Is Your Organization Ready for Industry 4.0?

Many articles on digital transformations and industrial IoT focus solely on technology enablement. In doing so, they underestimate the negative impact of poor organizational alignment.

Assuming that employees can both do their day job and be handed a new set of responsibilities for digital initiatives will negatively impact the potential value of such projects.

As an example, several recent articles including one by Michael Brito, Digital Transformation: Four Ways To Ensure Adoption From Your Employees, highlight how organizational heritage can and will hamper transformation initiatives.

As companies embark on their journey toward the 4th Industrial Revolution, the ones that are willing to bring in new leadership and make the organizational enhancements to power new digital customer relationships will be the ones that rise above the fray.

Digital Transformation Is Not...

A recent article in Forbes, Three Clear Signs Your Digital Transformation Isn't Transformational, contributed by Barry Libert at Open Matters, suggests that some companies wrongly believe that digital transformations are just "a collection of activities" including:

• Process improvement;
• Operational improvements (doing things better, faster, cheaper);
• Adoption of new technologies (cloud, social, mobile, big data);
• The same teams and the same budget trying to do something a little different.

Others focus solely on driving sales revenue. While selling "shiny new objects" creates great excitement, ensuring successful digital transformations require much, much more.

New Digital Relationships Are Much More Than New Sales Opportunities

New digital customer engagements (physical and virtual) are of the greatest value when sales is not the sole focus.

In fact, intermittent, reactive, uncoordinated, and out-of-context customer interactions can create internal friction and poor customer engagement.

To increase customer lifetime values, one that contributes to your top-line growth and bottom-line efficiencies, take the time to truly understand your customers and your organization in their new digital context.

Your New Digital Customer Lifecycle Journey

Customer segmentation and personas drive successful product, marketing, and sales programs. The same analysis applies to your organizational requirements.

Start with a clear understanding the of following:

• Who (target segments and buyer/user personas)
• What (solution, business model and value proposition)
• Where (new or existing channels)
• How (deployment, on-boarding, training, support, and billing)
• Why (measuring success for you and your customers)

Then create a map that starts with prospecting and continues through support and retention efforts. The following graphic from The Interaction Design Foundation provides a nice outline.

Image Credit: The Interaction Design Foundation

You will need to augment a basic journey like this with the people and the information requirements and sources at each step of the process.

Based on this analysis, you will quickly recognize that buyer personas (researching, evaluating and purchasing) as well as the user personas (deploying, using and supporting) are NOT the same individuals who traditionally engaged around your legacy products.

Similarly, your existing sales, support, and operations teams are also likely not the best suited to deliver your new digital initiatives.

Your Target & MVO Organizational Structure

Your organizational alignment should be based on:

• The customer lifecycle processes
• The people (not individuals or title but rather skills and expertise)
• The systems (driven by the information requirements)

Similar to product management, you will need to establish a target end-state, a roadmap and a minimum viable organization (MVO).

With a clear path in hand, you can communicate a clear message, provide specific guidance and make adjustments along the way. Getting everyone on the same page early with a singular vision will help smooth over the bumps in the process.

Employee Buy-In

When employees understand the vision and participate in its development and growth, organizational changes become a more transparent and less stressful process.

But don't stop there.

Be sure to provide the training, time, and budget to deliver on your new organizational objectives. Also, don't forget to align compensation with new program expectations.

By answering the "what's in it for me?" question up front, employees will feel a closer bond with the initiative.

While this may sound simple, in my experiences, it's one of the most overlooked parts of the digital transformation process.

Make Organizational Alignment A Priority

Digital transformation is both a technology and a management challenge.

Focusing on one without the other is not a recipe for success.

Instead, companies should adopt a more holistic approach - one that starts with the target customer and ends with organizational alignment based on your targeted outcomes.

Doing so, will help drive the ideal product, sales and marketing programs as well as organizational structure.

Remember, start your organizational changes slowly. With an end state target in mind, add the team members, training and other programs to drive success.