Someone asked me recently my thoughts on smart manufacturing—the so-called IT revolution in the factory. They couldn’t believe that I didn’t see smart manufacturing as the salvation of American manufacturing. Don’t misunderstand me; smart manufacturing has a place in reviving American manufacturing. I have a smart factory. We employ the latest in pick-to-light systems, automated CNC machines and seamless integration from order inquiry to accounts receivable. But that isn’t where I started my revolution, and you shouldn’t, either.

The problem with many CEOs today is they have turned away from the astonishing potential of the workforce and turned toward automation instead. Big mistake. What is the sense in spending millions on automating your factory if our workforce couldn’t care less? What is the sense in buying expensive machine tools if your workforce can’t wait to get to the bowling alley, yet drag themselves to work? I’ll tell you why: Because too many CEOs view their employees as expandable assets. They should view them as renewable resources. And renew them.

Don’t bother with smart manufacturing if you have a dumb workforce. And if your workforce is dumb, it’s your fault, not theirs. Don’t bother with an IT revolution. Your revolution has to start with a “smart workforce.” You have to make a new compact with your employees. You need to ignite the human spirit in your workforce. Imagine this: What would happen if every day your employees came to work excited to do better today than they did yesterday? Imagine how your company would soar if your employees were absolutely dedicated to supporting the mission and each other in attaining it. Imagine what it would be like if your employees were like Cirque de Soleil performers.

This is the place where I get blank stares from many CEOs. They don’t like the “soft stuff.” “Give me the hard stuff,” they say. “Tell me how to build a smart factory, not a smart workforce.”

It has to be the other way around. Start by building a smart workforce, one that is engaged, enlightened and empowered. A workforce that trusts in its leadership. A workforce that believes in its leadership. This is a tall order to be sure—especially if the leadership is a bunch of boneheads who care more about depreciation than employee engagement. Here are four key ways to start:

1. At the top. Build leadership credibility. The only way to have leadership credibility is if your leaders demonstrate key values of respect and integrity.
2. Leaders need to treat their employees with respect, but many don’t. In a recent Harvard Business School study of 20,000 employees, half of them did not feel respected by their leaders. And respect was rated by the participants as more important than anything else, including compensation. Imagine how company performance would skyrocket if you solved this one problem alone.
3. Leaders have to demonstrate integrity. In study after study, integrity is a key attribute in leaders who people admire—and want to follow. Integrity is a key part of building credibility, but leaders also need integrity in everything they say. You can’t be like many leaders and “tell half the truth, hoping the other half doesn’t show up.” You have to be bone honest all the time. You have to tell them what they need to know. If the company is headed for trouble, tell them. If the company needs to pivot into new markets or products, tell them. And tell them why. Tell them everything. You would be amazed at how smart your workforce can be if you give them half a chance. I always say “trust in truth.”
4. This is not just for the top. Your entire workforce has to embrace the values of respect and integrity. But you cannot expect “people below to do what the top will not.” You may have leaders who have lost credibility long ago. They can’t get it back. You have to replace them.

Smart manufacturing starts at the top, not the bottom. Smart manufacturing starts with creating a new compact with the workforce. Smart manufacturing starts with people, not machines.

Steven L. Blue’s new book is called American Manufacturing 2.0: What Went Wrong and How to Make It Right. For more information, visit www.steveblueceo.com or www.milleringenuity.com.