Industrial Culture Change in Digital Transformation

Why Industrial Culture Change Is the Most Challenging Aspect of Digital Transformation for Industry, Infrastructure, and Smart Cities

Because there is so much emphasis today on how to harness disruptive technology, digital transformation discussions often follow a natural progression. They take on a technology-centric flavor, with end users often wading through quite complex information about topics like data management architectures, human-machine interactions, algorithms, and models. Considering the most pervasive impact of digital transformation is the industrial culture change it effects, where do people fit into the equation? That topic is often not given its due, usually as a result of just how difficult industrial culture change can be. 

Impact on People Is Recognized

It would be an overstatement to indicate that organizations engaged in digital transformation dismiss the human element. Far from it. In fact, it’s often identified as the most difficult component of digital transformation by those planning or going through it. Sighs and weary shakes of the head are common when industrial culture change is raised. Galvanizing the organization often seems to them to be a case of Sisyphus and the boulder. Many times, those most in need of the innovation brought on by a change in culture must also figure out how to drive it, a phenomenon akin to building the airplane while flying it.

It’s not just technology end users. Solution providers, too, will nod their heads when industrial culture change is raised or discussed. They’ll likely land on the importance of first identifying the problem being solved, following with what needs to change, and then getting to the technology for doing so (theirs, hopefully). Sighs and weary heads shakes will abound. It’s still Sisyphus on the hill, but the boulder appears to them to be market education and speed of adoption.

In fact, in most conversations I’ve had with end users and vendors, the impact on people drives use case development and technology discussions. After all, those engaged in these initiatives are typically trying to manage some aspect of operations or processes that have direct impact on humans. They desire to improve customer satisfaction, enhance product quality for consumers, reduce safety incidents, implement best practices, eliminate rework, and more.

Identifying and Sustaining Industrial Culture Change

However, industrial culture change is something fundamentally different than technology modernization. It’s much more than defining a business case. Viewed through the lens of digital transformation, it is likely to continuously drive change across the board—core competencies, knowledge and expertise, profitability models, product and service creation, hiring practices, teams and organizational design, customer engagement, etc. As outlined in the image of Herman's iceberg model of workplace dynamics, changing how we really get things done is a profound endeavor that is much larger than what appears visible to the organization.  

Take, for example, rethinking how human expertise is identified, captured, communicated, and applied in a digital economy. Vast amounts of knowledge lie trapped in sources that are often tightly siloed, collected but rarely ever used, or not part of an “active” knowledge base.

Yet, fast and accurate delivery of contextual expertise will determine the level of value an organization can deliver to customers. That value will separate competitors, whether for product quality assurance, asset reliability, or personalized customer experience.   For an organization to remain competitive in a digital economy, how expertise is managed and the role it plays will need to undergo culture change, perhaps supported by technology.

Join Me in Conversations About Industrial Culture Change

With that reality in mind, organizations need to apply as much, if not more, operating discipline to industrial culture change as they do technology improvement. Decisions that drive industrial culture change (and lead to technology adoption) will be more strategic than business case development, such as:

• How can people and skills be organized to react to unexpected market change?
• What are sustainable strategies for knowledge management when skill requirements are quickly evolving?
• How will the organization need to evolve to support closer collaboration with customers?

During my Tuesday and Wednesday sessions at next week's 22nd annual ARC Industry Forum in Orlando, FL, I’ll be tackling some of the people-oriented issues that come with digital transformation. I welcome your participation, as we are going to hear from some organizations that are on the front lines of industrial culture change. Hear about their challenges and successes as they grapple with how to prepare and organize people for digital transformation.