In a recent CEO Forum organized by MGTL, Dr. K. (Subbu) Subramanian, President STIMS Institute Inc., offered his vision of the 21st Century Manufacturing and outlined the need for requisite work force skills to meet the emerging needs. This forum was held at Pune, India on Nov. 21, 2014. For a complete presentation, please see: Manufacturing in the 21st Century
“Manufacturing” is a collection of (a) physical processes enabled by a host of (b) information processes and aided by a collection of (c) pick and place and transfer processes, which at the moment are a combination of physical events and information events.
Core capability for any manufacturing: repetitive use of physical processes, to achieve or USE the “Product” at the required quantity, place and time to meet the end user needs.
Manufacturers have two options: (a) Steady improvement in the processes already deployed; The result is a constant reduction in the explicit knowledge and skill required with respect to the Physical Processes used. Over time, they have become the black boxes surrounded by a myriad of service processes, which are generic and practiced in all companies and industries. (b) Introduction of a stream of new solutions resulting in New Products, New Processes and New Applications/ USE. These new solutions are the result of intense knowledge of the physical processes unique to the manufacturing company.
Breakthrough – step change – solutions will be expected as a routine output of manufacturing professionals of the future. But, in order to sustain such improvements the process has to be managed as a whole – as a system. Constant tweaking or small changes in the system which disturbs the equilibrium of the process cannot be tolerated, if maximum impact is the desired outcome. This will require manufacturing professionals who are simultaneously good at process science as well as process economics, with expertise to integrate knowledge from all available sources.
We find two parallel chains operating across all manufacturing companies (i.e.) Supply Chain which deals with the information processes that interconnect the various tiers of manufacturers and Functional Value Chain, where the physical processes and their exploitation play a silent but foundational role across the manufacturers.
Since the products are enables by processes and the USE is also a process in a manner of speaking, we are left with “Process and its knowledge and the capability to manipulate any process” may be the primary core capability or skill set of future manufacturing professionals! The role of human labor and their employment in large numbers is not a critical need in this description of manufacturing. It is important for policy makers to make note of this subtle but significant point.
Work force skills required for 21st century manufacturing:
Traditional Sources of Knowledge
New Knowledge Required
Traditional Worker Skills
New Worker Skills Required
Engineers and shop floor workers with technical training, trade skills and academic education.
It is an undeniable axiom of globalization: anyone in any job or profession has to be better than anyone else who can do the same job from a pool of workers across the globe. Conversely, those who can do a job in a similar manner to others around the globe will be rewarded for their effort at the lowest value at which the work can be procured from anyone else across the globe! Every worker will fall into one of these two extremes. Anyone in the middle will be ultimately swept to the low-labor-cost pool.
While there will be a natural tendency to be swept into the lower-wage pool, it will require a special effort to swim against the current to be associated with the limited few in the high-wage, high-reward pool. Swim against the stream and reach a high place (of New Solutions with identifiable impact) or be swept away into the global pool of low-cost resources (needed for Replication Solutions) is the true paradigm of globalization. There is little or no opportunity for treading water in this paradigm. This constant struggle to swim upstream and against the current is what is perceived as the volatility and uncertainty in the workplace. Suggestions such as higher education, higher SAT scores, and more grit and perseverance are all means to the same end. But as we have detailed in our book – see the links below – all of these have to be formatted toward identification, development, and exploitation of New Solutions using Transformational Skills as the means to this end.
Are you the owner of a small or medium sized manufacturing company? Are you the head of a profit center or a Business Unit that is part of a company group? If you are, it is very likely that you are one of the business leaders, trying to find ways to keep your business above water. Some of you may be concerned about growing your bottom line and in rare occasions seeking ways to further grow your business. But, no matter what your needs are, it is certain that you are facing the stiff winds of global competition, cost pressures, challenges from outsourced operations and above all a sense of uncertainty about the future.
We believe that such pessimism and the sense of gloom and doom about manufacturing industries and their future is not warranted. It is true that there are stiff head winds and it is also true that the waters are turbulent. But, you are not up the creek, with out a paddle!
Have you ever sat back and asked yourself, “How did we (your business unit) get here?” No, I do not mean, how you got into a situation of stiff competition and low profit margins and high costs. These are all obvious and readily known to every one. But, have you figured out how your business or operation grew from its beginnings to where it is today? It did not happen by chance or by some luck or through magic! It happened because you and your people along with your suppliers and your customers contributed their share of knowledge and know-how that resulted in the products you manufacture, the processes you use to make them and also the applications know-how through which your customers use your products. The “Products. Processes and Applications knowhow” are your core capabilities. These core capabilities are embedded in the knowledge of many people connected with your company – through your employees, suppliers and customers and their customers.
You might say “It is indeed true that we did not grow out of thin air. We built our company, brick by brick though our products, manufacturing process capabilities and our know-how to help our customers use our products better. Then, whatever happened to my business or operation, over the years? Why are we struggling today with low profitability and shrinking margins and low to no growth?” One can ask such valid questions and wallow in misery or merely be nostalgic about the good old days for ever. Instead, you can muster the passion to dig deeper.
Your product is not any widget you put in your shipping box. It is not merely something you identify by a product number or a bar code. Product is something of value to some one (the user), who is willing to pay you (the manufacturer) something of value to you. Can you describe your “Product” using the above definition? Is there any one in your sales, product design/development, manufacturing/production, tech-support or general management who can describe your product in terms of the value to your customer and the expected value for you in return? Do you know who they are? Do they all have the same understanding of the user value and manufacture’s value or are they speaking over each other in different languages? Your journey for the future can start right here and now, by developing a common definition of your “Product” and developing a core team across the business functions that speaks the same language about your product.
