In recent decades, lean management and Six Sigma have revolutionized global productivity efficiency and quality. And new waves of automation, artificial intelligence (AI), augmented reality, 3D printing, cloud manufacturing, and robotics—which many are calling the fourth industrial revolution—will no doubt take productivity and efficiency to unprecedented levels.
Yet one factor often gets overlooked: Process efficiency cannot achieve its intended benefits without people efficiency. Manufacturing organizations need people to adapt to, and implement, the new automation.
The problem is, while technology changes in months, human nature changes in millennia. Changes in automation that make processes more efficient carry with them uncertainty and even fear about which jobs will be replaced or how current jobs will change going forward.
Creating people efficiency requires a shift in organizational culture from “boss” to “coach.” That is, a shift away from having traditional top-down, command-and-control bosses to managers who coach, develop, communicate frequently with, and engage employees.
Organizations have made many attempts to improve people efficiency. These have included using traditional performance systems with annual reviews, forced rankings, annual engagement surveys, pay systems, and training programs to reskill workers. But these systems do not support the continuous learning, response, and change that’s demanded by ongoing automation.
Traditional Approaches Don’t Work
Here’s one symptom that traditional approaches don’t work: globally, only 15 percent of workers are engaged at work—meaning only that small percentage of workers are highly involved in and enthusiastic about their jobs and workplace. The percentage is even lower in manufacturing, industrial, utilities and transportation industries. Employees who are not deeply invested in their organization can fall into the “victim” trap when change occurs. Those who are engaged in their work, however, become integral parts of the evolving business and adapt quickly.
Consider the view from the employee’s perspective. Strong majorities of Americans who work in repair and manufacturing believe that AI will eliminate more jobs than it will create in their industry. While few employees believe it is very likely that their current job will be eliminated due to new technology in the next five years, more than one-third report that technological changes have occurred in their job in the past year.
Changing technology, on its own, has no relationship to employee engagement—but how change is handled does. Employees are more than twice as likely to be engaged in their work and workplace if they strongly agree their company is ready to implement new technologies. Most believe that employers should be responsible for retraining due to technological disruption.
Getting ahead of the curve of change is essential. And the quality of managers is central to this because managers are in the best position to communicate changes as they occur and to make employees feel secure and a part of the changes.
Gallup estimates that the cost of poor management and lost productivity from not-engaged or actively disengaged employees in the U.S. is between $960 billion and $1.2 trillion per year. Globally, that cost approaches $7 trillion—or 9-10 percent of GDP.
Organizations that substantially improve engagement have significantly higher production output with higher quality compared to their peers because their employees adapt more quickly to changes within and outside the organization.
The good news is that the status quo of low employee engagement doesn’t have to remain a reality—some manufacturers have reached 70 percent or more of engaged employees.
Research shows how to increase the percentage of engaged employees. The problem is, while the science of management has advanced significantly in the past three decades, the practice of management hasn’t.
Most past systems have failed because management approaches have not kept up with changes in the workplace, which include automation and changing expectations of what work should be from a new generation of workers, particularly millennials. Younger generations want work to have meaning and purpose. They want jobs in which they can develop their strengths and managers who are coaches.
This means the systems of performance management, employee engagement, and learning and development cannot exist in silos—they must reinforce three requirements of effective coaching:
- establish expectations,
- continually coach, and
- create accountability.
Manufacturing companies should transform their managers into coaches by teaching them to meet these requirements through a year-long curriculum that builds from base knowledge to experiences that teach the skills of having the right kinds of ongoing conversations. What’s more, Gallup’s research revealed these insights about effective performance management:
- Employees whose managers involved them in setting goals were nearly four times more likely to be engaged than other employees. Yet only 30 percent of employees experience this basic expectation. Setting expectations that are clear, collaborative, and aligned with organizational objectives are essential in the age of automation.
- Employees who receive daily feedback from their manager are three times more likely to be engaged than those who receive feedback once a year or less. But the feedback must be based on an understanding of the individual’s strengths. As a rule, managers should give their employees meaningful feedback at least once a week.
- While many organizations are changing their annual review systems, accountability is still vital. Managers should have progress reviews at least twice per year and focus on the employee’s purpose, goals, metrics, development, strategy, team contribution and personal well being.
- Performance measurement needs to be paired with individualized development. If managers don’t merge individual employee development with their performance measurement, employees can see performance measurement as a threat.
One thing is certain—automation will continue to have a sizable impact on manufacturing. Although the specific how and when isn’t perfectly known, there are two things that leaders can do now to prepare for the next 10 years:
Invest in your people. It may seem counterintuitive, but in an increasingly automated world, people will matter more than ever. The jobs of the future will also require the ability to learn quickly and to work alongside robots, and these jobs will require new skills.
Gallup has found that only three in 10 U.S. workers strongly agree that there is someone at work who encourages their development. And four in 10 strongly agree that in the last year, they have had opportunities at work to learn and grow. These ratios shrink as people get older. Simply put, leaders will need to do a much better job at developing their workforces for future needs.
Communicate future opportunities. If the most extreme predictions come true, there will be role changes and massive layoffs in the years ahead. This type of organizational disruption requires clear and caring communication. Leaders will need to be transparent about where their organization is headed and what skills their company needs to win in the future.
Agility is a new buzzword in business. Managers, more than ever, are central to creating an agile culture where employees can respond—and develop—quickly amid rapid automation. Moving from a culture of “boss” to “coach” gives manufacturing organizations the best chance to maximize their human capital amid the evolution of machines and technology.
About the author: Jim Harter, Ph.D., is the co-author of “It’s the Manager,” with Gallup CEO Jim Clifton. Gallup is an analytics and advisory company based in Washington, D.C.