To move into the digital future, manufacturing leaders must lead with disruption and innovation.
● Transformation starts with leadership.
● Employee-wide upskilling development is needed.
● How to instill a learning culture.
The manufacturing industry continuously faces new challenges in an ever-changing landscape. Leaders must contend with increasing demands to adopt sustainable practices, the need for greater data security, rising customer expectations, and difficulties around recruiting and retaining talent as skilled workers approach retirement.
This complex landscape requires disruptive and adaptable manufacturing leaders ready to navigate uncertainty and introduce new ways of working designed to fit shifting priorities.
To do this, leaders will need to look inward to identify the behaviors that will support and empower workers, upskill current employees, and cultivate a culture of constant learning.
Transformation Starts With Leadership
The new transformative, disruptive manufacturing leader will need to pivot away from “business as usual” to a digital-first “change as usual” mindset. They must understand and embrace data, be able to role model digital behaviors, leverage the strengths and behaviors of the team and individuals to retain competitive advantage, and bridge the gap between the now and ever-changing digital future.
Contrary to popular belief, leadership is not a stand-alone, isolated activity. The new leader must be able to ideate, innovate, and create future solutions while leading, empowering, and engaging teams undergoing transformation. This leader should encourage people to think and operate outside the box. In an industry that is heavily product driven, this new paradigm will need to be applied with caution given the reduced margin of error within this sector.
“The new leader must be able to ideate, innovate, and create future solutions while leading, empowering, and engaging teams”
PA Consulting recently surveyed over 300 business leaders across the U.S., U.K., and Europe to explore the behaviors driving the new way to lead. The finding revealed that over the next five years, the following behaviors will be critical to success:
- Nurture human optimism by helping people create a positive mindset and approach, tapping into people’s innate capacity to adapt to new and complex situations with innovation and creativity.
- Empower teams to innovate by inspiring people to understand their customers’ desires and giving them the space and permission to imagine and deliver value-creating responses.
- Build evolving organizations by creating environments where rapid change is the norm, and where aware, inclusive, and responsive teams can make a success out of change.
- Seek inspiration in surprising places by applying new perspectives and a broader lens to both existing technologies and evolving challenges.
An overwhelming majority of surveyed leaders recognized the importance of those behaviors as essential to leadership now and in the future. Moreover, these behaviors are linked to 70% and 74% better outcomes in performance and societal outcomes, respectively.
Driving Economic Optimism Through Upskilling and Learning
To lead systematic change and deliver organizational transformation at pace, businesses must ensure that all employees are prepared and ready to face the challenges of the 21st century. Indeed, being disruptive isn’t just about thinking differently, it’s about having a stable and secure organizational foundation to take risks and adapt. To do so, leaders must prioritize building new talented teams, upskilling and transforming the learning capability.
The World Economic Forum’s Future of Jobs Report states that due to the growing uptake of technology and automation, half of all employees will need reskilling by 2025. This remains particularly relevant within manufacturing where operationally intensive companies begin to enter a new era of automation reliance. In Europe and the U.S., demand for physical and manual labor for repeatable and predictable tasks within the sector is predicted to decline by nearly 30% over the next decade. In contrast, the requirement for digital skills (coding analytics for example) is predicted to almost double. Finally, demand for high-level social and emotional skills will continue to increase as global partnerships and supply chain complexity expand. Such significant workplace trends present real challenges, and opportunities, to manufacturing firms.
Create a long-term vision for growth
In this context, leaders can no longer rely on a reactive and short-term people strategy but must look to develop a long-term vision for growth, which recognizes the importance of an adaptable and cognitively mobile workforce. The economic incentive remains paramount and clear: retention and training are, and will continue to be, a more sustainable and effective employee policy than hiring new employees. Moreover, shifts in societal and workplace attitudes will only strengthen this approach and the expectation that employers must do more to retain their current workforce where possible. In light of this clear momentum shift, what can leaders do to guide this skills transition and drive progress?
