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Critical levers for production companies in 2021

Anders Jorgensen, IRC Denmark, Founder & Managing Partner at People Executive | 18.11.2021

As search consultants working within manufacturing sector we are experiencing significant change. Manufacturing companies are not only affected by the current pandemic but to a large extent also by a number of megatrends.

Concepts such as scalability and digitalization are emerging as key concepts. But what do these entail, and why are the concepts so crucial?

Basically, they mean that the competencies that employers and hence search consultants demand have changed. Therefore, it is crucial to understand the new competency requirements in the search from the very top leader, leader or specialist who is to realize the strategies.

Scalability: Another nonsense word in management language - or a concept you as a leader should relate to?

The majority of our dialogues with business owners, leaders, boards of directors or private equity funds are based on or around a growth strategy. Growth is the mantra of the age and is especially driven by a desire to stand strongest in the global economy. But we observe to a large extent that the levers for growth have changed.

I am of the belief that many manufacturing companies recognize that their growth at times has been driven by strong management teams who were far-sighted on the product and production side.

Together with selected key employees, they have proven themselves as frontline soldiers and ‘hand-carried’ a number of processes that have led to change.

In step with the development, however, the demands from the outside world have shifted in favor of agility, readiness for change and professionalism.

The answers are no longer given by ‘pulling together on the bus and running fast’. No, the growth has changed character in step with a development where our industrial landscape moves from skilled craft productions to industrial companies.

The mantra of growth is increasingly focused on robust processes that are scalable. But what are the prerequisites for success with this? It requires completely different levers.

Digitization: Is it the emperor's new clothes, or is it really something new?

There is nothing new in the fact that today's technological society is characterized by processes that are driven by the right system support. But what exactly is system support - and is it just ERP?

In my work as a search consultant, I see that scalability and digitalization are often the focal point of the producer' strategic must-win battles.

While some companies are in the process of their first roll, others are in the second or third roll. Therefore, clarification of concepts is absolutely crucial when we have to hire the leaders or key employees who have to realize the strategies and deliver business results.

ERP is the basis, and the foundation, for the digitization of business-critical processes. Thus, a growing distinction must be made between the daily IT operations, support and proactive work in identifying technological roadmaps.

And precisely in that distinction lies the core of the concept of digitization. Digitization is a matter of optimal system utilization and application. But also a question of identifying technological possibilities that power the manual processes via various technology solutions.

Here, digitization becomes much more than internal processes. It will also be the core of product development, where R&D works to build IoT, AI and sensory science into the products. Not least for the purpose of gaining an overview of an installed base and the possibilities of utilizing structured data about user behavior etc. commercially. Digitization is therefore also closely linked to growth via ‘service as a business’.

The word digitalization thus contains a number of significant distinctions, which together increasingly form the platform for scalability and successful business development.

The competencies that will be contested, digital transformation, and the speed at which this is implemented, thus becomes a crucial and increasing competitive parameter. It requires leaders who are able to mobilize an action-packed organization and who can engage in development through purpose-driven leadership. Leaders who manage to translate ambitions into concrete and implementable initiatives.

It is our experience that there will be a battle for management competencies. Leadership competencies that deal with balancing a forward-looking strategic development with hands-on execution and that show the way through example and purpose. This is true at all levels of management; not least with the small and medium-sized production companies.

The above should be considered as my bid for a concise compilation of some selected critical levers for manufacturing companies in the year 2021. There are of course many more nuances and I am very curious to hear your opinion, comment or input!

Anders Jørgensen, author

 Anders is Founder & Managing Partner at IRC Denmark (People Executive). Anders is highly experienced in advising boards and management teams across a wide range of industries on recruitment, development and retention and is very experienced within recruitment of C-suite, managers, specialists, etc. Anders adds value through high quality at the right time with an energetic and performance-driven attitude. He holds a Master’s degree in political science (cand.scient.pol.).

 

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