How well do you know your Processes to manufacture your products? They are not “black box” that nobody knows anything about, after Joe Smith retires from the company! All processes in your manufacturing floor have well defined Inputs, which are converted into Outputs. All processes are “Input/Transformation/Output” system. No, we are not talking about Ph.D language. In the past years, few who knew about the process could tweak them and keep them going, while others were simply pairs of hands to help them out. We can not do that any more. All processes can be diagnosed (using proper sensors and IT tools for measurement), repaired, improved and in some cases changed dramatically. But, you can not do any of the above, if you think that the processes in your shop floor are merely “black box” put in place by some one who left the company years ago! Your journey for the future can start right here and now, by developing a common definition of the key “Processes” in your manufacturing floor and developing a system view of these processes across all the business functions that support such processes. You would not like to see any medical professional with out a stethoscope and a thermometer. Then, why would you not want all your manufacturing process professionals have similar capability to measure and diagnose and cure the problem with respect to your processes and their health?
How well do you know your customer’s processes (Application) and how you can add value in their processes through your products? If software is the enabler of all the growth and success in the IT industry, you can make your AT (Applications Technology) as the enabler for your growth and success in the manufacturing industry. AT helps you to build alliances with your suppliers and customers towards building solutions of shared benefits. If you have treated your process as a black box, it is likely that your customers have done the same with their processes. It is about time, you helped them to do a “health check up” on their processes, while they use your product. After all, strong and healthy customer process is essential for your long term strength and success.
Product, Process and Applications know-how are your core capabilities, which got you where you are today! They are the bench strength of your team. You can do more or less with them enabled by all the plug and play IT capabilities. But, you can not build a manufacturing industry with out the brick and mortar (i.e) Product, Process and Applications Technology. Have you taken the time to cultivate them? If not, may be it is time for you and the key personnel in your team to go through the “Core Capability Boot Camp”?
A young man, recent graduate in physical sciences approached me recently on some advice for career development. After graduation he liked working in a bicycle shop and later got a shop floor job at an aerospace Co. Now he is laid off, wants to pursue engineering and wants to work with hands on projects. Now he wants to know if he should invest in education for a four year undergraduate degree in Engineering? Such adhoc choices in education and career options may be the thing of the past. Today everyone needs to be more strategic and systematic in their plans and career choices.
Let us review the evolution in the changing nature of jobs and careers. Then we shall discuss how they can be tailored to meet individual needs.
Jobs and Career: What is the need in the 21st Century?
The traditional pyramidal organization is now getting divided into four separate and distinct layers as show in the figure below. These figures and the figure no. are in the reference book: Thriving in the 21st Century Economy – Transformational skills for Technical Professionals.
In this changing organizational structure we can identify a group of workers called “Professionals”. These professionals add substantial value to the products and services – the output of any company. Much of the information work of these professionals can be augmented now using plug and play solutions readily available to any company or competitor. The labor aspect of these professionals is also readily supplemented through outside resources. They can also be augmented through automation. The abundance of small and medium sized suppliers, independent consultants and service providers can displace the in-house professionals on demand. Hence the professional ranks in companies – which are seen as head count or over head – have been diminished over the past three to four decades. The depleted “Professional” workers in the companies need gradual and careful rebuilding for the sustenance of the Co. today and also for its long term success. Below we address some of the reasons and how to address this critical need.
HR development for any company becomes a challenge targeting professional workers and their unique capabilities. This does not imply ignoring information workers or Labor pool. But unique value addition for any company will depend on the cadre of professional workers in every department.
Take for example any Design Department. In the past Design work involved concept development, drafting the part drawings, develop detailed manual analysis, select the materials and vendors, follow up on design alterations, support and overcome the production hick ups, etc. All of this involved some critical thinking but also required substantial attention to details, paper work and physical engagement for documentation, meetings, coordination, etc. These tasks were divided between many people with “expertise in each task”. Today the critical thinking has to result in identifiable new solutions that are implemented as a final solution. As an example the “design professional” with a new machine concept or new machine features has to carry these ideas from Concept to a fully commercial product to meet customer needs. These professionals need to be entrepreneurial, capable of handling a variety of jobs/ tasks and problems. This is in total contrast to the standardized task oriented capabilities and activities which was the forte of the large body of workers in the past.
The idea of “Professional as a solution provider” is not limited to Design Department alone. In fact such professionals are needed in every department and business function. The traditional “9 to 5 jobs” are no longer in place. You can no longer do what you are asked to do and be satisfied with it. Instead, today professionals also have many opportunities to integrate knowledge from various sources on a 24 X 7 basis, from other workers, knowledge available across departments, with the suppliers as well as from the customers or end users. Even the view of “Customers” need not be one outside the company buying the products and services. Instead any user of the “solution” of the professional is his/her customer.
The advent of smart phones, Facebook, Google and other search engines also augment the ability to aggregate information from across the globe and convert them into new knowledge. The result is a “new solution” of high added value. Through these new solutions the professional demonstrates the use of their higher skills. They are also constantly on the lookout for new skills and resources to augment their capabilities without being prompted by any one. They are the risk takers to usher in new stream of solutions and heralded as “entrepreneurial”. The new term used for such entrepreneur working inside a company – as opposed to a startup operation – is “intrepreneurs”! https://stimsinstitute.files.wordpress.com/2018/01/stims-cover-story-mmi-jan-2018-issue.pdf They are able to spread their wings to cover a wide range of issues as well as dive deep to address advanced technical or business or problems (on their own or using resources from anywhere). Because of the entrepreneurial nature of the work, risk taking and responsibilities the “New Solutions” wing of any department will have only a few highly skilled workers, with very few layers in the organization.
