The Essential Differentiator: Emotional Intelligence in Leadership

Leaders frequently fall short not because they lack intelligence, but because of emotional gaps that erode trust and stall progress. High emotional intelligence in leaders is directly linked to stronger team communication, performance, and innovation, while environments with low EQ suffer from higher burnout, conflict, and turnover.

Emotional intelligence is a skill that can be developed through focused practice. Leaders strengthen their effectiveness by focusing on key EQ skills:

• Self-Awareness: Effective leaders recognize their impact on others. An executive whose “high standards” are perceived as micromanagement, for example, must shift their approach toward building trust once they recognize this impact. Pretending to know how people see you is the fastest way to lose their confidence.
• Self-Regulation: The ability to manage emotions before they manage the leader is crucial. One emotional outburst can undo months of goodwill; people will forget a presentation, but they will not forget how it felt to be on the receiving end of a leader’s anger. Self-regulation involves spotting triggers and developing the instinct to respond rather than react.
• Adaptability: In a world of market shifts and disruptions, rigidity makes leaders fragile. Adaptability is survival. Adaptable leaders are open to different ways of reaching goals and adjust their strategies when new information emerges. If leaders resist change, their teams will resist them.
• Empathy: Empathy is not a weakness; it is strategic, ranking second only to integrity as the most valued leadership trait. When leaders tune into what others are feeling and respond authentically, they create the necessary conditions for motivation, creativity, and collaboration. When leading through massive change, checking in emotionally with employees helps engagement recover.
• Relational Intelligence: Relationships are currency in leadership. Nurturing these connections gains influence that outlasts any quarterly metric. The best leaders influence through data, stories, and the ability to read the room and adjust their approach.

Vulnerability and Courage: Navigating Uncertainty

Leadership success in uncertain times requires modeling courage and vulnerability. Courage is about acting in service of a purpose, even when fear is present, and creating clarity instead of waiting for it.

True leadership also requires patience, which involves allowing things to unfold naturally and embracing the discomfort that accompanies change. Leaders must be willing to “sit with” feelings of anxiousness and uncertainty to eventually reach clarity and truth. This includes taking action, even small steps, to build momentum and conviction when the entire path is unknown.

The Impact on Organizational Trust and Culture

Emotional intelligence and vulnerability are critical for establishing the organizational culture and trust that lead to high engagement and near-zero turnover.

Fostering Psychological Safety Through Openness

A strong culture is one where every employee feels their voice matters, which is the definition of psychological safety. Psychological safety is the belief that employees will not be punished or humiliated for raising a concern or admitting a mistake.

Low psychological safety leads to the organizational feedback loop breaking down, causing “error blindness” at the top as managers filter bad news. It also creates a “fallibility gap,” where teams conceal errors, slowing innovation and eroding long-term performance.

To address this, leaders must systematically build safety:

• Model Vulnerability: Senior leaders should openly share their mistakes and what they learned from them.
• Redesign Accountability: Systems should encourage constructive risk-taking and treat honest mistakes as learning opportunities, not grounds for blame.
• Destigmatize Errors: Companies should promote platforms for sharing near misses, errors, and failures to normalize candor and enable learning across departments.

Building Trust Through Connection and Consistency

The simple act of connection matters deeply to employees. Leaders build trust through accessibility, consistency, and appreciation:

• Human Connection: Leaders who take actions like minimizing the distance created by a title—such as a CEO eating lunch in the break room with employees—reinforce that employees are human, not invisible.
• Appreciation: Handwritten notes of appreciation to employees celebrating milestones acknowledge loyalty and contribution, reinforcing job satisfaction.
• Consistency and Calm: In tough moments, consistency builds trust. Leaders must show up with calm focus under pressure, acting as a stabilizing force that helps teams stay grounded and focused on progress.
• Transparency: Communicating to build trust requires being transparent, direct, and authentic. Leaders must acknowledge uncertainty while reinforcing stability, and ensure their actions align with their messaging.

