Use technology to cultivate a skilled workforce

We've all read articles on the growing workforce epidemic spreading across the global marketplace. As the Baby Boomer generation—more than 78 million strong in the U.S. alone—begins to trade in its work boots for beach sandals, this historic workforce shift will simultaneously plague existing organizations that are not prepared for its arrival.

04/01/2008


We've all read articles on the growing workforce epidemic spreading across the global marketplace. As the Baby Boomer generation—more than 78 million strong in the U.S. alone—begins to trade in its work boots for beach sandals, this historic workforce shift will simultaneously plague existing organizations that are not prepared for its arrival.

Although manufacturers have adapted supply chains for the flattening world and are sourcing from low-cost countries, few recognize the need for a further transformation. Demographic changes in the U.S. and Europe—and the rise of emerging countries—will negatively affect manufacturers unless they address emerging countries as markets while assessing their talent pools, thus complicating what most consider a traditional human resources (HR) issue.

There are companies at various stages of development of workforce planning and management strategies looking to inoculate themselves from market resource changes, rather than be invaded by and potentially devastated by them. Most organizations—especially those in the manufacturing industry—are throwing the burden squarely on the shoulders of the HR department. Unfortunately, only a few see that the rapidly changing workforce landscape requires a more comprehensive, technology-enabled solution.

The growing epidemic

The U.S. Census Bureau indicated statistics that are staggering: 78 million workers and professionals will retire in the next 10 to 15 years. The situation is compounded by lower birth rate trends in developed countries, and shortages of U.S. “replacements” from generations X and Y to offset the impending resource losses. The sum is that for the foreseeable future, U.S. labor demand will be greater than U.S. labor supply.

Unfortunately, for companies in the manufacturing sectors—whether discrete, automotive, aerospace, or process—these trends are impacting all organizational roles, from the shop floor to the top floor. The situation is unprecedented, and most companies today are at best just starting to act on it, with the majority lacking any long-term workforce plan.



Four areas sustain the knowledge-management culture: people, process, content, and technology. Each of these areas must be addressed both singly and collectively for effective knowledge management to flourish.

Historically, most companies have asked the HR organization to resolve the issue. In manufacturing, where resource tenure is traditionally long and work environments tend to operate in a “tribal knowledge” fashion with information being shared primarily through word of mouth, this is a tall order.

Even then, the HR team often finds that the company tends to dismiss this situation as a short-term, tactical problem—a “cold” versus an invading virus needing a longer-term strategy for marketplace survival. But because financial measures drive the focus of manufacturing companies in an increasingly competitive market, shoring up workforce planning and management is continually pushed lower on the priority list.

The reality is that solving the problem takes time, and time is running out quickly. Acting now, some organizations may find some temporary relief, but a proper inoculation solution requires much more than simple HR process changes. It requires a change to the organization's culture, and a cure can be enabled through technology.

Time for a shot

Organizations should start their workforce planning and management immediately. Since the workforce spans all manufacturing functional areas, all executives—from heads of HR to CIOs, CFOs, and plant managers—need to be involved in workforce planning and management. This is admittedly about HR in many ways, and the HR organization must help drive solutions in associated areas.

Some organizations have put programs in place, as seen in these examples:

  • Mentoring . Dow Chemical's strategy for growing new leaders depends heavily on a program of formal mentoring. Each senior resource has assigned mentees, with whom he/she must meet every month to track progress and to share knowledge.

  • Social networking .While traditional mentoring exposes mentees to only one person's expertise, Northrop Grumman has created social networks—i.e., companywide groups that connect to share information. The company has seen many young leaders emerge from such groups.

  • Action learning . GE puts people together from several disciplines—e.g., manufacturing, sales & marketing, legal, and finance—to solve particular problems. The handpicked, less-experienced managers participate along with experienced colleagues. GE combines such programs with deliberate fast tracking of the most promising people.

Enter holistic knowledge

Although successful in addressing specific points, just having processes and tools that address aspects of the aforementioned domains will not prevent companies from feeling the effects of large-scale knowledge loss. Along with the fundamentals described earlier, companies must quickly look to a knowledge-management (KM) solution before the knowledge worker heads to retirement.

