Chasing profitability in 2019

Pierre Cléroux, VP of research and chief economist at BDC, believes that 2019 will see great opportunities to expand markets and diversify product lines. But there are two huge threats:  labour shortages and technological advancements. Hugo Sarrazin, Senior Partner and co-author of the December McKinsey Quarterly 2018, predicts that the critical enabler of future success will be the symbiotic integration of human capital with advanced technology. When employment demands are high and supply is low, leaders must pay particular attention to building the skills and organizational alignment needed to deliver on the promises that advanced analytics and technologies bring. So, today’s business leaders must adjust their growth strategies with changing environmental and industry challenges. Here are some essential leadership qualities that will help moving forward:

Objectivity. Leaders must objectively examine both the tangible and intangible costs of achieving a positive bottom line. That means exiting the shop floor, leaving the trenches of micro-management, and providing line managers with the authority to eliminate inefficient production processes. Owners must get a crystal clear snapshot of production bottlenecks. Most of all, they must realize that staffers are not fodder. Employees cannot be expected to move from line to line in the absence of upgrading, training and working in an environment of respect.

Understand your leadership style. Some leaders believe that employees simply do their work, have little motivation, need constant supervision and do overtime reluctantly. Result: work environment can become toxic and recruitment efforts seldom attract the best candidates. More successful leaders believe that employees come to work motivated, want to do a good job and take pride in their work. These employees eliminate inefficiencies and are willingly to go above and beyond. Most of all, they feel respected and don’t have to be reminded of deadlines. Nielson’s (December 2018) research found that better pay was the overriding reason for accepting a new job. However, very close behind were employees who didn’t find their work interesting, didn’t feel respected, and lacked opportunities to take on new responsibilities. These opportunities were not necessarily moving upward in to management, but lateral moves that allowed for training to build employee skills.

Invest in human capital. Shop owners must get more creative when searching for talent. Cléroux suggests investigating under-used resources such as immigrants. Upgrading the skills of current employees and reducing retirements by re-hiring mature workers part-time, are also good strategies. Lisa Sterling, chief people and culture officer at Ceridian, is convinced that millennials desire work that’s interesting to them – and are more willing to walk away from an unsatisfying job than all preceding generations! Leaders need to check their HR practices, realize that employees do have a personal life, and build work protocols around that assumption. Building employee loyalty with more respectful HR policies can generate huge returns in employee productivity. Respected employees also find work more meaningful and are more likely to take on new tech challenges.

Digital warfare. The McKinsey Report 2018 points out that a cautious and incremental approach to technological investments to address digital demands is now passé. Technology initiatives must be bold and leaders must eliminate slow-paced incremental thinking and knowledge gaps.

Ignorance. Leaders must fight ignorance with education and a go-and-see attitude. They must understand digital’s potential to add value to existing products, to build new product lines, and to capture more market share. Leaders with high digital IQs galvanize themselves from falling prey to “the shiny object syndrome” – investing in cool technologies that simply don’t fit their business.

Bold moves. Leaders must communicate their production strategies with line managers and front-line staff. Allowing input from workers is the best way to introduce bold new technology while enhancing employee skills so they’re ready to take on new technology challenges.

Fear. Leaders must fight impulse purchases of digital technology by working with their line employees, customer service reps and marketing staff to carefully select key performance indicators. Relevant, timely and accurate data and feedback will minimize conjecture when it comes to adding new technology.

Diffusion of technology. Printers are constantly in a tug-of-war between reinvesting in their core processes by digitizing existing production lines, and making big and bold digital purchases that allow them to enter new markets. The dizzying pace of technological change combined with the uncertainty surrounding a near-future ROI, often creates a sinkhole that swallows up many shops. Successful leaders balance the concept of viewing their products as a diversified portfolio that requires continuous upgrading, with the concept that technology is changing far too fast to miss “first-adopter” advantages.