What the development of advanced manufacturing technologies means for executive recruitment

Greater Opportunities Bring Greater Challenges

The rapid adoption of next-generation technologies in the manufacturing sector is exciting, with huge potential for boosting productivity and profits. The advent of additive manufacturing, AI, robotics, edge computing and advanced factory automation will raise industrial production capacities to heights we’ve never dreamt of.

Along with this massive potential comes increased complexity, and a new set of challenges that executive leadership will be required to deal with. 

We are witnessing the growing importance of data analysis, disruptions to labour markets, and the increasing significance of ROI – as the expense of implementing new technologies could pose a financial dilemma for all but the most deep-pocketed organisations. 

Robotics & Automation

Investing in modern robotics and automation is considered a necessary step to remain competitive in the future. Automating factories should improve efficiencies in the long term. But in the short term, the up-front costs can be daunting – especially in emerging markets like Thailand. 

Many of the companies with significant manufacturing hubs in Thailand and Southeast Asia established operations here to save money: on labour, on construction & facility operating costs, on taxes, on logistics and shipping. 

Automation is expensive, however: many of the companies who’ve already built manufacturing facilities in Thailand are not prepared for the major additional cash outlay required to retrofit their factories. So, in most existing plants we can expect next-gen technology to be adopted slowly, in more piecemeal fashion. 

New players coming in will have to make similarly crucial strategic decisions on what level of automation they are willing to invest in, and that mainly will depend on what product(s) they plan to manufacture here. 

Which technologies to adopt, and at what pace, are going to be very important decisions for C-suite executives. Moving forward, leadership teams will need robust ROI analysis capacity and unparalleled market data expertise to remain competitive.

The Thai government’s ongoing strategy aims to attract modern manufacturing industries with a range of financial and logistical incentives. These policies are part of a concerted attempt by Thai officials to make the country a skills-based location of choice for regional manufacturing operations, compared to lower cost rivals such as Vietnam, who are competing intensely for multinational infrastructure investment. It’s not entirely clear at this point whether this strategy will achieve the desired results. Arguably, Thailand is attracting manufacturing investment for more advanced engineering endeavours and technical products.  

Local Labour Issues

Factor in rising wages with the costs of advanced technology, and we can see increasing pressure on the HR side of the manufacturing equation.

Thailand’s new government has passed a law that will increase the minimum wage by 30-40 percent over the next two-to-three years. Organisations are bracing for a reduction in staff, incentivised by a double-shot of higher labour costs, coupled with the need to adopt more expensive modern manufacturing technology. 

This dynamic will compel C-suite executives to make some very hard decisions, with significant knock-on effects for managers on down the line: how will it affect HR, investment strategies, and the integration of new technologies? 

For example, executives will need to choose between installing a robot, versus employing 5-10 people to work in a given 100sqm space. Corporate leadership that can make decisions with a strong focus on ROI, who are well-versed in cutting-edge manufacturing tech, and who are backed by a team of ultra-sharp industry and market data analysts, are best equipped to make these kinds of choices. 

Companies will need leaders who keenly understand future business needs and market trends, and who can accurately calculate how quickly organisational change needs to happen. This kind of tightrope walk requires a different kind of skill set, temperament, and emotional intellect compared to the qualities and character that were needed to steer businesses through the covid pandemic, when the emphasis was on survival and sustainability, more than market competition and investment for future growth.

Emotional Intelligence & Community Relations

The most successful leaders invest the time required to build trusting relationships, and manage to encourage a culture of integrity and accountability. Pursuing bottom-line results at all costs rarely pays long-term dividends.  

Displays of authentic, enduring empathy and genuine relationships with the team are paramount to achieving success in Thailand and Southeast Asia. Fostering a psychological feeling of safety and inclusion amongst rank-and-file workers & middle management helps organisations to navigate sea changes with minimal disruptions to productivity and morale.

I have seen some established business leaders struggle in Thailand. They have presided over successful tenures in ‘Western’ markets, but the pace of change, cultural differences, and capacity for implementing new technologies is not consistent with what they’ve experienced before.  Executives must understand they’ll need to engage with challenges and organisational transformation differently here: big changes don’t happen quickly in Thailand.

Transformational Leadership & Change Management 

Multinational companies undergoing significant operational or structural transformation need executive leaders who excel at change management.  Leadership who can clearly explain the reasons behind big changes, and get every level of the organisation to buy in, to see the transformation as an important shared goal that will benefit everyone. C-suite executives must create clear milestones, move quickly, and manage potential roadblocks, obstacles, and challenges adeptly – be they internal or external.

