Evolving industries: what keeps business leaders awake at night?

The beginning of 2017 has seen a measured level of business confidence in the face of what are unprecedented circumstances. The backdrop of economic and political changes combine with other factors, such as the impact of technology, to create an interesting set of challenges.

Throughout the first quarter of 2017 we spoke to over 500 senior leaders of engineering and manufacturing (E&M) sectors. These people lead functions within these areas and between them cover every sector of the UK economy. Many of them hold European or global positions but the predominance of their teams are UK based.

We asked them one question, “What keeps you awake at night?”

The top four responses don’t need too much explanation, though we also wanted to gain insight into what the leaders of these functions are doing to mitigate risks or capitalise on opportunities.
Political and economic factors (21%) – Brexit and America’s political climate continue to dominate the press and topics of conversations. There is an equal level of uncertainty around the upcoming European elections and whether trends seen in the UK and US will continue. From a commercial standpoint these factors have led to a heightened concern for exchange rates, currency fluctuations, what position to take on these issues and balancing global/local supply chains. A number of E&M leaders mentioned they have faced internal challenges with hedging against currencies in the past six months. Paying suppliers as per terms and bringing forward payment schedules has been debated. Ultimately businesses need to have a clear trading policy and then be agile enough to act commercially to deliver this.
Skill shortages (18%) – Given that each of the 500 leaders interviewed manage large functional areas within their sector, it is unsurprising that people were high on their list of concerns. Particularly whether or not their team had the right skills, which stemmed from two key issues:
  1. Do my team possess the right mix of skills to deal with what we are facing today? 
  2. Given where I believe we need to be in two-three years, do we possess the right mix of people and skills?
The short-term challenges which were highlighted are by no means new issues. There continues to be more and more emphasis towards social skills such as influencing and communication, and less towards technical sector expertise. The most practical managers seemed to be focused on how to best compete within a limited talent pool.  Some of the statements and questions that were being asked are summarised below.
  • Given that the top two reasons people give when moving organisations are personal progression/development and the ability to have an impact within their role, how well is your business function selling itself? 
  • Paying well and having a good brand are a good way to attract new talent, however if you were a high calibre candidate considering a move, what does your recruiter say to emphasise these benefits?
  • What does the vacancy advertisement on your website portray? 
  • How well does your recruitment process represent the role and organisation as a whole?  
The longer-term challenges are equally longstanding issues, however understanding the future requirements within these industries and managing the speed of changes has never been more difficult. The key factor creating this uncertainty is technology. Whether it’s predictive analytics, block chain or 3D printing, the world in which we will operate is going to look very different. As early as 2020 it is widely understood that we will have to relearn over one third of the skills required to continue performing our roles, across all of the areas surveyed. While we know all of these roles will be impacted and we also understand the basis of these technologies, having the right skills in place at the right points of this journey is a major challenge. The broad consensus showed that the solution will be a multi-channel one.
  • Internal talent development - what are you doing to prepare your own team for these changes?
  • Recruiting external talent with a developed skill set into the team.
  • Internal redeployment - adding people with technology, marketing, customer service, sales backgrounds into E&M functions was highlighted as a solution included in many of the managers' plans.
  • Hiring external talent from other business functions.
Holding on to talent (15%) – Having a plan to develop and hire a great team is clearly undone if you are not retaining your own key people and it is clearly high on managers’ list of concerns. The number one factor that the surveyed leaders were focused on was having a strong vision which is clearly communicated to the stakeholders it is relevant to. Second to this was the development of their team. A high number of leaders also stated that getting their staff involved in cross-functional projects and programmes was their number one objective. They believed this would lead to their personal development, higher engagement and more importantly better prepare them to meet the skill requirements that will be needed moving forward. 
Technology (12%) – As previously mentioned, technology is causing both immediate and longer-term challenges, though it also presents an equal amount of opportunities. Without the ability to correctly analyse data you simply cannot deliver success. The use of data has never been bigger within the industry, in terms of the volume available as well as business’s eagerness to utilise it. One example of this would be a straight forward ERP system. From the people who listed technology as a response 85% of them were focussed on either an upcoming ERP implementation or frustration due to the lack of investment in their existing systems. Similarly technology in E&M was viewed by many as a big opportunity. The improving feasibility to automate stages of the process is seen to be very exciting. This in theory would leave people to spend more time working on more value adding tasks around SRM, innovation and partnering. However the reality of internal systems were stated as the number one reason why more progress had not been made in this area. 
Summary
The natural thought process when asked “what keeps you awake at night” is often a negative one regarding challenges and issues. The reality is that what was established from many of the conversations was actually more positive. After all, each challenge represents an opportunity. What was resoundingly clear from the conversations is that change is coming, fast and it’s more complex than ever before. Blending advancing technology to allow talented people to do more of what they do well is the key. Those that do this will thrive and grow, those that don’t may find themselves reflecting on what more they could have done to evolve their business function and the people they manage. 
Michael Page are fortunate that we have over 50 people operating across engineering and manufacturing. This affords us over 100,000 conversations per year and we play a part in helping 3,000 professionals into new roles in the UK alone. Our preferred approach is to partner with professionals to share insight and give advice based on the trends we are seeing inside the industry and external market. 
If you would like to discuss any opportunities or arrange a meeting please get in touch today.
Jonathan Abell
T: +44 121 230 9384