July 2022 Connections video: When ERP Is a Shock to the System

Most privately held manufacturing businesses look for an ERP solution because they’re trying to grow and scale.

Their company is ready for a higher level of strategic leadership. And that’s great news, right?

But many times, a new ERP implementation can be a shock to senior leaders who are used to tactical, hands-on roles. Leaders who used to spend their time gathering and analyzing data manually now have new ERP tools that can take a lot of work off their plate. That means expectations change.

They are being asked to analyze information at a much higher level than before. They’re stepping up into far more strategic roles — and that can be exciting and overwhelming.

In today’s video, I share more about the small but critically important ways ERP improves the day-to-day work lives of business leaders in privately held and family-owned manufacturing companies — and how these leaders may need to prepare themselves before ERP implementation, and get additional support after it’s complete.

Watch the video:

Hi there! Erin Koss here, CEO at Syte Consulting Group. Coming from my own backyard in the Pacific Northwest and doing things a little differently. Summer is barely upon us and I’m doing everything I can to take advantage of it and working from home.

Thank you for joining me! Today, I want to talk a little bit about some of the unexpected changes that ERP can bring for the leadership teams of family-owned manufacturing companies. One of the things we unexpectedly see is that their role, their capabilities, and the tools along with the level of empowerment that comes to pass because of ERP projects. They really can be quite unexpected for a leadership team. What exactly do I mean by that?

Most of the time when clients come to us and are looking for an ERP solution, it’s because they’re trying to scale with the growth of their organization. This means a couple of things might be showing up for them. They might be transitioning from the first generation to the second generation. The leadership team might be relatively new. The company may have been run maybe by the founder and CEO and they’re finally getting to a place where, as they transition into the next generation, they begin to recognize they are ready for growth. They understand the company is ready for a leadership team and for a more higher-level strategic leadership. This is all exciting! Great stuff, right?

The challenge is that a lot of times these leaders have been with the company for a very long time. They have a lot of experience in their function. It’s great stuff but the obstacle becomes that they may not have the experience at the leadership or strategic level. They’ve been very tactical up to this point. Add to that the fact that they’ve come to us for ERP, which means the systems and the tools that they have are probably not doing as much as they need to do to support them. They’re doing a lot of things manually such as Excel. All this together adds up to a group of people who are now new in a leadership role and have been very tactical up to this point. Because of their role, they are probably taking on an ERP project because they know they need to grow and scale. They need the tools to do that.

The challenge is that when they get done with the ERP implementation, they’re going to suddenly have tools easily and available to them that allow for a higher level of decision making more quickly and more easily. What they’re used to doing is gathering all the information themselves, analyzing it all, and then hopefully, if they get time, maybe using it for decisions or they’ve been used to passing that information up to the founder and CEO for him or her to make the decisions on the company’s behalf. And everything is shifting now, right? They’re putting in a new system. They have a leadership team and now that strategic leadership and decision making might be being passed to them for the first time.

They’ve spent a lot of their time in the weeds and in the trenches doing a lot of this work on their own. After an ERP has been put in, they’re suddenly going to have people who probably work for them and are part of their teams that are able to now grab the information they need, do the analysis they are empowered and able to do now in a whole new way and push that information up to them for the actual decision. They’re not going to be spending as much of their time as they used to in the trenches and in the tactical role. This can be a bit of a culture shock, in part because that’s come to be expected of the executive team members. My clients frequently will call them working VP’s, right?

They’re expected to be decision makers doing the analysis, gathering the data and bringing it all together and providing some sort of decision making, whether for the CEO or for the executive team they’re now part of. It’s a lot and it can sometimes feel overwhelming, especially as the company is growing. ERP shows up and adds a layer of tools to their toolkit for helping them make decisions much faster. This can be a little discombobulating and so one of the things we want to help our clients and we help our clients think about along the way is what is it going to look like when you’re done implementing this ERP solution.

You’ve empowered the people in the organization in a way maybe you haven’t before. You’ve got leaders in the organization who are being asked to play a more strategic role, maybe then also a tactical role they’ve always played. How are we going to support that? I think having those important conversations is something that we want to do with our clients to help them navigate. As we help them think about these transitions, we want to point out that they’re going from a strategic to a strategic role, from a tactical role.

They’re going to be making decisions instead of compiling and analyzing data like they’ve been up to this point. They’re going to be leading instead of doing so much doing. This is going to shift things for them. If you feel like you’re curious about how we work with our clients to work through this process during the implementation and after, please feel free to give me a call and let’s chat about it. There’s some really creative ways you can talk about this to allay people’s fears and concerns.

There’s also some thinking that we want to do around coaching and leadership training. Potentially, that maybe isn’t something you’d think about in the context of ERP. If you’re interested, give us a call. Let’s talk about this. It’s a bit of a journey to navigate, and we’re finding fun, creative ways that we’ve been able to work with our clients.

Some of them have been our ideas, and more importantly, some of them have been their ideas as they work within their own culture and within their own organizations to make these important changes. At the end of the day, ERP is about helping companies grow and scale, be more successful, have access to information faster, and be strategic and more thoughtful about how they move their organizations forward. We’re here to help. Let us know how we can help. Take care!