Manufacturing Strategy Made Simple

By Matt Poepsel, Ph.D., Vice President & Godfather of Talent Optimization at The
Predictive Index

The manufacturing industry has endured an unprecedented series of market changes. Executive teams are absorbing seismic shifts in the economy, innovative and disruptive technologies, an aging workforce, and evolving customer needs.

Rapid adaptation can prove challenging in an industry that relies heavily on repeatable, scalable, and efficient output in order to satisfy demanding customers and produce suitable profit margins. Executive teams are being called on to chart a course that cuts through the choppy waters of change.

In a word, they must design and execute an effective strategy.

Unfortunately, many executives struggle to clearly articulate what their strategic priorities are, how they relate to one another (and even work against one another), and how well-positioned their organizations are to execute them.

This article offers a simple-yet-powerful way leadership teams can articulate strategic priorities and overcome common challenges to successful execution.

Categories of Strategic Priorities

A strategy includes a portfolio of priorities chosen from a small number of four distinct categories:

Innovation and Agility. Priorities focused on bringing new solutions to market and creating new customers.
Process and Precision. Priorities that aim to increase the quality, efficiency, reliability, and stability of operations.
Results and Discipline. Priorities designed to make objective use of data and logic while growing existing customer relationships.
Teamwork and Employee Experience. Priorities intended to meet the performance, engagement, and wellness needs of the current and future workforce.

Strategic Priorities in Manufacturing

The list presents 20 strategic priorities for manufacturers. Executive teams should choose a maximum of 5
priorities from this list. Try this technique for yourself by making note of your top 5 strategic priorities.
(Choosing only 5 may be more difficult than you think!)

Innovation and Agility
● Increase our flexibility and agility to quickly adapt to market changes.
● Determine how best to commercialize our new products and services.
● Boost or redefine our company's brand and perception in the market.
● Introduce new manufacturing technologies to boost our competitiveness.
● Introduce new product designs or customized manufacturing options for customers.

Process and Precision
● Implement new maintenance, materials, or inventory systems or processes.
● Improve process adherence to increase our quality and efficiency outcomes.
● Increase reliability of production or services to help avoid costly disruptions or delays.
● Cut down on waste and improve efficiency in our work to help improve our bottom line.
● Improve materials forecast accuracy to help inform long-term planning and budgeting.

Results and Discipline
● Invest in our sales team or marketing team to help grow revenue.
● Develop new pricing or distribution options that will appeal to customers.
● Enhance our data and analytics capabilities across the firm.
● Grow market share or improve profit margins by making data-backed decisions.
● Drive growth through increased sales or improved customer retention.

Teamwork and Employee Experience
● Retrain employees as new technologies perform parts of their jobs.
● Increase team cohesion in order to improve performance and reduce conflict.
● Increase employee engagement to improve productivity and retention.
● Attract young workers to offset the loss of tenured employees.
● Improve our employees' loyalty and faith in the company.

Strategy Composition & Common Pitfalls

Now that you have your most pressing strategic priorities selected, make a note of how many categories they represent. If all strategic priorities fall under any one given category, this is a Concentrated strategy. If the set of priorities represents two or three total categories, this is a Distributed strategy. Finally, if there is at least one priority in each of the four categories, this is a Balanced strategy.

In general, a Concentrated strategy is the easiest to implement. All goals are aligned in a single direction, and communication methods and decision-making styles can reflect this. A Balanced strategy, by contrast, is the most complex and the most risky. It naturally invites competing goals and competing styles between leaders and across the organization as a whole. A Distributed strategy falls somewhere between in terms of difficulty of

Where to Go from Here

Next, rewrite the items to include the names of your own products, processes, systems, and teams. This will make the priorities more relatable for your workers. Communicate your priorities down through your organization level-by-level until you’ve reached the entire workforce. Ask managers for their observations, and encourage them to identify any potential obstacles that may prevent successful execution. They need to own their portion of the strategic execution, so they must internalize it.

Finally, make sure you recognize your own biases and preferences as well as those of your executive team members. If you pay undue attention only to those priorities you enjoy most or are most comfortable with, you will inadvertently increase your risk profile and water down your results in the process.


About the Author:

Matt Poepsel, Ph.D. is the author of Expand the Circle: Enlightened Leadership for Our New World of Work and host of the Lead the People podcast. He holds a Ph.D. in Psychology, an MBA, and a Harvard Business School Certificate of Management Excellence. He serves as Vice President & Godfather of Talent Optimization at The Predictive Index (PI) where he works alongside Narish International, a PI Certified Partner, to help manufacturing executives boost revenues, profitability, and retention. He can be reached at