This week on leading change, we focus on capital and people.
Need to finance millions for robots? Consider Eli Whitney’s cotton gin. Only the most financially successful farmers could afford cotton gins when they were first available. Others had to compete with those who had the mechanical gins. Whitney figured out his prospective customers had a capital problem, so his company rented them to farmers for a piece of their crop. That allowed his company to grow, while getting his machinery into the hands of farmers who would struggle to compete without one. The last thing he needed was a shrinking, consolidating industry.
Likewise, robotics is a capital intensive business. It takes a lot of time & capital to design, prototype, test & manufacture robots. It requires engineers to design, people to test, programmers to program, foresters & others to identify all the necessary species, collect & refine the data, etc. It requires buying robots that manufacture your robots, & people to install, manage, repair, & monitor that manufacturing process.
Once these machines work, the math is difficult to ignore. (Sound familiar?) If a set of robots can, in a week, do the work 100 men complete in a week, then someone will start doing the math. If they don’t, they’ll soon have to compete with someone who WILL. The math will change quickly as the robots increase their productivity.
“The math” means figuring the full extrapolated cost of those hundred men, their equipment, their fuel / food / medical care, training, pensions, health benefits, managers, supervisors, transportation etc – then comparing it to the new cost of getting that work done. Somewhere in there, there are fixed & variable costs. Maybe the robots will make sense financially, or maybe they won’t.
If they make sense, the robot sellers can take a page from Whitney’s sales manual & say “Look, you don’t have to pay anything up front, simply pay me a percentage of your haul once you get paid.” At that point, the game changes.
On-ramps are critical
If leaders wait until the game has changed, it’s too late.
When some of these employees & contractors find that they aren’t needed anymore, or that the number of companies who do need them are steadily shrinking, it’s starting to be too late. At first, some of the people are needed for fewer shifts. At some point, the work they do might not be needed anymore.
If we’ve not prepared for that, & are unable (or unwilling) to prepare people to be ready for those transitions, we (and they) are going to get a surprise. You may think it doesn’t affect you because of what you do, but these dollars flow freely in the community. It will affect you at some point, even if the effect is caused by career changes for someone who lives 1500 miles away.
It isn’t about being ready for a legal 60 day layoff warning requirement so you can decide it’s time to find something to train them for. That’s too late. It’s about being ready for the new thing no later than when a substantial industry change starts to gain traction. A 30, 60, or 90 day delay / break in the ability to generate income can destroy the economy of many families, despite the best of intentions by that family to save, etc. We’re at the early stage of that as virus-related layoffs accelerate. Skilled people need to be ready to transition in advance. They can’t be trained overnight. The leading / bleeding edge folks will see the benefits early. They’ll quietly train their own people and implement these changes.
People have a mortgage to pay and kids to feed (etc), and they’re needed to deliver on the commitments of companies that put these pieces of equipment in the field (and those who don’t). You can’t wait 60 or 90 days or longer for somebody to become expert enough to do the new work. Equipment breaks down & needs to be configured, transported, maintained & deployed… today. Companies at the leading edge of that transition need trained people to do this work. Leaders help create the on-ramps that get them there.
Change doesn’t care
Change doesn’t care about our feelings, our likes & dislikes, much less the tender underside of our comfort zone.
The pace of change is even less considerate. The key is not to fight it, but to leverage it. The one thing you can’t do is stop it.
Choose leaders who can handle change. Cultivate new leaders to engage with it.
Want to learn more about Mark or ask him to write about a strategic, operations or marketing problem? See Mark’s site, contact him on LinkedIn or Twitter, or email him at [email protected].