“Employees should be encouraged to embark on their own upskilling journey through conversations and development plans”
Companies must ensure that any upskilling forms part of a larger digital strategy. Acquiring top talent remains a common barrier to achieving digital strategies, and success in either requires a combined approach that sees upskilling as a critical cog in the wider digital wheelhouse. Here, leaders must engage with serious discussions around workforce planning and resource allocation to design effective upskilling capability.
Reward and incentivize training
Upskilling and reskilling must be widely promoted and resourced at all levels to ensure enterprise-wide adoption. Leaders must consistently communicate its value, actively endorse and support opportunities, and identify risks of reduced adoption. Where possible, employers should look to reward and incentivize upskilling activity (both compensatory and non-compensatory). At the very minimum, employees should be encouraged to embark on their own upskilling journey through regular career development conversations and bespoke development plans. Flexible learning and additional staff development products such as microlearning and flexible time off should also be reviewed in order to see a noticeable shift in this area.
Leaders should work closely with learning and development (L&D) teams who have a wealth of learning resources, training skills, and valuable workforce data on required future skills and learning needs. Leaders should also discuss emerging trends, business needs and skill requirements to inform the L&D teams’ programs and middle leadership layer. A strategic response to this upskilling challenge will inform leaders and encourage staff to take up opportunities to upskill and grow. Developing an online opportunity marketplace or talent-seeking resource hub can help to meet business needs and develop individuals and teams.
Finally, upskilling provides numerous benefits to both employees and organizations. The meaning and importance of work have changed over time and research has shown that the main motivating factor is no longer money. More people are reevaluating their priorities, looking at their work-life balance and wanting their work to be meaningful, purposeful, and in harmony with their beliefs and values. When aligned with organizational beliefs, mission, and values, the power of upskilling is even stronger.
Cultivating a Life-Long Learning Culture and Digital Mindset
Manufacturing 4.0 is primarily anchored in interconnectivity which is underpinned by insights garnered from automation, machine learning (ML), big data analytics, and real-time data. Moving into a digitally enabled era means that there is an ever-greater expectation of delivering innovative products to the market at speed. This means that success ultimately lies in how well organizations are able to move their people to become truly innovative, agile, and collaborative in order to overcome increasingly complex structures and meet future customer demands.
“It is crucial for leaders to cultivate a foundational culture of life-long learning and a digital mindset”
Organizations going through such Manufacturing 4.0 digital transformations will recognize that, alongside investing in new technologies and upskilling/reskilling employees in how to use them, it is apparent that technological advances and the unexpected changes they bring are here to stay. To be unequivocally fit for the future, therefore, it is crucial for leaders to cultivate a foundational culture of life-long learning as well as a digital mindset that will inspire their teams and enable them to find creative solutions at an unprecedented pace.
Create a psychologically safe environment
Creating a life-long learning culture and a new digital mindset requires the right platforms and resources to provide more informal, on-demand, and bite-size learning opportunities that can be accessed alongside day-to-day work, and also an environment of psychological safety. Like evolving learning approaches, performance and development conversations are now also occurring both more frequently and informally, to meet the real-time nature of new or changing demands.
For manufacturing in particular, a move to greater automation can create substantial changes physically (from the shop floor to an office setting) as well as behaviorally (towards a fail-fast agile learning mindset), and this can create psychological unease. The uncertainty presented by inevitable technological and societal developments will require leaders to be proactive in offering a leadership style that is more sensitive, adaptive, and empowering so that their teams feel heard and supported through these shifts. In turn, this authentic approach to investing in employees and providing recognition of their intrinsic value will also help to retain and attract talent in these challenging times.
Transformation is now commonly viewed as being more of a journey than an end point. The long-term capability and culture of life-long learning will need authentic leadership to generate a psychologically safe environment that motivates teams to evolve, grow, and disrupt so that businesses don’t just survive but truly thrive. M
About the authors:
Nigel Lowe is a Partner and people and change expert at PA Consulting
Nini Ali-Khan is a change management expert at PA Consulting
Shanton Wilcox is a Partner and America’s Leader in Manufacturing at PA Consulting