Investing in people – the biggest competitive advantage in production?

When we talk about investments in a production environment, thoughts often turn to new machines, equipment and automation. They are important, but it is often forgotten that the greatest competitive advantage can be found in people!

Research evidence supports this claim. Ossi Aura's extensive research found that good Management improves the company's operating margin by more than a couple of percentage points. This means a million-dollar advantage in a medium-sized manufacturing company. So investing in management is not just soft tinkering, it is directly reflected in the results.

Good leadership builds a psychologically safe work environment where people dare to express their thoughts and development ideas. This leads to innovations and continuous improvement in everyday life. Clear rules of the game and support from superiors increase enjoyment, reduce problems and free up management time for development.

Leadership also has a direct connection to employer image.

A company where communication is open and people are doing well attracts new talent and helps retain existing ones – a crucial advantage, especially in the midst of a talent shortage. We can also say that through our own experiences, everything said above is absolutely true. So leadership has a direct connection to employer image.

Let's take an example from years ago. When we were working in factories for the summer, we saw and experienced situations where communication was unclear and feedback was not given. Employee motivation suffered and confusion grew, even though there was a lot of potential. For example, Janne was once at a cake and coffee party in production, but his colleagues couldn't tell him what exactly was being celebrated. The cakes and coffee were good, but there really would have been a good place for communication!

In our current work as coaches, we have also seen examples of clear, inclusive leadership, which has been proven to raise the level of the entire work community. Investing in people is not a soft alternative to machine investments, but a necessity alongside them.

Machines do what they are told – people do what they understand and what they commit to.

Therefore, investing in management can be the greatest competitive advantage in production, or ignoring it can be the greatest destroyer of competitive advantage.