At the same time, once developed and implemented these new solutions have to be replicated in large quantities to generate the volume and to meet the revenue needs of the company. The jobs in this section will be highly standardized but the volume of work flowing through will be high. Since the work is more task oriented there will be more organizational layers. But, even in this replication wing the workers will have to be capable of handling wider variety of tasks than the traditional workers with narrow and limited responsibilities (See Fig. 2.2.)
The professional workers can be divided into two modes with distinct difference in their skills as illustrated in another manner as shown in Figure 3.9.We can call this as the Binary Economy. https://stimsinstitute.com/2018/11/08/it-is-the-binary-economy-stupid/ In this binary economy the New Solutions and Replication Solutions are two independent clusters, business models or operational entities.
HR Development Strategy for the employers:
The HR development in every department in each of these two entities have to be managed as two parallel strems.
For example the HR management for the new solutions organization must also be entrepreneurial, creative and distinctly different from the traditional HR management for the task oriented organizations. The same applies for Research, Design, Purchasing, Production, Sales and Customer support. But, the new solutions entity will also have the obligation to refine and standardize the product in such a fashion that the Replication entity can do so with large volumes of reproduction without any hick ups. In this binary economy the middle portion of the “learning curve” no longer exists. This is shown as the dotted line – the gap – in figures 3.9 and 3.10. Consider for example the release of I – Phones by Apple. In the very first few weeks Apple sells millions of units of a new model!
Their reward will also be substantially different as shown in Figure 3.10. The “New Solution Providers” in all business functions across the company will be few in number but they will command higher salaries and incentive pay consistent with their contribution to the top line and bottom line of the company.
But the workers involved in the replication solutions most of whom are low wage workers are stuck in a flat wage economy. In fact the large body of these workers have not seen much rise in their wages, because the skill level required of these workers have not substantially increased thanks to automation and IT driven plug and play solutions. https://stimsinstitute.com/2016/05/23/do-americans-really-miss-the-unions/ This situation will only continue to worsen further thanks to Robotics and AI.
There is a legitimate question to be asked: Who cares for the long term economic health and well-being of the large body of workers engaged in “Replication Solutions” inside the company as well as in the nation (or the world) as a whole. This sector of the working population cannot be neglected for long. Frankly speaking it is this neglected generation of workers without any prospect for change that we see as the angry and disgruntled segment of the population in USA. They are also described as the “neglected middle” of America. Companies will need to sustain this work force through strategies that are equitable and also humane. Universal living wage is being discussed as a national policy for this in the USA and a few European countries. Guaranteed higher minimum wage must also be looked at seriously for this segment of the working population.
Skills and Strategy for sustainable employment of job seekers:
Three dimensions of talent: We started this white paper with the request from a fresh graduate seeking advice on Jobs and career. We have already seen that the well-paying jobs are now clustered in a narrow category of workers called “New Solution” providers. In this narrow set, each person creates his own career path. But to fill the opportunities in “New Solutions” it is not just sufficient to go to school and get a degree. It is not even important if the degree is in Engineering, Physical Sciences, humanities or arts and sciences. But what is important is to develop a skill to conceive and develop a new solution and reduce it to practice. This requires a “talent” which is a sum of Knowledge, Experience and People Skills. The details of these capabilities are tabulated in the Table below. Education in the broad sense of the term must comprise of accumulation of competencies that are readily deployable at will among all these three capabilities as required in a given situation.
Core Capabilities of Professionals
Tools or Enablers
Deep and extensive learning; Well informed; Comprehension of various aspects of the subject
Formal Education, Reading, Learning from peers, Data driven, searching the data base, Observations
Skill derived from actual participation or direct involvement; Accumulated wisdom from real life.
Ability to seek out others and receive their support, help, and cooperation; Willingness to reciprocate, to achieve mutual benefits
Honesty, Integrity, Communication Skills, Collaboration, Team Spirit, Results driven, Emotional Intelligence.
As we have described earlier every professional is a knowledge worker. They develop and implement new solutions. Every solution requires a collection of inputs. When brought together in a logical and orderly manner, the inputs change into outputs of use to someone for something. Meeting such needs of someone by transforming the inputs into outputs is what we call as a “solution”. Hence every solution is an “Input/Transformation/Output system”. Keeping this point of view relentlessly in everything we do is the beginning of system thinking,
Here is a check list for system thinking assessment:
Are you looking at the big picture (the solution) or operate blind folded? Are you able to focus on the picture on the screen as a whole (the solution) or are you fixated on the pixel?
Do you look before you leap?
Do you have a comprehensive view of the problem (or solution) as an input/transformation/outputs system? (See Figure 4.1)
When you are told “What?” you have to do, do you ask “Why?” this is important to do, for whom, how it will be measured for the success and make sure there is agreement before jumping into the solution? — Awareness level of system skills.
Are you driven by data and its analysis or by opinions and “rules of thumb”? Remember a good carpenter measures twice and cuts once? — This is the Analysis level of system skills.
When asked “What is 2 +2?”, do you instinctively answer 4 or say” Why is this question? Value or benefits? What goes “into the 2 and the other 2?” Then follow up on the questions until a new solution is developed and implemented? — This is the highest (Synthesis) level of system skills.
IT Skills for knowledge aggregation, data and its use and IT automation of everything you do more than once!
If customer was the king at the end of the 21st century, “Data” is the king in the 21st Century. You can efficiently deploy the data through your “Knowledge”, “Information” or “physical work”. How you aggregate and manage the data determines if you fall into the “New Solutions” projects or “Replication” activities. These largely depend on your IT skills to use search engines, communicate through social media platforms as well as extensive use of standard plug and play software tools. You need not be a computer whiz or IT genius. But you should be conversant and proficient in using every available and readily accessible software tool. The old proverb was “Pen is mightier than the sword”. Today the Digital Technology (through computers, network, search engine, social platform tools, etc.) is mightier than any pen and academic education!”.
