Rewiring the Factory Floor: Why Manufacturers Need More Than Hierarchy to Compete
When I started working with manufacturing companies on their culture, I didn’t expect so much of the conversation to revolve around structure. But time and again, I’d see the same pattern:
Teams buried under layers of approvals.
Leaders caught between accountability and agility.
Well-intentioned values statements that didn’t stand a chance against rigid silos.
The problem wasn’t just morale. It was inertia. And that’s when I started revisiting John Kotter’s Dual Operating System.
In his 2014 Harvard Business Review piece, Kotter outlines a compelling argument: organizations today need two systems: a formal hierarchy to manage operations and an informal network to drive change. These aren’t competing mechanisms; they’re complementary. One executes. The other adapts.
And for manufacturers, whose systems are designed for precision and repeatability, this idea might feel counterintuitive at first. But it’s not only relevant. It’s essential.
Why Hierarchies Alone Fall Short in Modern Manufacturing
Manufacturing has long prized efficiency. That’s what made the functional hierarchy such a natural fit. Clear roles, command-and-control decision-making, and a top-down approach to strategy were optimized for an era when stability was the norm.
But stability isn’t the norm anymore. We’re navigating:
Shifting labor markets and persistent talent gaps
Increasingly customized customer demands
Technological disruption (think: AI, IIoT, and automation)
Global supply chain volatility
In this environment, static org charts become a liability. They can’t flex fast enough to meet the moment. Which is why culture, and more specifically, cultural agility, is no longer optional.
What Kotter Got Right and Manufacturers Can Learn From
Kotter’s insight wasn’t just about flattening structures. It was about building networks of people motivated by purpose, not position. These networks cross departments, titles, and geographies. They surface ideas, challenge norms, and generate the kind of peer-to-peer energy that traditional systems overlook.
In short: They’re the parts of your company that don’t show up on the org chart but move the org forward anyway. In manufacturing, we already have examples of this:
Kaizen teams and lean initiatives driven by frontline insights
Cross-functional safety committees or continuous improvement councils
Peer mentoring groups for onboarding or upskilling
These are early glimpses of a second operating system. But they often lack the support, visibility, or intentional structure to thrive.
What Culture Has to Do With Structure
When we talk about culture in manufacturing, it often gets boiled down to safety, quality, or “teamwork.” But those outcomes stem from deeper behavioral systems—norms, feedback loops, psychological safety, informal rituals. All the things that fuel or frustrate performance.
Schein’s classic definition still applies: culture is the pattern of shared basic assumptions learned by a group as it solves problems of external adaptation and internal integration. 3
But how those assumptions get reinforced? That’s structural.
Which is why modern manufacturing leaders need to look beyond the org chart and ask:
Where does knowledge actually flow?
Who influences change even without authority?
What invisible systems are shaping visible outcomes?
When we map the informal system alongside the formal, we start to see not just what’s broken, but what’s possible.
The Dual System in Practice: From Buzzword to Blueprint
Adopting a dual operating system isn’t about blowing up your hierarchy. It’s about activating the latent energy within your organization, the people who already care, have already experimented, and have already connected across boundaries.
Here’s what that can look like:
Establishing internal culture councils that advise leadership and drive grassroots engagement
Designing rituals that reinforce values and encourage cross-team storytelling
Making time and space for peer-led experimentation—especially in areas like onboarding, employee development, or inclusion
Using technology to amplify feedback and connection across shift work or sites
And yes, it means putting culture work on equal footing with strategy. Because in times of change, culture is how strategy gets done.
Final Thought: It's Time to Build Organizations That Can Flex and Endure
Manufacturing is no stranger to transformation. From lean to Six Sigma, from digital twins to 3D printing, the sector has always evolved its tools and technology.
But the next frontier of competitive advantage isn’t just operational. It’s organizational. The companies that thrive will be the ones that balance control with connection, structure with spontaneity, and process with people.
Hierarchy can still have a place. But without a vibrant network beside it, it will always be a few steps behind the future.
