Driving value from digital technologies is a job for corporate leaders. To maximize the returns on their companies digital investments, executives can focus on five critical steps for strategy execution.

<<< Start >>>

Digital leadership: The ongoing shift towards technology affects industrial companies. But technology changes nothing without the people "driving" it. | Image: Accenture

<<< End >>>

Change is exciting. But how can it become growth?

I always challenge industry executives to consider this outlook when they are assessing their digital transformation efforts. That’s because our research shows that many companies are still stuck in pilot mode, gaining no value traction. Yet “shiny tech” continues to dazzle many.

I’m a former Operations Executive and a former strategy consultant. I know firsthand that the ongoing shift towards “Industry 4.0” and the Internet of Things deeply affects industrial companies. But the technologies “driving” this shift do, in fact, change nothing—only people do.

And in order to make the best kind of change happen, and to turn the shift into growth, people need the best kind of digital leadership.

“Leadership” takes center stage

To realize the full value of digital, companies will have to bring their new technologies, platforms, and ways of working together and fuse all of them into the very core of not only their own business but also of the other companies within their ecosystems. And that’s a job that’s all about people and change.

 

<<< Start >>>

Growth requires focused execution. Keeping this kind of implementation on track is the job of leaders.

<<< End >>>

 

A case in point: Remember that there is no more standalone “Industrial Equipment Industry.” It’s now a conglomeration of software engineers, hardware providers, application developers, user interface experts, data scientists, and many other partners you don’t normally think of when you think of “equipment.” Is equipment a product? A piece of software? A service? The simple fact is that today, in most cases, the answer is always “yes.”

Digital is blurring all the lines, everywhere: lines between concepts, between functions, between business and markets. But this blurring alone isn't enough to drive growth, as proven by the many companies which do invest in digital but have yet to see the returns they expected.

Growth also requires focused execution, that is: strategic, deliberate changes in the behavior of a company and the people within. And keeping this kind of implementation on track is our job—the job of leaders.

 

<<< Start >>>

What sets Winners apart? To maximize their scaling efforts, they’ve developed a muscle memory reflected and supported by their structure and organization. | Image: Accenture / Blomqvist

<<< End >>>

 

It’s a job that can be quite hard, too: Leading well and driving execution has never been easy—in fact, both companies and leaders have struggled with ever since the invention of organized venture. And both have gotten even harder due to the inherent complexity of software, connectivity, and data.

The same decisions which, a few years ago, could be made within the "four walls" of a company or department now require the careful management of many stakeholders. Today, executives work with entire ecosystems of partners, vendors, and project groups, all of which consist of people with often highly diverse backgrounds, expertise, and opinions.

Making sure that all these stakeholders move towards the same objective is one challenge. Keeping them all interested and engaged in what can be complicated, risky, and sometimes outright frustrating change efforts is another. So, how can leaders succeed in handling this complexity? A recent piece of Accenture research points toward an answer.

 

 

More on becoming a champion

The research reviewed 1,300 companies and found that only 22 percent of them were able to make the expected returns from their digital innovation projects; the key differences between these “Champions” and the other companies in the sample can all be linked to issues of leadership and execution.

Read the Research

 

Exercise your execution “muscles”

The research report highlights four critical areas corporate leaders should focus on and master—with tasks to execute and skills needing to be developed:

1. Define the value you want to create before setting your organization to the task

If a goal is not clear, companies are more likely to end up trying to scale digital pilots that do not have the organizational backbone needed to succeed. Creating the required clarity—of vision, strategy, and the language within both—and then aligning a businesses’ top management around it is a leader’s key responsibility.

2. Focus on internal organizational change and external digital value

Leaders should strive to bridge the gap between what you are trying to scale for customers and the technologies deployed internally to support scaling efforts. The best way to do this is to continuously blend digital transformation efforts with wider-reaching organizational change and change management. Finding the right balance between implementing new tech and creating new ways of working is crucial!

3. Build in-house innovation factories with targeted influence

There is an enormity to integrating rapidly changing technologies, along with talent and assets, back into the larger organization. Leaders can tackle this by prioritizing “re-rigging the tanker” over “pushing out speedboats”: Strive to grow new digital capabilities and talent within your organization as best you can; don’t over-invest in hard-to-reintegrate spin-offs, corporate start-ups or joint ventures.

 

 

Client case: Faurecia

The automotive interiors manufacturer Faurecia is transforming itself from a company that supports mobility solutions to one that contributes to a highly connected experience for consumers. It has implemented a smart factory initiative to improve process efficiency in tooling automation, manufacturing and logistics, quality control and management processes. It also created the role of Chief Digital Officer (CDO), whose mandate is to achieve better results from digital initiatives. From 2015 to 2017, savings from efficiency gains deployed to fund innovation have increased from €57 million to €160 million.

Find out how we helped Faurencia here

 

4. Find out what enables innovation in each business function

While technology alone might not change things, it certainly does make a difference. Leaders should learn enough about key technologies to understand where in their organization they might yield the best results. Our research revealed many examples for how certain companies were much better at putting the “right” digital solutions into the “right” place than others, to their benefit.

And then, there’s a fifth point which I can add from my experience: really do treat digital and innovation spending as investment, not as costs. Which means do give the people who use the funds the time and space to experiment and build. And expect things to go slightly wrong before they get massively better.

Change is difficult, and driving it is never straight forward. But as leaders, that’s exactly what we should embrace. Because if we do that, we will, over time, learn to do it better. And once we know how to do that, growth will follow.

<<< Start >>>

 

<<< Start >>>

About the author

 

<<< End >>>

Nigel Stacey

Nigel is Accenture’s Industry X.0 global lead. With his focus on growing the practice, Nigel drives strategy development and business planning for all Industry X.0 programs, while supporting his leadership team with the execution of several large-scale change efforts around capability building, post-merger integrations, and partner ecosystem growth. A veteran strategy consultant and industry executive, Nigel spent 26 years working across a variety of industries from aerospace and defense to consumer electronics in three core roles: leading global operations and supply chain, building new business start-ups, and heading strategy, mergers and acquisitions. Reach out to Nigel via LinkedIn.

<<< End >>>

 

Nigel Stacey​

Industry X.0 Global Lead​​

Subscribe to Accenture's Industry X.0 magazine Blog Subscribe to Accenture's Industry X.0 magazine Blog