All your execs have to participate in digital leadership for it to be meaningful and effective

When we talked about data strategies in a recent blog post, it quickly became clear that people outside of IT need to help shape and support an effective data strategy. so they can benefit from it. Giving this as an assignment to IT would not have a meaningful result.

A data strategy that meets your organization’s insight needs and helps you monetize your data assets can be one aspect of digital transformation in your business. What if you go further than that? Some companies we know use real-time data from the internet of things (IoT) to show them how well their own or their customers’ specialized vehicle fleets or production machinery perform under everyday conditions. They analyze that information to improve engineering designs, consult with customers on making better use of their machines, or create new services.

Then: serving customers when you come across a need

Not so long ago, it was very rare for companies to have access to real-time machine data. Instead, they had maintenance records and other historical information. An engineer might have been able to see that a certain part had a tendency to fail because of a design flaw. That fault could have been remedied. The service manager, once informed, could have suggested to the customer that a replacement be made and that the machine be maintained regularly at certain intervals to avoid any unplanned downtime.
The customer would well have been pleased with the service department’s efforts, and the company might have boosted customer loyalty and satisfaction by taking a few simple steps.

Now: data-driven innovation realized by a team

What would this scenario look like today? For one thing, it would happen much faster. Imagine that new data draws attention to the fact that a mining truck is using much more fuel than expected. In fact, it reaches a threshold that causes an immediate alert to be sent to a service manager, who consults with an engineer. Together, they determine that the truck appears to be fine mechanically, but the operator is going too fast over short distances, and the pressure in three tires is low. Within minutes, they connect with the customer’s operations manager to share their findings and recommendations.

Based on the data evidence, the company decides it’s time to offer customers a new, proactive maintenance service and a driver and machinist training program.

The entire organization moves as a whole

Immediately, a larger group of people becomes involved. The CFO needs to ensure that new service contracts and rates are financially sustainable. The COO, production managers, and engineers meet to discuss the resources and processes involved in implementing the new services. The VP of sales works on a model to roll out these services to other customers. The marketing VP prepares a campaign to support the effort and give the new offerings their own brand. The CEO participates in strategic conversations about planning and projections for the services and what they mean for the company’s competitive advantage.

In addition to the executive team, many others – including engineers, technicians, account reps, the legal department, financial planners – get busy in facilitating the company’s new services.
You couldn’t create this kind of fast response from the top down or by delegation. It takes the entire executive group and their reports to act in sync. That’s why a Gartner article points out that “Digital leadership is a team sport.”

Overcoming organizational complacency

When companies are successful, they tend to continue along the same path until a shift in the market or the competitive environment forces them to change. The organizational gravity favors the status quo. Even when digital opportunities look promising, some executives and teams may shy away from them because of the perceived risk and their relative lack of experience in tracking the success of digitally driven business initiatives.

When we work with machine manufacturers and other businesses that want to profit from digital transformation, we impress upon them that all-in executive involvement is essential in making this work. A serious digital effort may also require that other people – for example, a new VP responsible for the customer experience or digital services – join the leadership team. Maybe it’s also the case that another mix of personalities would make the group more open to innovation and sharpen its focus on customers.

Strategic perspective and top-value opportunities set your priorities

In addition, you can probably smooth the path for digital transformation by acting first on the opportunities that offer a tangible payoff in terms of revenue, customer satisfaction, or competitive standing. It may be your most forward-looking customers who help you take the right next steps as they understand the advantages of, for example, data-driven, proactive maintenance services.

You’re asking how we manage this transition at innius? We learn and explore innovation together. Everybody in the organization is aware of the digital transformation opportunities before us and contributes to articulating and realizing our strategy to benefit from them. We are not unlike other companies in that our digital business initiatives are propelled by a single, powerful concept. For us, that’s transforming the organization and the way we create and deliver software solutions with an unwavering focus on the needs of our customers.

What is your experience in digital leadership? If you want to take action on your innovation agenda, start downloading our free tipsheet.