Part five of a six-part blog series based on my 30+ years’ experience collaborating on innovation with complex, discrete machinery manufacturers.
In my last blog, I discussed how best-run businesses can use digital procurement to stay connected with suppliers, internal decision-makers, and the shop floor. Now let’s turn our attention to the challenge of hiring and retaining qualified industrial manufacturing talent.
Industrial manufacturers have long been known for the products they make, but more and more frequently they’re also judged by how conscientiously they make their products and how they treat their employees and customers. Brand, purpose, and company culture define a manufacturer every bit as much as the products they make. Attracting and retaining talent is critical to turning out a quality product as well as burnishing a brand. Equally important, having great a great product, brand, culture, and purpose attract great talent.
If you’ve read any of my other posts in this series, you know that I came across an article from the Harvard Business Review titled, “Why (and How) to Take a Plant Tour,” by David M. Upton, professor of operations management at the University of Oxford’s Saïd Business School. The article was written in 1997, and I found it enlightening to reflect on how much has changed, or not changed, in the last 22 years. And that’s how I came to write this series.
Recruiting, training, and retaining talent has always been a challenge. Professor Upton felt that plant tours were a necessary part of the solution, believing that a Socratic approach was key to getting employees to react favorably to new ideas. At one point in Professor Upton’s article, he relates this story:
“Without regular visits, it is difficult to transfer knowledge effectively. There is, however, an art to such teaching. Simply ordering people to perform a task in a different way – without helping them understand why performing the task differently might be better – is an ineffective method of teaching. One excellent teacher is Chris Evans, the chief executive officer of North End Composites, a 90-person subsidiary of the Sabre Yachts Company in Rockland, Maine. Founded in 1970, North End started out making composite marine hulls and built a reputation for outstanding quality and customer service. By the time Evans took over managing the company in 1995, however, North End was in decline. The company still made only marine-related products and was in danger of being marginalized by competitors with a broader product range. Evans realized that the company needed to broaden its product line but immediately ran into a problem: plant workers knew how the manufacturing processes worked to make standard marine composite parts, but they didn’t always know exactly why the processes worked. ‘Some people on the floor had great expertise, but there was a lot of black magic in the manufacturing processes,’ Evans says.”
I think this is a key point. We talk about “intelligent enterprises” a lot, but it seems to me that there are really three levels of intelligence in manufacturing. The first level is the raw data. Manufacturing plants are filled with numbers – how much, how many, how long, how heavy, how often, and so on. The second level of intelligence is knowledge, specifically, knowing what to do with the data. If it’s too fast, you slow it down, if it’s too many you make fewer, if it’s too heavy you make it lighter. And the third level of intelligence is wisdom. That’s the ability to use knowledge to predict, adapt, or innovate. This is what Professor Upton was getting at with his example. People in all areas of manufacturing need to move beyond the knowledge level into the wisdom level, or they will likely find themselves replaced by robots or artificial intelligence.
This is what separates man from beast. Consider beavers, or bees, or birds. They have adapted to build dams and hives and nests, and they’ve been doing so for thousands of years. They have the knowledge to create their homes, but not the wisdom to innovate them. You never see a beaver living in a penthouse apartment.
Innovation is a purely human thing, and it’s why human resources are entirely different from other manufacturing resources. In manufacturing, when a system or piece of equipment no longer works, the standard operating procedure is to engineer a new system or simply chuck the old equipment and replace it. You can’t really do that with people. Well … you can, and a lot of manufacturers do, but it’s a bad idea. Really bad. You could conceivably replace your workforce with robots, and it may even be prudent to do so in some instances, but that alone won’t lead to innovation any more than giving birds 3D printers to build their nests. Birds lack the wisdom to innovate.
Not surprisingly, human capital must be treated with humanity. Employees need to be discovered and recruited, not ordered like machine parts. They must be onboarded, not installed. They must be educated and assessed, not programmed and calibrated. They must also be justly compensated for their efforts. Not simply with money and benefits, but with respect for their contributions and their ability to help innovate and grow the company. Success should lead to succession.
For example, take a moment to watch this terrific video about Agco, a manufacturer of farm equipment, which was able to deploy an HCM software solution that not only met the needs of its workforce but also allowed it to stay competitive and innovative.
Today, there’s great uncertainty in manufacturing about attracting and retaining qualified talent. According to the World Economic Forum’s Future of Jobs Report 2018:
“One set of estimates indicates that 75 million jobs may be displaced by a shift in the division of labour between humans and machines, while 133 million new roles may emerge that are more adapted to the new division of labour between humans, machines, and algorithms.”
The full report is an exhaustive 147 pages. I admit that I haven’t read it all, but if you really want the inside story about the employment outlook, there are three pages of key findings at the beginning of the report that are an absolute must-read for any manufacturing human resources leader.
In truth, the turbulence in human resources is nothing new. Professor Upton noted this in his 1997 article. It’s the natural order of things that, as plants begin to innovate, older, more knowledgeable talent will retire and be replaced by younger, more enthusiastic talent. What is new is that today’s younger talent interfaces with the world and industry in a more hyperlinked and virtual fashion. We cannot expect that they will easily adapt to an old-fashioned manufacturing environment. If your goal is to attract the very best young talent, it will be necessary to create a digitally connected shop floor that is intuitive to them.
For a great look at how a world-class HR software solution can help HR leaders connect employees to their company’s purpose and mission, check out this video. It’s an overview – only two minutes long – but it should get the wheels spinning.
Back in 1997, Professor Upton likely understood that brand, purpose, and company culture define a manufacturer as much as the products they make, but he couldn’t have foreseen that the best-run manufacturers would one day combine people with technology, data, and machines in such a synergistic fashion. Back then, the best way to motivate and connect with the workforce was to visit them on the front lines. There’s nothing wrong with that of course, but in today’s fast-moving industry, being virtually connected with employees is essential.
In my final blog in this series, I’ll look at how manufacturing services supplement the larger mission of creating greater value for the customer.
For more insight about plant tours in the 21st century, stay tuned to this six-part blog series based on my 30+ years’ experience collaborating on innovation with complex, discrete machinery manufacturers.