It can be a big challenge for organisations in Thailand to implement global systems like SAP: different cultures have different work habits. Manufacturing companies that plan widespread changes, or the introduction of game-changing technology, will need a leader with enough emotional intelligence to navigate this complex process: sensitive enough to balance the needs of people with the needs of the business. This is especially relevant to the manufacturing field, where so many floor managers – who are responsible for carrying out leadership directives –have been promoted up from the shop floor. 

Executive search often focuses on the technical expertise required to drive technological transformation, or commercial expertise that can impact the bottom line by fine-tuning sales and marketing. In the next stage of manufacturing development, we need to be looking more for leadership who is better prepared for change management: impacts arising from geopolitical unrest, import/export issues, layoffs, trade wars, and logistical bottlenecks.

Borderless management is another essential skill that the modern marketplace demands. Recruiters need to be able to identify manufacturing leaders who can quickly understand and handle complex regional supply chain issues and other transborder complexities. Executives at the highest level now have multi-business or territory coverage, which has a lot of other implications for leaders who aspire to be champions of change management. 

Labour Expertise and Cultural Sensitivity

With pressure building on headcounts, expertise in local labour law and changing regulations is likely to become more valuable to executive decisionmakers. 

Thailand is traditionally a business environment that is heavily dependent on labour. Understanding the impacts of technological change, and potential layoffs, on the local community is extremely important. 

Of course, modern manufacturing advancements will benefit profit margins in the long term; but the cost to community relations, and a sustainable, content workforce cannot be ignored. The technical aspects of labour law and government regulations also mean that many decision-making processes need to be adapted to local market requirements. This is yet another layer of specialisation that the next generation of corporate leaders – and executive recruiters – must master.

What does all this mean in the search for executive talent? 

We have more requests for data analysts than any other work at the moment. Next in line is financial planning & analysis. Now, these are not specifically executive positions, but they are extremely relevant to executive success in Thailand.

Executive leadership has never had access to so much data before.  If your business generates large volumes of data – multinational manufacturing operations certainly do, especially those with links to retail, shipping, and delivery sectors – then your organisation needs a team of “right hands” to expertly advise and inform the top executives who are making the decisions that will determine the profitability and fate of your company. 

In Thailand, the demand for strong multilingual analysts is far greater than the supply of local talent available. So, whenever a major executive is recruited, a team of data analysts and other expert ‘enablers’, will need to be hired in tandem. Otherwise, changes at the top may not have the desired effect. 

I advise all C-Suite candidates who are considering a new assignment to first understand what resources and data their employer will make available to inform and support their decision-making. If the hiring company has limited analytical resources, they should strategise their hiring plans accordingly. It is crucial that executives taking on new roles in unfamiliar territory are well equipped and advised to make important decisions; especially in ambiguous landscapes, which abound in Southeast Asia.

For a C-suite team to adequately prepare for the future, more than ever the leadership must be agile. The days of siloed functionality and expertise are over.

Deloitte has promoted the concept of a ‘Symphonic C-suite’ as the best way forward for future corporate leadership. The approach of upper echelon executives towards teamwork and communication is evolving: the goal is to assemble and enable more sophisticated teams with the capacity to function at a higher level. Cross-functional or rotational leaders, and agile C-Suite project teams are features of this new wave of organisational leadership.

Studies show that as much as 80% of business leaders agree with the concept, and many say it is essential – but I’ve seen precious few who have the personnel, culture, and systems in place to really do it. The time to implement this strategy in your executive recruitment and succession planning is now: a company that hasn’t moved towards a Symphonic C-suite model is already behind the curve.

Today’s top executives need cross-functional experience, to better understand all the different dimensions of the business. Simply being the star performer in your division isn’t sufficient anymore. 

Our clients are asking for executive talent who are more empathetic, with cross-cultural sensitivity, who can think outside-the-box. Most importantly, they want business leadership who understand what the data means, and how it can be best interpreted to inform decision-making. The profile of the ideal CEO is shifting and evolving with technological change. The consensus is that the modern CEO needs a more complex, multi-layered perspective and skillset to achieve success and steer their companies in the right direction. 

Is your organisation in need of executive leadership? JG Executive can help. Reach out to us today