Creating a Meritocratic, T-Shaped Culture

Beyond psychological safety, an enduring culture thrives on meritocracy and collaboration.

• Meritocracy: In a true meritocracy, the quality of thoughtful contribution and impact is rewarded, not hierarchy or volume. Ideas rise to the top regardless of title, tenure, or age. When leaders listen first and decide second, great ideas surface from everywhere, especially from people closest to the customer.
• T-Shaped Collaboration: Leaders must go out of their way to prevent silos by encouraging employees to be T-shaped. The vertical bar of the “T” is deep expertise, while the horizontal bar is the ability to collaborate across disciplines and understand how one’s work affects others. When teams share, connect, and work together, the customer experiences the company as one seamless partner.
• Diverse Perspectives: True diversity drives innovation when different perspectives are actively heard and applied, not just collected. Encouraging people to challenge assumptions and bring different views to the table acts as fuel for better solutions and faster service.

Ultimately, by prioritizing emotional intelligence and embracing vulnerability, leaders create a workplace people are proud of and look forward to coming to. This culture of engagement and trust becomes a growth strategy that builds resilient, agile, and lasting organizations.

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This philosophy is not just a nice sentiment—it is a growth strategy that results in virtually no turnover and loyal customers. The foundation of this enduring success is built on three practical, everyday habits that foster agility, innovation, and trust.

1. Meritocracy: Ideas Over Titles

In a truly meritocratic environment, everyone’s voice counts. It does not matter how long someone has been with the company, their age, or their official title. What matters is the quality of their thoughtful contribution and the impact of their input.

This habit requires leaders to listen first and decide second. Decisions are not made by hierarchy, where the opinion of the highest-paid person automatically wins. When decisions default to hierarchy, innovation dies.

The power of meritocracy lies in its speed and fairness. If a team member in the warehouse suggests a small change—say, adjusting how pallets are stacked to reduce damage claims and ease deliveries—that idea is implemented almost immediately. There are no endless meetings and no requirement to “stay in your lane.”

A culture that thrives on meritocracy makes better decisions because great ideas surface from the people closest to the customer, and it ensures that every employee feels valued.

2. Being T-Shaped: Breaking Silos

The leadership team must actively work to prevent the formation of organizational silos. Employees are encouraged to be “T-shaped,” a concept where the vertical bar represents deep expertise, and the horizontal bar represents the ability to reach across disciplines and understand how one’s work affects others.

In a T-shaped environment, customer service representatives learn how their conversations connect to product design and operations, and warehouse employees think about how their processes impact customer satisfaction. Teams do not hide behind their specialties; they share, connect, and work together.

We’ve all seen the chaos that results from the opposite approach: marketing launches a campaign that sales wasn’t informed about, or finance tweaks billing without telling customer service. Each team stays isolated, and the customer feels the fragmentation. When employees become T-shaped and break down these lanes, the customer experiences the company as one seamless partner.

3. Embracing Diverse Perspectives

Diversity truly drives innovation when different perspectives are actively heard and applied, not just collected as an afterthought.

A company that values diverse perspectives uses them as fuel for innovation. For instance, when solving a customer problem, collaboration between support teams from different regions or countries can lead to a faster, more complete solution because they bring different experiences to solving the problem.

The lesson for leaders is simple: Encourage people to challenge assumptions and bring different views to the table, and most importantly, act upon the perspectives shared. Genuinely valuing diverse input—including learning to rally a cross-functional team by valuing their input instead of merely tolerating it—is essential to building influence and trust.

The Leadership Anchor: Emotional Intelligence and Connection

These three cultural habits rely entirely on leaders who operate with high emotional intelligence (EQ). Low-EQ environments see more burnout, conflict, and turnover, whereas high EQ is linked to stronger team communication and performance.

