“Volatility, uncertainty, complexity and ambiguity.” These are the things that now define the business landscape, according to Stefanini CEO (EMEA) Manuel Frade’s introductory presentation at our two-day Industry 4.0 event in Brussels in May. His reflections certainly resonated with listening delegates from the top tier of European manufacturing, who were drawn to the forum precisely by the digital disruption of the fourth industrial revolution, which has dramatically changed the game for companies across all sectors.
Stefanini has advocated for some time that the best response to this unstable and, at times, intimidating new world is bold innovation – meeting the challenge of the future head-on by embracing new technologies and ways of working. We’re in agreement with Mark Payne, founder of innovation consultancy Fahrenheit 212, who is renown for his belief that innovation is synonymous with growth, and we would absolutely stand behind his assertion that “Companies that aren’t innovating aren’t growing”. In fact, we’re convinced that companies who don’t innovate won’t only stagnate, but potentially fail, which is why we’ve been keen to emphasize the benefits of embracing Industry 4.0.
But we’re aware that while increasing numbers of companies are becoming persuaded of the benefits of embracing Industry 4.0, there is still much uncertainty around how they should actually go about that task. So, the Brussels event was designed to progress the conversation to the next stage. It was a recognition, as one of our speakers shared, of the fact that “Strategy, not technology, drives digital transformation” and that clear planning for future change was a vital first step towards the innovation we all know is necessary for survival. The key message that emerged from the event is this: true innovation, a full embracing of the fourth industrial revolution, is not just about changing the way your business functions – but changing the way your business thinks.
We’ve seen positive examples of businesses beginning to apply new technologies to their processes, engaging with activity like smart manufacturing, digital twinning, and Digital Performance Management. It’s hugely exciting to see these innovations having a real-life impact, saving companies time and money while improving their employee care. But digital transformation needs to go beyond that. Its future involves more than just digital competence and usage. It refers to the fundamental changes associated with the application of digital technology in all aspects of human society. So, businesses should make way for change at a fundamental level.
A guest speaker at the Brussels event, Paul Miller from Forrester Research, identified a gap in vision. Paul’s presentation revealed that early IoT projects focussed on instrumenting existing workflows. The drivers highlighted were internal (cost and efficiency), the actors were operational executives and the technology organization (and CIO) had little visibility or control. However, Paul defined the real opportunity with Industry 4.0 as a focus for the whole business. The drivers should be external (winning, serving and retaining customers) and the actors bridge IT, OT and lines of business. He acknowledged that the shift from product and service to outcome and experience is considerable. Customer-centric outcomes and experiences are the objectives of digital transformation and if we fail to recognize this, we miss what’s at the heart of the change.
A recent global study measuring businesses’ levels of maturity in digital operations discovered that EMEA companies are trailing worryingly far behind the curve. The study classified businesses in terms of being digital novices, followers, innovators, or champions of digital innovation. With 52% of regional organizations in the innovator or champion category, APAC is clearly leading the way, followed closely by the Americas. However, 75% of businesses fall into the novice or follower categories, with only 5% regarded as digital champions. In an increasingly global market that’s a sobering place to find ourselves.
So it’s clear that ‘innovate or die’ isn’t just a catchy saying – it’s the reality for your business right now. So which is it going to be?