I recently spent a couple of days at the Manucore Manufacturing conference, where the central theme was around digitisation, big data, smart manufacturing, automation and IoT. The conversations which took place there revealed a common 2-part challenge to industry leaders:
Part 1) Where should our company be going using these new technologies? What is my blueprint, my desired state?
Part 2) How will we achieve that? How do we get started?
Noticing that these questions received very different answers from different leaders, I was prompted to compile a few thoughts of my own to dispel some of the misconceptions associated with data-driven leadership.
It’s not about the technology. It’s about your business
Did you know that 30 to 50% of technical changes don’t deliver expected benefits? This is often down to getting so carried away with the idea of what a certain technology can do that its relevance to the business is forgotten. Before investing in new technology, its promise needs to be compared to the desired business impact. How much more productivity should this technology bring? How should it improve the customer experience? Technology in itself doesn’t make things better. That comes from good data-driven leadership. In order to make the right investments, you first need to examine whether your data shows opportunities to improve current behaviours and process stability. Then look at whether the technology you are considering fits the bill.
You’re already a data-driven leader? Take a reality check
Many senior leaders firmly believe they are already data-driven leaders. Before giving yourself a pass-mark in this subject, it’s worth cross-checking what you think you know against what you actually know. Challenge yourself with the following questions to see whether your (logical) assumptions are actually proven:
How well can you prove, with granular variance based data, what your business process performance issue is?
How well do the selected improvement projects have a data-driven correlation with the business problem?
It’s not how much data you have. It’s how you use it
In a world obsessed with collecting data, industrial companies actually put surprisingly little of it – only 3% – to use! Given that further digitisation will, by definition, lead to more data, extracting value from this increased amount of data becomes even more complex. New technology will not compensate for such massive wastage.
Recognition is the first step
The vast majority of leaders – 70% – do actually recognise shortcomings in their organisation’s capabilities for maximising the value of their data and exercising digital leadership. High marketplace demand for people with the relevant skills means companies might be forced to develop these skills in-house. And that’s no small undertaking.
If your organisation does have a heavy technology-based approach towards the future, it’s important to validate how ready you are to adopt it and benefit from it. If your roadmap is unclear, it can be a good idea to start with small steps in the right direction which will improve business performance. For example, designate one supply chain in a particular region and take a look at it through the eyes of big data software (such as Alteryx. PowerBi or Minitab) which helps you to blend and visualise data. You might be surprised what you’ll discover in just a couple of weeks. And if you continue to mine that data, you’ll get clarity on what needs improvement and where you can create value. Value which might fuel the next level of investments required for your digital journey!
Aart Willem de Wolf is managing partner at R&G Global Consultants.