4 Ways to Transform Your People Strategy for Industry 4.0

June 8, 2018
You've got to develop the talent and skills of your workforce.

Imagine you’ve been asked to oversee building a brand-new manufacturing plant optimized with the latest digital technologies including advanced robotics, sensors, 3D printing, data analytics, automation and the Internet of Things (IoT). You have a limitless budget except the company requires that all of the technology remains on a Microsoft DOS operating system.

Ridiculous, right? Even if you could find some things that might work, making that plant Industry 4.0 competitive would be an impossible task.

Still, many manufacturers are doing something similar with their workforce. They’ve focused on investing in new technologies, while operating on outdated people strategies. Meanwhile, the gap continues to widen between the skills that available workers have and those that manufacturing jobs demand.

Here are four key areas to help you update your talent strategy from a traditional to an Industry 4.0 approach:

1. Traditional Approach: Product first, people second

Product is king. Many manufacturers focus on how they need to change the product before they think of the implications for their people. Workers have to adopt the changes or risk their jobs.

When the labor market was flooded with qualified manufacturing workers, it was often relatively efficient to take this approach. But as manufacturing jobs grow more complex and the pool of interested and qualified workers dwindles, a product-first approach is more likely to breed resentment among workers or drive them out completely.

Industry 4.0 Approach: Build change champions

Implementing change in the world of Industry 4.0 depends first on getting employees to embrace the changes. That process starts by developing “change champions” who are ready to embrace innovation and have the ability to influence others in their networks to adopt transformation.

These champions are usually digital-savvy, can listen to others’ issues with empathy, and have excellent communication skills.

Manufacturers should aim to build 15-30% of their workforce as change champions, spread across mission-critical roles, from frontline leaders to plant managers to advanced technical experts.

2. Traditional Approach: Employee engagement is a bonus, not a necessity

Traditionally, decision-making in manufacturing was made from the top down, with lower-level workers awaiting instructions from their managers. In that environment, having an engaged workforce was a bonus, but less important than having people who could effectively implement orders.

Industry 4.0 Approach: Operationalize engagement skills

As manufacturers are increasingly driving toward lean, high-technology environments, it’s critical to have a highly engaged workers who take ownership over their work and can quickly solve problems. In fact, DDI research shows that companies with high leadership quality and engagement are nine times more likely to outperform their peers financially.

Many manufacturing companies have no idea how to solve the engagement problem, or try to solve it with short-term employee incentives they hope will improve engagement. But the best way to address the problem is to operationalize engagement by training leaders in how to demonstrate key engagement behaviors—including selling the vision, inspiring passion, providing timely feedback, delegating and following up, and helping to close skill gaps. 

Applying these skills must become a part of the way the company operates, not just a “nice to have” value.

3. Traditional Approach: Hire for skills and experience

The common-sense approach to recruitment in manufacturing is to hire people who have the experience and skills to meet the demands of the job. In the environment of Industry 4.0, however, the pace of change has accelerated, quickly making skills and experience irrelevant. Instead, personality is proving to be much more relevant on the job.

In fact, a 2015 study by The MPI Group showed that, at more than 300 manufacturing sites, poorly selected personal attributes and competencies were much more likely to be the cause of termination than technical and professional “know-how,” education, or past achievements.

Industry 4.0 Approach: Hire for learning potential

Industry 4.0 leaders must demand a radical shift in their hiring and promotion practices to focus less on skills and experience, and instead look for individuals who demonstrate strength in agility, continuous learning, interpersonal communication, and proactive problem-solving skills.

Manufacturers should start by looking for these skills within their existing workforce, and ensure that these skills are either already present or developed in their leaders before they apply these radical new criteria across their frontline hiring practices. Otherwise, companies may see an uptick in turnover and worker dissatisfaction as workers who are ready to learn, grow and adapt feel thwarted by their leaders.

4. Traditional Approach: Learning to be a leader happens by trial and error

Manufacturing leaders often determine their approach to leadership by observing their bosses on the job, and end up copying the behaviors they like or vowing to do things differently.

Formal leadership development, if it happens at all, occurs in bits and pieces during infrequent seminars in which participants are “talked at” for a few hours about leadership. As most manufacturers were more segmented in the past, this approach to leadership development was often good enough to accomplish baseline quotas in various parts of the company. But in the streamlined world of Industry 4.0, such an inconsistent approach hampers collaboration and stands in the way of implementing major changes.

Industry 4.0 Leader Approach: Create purposeful learning journeys

A purposeful learning journey combining face-to-face learning with online learning that helps hone on-the-job-skills can help manufacturers achieve more consistency in their leadership. This learning should be spread out over a specific time frame to avoid overwhelming participants.

Given enough capital, any manufacturer can invest in the latest technology. But without the right people in place to optimize that new technology, it will take a long time to recover the investment.

Scott Erker is DDI’s senior vice president of operations in the U.S. His global perspective on talent management strategy comes from his work with organizations around the world in workforce planning, selection, leadership development, succession, and talent analytics.

About the Author

Scott Erker

Scott Erker is DDI’s senior vice president of operations in the U.S. His global perspective on talent management strategy comes from his work with organizations around the world in workforce planning, selection, leadership development, succession, and talent analytics.

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