Digital Industry Insight #3: Identifying the Markers for Success
“It is not necessary to change. Survival is not mandatory.” —W. Edwards Deming
In our previous Insight, we detailed the significant barriers enterprises face as they transition to Digital Industry. However, we noted that digital transformation is not optional and that an enterprise must successfully change to avoid falling behind competitors and, ultimately, failing financially. These realities beg the question: What exactly does Digital Industry success look like?
Even within Digital Industry, what success looks like will vary by sector and sub-sector. However, a universal key to success is the increased utilization of data to drive decision making, as well as the capturing and encoding of tacit organizational knowledge for future use. Success also depends on ensuring that data and associated insights can be easily accessed by potential decision makers throughout the organization (and possibly across its extended ecosystem). Data silos and rigid organizational constructs must be removed while embracing the cloud as a data repository and collaboration platform. These changes are foundational and will require support and leadership from the top of the organization to break down the barriers to success.
Furthermore, successful Digital Industry organizations will invest in digital technologies in a way – and at a level – that supports a broader transformation strategy. In some cases, this will require reducing legacy, ongoing IT investments in order to free up resources to support the organization’s transformation goals. It does not, however, require a radical restructuring. Success will come from clearly articulating a strategy, soliciting and getting buy-in from key stakeholders, and then executing effectively.
“The significant problems we face cannot be solved at the same level of thinking we were at when we created them…” – Albert Einstein
Today, industrial and infrastructure organizations can be classified as either leaders or laggards. Leaders are enterprises that embrace the challenge and opportunity that emerging technologies such as IIoT, cloud, and machine learning/artificial intelligence present in order to differentiate themselves from competitors. Conversely, laggards tend to be more entrenched in legacy processes and structures, often resisting or only partially embracing digital change. The following is a breakdown of the characteristics of the two enterprise types:
Digital Industry leaders:
- Make data and digital technology use central to their strategy.
- Have strong, visionary leadership.
- Are focused but flexible.
- Have an open and collaborative culture.
- Have no “sacred cows” and are willing to make hard decisions.
Digital Industry laggards:
- Make reactionary digital investments mainly to support existing processes.
- Have a leadership team preoccupied with short-term goals and metrics.
- Are prone to chase the latest technology trends and hype.
- Have a hierarchical and change-averse culture.
- Have a strong bias for maintaining the status quo.
Most industrial and infrastructure organizations can be classified as laggards as opposed to leaders. Change is hard and organizational incentives are not designed to support the necessary adjustments. In many industries, the catalyst for change emerges out of the ashes of failure. For example, a company’s financial breakdown may result in a takeover by an entity that is willing to invest to disrupt the industry. In another scenario, investors with deep pockets may use data and digital technology to build a new industry entrant from scratch.
Digital technology offers transformative capabilities and extensive benefits to enterprises. Those organizations which effectively capture, contextualize, and share data will be positioned to become more agile, enabling the creation of new business models and more efficient, reliable, safe, and sustainable industrial value chains. However, the current early-stage state of industrial digital transformation means that success markers have yet to be clearly understood and embraced by most market participants. It’s not the machines or the technology holding Digital Industry back – they are by their very nature predictable and capable of improvement; it’s people and organizational inertia.
“… nothing is more difficult than to introduce a new order. Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new…” – Niccolo Machiavelli, 1532AD
Digital Industry is the end result of the business transformation of the energy, manufacturing, transportation, and infrastructure sectors by the use of IIoT, cloud, AI/ML, mobile technology and wireless communication.
To learn more about Digital Industry success and failure as well as what’s in store for 2020, join us on January 16th for our annual Predictions webinar.
Momenta Partners encompasses leading Strategic Advisory, Talent, and Venture practices. We’re the guiding hand behind leading industrials’ IoT strategies, over 200 IoT leadership placements, and 25+ young IoT disruptors. Schedule a free consultation to learn more about our Connected Industry practice.