Leading with Empathy and Self-Regulation

Emotional intelligence is a critical differentiator for leaders. It requires self-awareness, including recognizing one’s own impact and asking for feedback without defensiveness.

A critical habit is self-regulation: the ability to manage emotions before they manage you. Leaders must learn to “hit pause” before reacting when stress spikes, as one emotional outburst can undo months of goodwill. By harnessing emotion in a way that commands respect instead of fear, leaders preserve trust.

Furthermore, leaders must lead with empathy, which is strategic, not soft. This means tuning into what others are feeling and responding authentically. During difficult times, this involves checking in emotionally with teams and making space for honesty, creating the conditions for motivation and creativity.

Prioritizing Personal Connection

Leaders must create an environment where employees feel appreciated and happy, recognizing that employees take care of the rest of the business. Two simple acts underscore this:

1. Minimizing Hierarchy: Leaders must minimize the impact of their title. A CEO choosing to eat lunch in the break room with everyone is a simple act that blows new employees away, reflecting that connection matters.
2. Handwritten Appreciation: Taking the time to handwrite notes of congratulations to staff celebrating major milestones, such as 10 or 20 years of service, rewards loyalty and longevity, making employees feel uniquely acknowledged.

When leaders prioritize these daily practices—fostering meritocracy, breaking silos, using diverse perspectives, and leading with high EQ and genuine appreciation—they build companies that are trusted, agile, innovative, and, most importantly, built to last.

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The Indispensable Value of Great Leaders

Great leadership is essential for the success of any organization and can potentially double a business’s profits. Strong leaders do much more than just inspire their teams to work harder and achieve more; they cultivate a positive work culture that fosters growth and development.

A fundamental function of great leaders is creating a vision for the company and effectively communicating it so that the team “catches” that vision. This process provides clear goals and direction, making it easier to monitor progress. Strong leaders are also crucial for promoting positive company culture, which is critical for employee engagement and job satisfaction. Up to 46% of job seekers consider corporate culture an important factor in deciding to accept a job offer, and a culture attractive to top talent can contribute to revenue increases of up to 33%.

The absence of strong leadership is costly; poor leadership can drain a company of more than $126,000 over a year due to low productivity, staff dissension, and turnover. Conversely, effective leaders create value by retaining talent—a critical factor given that replacement costs can be as high as 50% of an employee’s salary. Moreover, good leaders have the ability to make difficult decisions quickly and effectively by gathering input and analyzing information. They also successfully navigate change, helping their teams adapt to new opportunities, an invaluable skill for business growth.

Ultimately, true leadership involves creating a place people are proud of and look forward to coming to. When this philosophy is lived out every day, it becomes part of the company’s DNA, explaining why some companies maintain loyal customers and experience virtually no turnover. This deep commitment to culture involves practices like meritocracy, where thoughtful contributions and impact are rewarded over hierarchy, and encouraging employees to be T-shaped, developing deep expertise while also collaborating across departments to prevent silos.

The Psychological Safety Blind Spot in Middle Management

While organizational discourse often focuses on empowering frontline teams, research reveals a significant blind spot: middle managers feel the least psychologically safe in their organizations. This crucial middle layer, which acts as the linchpin between strategy and execution—the organization’s central nervous system—scored lower on psychological safety than both C-suite executives and their own direct reports.

When middle managers do not feel safe to voice concerns or admit mistakes, the vital organizational feedback loop breaks down. This results in “error blindness at the top,” as managers filter bad news to avoid career risk, leaving senior executives in “good news bubbles” where early warning signs are hidden. Furthermore, if managers do not model openness about their own mistakes, their teams follow suit, leading to a “fallibility gap” where problems are patched over rather than addressed. This lack of safety stalls innovation, as managers fear the consequences of failed experiments, leading to a long-term erosion of performance and adaptation.

