Manufacturing and the cost of fear

Manufacturing and the Cost of Fear

Aversion to change means manufacturers tolerate inefficiencies that cost money today and will cost much more in the future.

Patricia Hume
May 4, 2023

I’ve been thinking a lot about fear this week, and in particular, what it costs businesses when it becomes a primary motivator or corporate mindset.

source: Statistica

Because I spent some years working in the telecom industry, what always comes to mind for me is the famous Nokia case study.

Here was a brand at the top of its game: in 1998, it overtook Motorola to become the biggest mobile phone manufacturer in the world. By 2007, it had captured an astonishing 51% of the global mobile phone market. It was considered unassailable.

But over the course of 8 years, between 2007 and 2015 as the market evolved towards mass smartphone adoption, Nokia tanked.

Just take a look at the graph showing their shipments between 2007 and 2013. You could ski down it.

What happened?

The short answer: fear.

What went wrong for Nokia

A Cornell University study took a closer look at the case. The study found that a determining factor in Nokia’s downfall was a climate of “shared fear” among top and middle managers, particularly around voicing concerns relating to Nokia’s Symbian OS and its ability to compete with iOS and Android.

This shared culture of fear prevented company leaders and middle managers from addressing the reality of Symbian’s shortcomings. By 2009 there were 57 different and incompatible versions of Symbian in circulation. And by the time Nokia took action, in 2011, it was far too late.

Nokia’s inability to let go of a legacy system cost them a position that had once been seen as unassailable. In the end, fear is very, very expensive.

Fast-forward to today and I see the same emotional factors at play in the manufacturing industry.

Avoiding change costs money

Manufacturers are guided by fear to prop up and perpetuate legacy systems and processes that are costing them money right now, and will cost them much more in the future.

Work instructions are a case in point. Despite the research, the case studies, the projected cost savings, and the logic advocating for a positive, committed switch to interactive digital work instructions, manufacturers cling to paper-based and flat digital product content.

And I believe fear has a lot to do with it: Decision makers are more afraid of disruption, and of being the fall guy if the solution they advocate for doesn’t work, than they are driven by the opportunities for positive change – even though there is strong belief in those opportunities!

They’re afraid of diverting resource to manage an upgrade amid the financial pressures of supply chain disruption and increasing raw material cost – and at a time when the manufacturing workforce is thinning out at an alarming rate.

These fears are all valid, and I understand them.

Don't be motivated by fear

But here’s the scoop: fear will always be a factor. What makes that fear much easier to handle is a stable, well-trained workforce equipped with everything they need to carry your operation into an uncertain future, successfully.

Investing in interactive digital work instructions is one of the most effective ways to build such a workforce. I see it every day. Teams equipped with better quality work instructions are more agile, more flexible, more reliable, and far better positioned to handle the new pressures and meet the more demanding performance targets required to safely navigate a choppy market environment.

So, here’s my question for you: what are you afraid of? And is fear holding you back from doing what needs to be done to stay competitive?

About the author
Patricia Hume
Chief Executive Officer

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