Manufacturers cite three drivers of business success in the “People & Profitability Survey”
Today’s manufacturing leaders face a myriad of challenges. Customers, competitors and markets are changing faster than ever. Sustainability is moving from a social movement to a business imperative. For many firms, going global is no longer an option – it’s essential for long-term growth and profitability.
But this rapidly-evolving global economy also brings opportunity – millions of new global consumers, emerging markets for manufactured goods and growth opportunities in promising new industries such as bio-tech, energy and overseas infrastructure development.
Capitalizing on these opportunities requires manufacturers to develop new leadership capabilities from the production floor to the executive suite. Leadership development, employee training, and talent acquisition are crucial elements of success.
It all comes down to people. Manufacturers that have the right mix of skilled employees, forward-thinking leadership, and access to information and the ability to interpret that information have a tremendous competitive advantage in capturing new markets and customers.
A recent People & Profitability Survey* (by Deloitte, The Manufacturing Institute and Oracle) of manufacturers found that “the most profitable companies consistently assign a higher importance to talent and People Management Practices compared to the least profitable companies.” This finding reinforces what the 2009 Wisconsin Next Generation Manufacturing study found – 68% manufacturers performing at world-class levels also ranked talent management as highly important.
The People & Profitability Survey asked manufacturers to choose the top three drivers of future business success over the next two to three years. The top three drivers were:
- New product innovation at 65% vs. 49% in the 2005 survey
- Highly-skilled, flexible workforce at 50% vs. 74% in 2005
- Low-cost producers status at 45%, unchanged from 2005
How do successful companies develop their employees? It starts with the culture. Management must clearly and consistently communicate the business strategy and objectives to employees, and this strategy must reflected in a well-defined people strategy. Employee performance must be measured using clear and understandable metrics.
Manufacturers must align talent needs with their business strategy. In these lean times, companies must not only understand their products, customers, markets and value proposition, they need to know what employee skills and capabilities are needed to support the business strategy.
The People and Profitability survey includes the following recommendations for manufacturers:
- Clear and consistent communication of business strategy and objectives to employees
- Development of an explicit people strategy in clear alignment with business strategy
- Use of clear metrics and metrics and methods of evaluation to measure and reward strong performance
- Formal and regular succession planning
- Additional rigor and emphasis in the recruitment process to evaluate problem-solving skills
- Utilization of formal training programs and certification programs
- Providing training programs to employees on new technologies
- Recognition of the importance of diversity and generational issues related to talent management
- Identification of specific workforce segments that are most critical to the success of an individual business, and increased rigor applied to understand what motivates/engages those employees.
- Much more extensive deployment of technology to support the entire spectrum of talent management, from how talent is sourced, selected, developed, measured, rewarded and deployed.
It’s not enough for manufacturers to efficiently make products – today, manufacturers must understand and anticipate customer needs, develop new products and services and serve emerging markets. This requires a highly skilled, motivated workforce.
WMEP understands this new reality and is ready to provide your organization with the unique resources, expertise and training that will help your company develop a skilled, motivated and capable workforce. Call us today at 877.856.8588 for more information.