Digital transformation is everywhere. You can see it emerging in marketing, sales, HR, supply chain and finance – as well as in domains such as plant operations and maintenance. Digital transformation is opening up new opportunities, challenging the traditional methods and changing the way we think and act.
In essence, digital transformation is a massive disruption, and for companies that want to become the new leaders, it offers a remarkable opportunity. Digital maturity equals 26% more profitability, 9% more growth and 9% higher market valuations according to Accenture and MIT. These are promising numbers, but according to a recent article in Forbes , 84% of companies currently fail to achieve digital transformation.
Companies that are committed to helping process manufacturing companies leverage operational intelligence are key to this digital transformation. Software helps to inform continuous improvement, but we know that software alone is not enough. Companies also need an active support team to achieve next-generation productivity and to create a digitally enabled workforce.
Due to this core focus, it’s necessary to spend time talking to potential customers to understand their needs with relation to transformation and digitization. Those discussions frequently spark new ideas for further improvement of software, but they also reveal some recurring trends and challenges.
The best way to overcome these barriers to successful transformation is by using proven best practices. In this article, we will dive deeper into some of the most important and interesting concepts that are crucial to achieving a successful digital transformation, such as:
1. Executive support is critical, but not enough
2. Start small, celebrate quickly and scale fast
3. Big corporations need to embrace the concept of failing forward
4. Technology adoption is only going faster and faster
5. Management of change is critical for success
Some of these concepts may seem like counterintuitive or irrelevant considerations, but in practice, they are not. By understanding how these concepts affect your transformation initiatives, you can increase your chance of success more easily than you may imagine.
1. Executive Support is Critical, But Not Enough
There is no question that having buy-in from the top is a must, but in addition, the whole organization should be engaged in the journey.
To initiate a successful transformation, decision makers need to believe in the potential value of analytics and operational intelligence. However, a frequent challenge to this support is the tendency of leaders to demand a proven return on investment (ROI) before being willing to commit their budgets to a new and speculative program. Often the economic questions that leaders ask cannot be directly answered at the onset. When this approach of proof before investment is pursued, it can easily become a showstopper – killing the potential opportunity.
Visionary leaders can instead support the beginning groundwork by helping to tear down internal barriers and support the potential gains. By promoting transformation as a positive change for all, executives can attract bottom-up acceptance throughout the organization – this is the key to success. Transformation works best when all levels of the organization are engaged.
Instead of only pushing a vision down, top leaders will identify champions and advocates who can help them generate momentum through cross-functional teams. These teams can be established and with the visible support of the executive, can be given a clear mandate to get things done and sufficient resources to enable the program. Their responsibilities within the transformation program can form a part of their yearly key performance indicators (KPIs), formalizing their contributions in a transparent way.
2. Start Small, Celebrate Fast Scale Faster
From a strategy standpoint, starting small and celebrating fast with an eye toward scaling quickly is the best formula to implement change.
This approach offers multiple benefits, such as:
• A smaller first scope makes starting the project easier to initiate.
• A quick success is encouraging. It attracts momentum and gets more people on board.
• An early proof of achievement helps overcome speculation about total value.
• The most successful parts of the initial project can be copied to all subsequent scopes
• Takeaways from the initial project can be quickly applied in the future to optimize larger scale success.
The single greatest advantage of this approach is the the flywheel effect, and this is the key to scaling fast.
When a transformation program is first described, it can be difficult for stakeholders to imagine it in practice. It can be like being shown a huge static wheel and being told that it could be set in motion. However, when that wheel starts to move – even a little – you can imagine it spinning faster, and it becomes easier to believe the next step is possible. Likewise, the credibility that a quick success generates makes every subsequent step (such as scaling out to multiple plants) much easier to achieve.
3. Embrace Failing Forward
For many people, the word failure is a negative, so why offer this as a best practice for success? Simply put, it’s because failing forward is not about embracing failing; it is about achieving success.
Failing forward is also called intelligent failure, and it is a concept that aims for innovation, agility, learning and resilience – all of which are advantages during transformation. Essentially, when you accept that (small) failure may inevitably occur, you make room for innovation and change. By removing the fear of failure, organizations can respond more productively, learning more from mistakes and making greater steps forward faster. This best practice is about cultivating an attitude that facilitates change.
There is a big difference between the DNA of many large corporations and start-ups. For start-ups, it may be easier to embrace failing fast and often to fail forward because they are constrained by limited resources and consequently are more open to risk. Within the culture of many large corporations, failure is often avoided. Such companies will go to great lengths to avoid the risk of even partial failure, but without the opportunities to learn from mistakes, their progress can be hampered.
