This year, unemployment rates have dropped to an 18-year low and local manufacturers are scrambling to find new and innovative ways to grow without gaps. As founder of the advisory firm 100X LLC and chair of Vistage Executive Peer Group, an executive coaching organization, former manufacturing exec Steve Johandes helps dozens of local organizations and companies position themselves for “what’s next” in the market.
How do you think manufacturers should be preparing for new investments in technologies?
I’ve seen a very interesting spin in the way people justify technology and automation projects. When I used to look at technology projects, it would be all about the ROI. How many people are we going to reduce as a result of this? The best-case scenario was that you would be able to grow with the same amount of people. We knew that this project was going to save us 20 people, and that was going to cost-justify that project. We knew that if we grew, we could keep those 20 people. But if we didn’t grow, those 20 people were going away.
The difference is now those same manufacturers are saying, ‘Look, let’s say we’re 10 percent of our workforce short. So what we’re justifying now is how much can this shortage be made up by the technology?’ It becomes a zero-sum game. That’s probably been the biggest trend that I’ve seen this year. It’s been people starting to acknowledge technology investment not as being a cost reducer but making up for those employment gaps, those unfilled position gaps. And I see that trend continuing. I believe that a lot of the companies that aren’t thinking about it that way should be.
How much time do you think they have to get there?
I think they’re there right now. The ones that are on top have made the connection. But for those that haven’t made the connection, particularly someone smaller — and when I say smaller I mean under $25 million — if they haven’t made the connection, they need to, because the bigger guys are making the connection.
Do you see any quick wins for this talent acquisition problem?
There are a lot of interesting initiatives that I see going on in the community. I see businesses actually working together and recruiting together. There are some progressive folks that are doing some really interesting things. Some of the furniture manufacturers are going with weekend shifts, three 12-hour shifts. And that’s for the person who wants a second job. They can work Friday night to Sunday night, and then during the week, they can do whatever they want. I’m seeing these 9 to 3 shifts. They’re targeting the stay-at-home moms or stay-at-home dads.
How can the region do a better job of encouraging entrepreneurs within manufacturing?
We’ve always done great at producing things. The big opportunity that exists is to produce what I’ll call a supplemental resource to manufacturers. How do they create that innovative environment among themselves? Let’s say that I’m a $50 million manufacturer in town, a decent size — I’ve got 200, 300, 400 employees. I can guarantee you there’s a lot of stuff in there that is not my wheelhouse. So the question becomes, how do we reach out into a community of these hungry entrepreneurs and say, ‘Hey, look: You could have a really nice company on my crumbs.’ There needs to be more of those partnerships because we have a lot of this young talent that’s coming up that we’re not being super intentional about.
What do you think could happen in the next year that people need to pay more attention to?
I believe they’re not paying as much attention to the ethnic makeup of our community. Go look at the freshmen class of Kentwood High School right now. Those are our future workers. How are we prepared for that? We have the leading indicator. This is business’ responsibility, to look ahead. My fear is that we’re so focused on filling these positions and capacity that we forget about the long-term community impact.
Interview conducted and condensed by Jessica Young.