Dr. Krishnamoorthy (Subbu) Subramanian, President STIMS Institute has been awarded the coveted 2020 Eugene Merchant Medal offered jointly by two professional Societies (American Society of Mechanical Engineers – ASME; Society of Manufacturing Engineers – SME).
Following is a brief summary by Dr. Subramanian on the highlights of the work that resulted in this prestigious award:
In a world dominated by computers and Digital Technology one would wonder what is left to do in a 100 or 1000 year old process like Grinding Processes?
Whatever work I did at Norton Co. (and later as part of Saint-Gobain) stand on the shoulders of many others from the long list of researchers in the Norton abrasives Co. family such as: Dr. Loring Coes; Dr. George Reichenbach; Mr. Bob Rowse (who invented Norzon together with Prof. Mert Flemings from MIT); Dr. Richard Lindsey (together with Dr. Hahn from Heald Machine Tool Co.), etc.
The researchers who worked on principles of grinding outside of Norton Family include: Prof. Milton Shaw, his student Prof. Nathan Cook and his student Prof. Steve Malkin and many others. I am also a student of Prof. Cook!
There are also many other eminent researchers from USA, Europe, Germany, Brazil and India among others from across the globe over the years.
My seminal work: Microscopic Interaction model : Every grinding process – from manual grinding using Coated Abrasives sanding of furniture or manual weld grinding to precision grinding of every kind to ultra-precision grinding including high tech ceramics manufacturing can be measured, modeled and studied using the “Microscopic interactions model” as the starting framework. https://stimsinstitute.files.wordpress.com/2018/01/manu-17-1209-final.pdf Such model is also needed to analyze and manage all modern grinding processes, where abrasive tools are used as Engineered Components as opposed to the traditional approaches where the abrasives have been used as commodity and consumables (and hence any deficiency in the grinding system was compensated by wearing away the abrasive tool!). In this aspect this model is analogous to the seminal work of Dr. Merchant (this award is named after him) and his model for cutting or machining.
Today in the Bay Area there is a movement called “Customer Success Management” for SaaS Companies. It is almost identical to what we have then called as Applications Technology as a core competence for the hardware and manufacturing sector.
Collectively all of these have enabled for the grinding process to be seen and used more as a science – driven by measurements, data and analysis – rather than as an art.
This was the time of globalization where traditional approaches of selling abrasives in tonnage and price alone were not sufficient. Rather the need was for generation of functional surfaces with added value. This was also the time when Ceramics Grinding in high tech. sector was emerging as a new growth opportunity. This required active collaboration with customers and machine tool builders. While it was like pushing at the end of a rope to move it forward, the System Approach model gave us a frame work for collaboration of many players based on Science and Strategy resulting in several Commercially viable end results for SGA, Customers and Machine Tool builders: https://stimsinstitute.com/2013/04/21/workshop-on-system-approach-to-precision-manufacturing-manufacturing-grinding-processes-june-3-6-2013/ Hence Ceramic Machining Technology Center (CMTC) was born. CMTC was a modest workshop with five or six machines (worth over $2 Million in total on loan from Machine Tool Companies to Norton Co. largely based on mutual trust, technology and innovation) which resulted in many new grinding process innovations, new products and new business for the machine tool partners. For details: https://stimsinstitute.files.wordpress.com/2015/06/published-paper-imece2015-52952.pdf This included novel processes for Thin Film Head fabrication in the hard Disk Manufacturing for Data Storage Technology, Machining to Grinding (M2G) processes for aerospace and wind mill gear components, etc.
This was also the time of acquisition of 100+ year old Norton Co. of USA by 300+ Year old Saint-Gobain Co. from France. The role of AT, the System Approach and CMTC was recognized as the cutting edge need for success in the Global Economy. These concepts were expanded to all abrasive applications across the globe. The Grinding Technology Centers were set up at many locations in the world (HGTC – USA, EGTC – Germany/ Europe, CGTC – China, India, Brazil, Japan, Australia). These centers have helped to organize and focus Education and Training on AT using the System Approach, International Trainee program, etc. https://stimsinstitute.com/2016/07/21/stims-institute-offers-industry-focused-education-for-fourth-year-in-a-row/Any technology organization survives based on the commercial impact to the bottom line of the Co. Such commercially valuable outcomes have been achieved across the globe through New Test Methods, New Product and Process development, new markets and business development, new sales approach using AT as a core competence – all focused on Grinding Processes. The emphasis on AT and the System Approach also fostered collaboration across companies and industry/university. All these GTCs continue to function successfully to date, 30 years after they were established! This speaks volumes on the technical foundation and the strategy on which they were established. I summarized the System Approach – A strategy to survive and succeed in the Global Economy in a book published in the year 2000. https://smile.amazon.com/System-Approach-Modern-Machine-Books/dp/1569902550/ref=sr_1_1?s=books&ie=UTF8&qid=1509138730&sr=1-1&keywords=The+System+Approach+Subramanian
I truly believe that the award is the recognition of the collective outcome of many from Norton Co., SGA, their customers, Machine tool builders and other suppliers from across the globe. It is also a reflection of the collective effort and collaboration with many more researchers and faculty from across the globe.
I have also expanded the education of the System Approach for Grinding to many locations in India and China. New R&D center for Mfg. Research based on System Thinking and Transformational Skills has been established at IIT – M, for which I am the advisor. https://www.amtdc.org/about/profile/
New Machine tools and hence process innovation have also continued. Some of these outcomes are highlighted at https://stimsinstitute.com/
Now I am collaborating with a Mgt. School professor here at UCSF to adapt many of the AT models for Customer Success Management for software product companies!
