The greatest challenges related to technology over the coming months and years to employers will no longer be the cost of purchasing and implementing automation or back office systems but instead will come down to people, organization and culture.
As the rate of technological changes continues to increase, perhaps the greatest impact is on the workers that will be affected by the adoption of automation and other forms of digitalization. This will be particularly true in developing markets where industries will face a greater leap from basic manual skills to IIoT and automation if they want to remain competitive.
For new workers coming into the market now, there is already an awareness of many of the technologies that are changing the way that work is done. Being comfortable with human-machine interfaces and even artificial intelligence systems will be easier for these younger workers but there is still a large gap in formal training for much of the workforce whether new or existing workers who need to change the way that they work.
While engineering and advanced technology programs are on par with the rest of the developed world, training programs for factory floor and field personnel are critically lagging. Lower and mid-level work is shifting quickly away from manual and basic cognitive skills to higher level capabilities requiring not only understanding of information technologies but high level communication, processing of complex information and making decisions based on multiple inputs.
Think of a production machine operator for example. Even with moderate levels of automation, todays operator typically makes decisions based on information from a few real-time sensors and a focus on keeping a smooth and steady operation until a discrete change is required such as a product or grade change. With the emergence of new technologies, many operators may be replaced by automation but the ones that remain will have to consider not only what is happening right now but also historical information about the process and future information generated by predictive algorithms and/ or AI to make decisions and to make constant adjustments in order to optimize the process.
Even in developed markets, up to 40% of employers say that they cannot find people with the skills that they need. The challenge in Latin America may be even greater.
Implementing new technologies and processes not only requires changes in the workforce but also in the way that companies are managed and run. Implementation of new technologies will necessitate the reorganization of work flows and responsibilities and even the basic structure of internal departments.
A major component of digital transformation requires organizational design for both stability and flexibility. The capability to use data will be uneven throughout the organization both by function and geographically which will require less centralized, more nimble decision making processes and leadership. Companies must be willing to use information not only in what they produce but also internally to their business.
As with front-line workers, managers will also be required to adapt and develop new skills particularly in empathy to understand the challenges faced by others in the organization and to have the communication skills and leadership capabilities to provide clarity and allow others to make decisions. Now more than ever, micromanagement will be a hugely destructive force for companies trying to leverage new technologies.
At the core of all of the changes required will be the need for companies, industries and even whole markets to adapt their culture. The implementation of digital transformation will change the competitive landscape and often the way that companies compete.
Internally, companies must be prepared to change their cultures to fit the new realities. Perhaps the greatest challenge identified above is the need for mid-level managers to adapt. This a much more indirect impact of digital transformation. These managers must often shift decision making and be more flexible which can seem like a loss of control. The drive to make these changes must come from the top down.
With respect to worker skills, small to mid-sized companies have almost no capability to directly impact general training and may not have the resources to invest as much as needed in individual workers considering the risk of turn-over. This will require companies to think differently about their competitive situation and to work differently with competitors, suppliers, customers, governments and educational institutions to create an ecosystem that develops the workforce that all will need to remain viable.