This unique vulnerability stems from several factors, including the promotion paradox, where increased visibility leads to greater risk aversion. Newly promoted middle managers, those in their roles for less than three years, report the lowest psychological safety of all, struggling with the transition to leading other leaders and feeling highly accountable. Addressing this requires modeling vulnerability from the C-suite, redesigning accountability systems to encourage constructive risk-taking, and providing dedicated communities of practice for peer support, as structural isolation exacerbates the pressure managers feel from both above and below.

Leadership Requires Patience, Discomfort, Emotional Intelligence, and Connection

Contemporary leadership demands profound psychological strength and intentional relationship building. Essential traits include the ability to sit with discomfort, high emotional intelligence (EQ), and the commitment to genuine human connection.

True leadership requires patience, which is the ability to focus on what truly matters and allow things to unfold at their own pace. Leaders are accustomed to controlling outcomes, but stepping back and permitting change to happen is where significant transformation occurs. Patience is not passive; it is robust and anxious. Leaders must learn to “stay with your discomfort until you reach that place where it becomes something else.” To channel this energy, leaders should engage in self-reflection, perhaps by journaling, asking: What am I really feeling (anxiety, fear, excitement)? What am I avoiding (an inevitable outcome or a difficult feeling)? And what is the untrue story I am telling myself?

Emotional intelligence is the differentiator that determines whether leaders merely survive or truly transform organizations. Leaders rarely fail due to a lack of technical intelligence (IQ), but rather because of emotional gaps that erode trust. High EQ is linked to stronger team communication and innovation. EQ can be strengthened through practice, focusing on:

• Self-Awareness: Recognizing one’s impact, as perception is reality in leadership. Nearly half of leaders may be unaware of how they are coming across, making feedback essential.
• Self-Regulation: The ability to manage emotions before they manage the leader. An emotional outburst can undo months of goodwill, as people remember how it felt to be on the receiving end of anger. Self-regulation involves spotting triggers and rewiring instincts from reacting to responding.
• Adaptability and Empathy: Rigidity makes leaders fragile, while adaptable leaders adjust their strategies when new information emerges. Empathy is strategic, ranking second only to integrity as the most valued leadership trait, creating the conditions for motivation and collaboration.

Beyond psychological acuity, simple gestures of connection hold an outsized impact. In an era of digital overload, the handwritten note serves as a powerful ritual of appreciation, reflecting a people-first philosophy. CEOs across major industries routinely send personal, on-paper messages to acknowledge and reward loyalty and contributions. This commitment to physical connection, shared even by leaders who practice writing things out to facilitate complex problem-solving, demonstrates that connection can outlast convenience.

Future Leadership Will Be Multi-Hyphenated and Lead Through Uncertainty

The nature of the successful career path is shifting from a linear ladder to a multidirectional “lattice.” This shift favors the multi-hyphenate leader—individuals who have pivoted across industries, re-entered the workforce, or taken lateral moves, gaining diverse lived experiences.

Nonlinear careers, once dismissed as unfocused, produce resilience, adaptability, and broader perspective. These multi-hyphenate leaders are uniquely equipped for complexity because they carry the skills once dismissed as “soft” but now recognized as indispensable: empathy, emotional intelligence, and the ability to build trust across divides. Innovation thrives at the intersections these leaders inhabit. The business case for this model is strong, as companies with women executives (who have often mastered the multi-hyphenate model out of necessity) outperform competitors by 30%.

Leading in the face of constant disruption and uncertainty requires intentional strategies:

• Courage and Action: Courageous leaders do not wait for clarity; they create it by acting in service of a purpose, even when fear is present. They focus on taking the next small action to build momentum and conviction, rather than needing to know the whole path.
• Communication: In tough times, teams need clarity, not spin. Leaders must acknowledge what is working while being honest about challenges, making space for genuine questions, and sticking strictly to facts and observable progress, avoiding speculation. By modeling calm focus and consistency under pressure, the leader becomes a stabilizing force.
• Resilience and Foresight: Leaders must ask critical, future-focused questions, such as, “What decision today will still make sense a year from now?” This moves leaders beyond short-term pressure to prioritize long-term values. Furthermore, leaders should ask, “What if this isn’t the storm—what if it’s the climate?” This compels organizations to shift from rigid annual planning to continuous scenario forecasting, evolving systems, culture, and strategy to endure, not just survive, in volatility.