Every one of the items highlighted above is not unique to Grinding Processes. They can be readily adapted for their use in any physical manufacturing process and also for many information processes. It is hoped that this award will serve as a catalyst for such expanded use across many manufacturing and industrial processes of the ideas and methods already proven and validated.
Any industrial process can be seen and used more as a science – driven by Model, measurements, data and analysis – rather than as an art.
Microscopic Interaction model
2. Portable Instrumentation System and its use at the manufacturing floor with accelerated data science and IoT.
3. Manufacturing, Sales and R&D Engineers acquire proficiency to obtain customer process driven data through sales channels for internal use (in test methods and mfg. rationalization)
4. Application Technology – AT (leveraging end customer’s process and its related know-how, distinct from Product Engineering) to leverage gain through new sales, share gain and higher margins. Today in the SaaS companies in the IT Sector, leveraging Customer Process Know-how for business success is now being developed and managed under the theme of “Customer Success Management”
5. System Approach model as a frame work for collaboration of many players based on Science and Strategy: Collaboration with customers, OEM and other partners for development and implementation of new process solutions.
6. Grinding Technology Centers:
Education and Training on AT using the System Approach as a frame work
International Trainee program,
New Test Methods,
New Product and Process development,
New markets and business development,
New sales approach using AT as a core competence
— all focused on one or few manufacturing Processes.
7. Collaboration across companies and industry/university.
Largely based on mutual trust, technology and innovation(e.g.): Consignment agreement with OEM; University / Industry Collaboration.
In this brief presentation we look at the driving forces for the nature of jobs and careers in the first two decades of the 21st Century. After this brief preview, we look at the impact of COVID 19 pandemic and how it is likely to leave its imprint. The net result we believe will be a further narrowing of good paying jobs for the few highly skilled and motivated workers to deliver value through new solutions to their employers, customers and / or investors. This will further force the emphasis on the System Thinking and Transformational Skills, to obtain and retain the limited number of high paying jobs in return for high value addition. For the rest – the large majority of the work force – progressive social and economic policies may be needed such as higher minimum wages, better and readily accessible health care, housing and education, early childhood care, etc.
Pre COVID 21st Century Economy:
If we look at the labor population as the number of workers engaged by employers we find them with a range of skills to do their jobs. We find an exponentially decaying curve on an average, with few people with very high skills and increasingly larger number of workers with lower skill levels. As a general rule higher skills are acquired through higher levels of education. These higher skilled workers are also paid higher wages for their outputs. This averaged exponential decay curve also created the rich, large body of middle class and low wage earning labor pool.
Since the early 1970s the advent of Digital Technology started permeating the way we live, work, shop, consume resources of all kind, etc. The role of DT included collection and processing of data and information, wireless communication, worldwide supply chain, IT automation, de-skilling, off shoring, outsourcing, gig work, …… One could use these same tools and resources for integrating knowledge to create new skills and outcomes not conceived before. The combined effect of all these can be grouped into two categories:
NEW SOLUTIONS: that are created through integrating knowledge from across the globe leading to outcomes of higher value and higher skill levels. These require high value addition workers such as at Google, Apple, Space X, Amazon AWS and at all the startup companies as well as innovation and new business teams operating within every company.
REPLICATION SOLUTIONS: that are mere re-production of what is already known cheaper, faster, better and increasingly larger quantities. These are the low skill and low wage jobs at Walmart, McDonald, fulfillment centers of Amazon, meat processing plants, farm workers, workers at the mines, workers in the service sectors, minimum wage workers in the health care, etc.
The net result of these two modes of employment and work outcomes has been to distort the curve for skills required and the wage earned as a result. We now see an L – shape or Binary Economy with a steep line with rewards increasing sharply with more skills for a narrow set of work and workers and a shallow or flat segment where the skill required for a large number of jobs is relatively small and constant. This Binary Economy which evolved in the end of the 20th century has taken its deep foot hold for the past two decades at the beginning of this 21st century.
Before we look at the impact of COVID 19, we need to take a closer look at the impact of the Binary Economy and its effect. They provide the basis or starting point for our further analysis of the serious impending impact of this pandemic.
The impact of the Binary Economy can be divided into two categories based on its effect on the developed economies such as the USA and emerging economies such as China, India and Brazil. The Income Vs. number of people in the work force has always been an exponential decay curve for any nation. But the rate of decay or decline vs. work force size has been more gradual for developed nations. This also sustained a larger number of people in the middle class. The developing nations with their huge population have a steeper decline in wages with few in the middle class and a large number of people living in poverty. When we superimpose the Binary Economy on top of these pre-existing economic conditions one can see the following outcomes:
Higher labor productivity and efficiency through Digital Technology applications leading to lower direct wages ($/hr.) paid to workers. Wage stagnation.
Most of the workers in these economies who were the middle class are pushed into Economy 2 and are suffering from downward economic pressures.
Few investors and innovators, who participate in Economy 1 have done very well.
Much of the middle class and some poor—most of the population in these economies -benefit from Economy 2
Many investors and innovators, who participate in Economy 1 have done extremely well.
Extreme poor have not seen any benefits.
The above are inevitable consequences of relentless reliance on “Replication Solutions” to produce and distribute more of what is already knows such as automobiles, transportation, fossil fuel solutions, etc. All forms of “New Solutions” have been concentrated on Digital Technology applications that have been adapted for further efficiencies in the Supply Chain, Global logistics and productivity gains in the above Replication Solutions. In other words Globalization can be thought of as a scheme where the water (knowledge and resources) from the lakes at a higher level are drained to fill the lakes at a lower level raising a few boats in it (increasing middle class in China and India). This has lowered the water level in the lakes (at the source) in higher altitude making many of the boats in it hit the rocks (Collapse of the middle class). This could be avoided only if the lakes at the higher altitude are filled with more water (such as more New Solutions for alternate energy, better climate, control of hunger and poverty through better resource management, control of pandemics, etc.) Occasional outcomes in New Solutions such as in Bio Sciences are too small and limited to have the required impact (fill the lakes in higher altitude). The outcome of this economic activity (Globalization) has been to pump some rewards to a limited few, the class of people described as “investors”.
