Focus groups have always constituted one of my favorite activities associated with the State of Manufacturing®, our annual survey of executives from Minnesota’s manufacturing companies. We’ve now conducted 159 of these groups over the 11 years since we first developed the survey project. I enjoy them because they give manufacturers a chance to assess the big picture context about their companies and industries with the kind of astute candor that comes with guaranteed anonymity. Every year there are at least a couple conversations that provide original and thought-provoking insights.
Here’s the one that stands out in 2019: In the midst of a long exchange about the deepening challenges of the thinning workforce—the cornerstone topic of every focus group—one participant startled his group by suggesting the worker shortage might represent a potential long-term market opportunity. The workforce shortage is a fact of life, he said. The way manufacturers apply innovation and creativity to address their employee issues, he said, could well differentiate their companies from competitors who are standing on the sidelines merely admiring the problem. It could be as important as adding a new product line or finding new major customers, he said.
His insight at first summoned the memory of our very first round of State of Manufacturing focus groups in 2009. Participants at the time, you’ll recall, were still reeling from the sudden and unexpected crash of the U.S. economy. But to our surprise, those first focus groups were dominated by manufacturers who wanted to identify opportunities in a down market. They talked about finding potential acquisitions, seeking opportunities to retrain employees, examining new product lines, leaning up their processes, and solidifying sales relationships—all with an eye to position their companies to best take advantage of the market’s inevitable comeback.
But that’s a false comparison. The worker shortage may ultimately have the effect of an economic recession, but it’s not going to bounce back. RealTime Talent, a research operation housed by the Minnesota Chamber of Commerce, predicts that the number of open jobs in Minnesota could increase from 60,000 to 200,000-plus within four years. That’s dire. The shortage of workers does not represent a temporary market condition. It is a matter of inalterable demographic realities. There just aren’t enough people to go around, and there won’t be any time soon.
This year’s State of Manufacturing survey revealed at least some encouragement that manufacturers are looking to take charge of their situations. Some 60 percent of executives who say their inability to attract a sufficient number of employees makes growth “difficult,” say they intend to rely on improved productivity to navigate the worker shortage. On top of that, larger companies—defined as having revenues greater than $5 million—expect that advances in productivity will be as significant to their company’s growth as developing new products.
That’s the good news. At the same time, a substantial number of manufacturers seem to be content in the hope that tomorrow will somehow take care of itself. Consider these findings:
- Only 49 percent say their company uses a formal strategic plan for profitable growth. That’s down four points from our 2018 survey.
- A full 32 percent say that “strategy is strictly the role of the CEO.”
- Just 28 percent say they operate from one-to-three-year written plans “and all staff know their roles and actions to achieve the plan.”
- 16 percent say their company “has some ideas but has not yet worked through what our primary focus is.”
- 15 percent say they had a plan “but it needs to be further communicated with staff.”
Only 23 percent say they have a structured leadership program for employees, but among those who do, only two percent describe their involvement as a “major investment.”
I think this data gives us a good sense of the competitors from whom our focus group innovator expects to find market differentiation.
While I believe strongly that manufacturers should take decisive, proactive measures to protect their own destinies, I also believe the solution to the workforce shortage represents a statewide challenge that demands a non-partisan statewide response.
Unlike an economic recession that can take us by surprise, the worker shortage is a challenge coming straight at us, and we know it. We don’t think it’s going to disrupt our economy, we know it will.
I don’t believe there is a magic bullet solution to this issue statewide, but I do know that the states that actively coordinate strategies to limit the potential economic harm will find themselves at an economic advantage over those that don’t. Communities, educators, and business leaders must work on this with policymakers, too. We would all do well to learn the problem-solving lessons from forward-looking communities like Bemidji, Brainerd, and Alexandria (among others) who have created hometown coalitions that are going to serve them well in the future.
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And now we have some people to thank for making this State of Manufacturing project such a success. I say this every year because it is always true. The State of Manufacturing would not succeed without the selfless collaboration of so many organizations and individuals. As always, we’re grateful to our sponsors, whose financial backing helps us defray the considerable costs of the overall project, whose insights and ideas always contribute to a meaningful questionnaire, and whose individual networks always plug us into a new set of thought leaders.
Pollster Rob Autry has conducted the survey in each of the 11 years. Rob, the founder of Meeting Street Research, is one of America’s premier pollsters. We draw credibility from his creativity, patience, and keen analytic skills. And Tom Mason, our long-time consultant, has also been with us from the beginning. Tom also produces Enterprise Minnesota magazine, along with creative director Scott Buchschacher.
Special thanks go to Lynn Shelton, vice president of marketing at Enterprise Minnesota, who has directed the State of Manufacturing project since it was nothing more than a concept. Lynn’s team manages this major undertaking with the utmost of professionalism, integrity and passion for excellence. Kudos go to Lynet DaPra, Constance Fantin, Chris Morse and Chip Tangen.
Finally, I want to again extend sincere thanks to the manufacturers who take time out of their busy days to talk to our pollster, the many people who participate (often year after year) in our focus groups, and those who will attend the regional events where we present and discuss the results.
Featured story in the Summer 2019 issue of Enterprise Minnesota magazine.