus on their high-tech products. In order to do so, they needed a new leader — one with creativity and experience working with a highly engineered products R&D Department. This type of candidate simply could not be found in their sector. Instead, we brought in a new executive from s a highly engineered custom product manufacturer in the high technology industry, with the right experience and change management skills, and the company is now in the process of changing their product mix.

Terry Gallagher is President of the executive search firm Battalia Winston.

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