The above impact of the Binary Economy can also be seen in the nature of available work to earn wages. It has been stratified into four layers which are increasingly impermeable.
As a broad category we can divide the impact of jobs and careers between Non-Wage income and Earned income. Non-wage income is gained through equities and dividends. They are called “Investment Income” dependent on the stock and bond markets and many other investment instruments.
Earned income is the wage gained, paid for by the employer. These are the salaries, benefits, bonus and such compensation paid to the workers.
The non-wage income and ability to acquire that from sources across the globe has substantially increased the wealth of the few at the cost of the large majority of the global population. As a result we have a few highly rich (the 1%) Vs. all others (who are modestly well off to the very poor (the 99%)
The investors look at their outcomes only in terms of the financial metrics. They do not generally have the insights or knowledge of the physical processes and methods that enable the products and their use. It is reported that over 70% of the stocks traded daily in the Wall Street are purchased and sold in less than 3 minutes. Is it realistic that these investors know anything about the ins and outs of the company they buy and sell in 3 minutes? Increasingly the top executives of most companies are also non-wage income earners focused only on the financial metrics of the company. These senior executives earn higher levels of compensation through stock options and bonus paid based on stock prices more than their salary and wages.
The wage earning population (the 99%) is now further divided between three separate layers:
The Professionals, Information workers and Physical Labor workers. It is easy to identify them as College educated workers, Call center workers and the large majority of low skilled workers at Walmart, McDonald or Amazon fulfillment centers without any college education. They are also mostly the minimum wage earners. These low skill, low wage physical labor workers do not have opportunities to migrate to the information work for two reasons: One is that they lack the basic education and proficiency in IT applications; Second the information work and physical work take place at locations distinct from each other. For example the physical labor may be employed in a factory in China or Thailand while the call center for information work may be in India or Korea. There is little room for on the job learning or cross pollination between these two sets of workers.
Now let us focus on the “Professional work”. This is the work required to conceive, develop, deploy and exploit a complete solution and get paid for it. This work requires higher education. This work also requires selected physical labor and substantial information work. These jobs require integration of knowledge and fostering high value added new solutions.
These layers of work are no longer well integrated within one organization. It requires workers to think broadly, beyond their comfort zones and ask what is the solution I am creating? What is the solution I am responsible for? – in a larger and broader context. This is the beginning of the system thinking required for jobs in 21st Century economy.
The information and physical labor work is constantly standardized, deskilled and pushed into the low wage “Replications Solutions” category. It is only those who participate in professional work and deliver a constant stream of new solutions who are also able to sustain high wage levels consistent with the value of their new solutions and their use.
Post COVID Economy:
In the post COVID world, the entire world economy has been put on hold, while the world population finds ways to survive the Pandemic. The economic consequences of this pandemic are yet to be quantified. But one thing is certain: Every sector of the economy and all categories of the workers everywhere in the world will be negatively affected for sure. This down ward pressure or the negative effect is already felt in the financial sectors. At the same time the poor who truly live from pay check to check are also devastated. This is evident through the long lines – over 10,000 cars in line each day – at the food shelters in many states across the USA.
We have already discussed the economic conditions which are represented by the Binary Economy. The wealth is also divided between the 1% ultra rich and the rest (99%). While these challenges and inequities continue, the COVID 19 has imposed a downward pressure or depression across all categories of workers.
How will the recovery after COVID 19 look like?
To answer this question we have to assume that nations across the globe and their leaders will exercise prudence and collaboration. This globalization will have to be for the betterment of all. Otherwise economic cannibalization and related policies across the globe may leave little room for meaningful predictions.
Let us assume that the Pandemic is contained in the next six months and a vaccine as well as cure is found in 18 months. These conditions provide room for meaningful recovery of the economy across the globe.
Such recovery for the rich (1%) is highly likely to be V shaped with a sharp apex at the bottom. As long as the financial markets respond to certainty of possible recovery and not the actual recovery itself (which will take a while to achieve and establish) the recovery of the financial markets might be sharp and quick.
For the 99% wage earning workers the economic pain of COVID 19 will be very intense. Their economic conditions to start with are already “L” shaped or binary as we have discussed earlier. This L shaped economy will be further depressed across the board and in all sectors of the economy.
The recovery of Individual workers and their economic plight from COVID 19 may have to be separated from the impact based on industry sector. Thanks to the need for cost reduction and higher efficiency to achieve higher profitability, the drive for further Automation, Robotics and AI Solutions may only make the L shaped economy even more acute. These will further propel a faster recovery of companies in the Digital “Technology” sector. However the hardware or brick and mortar industries will see a slow and painful recovery best described as a large “U” with a large flat at its bottom.
Nationalism and Unilateralism may also reduce the spreading of work across the globe, especially to lower wage countries. But their replacement in wealthier countries may be through automation and AI rather than through engagement of more workers and their labor. Increase in minimum wage may be the only way to address the needs of the poor in wealthier nations to limited extent.
Will the recovery be U shaped or V shaped may be the question for the companies and the industry and sectors as described above. For wage earning workers the L shaped economy will continue to dominate. Their ability to nudge into the steep line of the “L” through Transformational skills required for conceiving, developing and implementing new solutions will determine their better economic condition. Otherwise they will be pushed further into the flat segment of “L” with lower wages and diminishing growth opportunities.
