2.0 Introduction
This guide was prepared for the Manufacturing Extension Partnership (MEP) of the National
Institute of Standards and Technology (NIST). The MEP was created to help manufacturingbased
small and medium-sized enterprises (SMEs) improve their business conditions.
Traditionally, MEP consultants have helped many manufacturing companies successfully
implement operational-based efficiency programs, such as lean manufacturing. However, it is
becoming clear that such programs only provide SMEs with “table stakes” to get into the
competitive game. As more and more companies gain requisite knowledge of lean
manufacturing, the focus on competition will shift from cost reduction to revenue enhancement,
mainly by offering new and existing customers new products and services that can generate
higher profit margins. SMEs will need assistance in implementing the type of change necessary
to make this shift. Introducing new cross-functional product development teams is a start, but
they will not be introduced successfully unless accompanied by major organizational and
cultural-based change, which is perhaps the most challenging type of change to implement.
Although much has been written about managing change in large private and public companies,
very little has been written about managing change in the unique context of SMEs. Concerns
particular to SMEs include their relative lack of control over their environment, commingling of
business and personal priorities, and lack of resources to carry out the magnitude of change that
is appropriate to meet accurately diagnosed problems or recognized opportunities. When change
is undertaken, it is often carried out unsystematically without use of a comprehensive strategic
framework for guidance. Critical change steps are omitted or not performed in a logical
sequence. This guide is intended to remedy these all too frequent occurrences.
The guide that follows focuses on senior SME managers and addresses the issues that are
associated with change, proposing a framework and tools for these managers to use when
identifying and implementing change in their own companies. Founding managers are no
strangers to managing change. They have already transformed a fledging start-up into an
operational company. However, non-founding managers may be less familiar with the change
process, and not all change looks and feels like start-ups, thus both types of managers can learn
much from the ideas presented in this guide. In addition, the routines that are ingrained in SMEs
helped generate their success and provide often hard-won stability, but it is important to know
when change is appropriate. Specifically, the guide discusses the triggers for change, types of
change, diagnosis of problems, recognition of opportunities, implementation of change activities,
measurement of outcomes, and rewards for progress toward goal attainment. In addition, the
guide focuses on many issues that are unique to small businesses, such as limited resources, risk
averseness, etc.
The guide was developed through the use of the research team’s own consulting, teaching and
research experiences as well as knowledge gained from secondary sources such as ProQuest and
Harvard Business Online. The information gained from secondary sources helped the team to
refine the framework that was developed from its own experiences and ensure the applicability
of the information to small and medium-sized manufacturing companies.
5
Our focus in this guide is on making companies more innovative generally, and able to introduce
more successful new products and services specifically. The change process that we discuss here
can be equally effective in change efforts to reduce cost or enhance quality in the factory or
supply-chain, but the emphasis in this guide is more on revenue growth than operational
efficiency. Being innovative means being open to ideas about new products and processes, and
having the capability to develop and introduce them successfully. These ideas may come from
new and unexpected sources, such as collaboration across traditional company boundaries with
customers, suppliers, and even competitors. Collaborating with these groups in addition to
tapping into the creativity of your employees can generate new products and services that serve
or enhance all interests.
2.0 IntroductionThis guide was prepared for the Manufacturing Extension Partnership (MEP) of the NationalInstitute of Standards and Technology (NIST). The MEP was created to help manufacturingbasedsmall and medium-sized enterprises (SMEs) improve their business conditions.Traditionally, MEP consultants have helped many manufacturing companies successfullyimplement operational-based efficiency programs, such as lean manufacturing. However, it isbecoming clear that such programs only provide SMEs with “table stakes” to get into thecompetitive game. As more and more companies gain requisite knowledge of leanmanufacturing, the focus on competition will shift from cost reduction to revenue enhancement,mainly by offering new and existing customers new products and services that can generatehigher profit margins. SMEs will need assistance in implementing the type of change necessaryto make this shift. Introducing new cross-functional product development teams is a start, butthey will not be introduced successfully unless accompanied by major organizational andcultural-based change, which is perhaps the most challenging type of change to implement.Although much has been written about managing change in large private and public companies,very little has been written about managing change in the unique context of SMEs. Concernsparticular to SMEs include their relative lack of control over their environment, commingling ofbusiness and personal priorities, and lack of resources to carry out the magnitude of change thatis appropriate to meet accurately diagnosed problems or recognized opportunities. When changeis undertaken, it is often carried out unsystematically without use of a comprehensive strategicframework for guidance. Critical change steps are omitted or not performed in a logicalsequence. This guide is intended to remedy these all too frequent occurrences.The guide that follows focuses on senior SME managers and addresses the issues that areassociated with change, proposing a framework and tools for these managers to use whenidentifying and implementing change in their own companies. Founding managers are nostrangers to managing change. They have already transformed a fledging start-up into anoperational company. However, non-founding managers may be less familiar with the changeprocess, and not all change looks and feels like start-ups, thus both types of managers can learnmuch from the ideas presented in this guide. In addition, the routines that are ingrained in SMEshelped generate their success and provide often hard-won stability, but it is important to knowwhen change is appropriate. Specifically, the guide discusses the triggers for change, types ofchange, diagnosis of problems, recognition of opportunities, implementation of change activities,measurement of outcomes, and rewards for progress toward goal attainment. In addition, theguide focuses on many issues that are unique to small businesses, such as limited resources, riskaverseness, etc.The guide was developed through the use of the research team’s own consulting, teaching andresearch experiences as well as knowledge gained from secondary sources such as ProQuest andHarvard Business Online. The information gained from secondary sources helped the team torefine the framework that was developed from its own experiences and ensure the applicabilityof the information to small and medium-sized manufacturing companies.5Our focus in this guide is on making companies more innovative generally, and able to introducemore successful new products and services specifically. The change process that we discuss herecan be equally effective in change efforts to reduce cost or enhance quality in the factory orsupply-chain, but the emphasis in this guide is more on revenue growth than operationalefficiency. Being innovative means being open to ideas about new products and processes, andhaving the capability to develop and introduce them successfully. These ideas may come fromnew and unexpected sources, such as collaboration across traditional company boundaries withcustomers, suppliers, and even competitors. Collaborating with these groups in addition totapping into the creativity of your employees can generate new products and services that serveor enhance all interests.
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