Change management in the era of automation and AI: a practical guide for manufacturing companies

Technological change management – why did I decide to take up this topic? Because this issue is crucial for the development of manufacturing companies. It cannot be passed by indifferently. Digital transformation is rarely successful just because “outstandingly good technology” is implemented. In practice, the success of the implementation of new solutions is determined by the organization’s ability to carry out the change. This readiness relates to several areas: communication, culture, understanding the intent of the change (why is the new tool coming to the production floor?).

Let’s take a look at are three types of changes taking place in companies and how their implementation is approached.

One of the most common types of change is strategic change. They are referred to when a company enters a new market, changes its business model (e.g. from a fixed fee to a subscription) or develops a new product line. Each of these situations requires not only important decisions, but more importantly, their proper implementation. Hence the importance of proper management of this type of change.

A good example of this is the history of the Kodak brand – one of the technology giants that developed the first digital camera back in the 1970s. Sounds good, right? And yet this world-famous company failed to respond to the changing competitive environment and the development of smartphones. The result? A significant shrinkage of the market and the declaration of bankruptcy in 2012.

This is classic proof that even the most innovative company can fail if it can’t execute a strategic transformation wisely.

The second type of change concerns structure, work style, values and organizational culture. It could be a merger, entering a new corporate culture or implementing the principles of lean management or a turquoise organization. This is a really big challenge for those who manage change in an organization.

You may be familiar with the example of the 1998 merger between Daimler and Chrysler. It was intended that the merger of the two brands would be a conglomeration of the best qualities of each: German precision and American innovation. So the idea was beautiful, but in reality it led to years of internal problems. The reason? Imposition of the organizational culture of one company on the other, lack of adaptation and failure to merge the two organizations. In the end, Daimler sold Chrysler in 2007, and at a significant loss.

This case study shows that without preparing people and without dialogue, even the greatest strategic ambitions end in organizational chaos. Hence, changing organizational culture is worth approaching with full commitment.

The third group is technological change – implementations of ERP, automation, CMMS or artificial intelligence systems. It turns out that many companies seem to overlook how strongly technology affects the way they work, or downplay the correlation between the success of implementing the change and preparing people for it. The system won’t implement itself, so it is very important to properly communicate the change to employees and ensure that the new solution is adopted by them.

This is illustrated in an interesting way by the example of public reactions to the railroad revolution in the 1830s. The new technology caused delight and panic at the same time. Newspapers of the time frightened that driving at 30km/h could lead to “detaching the lungs from the body,” and livestock allegedly could not cope with the presence of trains. Did these fears find coverage in reality? Well, no. But this story of transformation is a reminder that communication in change management is wildly important. Any technology – implemented historically and today – needs time, education and preparation of people for it to be accepted.

Each of the types of change I have outlined has a chance of success or is doomed to failure. It all depends on how we approach change management. What are the reasons for the failure of the change implementation process?

1. technology is being implemented without a cultural fit

This is the most common scenario. A great tool “doesn’t work” because employees don’t know why they have it and what it changes in their daily work.

2 There is a lack of communication and support at different levels of the organization

The team gets the system. The management gets the report. And no one gets the context. Communication in change management – still so undervalued – is the key to success.

3. the company does not manage emotions and concerns

Every change (yes, even the good ones) provokes resistance. The history of railroads from the 19th century shows this bluntly. This is why change management education is so important, in my opinion.

We’ve already told ourselves a lot about the mistakes in implementing new IT solutions. How, then, does proper change management look like? Personally, I advocate a methodical approach to change management:

This is the inverse of what we often see in companies: the company starts by choosing a system, and only later considers how it will affect people. Strategic change management is planning the process not from the technology, but from the organization that the technology is intended to support.

Even the best automation, digital or AI solutions won’t work if the organization doesn’t make the change with people, not alongside them.

For medium and large enterprises, this means three questions worth asking before any technology project:

If the answer to any of these is “no,” it’s not the technology that’s the problem. but the process of implementing it. Then develop a better strategy for implementing the change, or get professional help with technology change management. Don’t waste this opportunity, as any mistake could cost your company dearly.