Core Capabilities and their alignment – Globalization in the post COVID world:
We can identify core capabilities for any economic effort delivered through three dimensions: Professionals or workers; Collection of workers engaged in a project or activity (we shall call this as a department or function) and the enterprise or company which deploys a collection of workers and their collaborative outcomes. Each of these vectors have three core capabilities imbedded in them.
Starting from late 1970s, when the Globalization took hold all of these three dimensional core capabilities have been used leveraging every available resource from across the globe to deliver outcomes or benefits needed for anyone in the world. This unbridled inputs (use of resources) and outputs (to serve the needs of global customers) was enabled thanks to rapid developments in Digital Technology applications such as Wireless communication, Internet, networks, I phone, ……..
Along with the benefits of Globalization also came the challenges of Climate crisis, income inequality (1% Vs. 99%) and isolated layering of jobs and careers as we discussed earlier. Despite all these plus and minus have been the good news of collaboration across the countries through Trade Agreement, Accord for Climate Crisis, etc.
But in the recent few years all such collaboration are being systematically broken. Current COVID Pandemic could have been localized and managed – like Ebola crisis – but for the nationalism and unilateralism of the leaders across the globe and their hiding into their corners to find local solutions instead of working together to find a global solution addressing the needs of the humanity at large. Today countries are blaming each other for hiding the origin of the Pandemic. They are fighting with each other for PPE. Can you imagine the fighting that will occur once a vaccine is found – after all each nation would want to protect its citizens first and not the neighbors!
The point is this: The jobs and careers as well as the economy as a whole Post COVID will largely depend on enlightened leadership within each country along with collaborative leadership across the nations. The current approaches and leadership are ominously opposite to such success through mutual collaboration.
It may be better for individual workers to look out for their success based on their skills and opportunities to identify, develop and implement a stream of New Solutions. This may require greater emphasis by individual workers more than ever for emphasis and realignment of their core capabilities as individuals and as part of group or team. The core capabilities required in Post COVID economy would be the same as in the pre COVID era. However the need to pursue these core capabilities as organized set of tools through System Thinking and Transformational Skills will be far more critical and imperative in the post COVID era for the following reasons:
The opportunities for new solutions and hence demand for high skilled professionals will be limited as the enterprises struggle for their mere survival more so than growth initiatives. With the limited opportunities available the enterprises will look for higher rate of success through any new solutions for their economic justification. In other words if there were pressures in the L shaped Binary economy before, they will be even more exaggerated in the post COVID economy. This will require view of any activity, project, program or enterprise wide activity as a “Solution” not a mere collection of tasks.
System Thinking and Transformational Skills:
The solution viewed as a system involves:
Simultaneous emphasis on breadth as well as the depth of the problem on hand or the solution required. We can call this T- shaped thinking (as it is referred to by IBM).
This requires integrated use of the three core capabilities appropriate at every level.
Science pertaining to any solution is the data driven analysis of the fundamentals of the problem or solution.
Engineering is the application or use of the above data and analysis
Management is the strategic thinking or “Why?” we are interested in the problem or solution and operational excellence or how to achieve what is needed efficiently and economically?
We define “Technology” as the integration of the above three (Science X Engg. X Mgt.) and not merely as IT or Digital technology applications.
Three levels of System Thinking and the corresponding Transformational Skills: Awareness:
Develop a common language or conceive the problem on hand as a system with all the relevant contributors identified. The system is also described as the Input/Transformation/Output scheme; the output itself is clarified between Technical Output or the “What?” we need and the System Output of “Why?” is that needed?
With the above system description of the problem or solution, we need to identify the opportunities to integrate the relevant knowledge at each level (T shaped thinking) as described in the previous figure.
This level of system thinking also coincides with the “Conceiving” of the New Solution.
This level of system thinking also coincides with the “Development” of the New Solution.
This is the phase where core capabilities are rigorously integrated.
This also relies heavily on data, analysis, analytics and validation.
Core capabilities are not always limited to those available from a few. Instead they are readily available and accessible provided we reach out to them and incorporate them into our eco-system. This integration of resources should not be random and hence inefficient. More rigorous our effort in the Awareness level greater the clarity and specificity of the resources integrated in our eco-system. Such integration should also be based on the system outputs (Stake holder benefits) of which every eco-system partner id truly a stake holder!
The important transformational skill here is End to End Innovation. It can also be described as “Concept to realization of Commercial Impact”. This may require the system thinker to play many roles some which are assigned but some others which are necessary whether formally assigned or not.
This flexibility required to take on many roles, integrate several eco-system partners as well as learn new skills to integrate core capabilities as needed requires a high level of emotional intelligence.
The Synthesis level of system thinking also coincides with the “Deployment or Implementation” of the New Solution.
What is Emotional Intelligence and why is this needed as a Transformational Skill?
New solutions by definition imply something new or different. They require change. Such change may be incremental or disruption on large scale. No matter what, New Solutions require acceptance by others. This implies convincing others to collaborate with us for a common goal. This ability to foster collaboration for shared and common goals is best described as “emotional intelligence”.
In this image here a new solution, something new – a black dot – stands out readily from the rest of the larger space in the white circle. Compare this in contrast to “replication solutions” or doing more of the same and in larger quantities. It is like blending a white dot in the white space, which happens readily, seamlessly and without notice.
Today a large majority of professionals carry out the job as the task assigned to them. This task oriented jobs are plenty as they pertain to Information work and Physical labor. Increasingly professionals will also fall into this trap of task oriented jobs as their work gets standardized, de-skilled, automated and laden with AI tools. To go beyond this limitation these workers have to learn to become system thinkers with a clear understanding of the Knowledge Integration and 3D Core capabilities described earlier. For these professionals the job has a goal with identifiable New Solutions to be conceived, developed and implemented. As they progress through these system skills they will become more involved in achieving and delivering “Impact” through end to end innovation. As COVID 19 has made clear to all of us we are not safe unless all of us are safe. The same goes for job success and its sustainability as well. It implies promoting and fostering eco-systems and emotional intelligence for the sustainable growth for all. This step wise and yet lifelong strategy is illustrated in the figure below.
