For lots of organisations, like those in the manufacturing, water, wastewater, and oil and gas industries, digital transformation is a challenge. Because of the intensive levels of automation in these industries, most assume that a high degree of digitisation has occurred. They also assume that they are in a strong position to leverage business transformation. In fact, the opposite is true.
Rik De Smet of Schneider Electric argues that developing a digital mindset is the key to industrial transformation. According to recent Bain & Company research, only 8% of global companies who invest in digital technology have been able to achieve their targeted business outcomes.
Why is this happening when vendors, analysts, and experts describe the impact of digital transformation on business growth in positive terms? Contrary to what people believe, digital transformation represents a great deal more than technology. It is about the people who wish to break new ground, create new value for customers, and gain the promised benefits. It is also about leveraging technologies, processes and people to establish a new corporate mindset.
What does a digital mindset look like?
Lots of companies are personality led by manufacturing/process, marketing or engineering departments who focus on asset utilisation. This manifests itself in ways such as business initiatives that emphasise continuous improvement efforts rather than transformation. Often their staff are people who already feel comfortable and experienced with the challenge assigned to them. But a side effect of this approach is the division of the business into silos that limits their options for growth. Some organisations manage to stay in business and grow, but are they growing their market share?
New competitors and technologies can soon unbalance markets, for example with mobile phones displacing cameras and MP3 players. Companies that have succeeded in decoupling the people, processes and systems from their physical assets can adapt and change fast.
Free of institutional restrictions, this new digital mindset makes it possible for businesses to be more creative and holistic. They use competitive advantage and knowledge rather than raw data to create an exceptional experience for their customers through experimentation. Yet both worlds are important, and a company does not have to select one over the other. To be successful a company has to strive to be a leader in both.
Organisations need to build strategies that guarantee they stay ahead. Yet engineering such a shift, from the physical world to the digital world also requires new thinking. New thinking provides the key, otherwise, if you always do what you have always done, the outcome will not be different.
The first step
The first step for manufacturing organisations hoping to implement true digital transformation is to put a diverse team of people in place led by a transformational leader. This team should involve not just engineers but individuals from sales, finance, and human resources organisations. The team should be diverse in age and gender. People are more creative after the removal of traditional constraints.
When identifying a transformational leader, do not look to someone with experience, but instead to someone who wants to experiment. For industrial firms, the transformational leader could be an individual from the commercial side of the company or someone new. An individual with executive-level talent, a natural thirst and curiosity for innovation, and a digital mindset.
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