Last week I got to attend the Global Tech Advocates World Tour conference in London. It was a great event with a wide range of speakers from a variety of backgrounds, and a fantastic venue in Here London at the Olympic Park in Stratford.
From the discussion and presentations one thing that struck me in particular is the potential to use digital technologies to modernise ‘traditional’ industries like manufacturing.
As you might expect, there was a great deal of conversation focused on growth and opportunity in emerging sectors like fintech and medtech. Both these sectors and others are important to the economy, offer a great deal of potential for innovation and are supporting burgeoning start-up communities. Yet the attention they attract means it can be easy to overlook the potential for growth in established firms and industries – through incremental innovation or radical change.
Another conspicuous theme of the conference was uncertainty in the economy and society emerging from the Brexit decision and the political climate in the US – to name two of the most conspicuous factors discussed.
But, change and disruption can also bring opportunity for businesses willing to adapt. According to research by the World Bank, global growth is firming up. Growth forecasts are projected to strengthen to 2.7 percent in 2017 and 2.9 percent in 2018-19, and in emerging markets improve to 4.1 percent in 2017 and reach an average of 4.6 percent in 2018-19. For core manufacturing and trade industries this indicates potential for growth.
For established firms and industries, grasping the growth opportunity also means developing a capacity to adapt. This is especially important when growth involves adopting a new technology, or collaborating with new partners. According to IBM (my employer), 63 percent of executives in industrial products manufacturers say the competition from new and unexpected sources is beginning to impact their businesses, and 57 percent indicate that the boundaries between their industry and others are blurring. These are patterns I see occurring in other industries too. The key to dealing with them successfully is alignment: in strategy, operations, culture and management style. All four contexts are crucial for the firm to evolve and when the goal is innovation, change must be managed across all of them simultaneously.
The most crucial area – and the one that most commonly gets overlooked – is culture. Adapting or scaling a culture is arguably the hardest challenge for a business striving to grow or innovate. When the culture is not being actively managed and the workforce isn’t sufficiently engaged, then efforts to grow can rapidly unravel, regardless of how robust the strategy or operations plans might be.
Cognitive computing (AI), Virtual and Augmented reality, Blockchain, Cloud and numerous others all offer massive opportunities for traditional industries and established firms to disrupt themselves and harness their scale to great effect. But at the heart of a successful transformation is the coherency of the brand and the culture.