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Today, industrial transformation is gaining significant momentum, with 56% of manufacturers piloting smart manufacturing, 20% already using it at scale, and another 20% planning future investments. This evolution emphasizes the combined potential of people and technology to shape the future of manufacturing.

Why Businesses Should Never Be Too Busy to Automate

For businesses operating in today’s competitive global marketplace, automation is rapidly moving from a “nice to have” capability to a necessity for remaining competitive and profitable.

The central reason companies should prioritize automation is that it is a profound causal factor for success, not merely a benefit of it. Companies that embrace automation as a core operational strategy—such as Amazon, Tesla, and Google—are rewarded by the market with strong customer loyalty, fast-growing revenues, and high valuations.

Automation provides tangible benefits that allow companies to outpace competitors, including increased productivity, reduced waste, improved quality control, and enhanced employee safety.

Furthermore, automation is critical for addressing major internal and external pressures facing the industry:

• Closing the Labor Gap: High-growth companies struggle to hire quickly enough, and automation helps close the gap between the necessary output and available people. Manufacturers are increasingly relying on introducing AI/ML technologies and increasing automation (41% cited this strategy) to fill the skills gap and labor shortages.
• Focusing on Value: Automation is primarily seen as a way to free up businesses and people to focus on higher-value activities. For instance, manufacturing decision-makers believe AI/ML will save time by 2027 by minimizing manual tasks and allowing employees to concentrate on value-added work.
• Driving Efficiency and ROI: Automating 50% to 70% of tasks in a workflow can lead to a 20% to 35% decrease in annual run-rate costs and time savings of 50% to 60%, resulting in triple-digit ROI percentages.
• Adapting to Disruptions: Companies that can swiftly adopt automation solutions are better equipped to handle rapid changes, such as shifting market demands, shorter product lifecycles, or sudden disruptions.

The advice for businesses is clear: be relentless about identifying ways automation can benefit the company, and never use the excuse that you are “too busy” to automate.

Key Trends in Industrial Automation Today

Several technological and operational trends define the current state of industrial automation:

The Central Role of AI and Machine Learning

AI is identified as a potential solution to address labor shortages, skills gaps, quality control, and external pressures. In the next 12 months, AI and machine learning are expected to shape process optimization, quality control, and cybersecurity.

Current applications of AI/ML are heavily focused on practical needs:

• Quality Control: Half of respondents plan to use AI/ML to support quality control in the next 12 months, making this the top planned use case.
• Process Optimization: Process optimization is one of the top planned uses of AI/ML.
• Cybersecurity: Compared to previous surveys, more organizations plan to use AI/ML for cybersecurity, highlighting the evolving role of advanced technologies in enhancing security measures.

Advanced Robotics and Cobots

Industrial automation is being driven by advanced robots and collaborative robots (cobots). Cobots are a “game changer” for Small and Medium-sized Enterprises (SMEs), which often make up the vast majority of manufacturing firms.

Cobots are beneficial for SMEs because they are generally more affordable, easier to program without extensive expertise (offering flexibility), and can be deployed to automate specific tasks even in confined spaces (scalability). This allows smaller companies to leverage cobots for a gradual automation process, starting one task at a time.

Data Integration: Edge and Cloud Computing

The Industrial Internet of Things (IIoT) is changing traditional isolated industrial systems by enabling seamless data exchange across entire operations. This relies on a tiered data structure:

• Edge Computing processes real-time data directly at the source (like a machine or robot). This allows for swift decision-making and frees up bandwidth.
• Cloud Computing offers vast storage and remote data access, reducing latency when receiving results processed at the edge.

