PLM and the death spiral of cultural change

PLM and the death spiral of cultural change

 

plm-cultural-change

Culture eats strategy for breakfast. You probably heard the phrase usually attributed to Peter Druker. Did Peter Druker really said this? Let’s leave this discussion for somebody else. The problem is that culture also eats technology for lunch and everything else in your company for dinner. You can think, it is the worst thing that might happen to you? Actually not… The real problem that after that, culture is still leaves everyone in the company hungry.

Jos Voksuil reminded me about the importance of cultural transformation in his blog earlier today.  – PLM and Cultural Change Management? Too expensive? According to Jos, you should budget cultural transformation when you plan PLM project. The reason is simple – PLM brings business transformation to the company. Without cultural change, business transformation is mission impossible. The following passage is my favorite.

In the majority of the implementations I have seen the past two years, the company did not want to invest in change management, defining the new process and new roles first for an optimum flow of information. They spent the entire budget on software and implementation services. With a minimum of staff, the technology was implemented based on existing processes – no change management at all. Disappointing, as short-term thinking destroyed the long-term vision and benefits were not as big as dream off. Without changing business processes and cultural change management the PLM team will fight against the organization, instead of surfing on the wave of new business opportunities and business growth.

Change is hard and to manage cultural change is an important thing that every company should do to make their business successful. So, the recommendation is simple and straightforward – allocate budget, invest into business process improvement and then voilà – you’ve got a perfect PLM implementation and optimal information flow.

But is it a right thing to bundle PLM implementation into change management project? An old Jewish adage warns against “bringing a healthy head into a sick bed”. As I mentioned before, culture is a very hard thing to change. By bundling your PLM implementation into cultural change management, you create an impossible level of complexity in the project. The complexity of change management multiplied by complexity of technology can create a total mess. You can find many examples of these disastrous PLM projects.

Maybe we need to distinguish between cultural change management and inflexible technologies or just bad tools? PLM implementations are challenging not only because of change management, but because of existing PLM paradigm, technologies and products. I called it “Analog PLM” in one of my earlier articles.

The fundamental problem is an extreme complexity of data management tools and PLM abstractions. Every organization is trying to map whatever business processes they have to the PLM data models supported by vendors. This “mapping” is creating a conflict which slows down organization on the way towards bright PLM future.

So, what is the solution? If you can’t beat it, embrace it. Technology is much easier than people. Maybe the right way is to stop changing people because it is hard and inefficient and start focus on technology? Let’s challenge technology to support flexible data models, global platforms, simple integration, automatic upgrades and many other things. The evolution of web search technologies is a good example. Google and other search vendors didn’t restrict website creation process and didn’t ask for web masters cultural change. Exactly opposite. Everyone can create website today and technological companies embraced much easier way to do so compared to what we had 10 years ago. Google engineers embraced the challenge of indexing database driven web sites together with many other challenges created by web developers and users. Another example is file management. It was simple to work with files when all files where located on a single computer and used by a single person. But it is sub-optimal for distributed network. Cloud storage and data management was the answer.

What is my conclusion? Organizations are dealing with change management every day. Business environment is changing, economy is changing, new manufacturing technologies are coming, people are retiring… this is only a short list of challenges manufacturing organization are facing. Companies are developing PLM strategies, but these strategies are facing implementation challenges. One way to think about it is to say people are not ready. But very often people are resisting to something that less comfortable or something that is very hard to use. So, probably these PLM tools are not good or outdated and we need to think how to change them.Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.

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  • Oleg thanks for contributing to the theme of cultural change. Your post illustrates that my
    post was not clear enough, or perhaps too short.

    I do not believe PLM is that difficult because of technology, I would even claim that technology is a the bottom of my list of priorities. Not stating it is not important, but meaning that when you are converging with a company to a vision for PLM, you probably know the kind of technologies you are going to use.

    The highest priority to my opinion is currently the business transformation companies need to go through in order to adapt their business to remain relevant in a digital world.
    The transformation will require companies to implement PLM in a different
    manner, less silo-oriented, more focus on value flows starting from the
    customer.

    Working different means cultural change and a company needs to allocate time, budget and energy to that. The PLM implementation is supporting the cultural change not driving the cultural change.

    And this is the biggest mistake I have seen: Management decides to implement a new PLM as the driver for cultural change, instead of the result of cultural
    change. And they reason this is done, is most of the time due to budget thinking as cultural change is ways more complex and expensive than a PLM implementation.

  • beyondplm

    Jos, thank you – this is very helpful clarification. Management is in charge of cultural change, but they decided that PLM can do a job for them as a driving force. It is wrong as you stated. It can only be a supporting tool. It make sense to me Best, Oleg

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