Too Often Overlooked, Talent Is an Important Piece of Digital Transformation

Manufacturers increasingly view digital as a key transformation lever, yet they are also grappling with increased talent challenges as they seek to recruit younger, tech-savvy workers, retain current talent and manage an aging workforce.

To tackle these challenges, manufacturing leaders need to be thinking about how they can most effectively build and engage an employee base that is ready to tackle the digital transformations of today and tomorrow.

While many assume that digital tools are the key to capturing market share, the success of any digital transformation lies with an organization’s people—not technology tools. As manufacturers look to set their digital transformation efforts up for success, they should be thinking about these efforts across three people dimensions: individuals, teams and the organization at large.

Engaging Individuals, While Quelling Fear

Digital transformation is likely to cause anxiety and fear among current workers, who may be wondering what these new tools will mean for their jobs and whether they will be able to keep up with the new skills required by the technology. On the flip side, there is declining interest from younger workers in the manufacturing profession.

As industry leaders seek to appeal to both younger and older generations, it is critical that they work to alleviate these concerns. Our human hardwiring often causes us to see change as a threat, triggering a survive response that helps us problem-solve against that threat. Successful transformation requires us to embrace opportunity (what we call the thrive response), which allows us to collaborate, innovate, and work differently. As technology advances, leaders must find ways to calm the natural survive response that comes from the fear of digitization. Too often, leaders underestimate the resilience and willingness of employees to learn new skills. Leaders should invest in building capabilities across the workforce—not just in new technology, but also in adaptability and change.

While investing in the workforce can involve traditional learning and development approaches, it should also include on-the-job opportunities to ensure growth. For example, a manufacturer of tubular products for the oil and gas industry created small focus teams to tackle some of their most intractable business challenges. These teams set audacious goals that required them to work differently (not just harder), with the expectation of realizing measurable results within 90 days. By reimagining how they worked, they were able to achieve unprecedented results—such as reduced production time and inventory costs (by reducing batch sizes), leading to $21M in annual savings. Moreover, they developed the ability to spot opportunities more readily, respond to shifting market and customer demands, and pivot quickly when needed.

Leaders should also seek out ways to help their employees thrive and build a sense of excitement for those hesitant to join the industry. It’s important to provide an opportunity for meaningful career growth and to break down the inaccurate assumption that manufacturing work is rote and stale by helping younger workers see what’s possible for the future of manufacturing in the digital age. The COVID-19 pandemic has shown us that successful leaders appeal to employees’ own concerns and sense of duty. Making the job more about helping society than about manufacturing a product allowed employees to see the importance of greater efficiency in producing items like PPE or vaccines.

Thinking Differently About Team Leadership

“How” the transformation happens is just as, if not more, critical to success as “what” the transformation is. Those leading teams are uniquely positioned to create opportunities to energize and engage the members of those groups. As manufacturers use digital transformation to integrate new technologies, achieve operational excellence and better meet customer needs, managers and supervisors must start to think differently about how they lead.

To help quell natural anxiety, leaders first need to help their teams understand why the transformation is so critical and why it is imperative that these changes occur now. What will be possible when successful—for workers, customers and the organization at large? What are the risks of not changing? Why is the organization and the team positioned to undertake the transformation now? While it might seem like a luxury to take the time to communicate these messages, doing so is critical to building the buy-in and commitment needed to accelerate action and results.

Leaders should then take time to source ideas from the workforce. Those working the manufacturing line every day are intimately aware of the challenges getting in the way of digital transformation goals. They know what slows work down, leads to unacceptable deficiencies or hinders safe operations. It is also likely that they have found workarounds to make their jobs easier because they have never had the opportunity to co-create useful solutions with those making decisions about which digital tools to invest in and implement.

Once these ideas are sourced, leaders must create space for workers to contribute to executing on possible solutions.

Embracing an Employee-Led Innovation Culture

Historically, manufacturing has been incredibly management-centric and often seen as “command-and-control.”

While this approach made sense throughout the Industrial Revolution, when change was much slower and much less complex, manufacturing now needs to embrace much more leadership from every level of the organization, in order to drive the innovation and speed required to stay ahead. Part of creating these shifts is embracing an employee-led innovation culture—one in which everyone’s voice is valued, and individuals feel ownership over contributing to a bigger picture. A great example of this was when a global beauty company invested in building this type of culture by actively and consistently encouraging employees to raise ideas and experiment with executing them. The Head of Supply Chain captured and shared wins each week in order to reinforce the importance of this new way of working. This employee-led innovation culture engaged 2,700 employee volunteers from across the organization, resulted in better product packaging, helped drastically decrease carbon emissions, and led to a 50% reduction in go-to market time.

This desire for meaningful work has been growing, particularly among Millennial and Gen-Z workers. Especially during the COVID-19 pandemic, workers of all generations are expecting their employers to make decisions that positively impact not just shareholders, but also employees, customers and their communities.

As organizations approach a digital transformation, it is more important than ever to demonstrate that this transformation is intentionally integrated into the organization’s mission, values and broader strategy. Employees need to know that new digital solutions will serve a greater purpose—whether that’s increasing capacity to produce COVID-19 vaccines, creating a safer work environment for workers on the line or driving revenue that will be invested in innovative solutions that better serve the community.

Technology will play a large role in the future of manufacturing. Leaders who are able to inspire their workforces and create space for employees at all levels to contribute will be better prepared to tackle the challenges of today and emerging challenges of tomorrow—all while positioning their organizations to thrive in the digital age.

Vanessa Akhtar, Ed.D., is a director at Kotter. She works on Kotter’s most complex transformation engagements and helps drive research and development with the ultimate goal of helping individuals and groups develop leadership skills across all levels of organizations to drive successful change.