Trends in Automation Startups

The startup ecosystem is focusing on building specific, targeted, and often AI-native solutions, frequently adopting Robotics-as-a-Service (RaaS) models to reduce upfront costs for businesses:

Specialized Automation and Ag-Tech

Startups are applying advanced technologies to deeply verticalized industries:

• Smart Agriculture: Companies like Blue River Technology are using computer vision to identify weeds in organic crop fields and selectively eliminate them using organic oil, offering an alternative to chemical fertilizers. Orchard Robotics is building the AI farmer by collecting valuable data on millions of fruit using advanced camera systems. Hedgehog is building robotic mushroom farms, using robots to eliminate labor and AI to optimize yield.
• Quality and Defect Detection: Bucket Robotics is creating quality control infrastructure by turning CAD files into defect detectors using synthetic, photorealistic training data, eliminating the need for manual labeling or real defects.
• Digital Manufacturing: Authentise builds process management and automation software for additive manufacturing (3D printing), emphasizing connectivity to machines and data-backed performance.

AI-Native and Language-Controlled Robotics

A major trend is the development of user-friendly interfaces powered by Generative AI and natural language processing:

• Natural Language Programming: Startups are enabling non-experts to control and program complex systems. For instance, Orangewood Labs offers AI-powered industrial robotic arms that can be programmed using natural language prompts. Similarly, Mbodi AI is focused on teaching robots new skills through natural language, allowing them to run reliably in production within minutes. Zeon Systems allows scientists to type their experiments in plain English, which is then translated into code and run on robotic arms in scientific labs.
• AI for Maintenance and Operation: Praxis AI builds manufacturing-specific agents capable of reasoning and processing complex situations. Their “engineering copilot” predicts and prevents machine failures by making sense of structured and unstructured factory data. Augury focuses on providing superior insights into the health and performance of machines to enable Digital Transformation.

Future Trends Shaping Tomorrow’s Automation

Looking forward, the industrial automation space will continue to be reshaped by sophisticated AI technologies, tighter security measures, and deeper human-robot collaboration.

Accelerated Adoption of Generative and Causal AI

Investments in Generative AI (GenAI) and Causal AI are seeing growth (12% increase noted). These technologies are foundational to future strategy, with 95% of organizations either having invested in or planning to invest in AI/ML and GenAI or Causal AI in the next five years.

• Causal AI identifies cause-and-effect relationships to go beyond correlation, enabling AI systems to prescribe actions more effectively and act more autonomously.
• Generative AI learns representations of artifacts from data to generate new, unique content, including workflows and models of physical objects.

The Rise of the Industrial Co-Pilot

The future of industrial automation is increasingly collaborative. By 2027, AI is expected to drive significant efficiency and time savings by streamlining processes. An example of this is the development of an “Industrial Co-Pilot” AI, such as the one Siemens and Microsoft are working on using OpenAI’s ChatGPT. This co-pilot is anticipated to help engineers and technicians by:

• Generating, optimizing, and debugging complex automation code.
• Assisting with engineering designs.
• Allowing maintenance technicians to use natural language to receive detailed repair instructions.

Cybersecurity as a Critical Business Competency

As industry becomes more interconnected, cybersecurity risks continue to rise, jumping to the number two external obstacle to growth. Manufacturers plan to strengthen Information Technology (IT)/Operational Technology (OT) architecture security to drive positive business outcomes. Cybersecurity will be tightly intertwined with smart manufacturing priorities, making cybersecurity skills and standards a higher priority in hiring.

Strategic Reshoring and Distributed Manufacturing

To mitigate the effects of global trade volatility and persistent supply chain issues, companies are increasingly focusing on reshoring and nearshoring operations to bring production closer to customers. Smart manufacturing and emerging technologies will be key to creating the responsive and flexible operations needed for competitiveness. Looking further out, Authentise suggests that the future of manufacturing will be distributed, enabling remote parts production.