When it comes to digital transformation, an open attitude to uncertainty becomes crucial to success. There is still a lot of hype around the promise of Big Data, analytics and the connected enterprise. No one has all the answers yet. The benefits cannot always be neatly quantified up front – but if the fear of (partial) failure is too strong, then transformation programs will be killed before they can begin.
Failing forward does not mean taking unnecessary risks, however. As described earlier, it is better to start small (and be open to learning) than to begin with an oversized waterfall project in which failure cannot be tolerated.
Instead, provide the opportunity to learn during your transformation. Test a hypothesis and reject, iterate or adjust it as you go. The moment all the assumptions are validated, there is nothing to stop you from scaling up fast.
4. Technology Adoption is Only Going Faster and Faster
The pace of innovation and the adoption of new technologies are only speeding up. It took decades for the telephone to reach 50 percent% of households, but it took five years or less for cell phones to accomplish the same. Today, large companies need to anticipate new technology trends even faster to stay successful.
According to the Global Technology Adoption Index (GTAI), there is a low risk and large reward when adopting new technology. This global survey illustrates an interesting statistic: Companies that are actively exploiting analytics, big data, cloud and mobility have on average 50 % higher revenue growth rates than organizations that have not yet adopted these technologies. These same organizations also reported that one or more of those new key technologies were responsible for several other areas of company progress, including increased efficiencies and organizational growth.
Innovation is unlikely to slow down; if anything, it will probably accelerate further. Don’t wait to transform. Start leveraging new technologies as quickly as possible – it is your key to future success.
5. Management of Change is Critical for Success
As mentioned earlier, transformation cannot only be pushed from the top down. However, to truly engage stakeholders throughout the organization and get everyone pulling in the same direction, a plan is needed. This is where having an effective change management program comes in.
A change management program is the key to shifting behavior and reshaping organizational culture during transformation. Rather than describing a vision, such a program actively helps people to change. By focusing on a finite initiative, the way things work inside the company is shifted. If that shift is in line with your digital transformation program, it will assist in moving you forward.
According to the Mckinsey influence model, there are four aspects that need to be tackled if you want people to change their behavior. They will change if:
• They have a proper insight and understanding of why to change. They need to agree to a certain extent that the change is meaningful to them.
• They have developed the right talent and skills so that they have the capabilities to behave in a new way and to be successful. Training, onboarding and academy models need to be designed in an optimal way.
• They see role modeling and culture change. Change requires that people see that their leaders, peers and reports all behave in the new way.
• There is reinforcing with formal mechanisms. The structures, processes and systems support the desired change.
Start Your Journey
Now that you understand the five keys to digital transformation, you can see how they work together in combination, each synergistically adding to the other.
When you plan to manage change as part of a vision of a new (transformed future), you can enlist the support of your leaders and stakeholders throughout the organization to begin with a small project. Having overcome the fear of potential failure in that initial project, you can move faster to start benefiting from new technologies and overcome the internal barriers to success. And by approaching the journey to transformation with the help of proven best practices, your company will open the door to previously hidden opportunities for growth.
If you’re ready to begin, or you’d like more information about how TrendMiner can support your transformation initiative, start a conversation with us. Our team is on hand to help you achieve success.
Founded in 2008, TrendMiner is a software company that delivers self-service industrial analytics. Our software is specifically developed to optimize process and asset performance in industries such as chemicals, petrochemicals, oil & gas, pharmaceuticals, metals & mining and process manufacturing.
TrendMiner software is based on a high-performance analytics engine for data captured in time series. Through an intuitive web-based client, process engineers and operators can easily search for trends. Using pattern recognition and machine-learning technologies, they can question the data directly without help from a data scientist. The plug-and-play software adds value immediately after deployment, eliminating the need for infrastructure investment and long implementation projects. TrendMiner software can improve efficiency and quality, reduce waste and energy consumption and optimize production performance across divisions.
To learn more about TrendMiner, please visit www.trendminer.com.
Bert Baeck, CEO, TrendMiner
Bert Baeck is co-founder and became CEO of TrendMiner in 2013. His professional experience includes over 10 years within big data/ analytics and the manufacturing industry. Before he started TrendMiner, he was a Process Optimization Engineer for Bayer MaterialScience (now called Covestro). Bert is what they call an engineer with a twist: an analytical, lateral thinker and business savvy with a strong can-do mentality. Bert holds a Master’s Degree in Computer Science and a Master’s Degree in Micro-Electronics from the University of Ghent. His personal motto: ‘Failure is not the worst outcome. Mediocrity is.’