Our PwC study “The Leadership Edge” reveals the secret of successful customer transformation and provides insights on where to focus in order to improve transformation initiatives. There are significant disparities between sectors, and, unfortunately, manufacturing firms are lagging when it comes to Front Office Transformation.
One result of our deep-dive into the state of Front Office Transformation (FOT) stands out: senior leadership involvement drives FOT success. This also holds true for the manufacturing sector. Clearly, there are several success factors in transforming the front office – such as creating a culture of transformation, empowering employees and budgeting seriously – but the more heavily and actively involved the senior leadership, the more successful the project. While 68 percent of companies whose senior leadership team was actively involved in their FOT said the project was successful, the figure for those without active support from the top was only 45 percent. We call this effect the “leadership edge”. But what does it actually mean?
Leadership provides the edge
Front Office Transformation, as with any other transformation project, stands and falls with the commitment of the employees. Yet in order for them to come on board, they must clearly see the benefits of the initiative and they must be encouraged and empowered to actively carry and support it. As our study shows, 97 percent of all companies said FOT was seen as a side project by employees rather than as a major company initiative. 61 percent stated that employees were at first reluctant to partake in Front Office Transformation, but eventually became advocates. 40 percent complained that the technology involved in FOT was too difficult to use, and 20 percent felt that Front Office Transformation was all about technology, not about making their lives easier. A mere 7 percent of companies said their employees were very keen to participate in FOT.
To change this, the senior leadership must not only show a vested interest in the success of FOT, but must also be more active in its support for cultural change and must take part in the transformation.
Against a background where too few employees truly support the transformation initiative, it is no big surprise that in manufacturing, transformation projects do not always live up to expectations. Just 51 percent of companies describe their most recent FOT project as ‘successful’. Why are only half of manufacturing firms getting their Front Office Transformations right?
What is the purpose again?
To meet customer demand, manufacturers are investing significantly in transforming technology and processes across sales, marketing, and customer experience – with limited success. Growth from these projects may be stunted for one of two reasons: a lack of company-wide clarity on the project’s vision, and/or an overreliance on employee initiative. Only 16 percent of companies in this sector say they were very clear about the culture they were trying to build through their FOT programme – finding it difficult to get employees involved. Without this sense of purpose, investment does little to meet demand.
To turn the mixed results of Front Office Transformation initiatives around, companies must establish a culture that allows employees to learn and flourish. In addition, they must ensure that budgets are properly set by a senior team that is fully on board, as FOT budgets are often inadequate.
How to gear up transformation
In our study “The Leadership Edge”, we surveyed more than 700 top managers and front office transformation experts, across eight countries and nine industries, on their direct experience with transforming the front office. All respondents had completed a Front Office Transformation within the last five years.
Our research has identified three actions to improve the mixed transformation performance in manufacturing:
- build a strong cultural foundation and establish clarity of purpose and communication;
- engage and enable employees in a more creative way; and
- bolster budgets and involve top leadership.