Knowledge in most organizations resides within the resources employed, with only a limited amount of new knowledge being represented in explicit systems. In the manufacturing sector, the problem is compounded due to lengthy tenures and the large amounts of implicit knowledge embedded across the company.



Knowledge in most organizations resides heavily in the resources it employs, with only a limited amount of new knowledge being represented in explicit systems. In the manufacturing sector, the problem is compounded due to high levels of tenure and thus larger amounts of implicit knowledge existing across the company.

Knowledge persists in these semi-latent silos of information held by domain experts, scribbled on Post-it Notes, and digitized in Excel spreadsheets. A typical corporation is structured 40 percent to 50 percent knowledge-implicit, and 20 percent to 25 percent knowledge-explicit. A culture of “tribal knowledge” sustains the organization.

With the impending loss of retiring resources and the challenges of having to find a cost-effective solution, the aim of a KM strategy is to not only capture implicit knowledge and transform it into a robust retention system, but to evolve the organization's culture to one that is driven by knowledge preservation and distribution.

Traditionally, many organizations relegated knowledge-management system development to the bottom of the priority list as it seemed that there were always near-term priorities being clamored for. Fortunately, these same organizations do not need to view a KM system as an unexpected additional expense, but rather look at it as simply rechanneling current expenditures into a solution that will help avoid greater future expenditures.

The absence of a robust knowledge-management system could result in the following:

  • Heavier recruiting costs as a company wrestles with long lead times trying to obtain needed resources from an increasingly competitive market;

  • Delayed delivery of value from newer resources as knowledge assimilation times extend; and

  • Costly, unreliable retention programs that struggle to not only keep the more fickle and mobile generation X and Y but also the retirees who want to hit the beach.

Never before has the risk of productivity losses and increasing cost significance of lost knowledge been as high.

Culture of preparedness

Organizations must begin now to develop the foundation of a knowledge-retention and sharing culture. The four aspects to building and sustaining the knowledge management culture are people, process, content, and technology. Each of these areas must be addressed together for effective knowledge management to exist.

While the HR domains discussed earlier are fundamental to obtaining and retaining resources, it is the knowledge management component of a company's overall approach to the workforce planning and management dilemma that will be critical to its long-term survival.

In today's world, solutions proposed by the leaders of any organization must be a technology-enabled, driven by the need to move from a more traditional operating model to one based on knowledge retention and sharing across the organization.

Companies must leverage innovative alternatives such as Web 2.0 and social networking technologies to encourage and facilitate more unstructured knowledge-sharing that is driven from the bottom up versus “edict-driven” approaches of the past. For instance, the “Wiki” model is a perfect demonstration on how knowledge can be collectively captured, maintained, shared, and easily replicated.

Manufacturers must take advantage of services partners who have demonstrated a strong knowledge management culture of their own, allowing companies to implement proven technology-enabled solutions faster and at less cost than if done on their own.

For instance, a leading aerospace manufacturer has established a knowledge-based engineering facility with one of its strategic services partners to expedite the design and development of its product offerings. By centrally compiling global designs, specifications, testing results, and other product-oriented knowledge across its partners, this knowledge-based environment increases productivity, drives down costs, and speeds time-to-market—all with the goal of making the culture less resource-reliant and more knowledge-centric.

Unfortunately for the manufacturing industry, this example is more the exception than a widespread prescription, though it must be filled by more companies if survival is to be achieved.

The workforce crisis is spreading across the marketplace to most organizations, especially those within the vast manufacturing industry. Organizations that recognize the significance of this impending epidemic need to take swift action to turn back its advances.

As the world rapidly flattens to allow for both new markets and workforce opportunities, manufacturing executives need to look past HR-related solutions and take a more comprehensive view of their operating culture—especially in the realm of how knowledge is captured, retained, and shared—to be successful in the future. By looking toward a holistic, technology-enabled knowledge management environment, today's companies can cure themselves.



For manufacturers in the discrete, automotive, aerospace, and process sectors, shrinking workforces will impact all organizational roles. The result is an unprecedented situation that most companies today are at best just starting to act on, with the majority absent of workforce plans.





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