How do you start your digital transformation journey and begin implementing ideas and strategies? Even more importantly, how should you activate the workforce to let them embrace digitalisation? This is my personal story from a General Manager perspective about how to execute a digital strategy.
The big question in 2015 was how to manage ever-increasing complexity and a huge variety of products with an unpredictable workload, whilst at the same time, keeping efficiency high and increasing the profitability for low order sizes. If you have a proper organisational setup, which has been implementing Operational Excellence and LEAN initiatives for years, then digitalisation is a big additional lever to achieve this. You simply cannot add more staff to do “more of the same.”
Industry 4.0
One of the most intriguing concepts related to industry 4.0 is the idea of building a digital twin of the physical world. When you have a digital copy of everything and everyone, of every process and every machine, then ultimately, you can predict the future and make better decisions in daily routines. However, when creating a digital twin, many technical questions from IT and engineering departments will arise and a lot of detail needs to be determined.
In my case in 2015, which was about digitising a factory with more than 4000 people, a lot of the required technology was not yet available. We had discussions about “make, buy or wait,” which turned into a hybrid solution. We found numerous start-ups, which specialised in sensors and connection devices for people and machines and at the same time, hired a couple of very talented young IT professionals, who were eager to do something completely new and were brave enough to learn on the way. Most of the software needed to be newly written and algorithms developed in combination with engineers from the shop floor.
Built-in technology
Building blended teams from IT and the actual users is very important for later success and acceptance. From the start, we wanted built-in technology that would integrate seamlessly with the daily habits of the workforce. We requested that functionality would be as intuitive to learn as Facebook or WhatsApp, so no introductory trainings, for White-Collar and Blue-Collar employees was necessary. That was a key driver for acceptance on the shopfloor. Everyone quickly understood that technology would make their life easier, more transparent and lead to better decision-making for the leaders.
With transparency comes the question of hierarchy - who makes decisions, who needs reports, why meetings are held and why hierarchy at all is needed. That is a complex problem for HR departments to solve, because with digitalisation, some jobs, decision boards and ultimately hierarchy levels become redundant and obsolete. So, in parallel to the technical transformation and the building of the digital twin comes the development of a new organisational set up. Here, the involvement on all leadership levels is needed. Otherwise there will be trouble later on.
It is imperative, that the new set up is built from the ones who later execute it. We called this initiative create your job and let the team define future roles and required skills, given that we have a fully digital twin available. That turned into a much faster integration and more focused problem-solving behaviour based on the missing bits and pieces of the digital twin. Everyone in the organisation knew about the missing functions. This enabled the IT division to prioritise and concentrate on what was needed, rather than desired.
Agile Organisation
That also included me as general manager - I had a couple of ideas which didn’t make it, because other topics were simply more important. Which brings me to the next learning, establishing an agile organisation and project management approach. It quickly became apparent that this transformational journey was highly undefined. There was new technology that was hard to implement, deploy and define in the structures. A waterfall approach would not help. Therefore, we moved to SCRUM.
A lot of people think that SCRUM is only achievable and successful in IT developments, but based on my experience, the fundamentals of this mindset can be applied everywhere. We used it during our daily sprints and in particular, within quality management. It is not so important to study the Manifesto, but much more to understand the principles and convert them to your organisational needs and particular industry. Everyone had to understand agile methodologies. After training the whole IT department, starting from the top management, everyone received scrum training. That helped them to better understand the progress and accept open issues that would be fixed in later Sprints.
Innovation Excellence
The great implication of digitalisation is that with every nascent technology, new ideas of implementation and usage appear. During the last five years we had thousands of improvements coming from employees. This turned into a new, systematic behaviour, Innovation Excellence. Not just improving the current, but innovating on a daily basis. Innovation that was not confined to dedicated teams, but everywhere and from everyone. I experienced this to be extremely powerful and expect it to become a precondition for every successful organisation.
Lastly, every investment needs proper calculation and digitalisation is no exception. Transformation processes need space for experimentation. At the same time, narrow budgets safeguard against making wrong investments on a big scale. As Simon Sinek states, the ultimate goal for businesses is “not to win once, but to stay in the game”. I am sure digitalisation is a fundamental pillar for that.
