Small Business
Business INSIGHTS e-News for Manufacturers
Talent at the Top

About the Author

Dr. David Boulay

President
Illinois Manufacturing Excellence Center
www.imec.org/

  • 20+ years of experience in manufacturing, university and nonprofit settings
  • Expertise in economic and workforce development, manufacturing competitiveness, performance management, small business development and organizational growth strategies
  • Ph.D. in Workforce Development and Education (The Ohio State University), Master of Business Administration

Talent at the Top

by Dr. David Boulay
Illinois Manufacturing Excellence Center (IMEC)

The manufacturing skills gap is garnering significant attention, with reports suggesting 600,000 unfilled manufacturing jobs - mainly operator and machinist positions. Another workforce crisis looms as well: the talent at the top. Manufacturers are undergoing a massive transition of ownership, which will challenge the skill readiness of Next Generation Manufacturing leaders.

Baby boomer retirements have begun affecting all facets of our lives. Many boomer entrepreneurs created the firms that are engines of today's economy. Consider that 87% of U.S. manufacturers, approximately 261,000 firms, are privately held. Furthermore, according to the American Small Manufacturers Coalition's Next Generation Manufacturing Study, 59% anticipate a transition of leadership over the next five years. Therefore, approximately 154,000 manufacturers could face leadership transitions.

Foundational steps of ownership transitions such as estate planning, valuations and exit plans will undoubtedly be handled well. But what about the transition of skills? Certainly new leaders will be skilled in cash flow management and profitability. How will this next generation be prepared to understand the drivers for these financial results? Their knowledge and skills in key areas will be essential.

For example, leading a continuous improvement culture, driving innovative capacity to meet market needs, optimizing supply chains, developing workforce skills and applying green manufacturing principles into the business model are drivers of future manufacturing success.

Skills in these areas may be intuitive for today's leaders. Yet in the impending leadership transitions, we will experience a massive exodus of invaluable knowledge. Capturing and teaching this knowledge is essential for Next Generation leaders.

I expect the national conversations about the skills gap to continue for many years. Within this dialogue, we must be thoughtful about the leadership skills transition. Our nation's manufacturing future will be dependent on how these new leaders will craft strategy and implement the drivers of manufacturing success.

IMEC, the Illinois Manufacturing Excellence Center, serves as a catalyst for transforming the state of manufacturing. A public-private partnership, IMEC is part of the National Institute of Standards and Technology's Manufacturing Extension Partnership, and works closely with the Illinois Department of Commerce and Economic Opportunity, as well as the City of Chicago Department of Housing and Economic Development and many other organizations, to support manufacturing success in the state. IMEC is a part of four universities and has 40 full-time manufacturing improvement specialists focused on helping manufacturers achieve new standards of excellence.

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