The Digital Transformation Framework for Manufacturing Executives

Focus on clarity and transparency

Change is hard. It’s harder when it requires a fundamental shift away from “the way things have always been done.” And, let’s be honest: teams can only handle so many “shifts.” Whether it’s a new strategic direction, technology, or process, it’s hard to not feel burnt out. 

Moving towards digital transformation is no different. Bringing in new tools and ways of working can create a lot of confusion for people at every level of the company. This confusion can lead to misinformation, uncertainty about job stability, and even forceful resistance to change. 

Executives play a crucial role in bringing clarity to transitions. As the team members closest to the source of change and the ones in charge of key decisions, employees are looking to executives like you to help show them the way forward.

Do your best to make yourself available to teams. Make sure they can ask questions, provide feedback, and get the right information directly from leadership. This could be as simple as a series of ongoing virtual company Q&A information sessions. Personal visits to different facilities to meet with teams face-to-face are great options, too. Access to leaders and transparency into why changes are taking place can help ease tensions during transitions. 

Bridge the gap between OT and IT

Digital transformation is so much more than an IT project. Leaders are in a unique position to enable collaboration that is crucial for moving forward. And as a leader, you have the opportunity to build the most effective team to lead and champion that change.

For manufacturers, smoothing over the culture changes between IT and OT is vital. There’s often a significant gap in sharing knowledge, objectives, and expertise between these two different internal teams. This is not a unique problem; it is quite common across all manufacturing sectors but is nonetheless worth addressing. 

Oftentimes, IT teams don’t come from an OT-specific background. This can make it difficult for them to understand the nuances and limitations of Operations teams. IT teams may not fully understand operational functions (e.g. the intricacies of a= process), making it difficult for them to find holistic technological solutions. Similarly, few OT team members grasp the full scope of what IT teams do. IT teams do more than simply grant computer access and fix network errors. As a result, OT teams may be resistant to outside help from IT teams. 

Find a way to get IT and OT teams working together and speaking the same operational language. Generally, this means getting IT teams up to speed on operational know-how and context. At the same time, OT teams need to understand that IT isn’t just about technology or security: it’s about bridging together how the entire company functions. Identify key team members that can help lead this charge internally, then give them the resources—in particular, time and autonomy—to find common ground.

Setting up goals, strategies, and projects that require IT and OT teams to work together is a good way to coax teams into working together and sharing knowledge.

If there are too many silos or teams that don’t organically interact very often, form sub-committees that include managers from both IT and OT. Setting up goals, strategies, and projects that require IT and OT teams to work together is a good way to coax teams into working together and sharing knowledge.  

The reality is that both sides need to put in the effort to make things work. As a leader, you can facilitate these changes by appointing the right team. Continue focusing positive energy on employees and cross-departmental partnerships that do it right. 

Set cross-departmental initiatives

Executives can also encourage cross-departmental success by weaving it into their digital transformation framework and success metrics. 

Make sure the committee’s outcomes benefit more than one team. Small wins across teams are the best way to build trust between departments and reinforce collaboration. If both teams are able to walk away with something that benefits them, they are that much more likely to continue building and growing the relationship after a project is completed. 

As an IIoT Platform provider, we see these kinds of wins often. For example, IIoT Platforms make it easy for IT teams to manage data from multiple facilities within one centralized repository and empower OT teams to move the needle on their KPIs. These (and many other) anticipated benefits often help IT and OT overcome their differences for a common digital transformation vision. 

As discussed in our white paper, “How to Handle Change Management During Digital Transformation,” incentivizing can sometimes backfire. Pitting teams against each other might have the opposite effect in the long run. Instead of incentives, executives can encourage further collaboration by highlighting stories, employees, and projects that exemplify strong collaborative mindsets. 

Communicate goals consistently

Digital transformation is such a large endeavor that it must be met with a collective approach. Piecemeal, one-off projects are not going to revolutionize your organization. If you’re going to make big strides, you need to move everyone together at once (even if it means incremental progress at first).

In our experience working with thousands of manufacturers, we’ve discovered that the companies with successful digital transformations start by aligning goals, strategies, and initiatives at the top of the org chart. Executives should work together to generate clear goals and objectives that resonate across the entire organization. 

This is not always an easy step but it is a crucial one. If your company’s executives don’t agree on the same framework to move forward with digital transformation, it will be difficult to convince teams that the entire organization is moving forward in solidarity. Collaborating on Industry 4.0 goals by working cross-departmentally at the top enables executives to lead by example, paving the way for teams to follow. 

Once leadership has established a collective approach, repeat your message constantly and consistently. Executives should speak the same Industry 4.0 language, emphasize the same goals, and point towards the same future. 

Executives should speak the same Industry 4.0 language, emphasize the same goals, and point towards the same future.

Leaders can also help employees internalize this shift by weaving larger Industry 4.0 goals into the fabric of your organization. This could mean rolling out a new internal statement of purpose, a shift to your mission statement, or formally launching a new initiative that excites employees and motivates them to get on board. Keeping employees in the loop on progress, including team contributions to successes, can be the motivation people need to get on board.

In time, message consistency from the top down is what moves the needle towards holistic transformation and gives rise to a data-driven culture. 

Establish a space for ideation

One of the most important roles an executive can play during digital transformation is truly, wholeheartedly supporting experimentation. If your digital transformation framework includes experiments with a 75% chance of success, you’re likely not pushing yourself (and your teams) to truly experiment.

If your digital transformation framework includes experiments with a 75% chance of success, you’re likely not pushing yourself (and your teams) to truly experiment.

Big changes often follow big risks. As a leader within your organization, you have the capacity to help facilitate true transformation by helping others feel comfortable with true experimentation and taking risks, even outside of the R&D team. Where you lead, others will follow. 

If possible, create a space at your company—a physical space—where ideas can grow. Separating this space from your normal production streams enables teams to balance the creative spirit of new ideas and tools with the necessary structure to still maintain current production.

By facilitating opportunities for collaboration, innovation, and risk, employees will be more likely to add their own ideas and contributions. It might not be possible to pull teams off the floor at the busiest times. However, knowing they have a space for when ideas present themselves is important.

Seeking employee feedback can help you understand if a new tool, process, or technology provides value at a larger scale. Once a new concept, tool, technology, or methodology is tested and proven in an isolated environment, it can be easier to provide a projected ROI when rolling the solution into production. 

Summary

Executives are uniquely positioned to design a digital transformation framework that moves the whole organization forward. Even so, there is no cookie-cutter path to success. In a rapidly evolving industry, the ways you react and respond to Industry 4.0 efforts are mirrored by others. As such, it’s important to continue casting a positive light on even the smallest victories. 

Consider your organizational structure when building out your roadmap, too. Think about how teams should be working together and determine what gaps currently exist between departments, such as IT and OT. Find ways to encourage cross-departmental collaboration by developing overarching goals with shared outcomes or even a physical space designed specifically for experimentation.

Digital transformation is not exclusively powered by or successful because of technology. Your people should continue to be a valued part of your strategy and framework. Employees look to their leadership for the company’s pulse. Clearly communicate the company’s larger goals and remain optimistic (but honest) through difficulties. This will help you win the support of the shop floor and top management.