Know which way your org chart leans and how to shake it either direction

Every manufacturing company I’ve worked with has a fairly standard organizational chart: a CEO at the top, handful of managers underneath, and various managers, supervisors, and individuals spread below those. They’re organized into divisions, all led by a VP or director: HR, operations, sales, marketing, and production.

They make the management team appear as equals, but that’s not the reality of how a company truly behaves.

Traditional org chart (Wikipedia)

But in reality, this chart leans — and the direction defines what type of company you’re working with.

If your Operations and Production team define capabilities that the salesperson is allowed to sell, you’ve stabilized. Your Operations team is sitting higher than the Sales staff; they can dictate reality. Hopefully you have a company earning good margins, because this means there isn’t any drive to develop new products, incorporate modern technology, or facilitate product innovation. The customers might ask for new products, but your sales staff have their hands tied: the company will only produce goods they’ve been making for years.

Innovative organizations, which are typically smaller and more startup-like, lead with their sales staff. They hold more company clout, and they can push across the aisle. Any revenue is worthwhile, and if a project is within the company’s wheelhouse, they’re going to take the sale. The Production team might have to make changes to manufacturing processes or machinery, but that’s not a big problem as long as the sales team are all well-versed in the industry and understand what changes are required to meet a customer demand. Meet the customer’s requirements, adapt as necessary.

This isn’t anything new. Stable companies tend to work within limits that startups can more easily overcome: there are fewer people to convince, teams are closer together, and oftentimes there’s a strong push for revenue growth.

It’s easy to switch to the stable, Operations-led mantra. What’s crazy difficult is switching back when revenue starts to shake: How do you convince a stable company to push innovative sales again, particularly when that seems like a risky proposition? And how do you push forward on that change?

If you want to avoid becoming a statistic of a has-been company trampled by technology and change, it starts by motivating the Operations/Production side to be more innovative, proactively asking the Sales staff about outside requests not currently achievable within the production environment. Tip the scales and raise the the sales people higher: they’re the ones who know what customers are wanting. If you can’t facilitate that need, then you’re losing (because someone else is making it work).

Avoid being an incumbent company failing to adapt into the next generation of goods by recognizing that previous investments might have to go by the wayside in order to continue winning. Just because you’ve got millions in industrial manufacturing hardware doesn’t mean you milk it forever. If new entrants are coming in, they’re somehow doing it cheaper than you did. Your market position is from your brand, not your machines; adapt or lose.

Once you get comfortable, figure out your plan to reverse it. Because if you’re making great margins, someone is looking to cut into it: at some point, you need to be focused on sales growth. The production folks will figure it out. They’re good at what they do.