STIMS Institute and MICROMATIC Grinding Technology Ltd (MGT) have been collaborating for more than eight years on an initiative to develop Unique New Solutions (UNS). These are solutions for new machine tools and their auxiliaries for novel grinding processes for customers. The goal is to focus on unique outcomes not available in India and, in some cases, first of its kind in the world. The focus is always on the end to end innovation (i.e.) from concept to commercially realized or implemented solutions.
This initiative also involves an innovative program designed to train and foster a few highly competent graduates into future leaders in manufacturing technology through System Thinking and Transformational Skills.
This team works in close collaboration with design, manufacturing and application departments at MGT, with end customers as well as research teams at the innovative University / Industry collaborative R&D center: Advanced Manufacturing Technology Development Center (AMTDC) at IIT Madras, India. Dr. Subramanian, President, STIMS Institute serves as the adviser to AMTDC.
Through the years, these teams at MGT and AMTDC have had several successes many of which are first of its kind for ‘Make in India’. Some of them are unique or novel in the world. The lessons learned from these collaborations are summarized below:
TALENT DEVELOPMENT FOR THE Unique New Solutions (UNS) TEAM: Recruitment and development of the members for this initiative is rather unique. Individuals, mostly recent graduates, are recruited and assigned to assume a range of responsibilities in a short period of time. The assignments include: • Market assessment in close collaboration with Sales and Application Engineering to establish the ‘need’ or the customer’s interest and the reason behind; • Concept development for new solutions as a system, pricing and commercial contract execution; • Research, Design and analysis of critical sub-assemblies and components; • Design validation through theoretical calculations using modern tools and methods of FEA/FEM/ Mechatronics as well as advanced software solutions; • Development of the solution through Concept Validation (establish the ‘science’), Prototype Demonstration (refine the ‘Engineering’), develop the Complete Solution (driven by “Strategy”) and implement at the customer facility; • Complete ownership in the development of unique products (machines, software, process solutions) from Concept to Commercially Viable Solutions. Thus, in a short period of a few years, the fresh graduate can grow into a thorough technology professional (with integrated skills across Science, Engineering and Management) in the manufacturing sector. All this shift requires constant training and mentoring on System Thinking and Transformational Skills. This experiment in human resource innovation has been very interesting to say the least! It requires continuous engagement by the senior management as well as rigorous review and on-line mentoring. Location or time zones are not the barriers for such human resource innovation!
TALENT IS MORE THAN ACADEMIC KNOWLEDGE: Developing a new solution requires an integration of knowledge across various disciplines. No one person can come with the knowledge from diverse fields such as Manufacturing Processes, Mechanical Engineering, Design, Materials, Electrical Engineering, Instrumentation, Testing, FEA, Mechatronics, Advanced Software and CNC programming skills. Hence, recruiting the right talent with the required knowledge is a challenge and a starting point.
While graduates from well-known institutions have an edge in the beginning, this advantage is sustained more by those with a passion for continuous learning. After a few years of our experiment we find that true talent resides in those who excel at three core capabilities: Knowledge, Experience and People skills.
Experience is not to be judged by the years of work in a given job or assignment. Instead it’s gained very quickly by those who are risk takers, willing to experiment with new ideas. Real life validation of their knowledge through working models, prototypes or sales contract builds self-confidence and a true sense of self-worth in young professionals, which is priceless. But this also requires a set of personal skills such as involvement, risk taking, collaboration and a result-driven attitude.
Core Capabilities of Professionals
Tools or Enablers
Deep and extensive learning; Well informed; Comprehension of various aspects of the subject
Formal Education, Reading, Learning from peers, Data driven, searching on-line data base, Observations
Skill derived from actual participation or direct involvement; Accumulated wisdom from real life.
Ability to seek out others and receive their support, help, and cooperation; Willingness to reciprocate, to achieve mutual benefits
Honesty, Integrity, Communication Skills, Collaboration, Team Spirit, Results driven, Emotional Intelligence.
Core Capabilities of professionals
People skills are those beyond the well-known attributes for inter-personal interactions to get along well with others. In some regards, the people skills we find valuable are grounded in factors such as honesty, integrity and emotional intelligence. These are the skills that not only impel one to personal success, but also helps others and the team to the same outcome.
END TO END INNOVATION:
In most companies, R&D and commercial efforts are run as two parallel silos. One is an internal driven approach where ideas are developed and pushed outside. In other cases it is the sales driven identification of customer needs being pushed into the company for further internal development. Most of the time the internal identified solutions are partial representation of the “system” largely driven by “science” based ideas and their “engineering” refinement. The externally identified marketing driven needs are also partial in that “sales potential” is translated into “engineering” parameters which may or may not be compatible with the internal core capabilities. Hence these partial descriptions of the solution are often incompatible. Also the science and engineering minded professionals show little interest in engaging with the end customers and their needs. Sales and marketing professionals also show little or interest in the graphs, charts and simulations proficient to the technical “experts” inside the company. Our experiment has been to find a seamless blend between the two. Typically, such seamless connection happens in small startup companies. But our goal through UNS and AMTDC is to bring about entrepreneurial teams, talent and outcome while leveraging the resources and facilities of a well-established enterprise and institutions. The talent development for this effort requires education and commitment from everyone, especially the young talented professionals who learn and believe that ‘Every part of the fish has to be alive for the fish to be alive!’.