Why Lighting Industry Is Losing Billions – and How to Stop It

The lighting industry stands at a critical crossroads, facing a perfect storm of regulatory tsunamis, sustainability imperatives, and technological leaps.

As the EU is mandating stringent efficacy standards (SLR, ELR), manufacturers are under unprecedented pressure. The US' and UK’s proposal to increase minimum energy performance to 120 lm/W by 2028 sets a new global benchmark (don't even start me on how it will impact light quality and thus human health), while India’s mandatory star labeling for LED lamps aligns with the global push for energy efficiency.?

This seismic shift isn’t just about engineering prowess; it’s a reminder that our industry's survival hinges on our ability to transform our organizational DNA. As we navigate the upcoming legislative challenges, we face a harsh reality: while external pressures mount, internal inefficiencies are silently draining our $80 billion industry of $3.5 billion annually.

In this high-stakes game - where energy efficiency clashes with light quality and light pollution with public safety - the real battleground isn’t on the production floor; it’s in the boardrooms and inter-departmental silos.

The CEOs and HR leaders must confront an uncomfortable truth: the organizational inefficiencies are luxuries they can no longer afford. The time for incremental change has passed; we need a revolution in how we operate, collaborate, and innovate.

Our industry's future depends on it.

1. Why Inefficient Processes Are Sabotaging Your Bottom Line

For many lighting manufacturers, outdated and fragmented processes are draining resources. Inefficiencies often stem from disconnected departments, reliance on flawed performance metrics, and a failure to streamline operations. While top-performing companies in the industry are 35% more efficient than their competitors, others are falling behind, struggling to adapt to new technologies or optimize their workflows.

?? Solution: Manufacturers must start by assessing operational inefficiencies in a data-driven way, ensuring cross-departmental collaboration and adopting real-time insights to guide decision-making.

2. Why Your Leadership and Talent Retention Strategy Might Be Costing You

The lighting industry is as much about people as it is about technology. A company can have the best processes in place, but without the right leadership and talent strategy, it’s bound to underperform. High turnover rates, disengaged employees, and a lack of future leadership development are critical problems facing the industry. In fact, top-performing companies retain key talent 2.5x longer than the average.

?? Solution: Implementing a strategic talent development plan that aligns with company goals and fosters collaboration can lead to higher productivity and stronger company culture.

3. Why Cross-Department Collaboration is the Key to Innovation

With the growing complexity of lighting systems - incorporating advanced materials, optics, semiconductors, and IoT - cross-departmental collaboration has never been more essential. Unfortunately, 68% of lighting manufacturers lack critical synergy between departments, leading to missed opportunities for innovation and slowing down product development cycles.

?? Solution: Companies need to break down silos, encourage interdisciplinary collaboration, and leverage complementary expertise to stay competitive in a rapidly evolving market.

4. Why Outdated Metrics Are Holding You Back

Many lighting manufacturers are still using subjective, outdated performance metrics that don’t offer a true reflection of where the business stands. Worse, these flawed measurements often fail to align with industry benchmarks or international standards, leaving companies vulnerable to inefficiencies and poor decision-making.

?? Solution: Switching to research-backed, data-driven assessments can help lighting manufacturers gain the clarity needed to improve both organizational performance and employee engagement.

Conclusion

The lighting industry faces a pivotal moment, with unprecedented regulatory pressures and technological demands reshaping our landscape. These external challenges amplify the internal inefficiencies plaguing many lighting manufacturers, making organizational agility not just desirable, but essential for survival.

The market demands higher efficiency, greater innovation, and rapid adaptation to evolving standards and consumer expectations, often at a lower cost. Manufacturers clinging to outdated processes, poor collaboration, and flawed metrics will struggle to meet new efficacy thresholds while balancing the often-conflicting demands of energy efficiency, light quality, and human-centric lighting.

By addressing critical inefficiencies – from cross-departmental collaboration to talent retention and leadership development – manufacturers can unlock billions in savings and position themselves to thrive in this new era. This organizational transformation is crucial for navigating the complex interplay between technological advancement, regulatory compliance, and human well-being.

As lighting continues to evolve, playing a pivotal role in energy conservation, smart cities, and public health and safety, the companies that invest in their organizational health today will be the ones illuminating the path forward tomorrow.

Ready to stop the inefficiencies? https://brandtpartners.com/consultants/cieplik/