Manufacturing 4.0: Is Your Leadership Team Up to the Challenge?

(Manufacturing Leadership – David Brousell: 9-1-15) The emerging world of Manufacturing 4.0 will offer a host of potential benefits to manufacturing companies, but many firms will have to strengthen their leadership ranks in order to take advantage of this next wave of industrial progress.

That’s one of the key findings of a new Manufacturing Leadership Council poll on Next-Generation Leadership. Ninety-percent of survey respondents said the information-driven M4.0 paradigm will require a substantially different leadership approach and set of skills compared with what their leadership bench has today.

According to survey respondents, M4.0 will require manufacturing leaders to understand cross-functional process integration, develop collaborative skills to manage flatter organizations, use analytics to make data-driven decisions, and sharpen their abilities to manage accelerating market and technology change.

The problem that many see, though, is that their current leadership teams may not be up to the challenge. A surprising 51% of survey respondents said their companies’ overall success is either very vulnerable (12%) or moderately vulnerable (39%) to leadership deficiencies.

There are a number of possible reasons for these perceptions of leadership deficiency. Understanding, adopting, and effectively using advanced technologies to drive greater efficiencies and to create new business value can be a challenging exercise for even the most astute management teams. How many truly grasp the convergence of their current business models with digitization, for example?

The huge demographic changeover underway as baby boomers, with all of their tribal knowledge of how the business works, retire and companies struggle with replacements at both line worker and managerial levels is an existential issue for today’s leadership teams. How do manufacturers continue to attract the best and the brightest as they continue to grapple with negative perceptions of the industry?

Perhaps most central to the leadership deficiency issue, though, is where a company decides to focus and what set of activities it decides to emphasize. Here the new ML leadership survey offers some clues as to what may be causing the perceptions of leadership vulnerability. When queried about their companies’ strategic focus and activities, customer satisfaction, operational excellence, and financial performance – all important, but standard activities – rank high with 91%, 85%, and 84% emphasis scores, respectively.

But vision and strategy formulation, at 76%, scores decidedly lower. When asked about the degree of emphasis their companies should be placing on this activity over the next five years, however, respondents boost the score by a solid five points.

The road to Manufacturing 4.0 may not be smooth or straight, but it will require a long-term guiding vision and strategy. The key takeaway from this year’s Next-Generation Leadership survey is that manufacturing leadership teams must find a way to focus more on the longer-term future.

And it is a future that is coming at us all very fast indeed.

(A full report on the new survey will be published in the October issue of the Manufacturing Leadership Journal.)