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Looking in the Mirror: Reflecting on 7 Business Trends Uncovered by Automation Alley’s Industry 4.0 Assessment

By Eric Davis | Automation Alley | 11/14/2018
 

Two years ago, Automation Alley launched its Industry 4.0 Assessment initiative in an effort to help companies with corporate strategy and direction during their digital transformations. In that time, we’ve uncovered some insightful trends from the Michigan tech and manufacturing companies we’ve assessed. During our assessments, we ask pointed questions and present back to the company what we’ve uncovered. In essence, our assessment holds up a mirror to the company. As one company put it, we clean and polish the mirror, so they see their true self. These are the seven most common reflections:  

1. A blurred mission and vision.

Imagine packing the car for a trip Up North with your friends. Up North can mean different things to different people. The consequences are someone may have packed to go camping in the Upper Peninsula, while others packed their bags for a condo in Traverse City. For the companies we assessed, they made strategic decisions that took the company in different directions because there was no shared vision or mission on where the company was going to be in the near or distant future. Individually, team members could see the destination, but as a team, the final location wasn’t uniform. And when technology entered the picture, they couldn’t agree on which technology would help get them there fastest.

2. A culture of learning wasn’t established.

At Automation Alley, failure is accepted, so long as a lesson is learned, the downside is low risk, and upside is high value.  For those we assessed, employees didn’t have autonomy in the work they perform, so they stayed in their lane. The company was unable to adapt to rapid technological change and failed to recognize what may have already been discovered by their competitors.

3. No defined organizational structure.

For example, we assessed a 50-person company in which all issues were directly reported to the CEO. For a moment, imagine sitting in science class and watching the teacher turn a pop bottle upside-down over a sink. Air bubbles get caught coming in, and the liquid flows out of the small opening inefficiently. This company’s leadership team needed to empower their staff and delegate authority to remove the CEO as the issue bottleneck. Once work begins to flow more smoothly, companies can focus on Industry 4.0 initiatives without them becoming distractions to the day-to-day.

4. Misalignment and a fuzzy definition of goals.

Leadership and employees either had vague goals e.g. “Increase revenue”; no shared set of goals; and/or the timeline of goals were out of sync. For example, an annual goal for some was a 90-day goal for others. This had negative effects on the company, including poor workplace satisfaction, and stifled workflow due to a mismatch in priorities. If some team members view implementing an ERP system as a 90-day goal and other team members view it as an annual goal, the company is doomed to eventually fail to adapt in the world of Industry 4.0.

5. A lack of defined systems of work.

When we talk about systems of work, we ask ourselves: from the moment a customer becomes aware of a company to the moment they pay for a finished product, what does that process look like internally? Some companies we assessed missed the mark in marketing, sales, operations, and/or finance. As a result, a poor process in one area had a domino effect in another. For example, some companies admitted to a poorly designed sales process and sloppy handoff to operations. Operations was then scrambling to deliver to the customer, which lead to increased operating costs, and even worse, a lower brand reputation. When technology was added to a clunky process, the problems and miscommunication were amplified.

6. Companies did not capture key leading metrics.

A scorecard that captures activities related to marketing, sales, operations, and finance help audit and improve the systems of work. Companies either didn’t capture important metrics at all, or they didn’t record activities related to productivity. For the latter, let’s use an example of examining profit margins. While important to know, it doesn’t give insight on how that company became profitable. Profitability is a result of the company’s actions, not the action itself. Ultimately, companies couldn’t pinpoint which function of the business needed to be fixed with either an improvement in process or an integration with an Industry 4.0 technology.

7. Disagreement among the leadership team about the impact of Industry 4.0.

For example, a construction company had a lively debate about the impact of 3D printing on the business. Some viewed the threat as imminent, others as long-term, and others as not a threat at all. The goal of assessment was to bring awareness to the team on how everyone views the importance of these issues to spark that discussion. Otherwise, these conversations would’ve continued to happen in silos.

Industry 4.0 will impact all industries and all types of work. These new technologies can be the fuel that propels a company to new heights. Our job is to help executives realize when they’re pouring rocket fuel into a jet engine, and get their company back off the ground.

Is your company eligible for Automation Alley’s Industry 4.0 Assessment? Fill out this form to see if you qualify ($3,500 value).

Eric Davis is Automation Alley’s technology investment analyst. In this role, he is responsible for providing in-depth analysis and insight on participants in the organization’s successful entrepreneurship program, the Automation Alley 7Cs™, where he is also assistant facilitator of the icube™ methodology and the Growth Readiness Assessment, giving companies the framework for growth. Eric also oversees activities related to Michigan Economic Development Corporation’s Business Accelerator Fund, and manages the investment process for Automation Alley’s pre-seed fund. Eric has an extensive background in performing due diligence on both public and privately-held companies.

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