Why is Culture of Paramount Importance in IoT Digital Transformation Projects?

A phrase originated by the late Peter Drucker and made famous by Mark Fields former President at Ford, can't be more relevant in today's IoT / Digital Transformation projects.

Companies transforming and disconnecting Culture and Strategy are putting their success and future survival at risk!

What does culture eat for lunch? we would say technology, you can have the coolest tech in the planet to implement yet if the behavior, beliefs, values, and lack of IoT understanding by the employees, mid, upper and C-Level executives on how to transform can have a significant impact on the success or failure of an IoT project.

The people factor is always an issue in transforming an enterprise; even how executives are measured can place projects at risk. There are no Technological limitations hindering Digital Transformation.

Failure to address culture, the lack of a clear Strategy and lack of understanding are the three major underpinning reasons Why IoT projects fail.

According to Cisco 3/4s of all IoT project fail, Gartner reports 75%

Below are the top factors in the various reports:

? Huge Complexity

? Lack of knowledge

? Long completion times

? Poor quality of the data collected

? Lack of internal expertise

? IoT integration

? Budget overruns

OECD reports state that 8 out 10 mid to senior managers and 4 out of 5 C-Level executives don’t have the competence to transform their enterprise, coupled with the fact that 2 out of 3 people lack skills for the digital age, adds to the risk of failure.

Companies need to approach Digital Transformation/IoT projects as “Leading Change” and need to consider the Trusted Advise of people in companies, which have Orchestrated Successful projects with a proven track record, and academic methodology, which will help guide and facilitate the various stakeholders in the journey of change.

Doing a Leading Change exercise is one part of the equation, the business engineering and assembly of a proven partner Eco-system is another and both equally important.

An Orchestrator with a win-win horizontal approach is the key, never enter into an End-to End agreement to transform your enterprise, there is no such a thing as End to End in IoT. Remember most large companies are not very good a dealing with small ones, in IoT an Orchestrator will have the experience knowing which proven small players are essential for a project, the sensor, the Nano-sensor, the bit of software or the app, all the pieces of the puzzle which will construct the foundation for the project.

Failure to lay a foundation and ignoring the structure of the various pillars needed and the project will collapse.

This article depicts one of the various methodologies required to succeed in transforming an enterprise in subsequent articles others will be addressed.

As a relevant example of leading Change methodology please find my views on John Kotter′s eight steps that should be used in parallel with other methods for digitally transforming an Enterprise:

Step 1: Create Urgency

Without a sense of urgency to transform, projects will run into a stand still, time will pass and procrastination will be rampant, we are creatures of habit and reluctant to change thus the urgency needs to be felt by everyone involved.

A series of champions need to be strategically selected to facilitate change from every department to help get people excited, the project off the ground and move it forward.

Step 2: Form a Powerful Coalition

People need to rally behind and embrace the strategic change, and I mean everyone from the Board of Directors, C-Level suite, upper, mid management and every employee in all departments need to be involved and feel a sense of ownership, they need to feel safe, part of the Culture which embraces the agreed Strategic direction to be taken, the champions enlisted in every department will act as catalysts for change.

 Step 3: Create a Simple Vision for Change a Clear Strategy

If people have taken part of the decision making process, they contributed to the Strategy, the new company direction, they will feel a sense of ownership and belonging, the chances of success will go up exponentially, if they feel safe, have time to prepare especially when their jobs are at risk due to automation, when they are given the heads up, a chance to re-tool, to educate themselves, if you do all that the transformation project will be embraced.

It’s not only the right thing to do, but also the path of least resistance in any given change. So have a clear and simple Strategy and communicate it early or better yet get people involved, no one likes to be surprised and not be a part of something which impacts them and gets shoved down his or her throats.

The Strategic Vision needs to be clearly understood and articulated by everyone from the board to the reception, and I mean everyone, this is hard with large enterprise however it should be a common goal for everyone to know.           

Step 4: Communicate the Vision

Once the Strategy and Vision are agreed it needs to be quickly communicated efficiently and effectively to ensure success.

Use it in everything you do, every chance you get, use it to make decisions, to solve problems it needs to be in everyone′s minds.