Next Steps for Industrial Transformation

The industrial automation landscape is at a critical inflection point where the combined potential of people and technology is shaping the future. While automation was once primarily seen as a benefit of success, the market today clearly rewards companies that view automation as a deep causal factor for growth and efficiency. Smart manufacturing adoption is gaining momentum, with most manufacturers either piloting or planning future investments.

For manufacturers seeking sustained success in an environment marked by volatility, labor shortages, and rising cybersecurity risks, automation is no longer optional but a necessity for remaining competitive, profitable, and resilient.

To move confidently into the future, simplify complexity, and build resilient, agile, and sustainable companies, organizations should follow a structured approach to integrating smart manufacturing and automation technologies.

Phase 1: Assessment and Strategy

• Identify and Prioritize Needs: The first step is to identify the greatest opportunity areas, which may include disconnected systems, unexpected downtime, poor quality, or a lack of visibility/control. Diverse perspectives should be gathered to clarify these key areas. Simultaneously, organizations must consider if they lack the technology required to outpace competitors.
• Develop a Business Case and Roadmap: Prioritize specific use cases that balance value creation and time-to-value. Develop a business case tied to core business imperatives and create a clear strategy and roadmap to focus efforts. Automation efforts should always be linked to meaningful outcomes and improved decision-making to overcome resistance to change.
• Choose the Right Partner: When selecting an automation company, evaluate your specific industry needs, budget, and scalability goals. Look for a partner with proven expertise in your sector and verify their reliable support, ease of integration, and realistic ROI timelines. For small manufacturers, affordable options like Collaborative Robots (Cobots) exist, costing between $25,000 and $50,000, which can be shipped ready-to-use and programmed without extensive code.

Phase 2: Implementation and Scaling

• Define and Integrate Architecture: Use case enablement requires defining an enterprise-level Operational Technology (OT) and Information Technology (IT) architecture. Define the future state vision and identify solutions to fill any gaps. Siloed solutions are a dead end; enterprise collaboration and digital connectivity unlock exponential value. Strengthening IT/OT architecture security is a critical priority for positive business outcomes.
• Stand Up and Scale MVPs: To deliver desired outcomes at scale, focus on the optimal set of technologies and ensure integration with the existing backbone. Implement Minimum Viable Products (MVPs) that deliver a full stack of capabilities in a specific area to realize value early. Aim to implement additional MVPs every 90–100 days to quickly build a scalable foundation. Transformations stall when ROI is slow, so building a rapid, steady flow of value is necessary to drive adoption and self-funding.
• Embrace Continuous Improvement: Automation should be treated as a process of continuous improvement. Maintain and continuously improve the solution, architecture, and people infrastructure for sustained value realization. Organizations should learn and adjust their strategy and execution to build on proven value as it emerges. Every time the choice is made to forgo automation in favor of short-term work output, the decision is often regretted within a few months.

Phase 3: Workforce Transformation and Resilience

• Equip and Champion People: Sustainable success requires a workforce that can evolve. Organizations must empower people beyond simply introducing new technology by fostering the skills and mindsets that support new ways of working. Manufacturers plan to address the labor shortage by introducing AI/ML technologies and increasing automation (41% for each strategy). Over half of respondents plan to repurpose existing employees to new or different roles. Critical skills for the next generation include analytical thinking, communication, and teamwork.
• Prioritize Cybersecurity: As interconnectivity increases and AI expands, cybersecurity risks continue to rise, jumping to the number two external obstacle to growth. Manufacturers must strengthen security and recognize that cybersecurity is a critical business competency, not just a technical one.
• Measure and Communicate Success: Measure progress using both hard and soft metrics to fully understand the return on investment (ROI). Communicate progress and success beyond the impacted group to build excitement for what is possible. Automating 50% to 70% of tasks in a workflow can lead to triple-digit ROI percentages and significant run-rate cost and time reductions.

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