C-Level Executives “Walk the Talk” you need to lead by example, this is the time to show leadership.

Step 5: Remove Obstacles

Taking actions to remove barriers early on is essential.

In transformation projects the mindset and skill set will change, sales people instead of selling widgets will sell solutions and take a consultative approach which requires a different skill set, many will have great relationships with dealers now they need to sell direct, some will work some won’t thus the people that get on the ship can stay unfortunately others will go.

You might have to re-frame the organization, the entire company will suddenly be offering a recurring service to customers from B2B to B2C, nuances need to be learned and embraced quickly or risk failing, production lines, operational models, customer services, every department will be affected.

Agility and simplicity need to be on everyone’s mind and efforts.

There are always people whom will resist change, these barriers need to be removed immediately to reduce the risk of contaminating others thoughts.

A structural change needs to be in place, this is why in Digital Transformation we recommend HR is involved in all steering committee meetings and part of the Strategy and Vision, this is not the sole job of a Chief of Innovation or CIO every department needs to participate.

HR needs to understand clearly the human capital required to hire, promote and foment leaders to deliver on that change, deal with union issues work with education, retooling, help re-frame the organizational structure, job descriptions, Etc.  

Step 6: Create Short-Term Wins

Aim Small Miss Small is the only way to go, if you Aim Big you Miss Big, “ Don’t make a Chicken out of a Feather” or “ Don’t make mountains out of molehills” when a company starts with an ambitious Strategy often they go Big.

The chances are that the Strategy you started off with might change this if you "Build to play not to last" you have a chance to pivot quickly at a reduced risk and cost, so don’t fall prey of man hours consultancy gigs or salesman that want to sell you a pen that works in space when you can use a pencil, keep it simple and build a sandbox to play and learn, once it works scale fast.

We use a proven methodology of "Crawl, Walk, and Run" which works in guiding you and we help you facilitate the entire transformation process in your quest for change.

So evangelize the small wins, success motivates people, embraced them, cheer for them and keep hitting the short-term toll gates or targets, it will help solidify your culture and make people feel safe and motivated.

 Please don’t forget to reward those who help achieve the targets this is important, as they will exemplify your objective.

Step 7: Build on the Change

"Don’t count your chickens before they hatch"

If you shout victory too early it could provide the organization with a false sense of accomplishment.

Real change, especially in IoT Transformation, runs deep and it requires Kaizen = change for the better ( Preached and used many Japanese companies and part of W.Edwards Deming total quality management) or a Constant and Never Ending Improvement Mentality, you and I can always do just a little better, that is Kaizen, so quick wins are the beginning.

Leadership is key not only senior management; we all need to show leadership in order for change to take place.

IoT is complex vast and with no standards, you need to be prepared to change direction, again and again, openness and objectivity will help a great deal.

You will now be offering one service later you will develop more thus Culture will challenge Strategy over and over, think of inertia if you keep moving you are OK, you stop suddenly you fall, simple.

?Step 8: Anchor the Changes in Corporate Culture

To conclude Kotter's application in IoT projects, the change needs to cemented in the corporate culture, an investment needs to be made on people, if you invest in developing your people you invest in your company, not only do you empower people to do more, do better and feel better about themselves, this is leadership and when people feel safe and motivated they spread that passion, yes passion and well-being for others, and that in itself improves culture, this will solidify the Strategy decided by entire company.

Don't fall into silly counter arguments about developing and educating your people, "Oh what happens if we invest in people and they leave us?" well "What Happens if we don't and they stay? " That is the more compelling question!

If you give people the opportunity to develop and re-tool especially those whom can be at risk due to automation, you will end up with an extremely loyal employee base.

Loyal motivated people, who feel safe, do more, do better and feel better and the good feelings are passed onto customers, partners, suppliers a win-win for all, then the business grows a no brainer right? So do it!

Most large enterprises have a set of common values which depicts their culture yet often the values are just a plaque on the wall a few pay attention or live by them when people are invested and they are lead by example they become leaders themselves;

Magic happens and cultures thrive and change is embraced; however "Magic Takes Hard Work and a Bit of Luck"

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Thoughts ? Comments?