The Human Side of Industrial Cyber-Physical Transformation: Three Considerations and a Recommendation

There are many elements to the Internet of Things, and in a broader sense, cyber-physical transformation. It can be complicated. From sensors to security, communications choices to power sources, from governance to the curation of the data, and more, there are numerous complexities and interdependencies. The progression is towards increased interaction of these solutions. It used to be the connected thermostat. Even the thermostat has multiple interdependent elements. But today, we see a warehouse forklift as its own vast ecosystem of interacting connected solutions, which in turn interact with other handling systems. We are moving to a hyperconnected world. What seems like a futurist novel today is likely to feel like an old western movie tomorrow. But while the technology is moving fast, and the capabilities or sometimes mind-blowing, a key element is the human one.

It is also becoming apparent that one of the key impediments to progress is not the speed of technological advances; it is the ability of leadership to understand and embrace the importance of the opportunity the technology represents. Agriculture and construction are numbers one and two respectively in industries that invest the least in technology innovation. Yet, paradoxically, they may have among the most to gain.

The industrial world, like everyone else, is moving forward with cyber-physical transformation. The positive outcomes of getting this right are hard to overstate. Setting aside for just a moment the positive social aspects of leveraging such innovation, the essential competitive table stakes of operational savings and bottom-line results should be more than enough to compel leadership to lean into innovation. Reduction in energy costs, increases in worker safety, more productive working environments (including more productive workers), greater operational resiliency, and increased supply chain visibility and optimization are some of the benefits. So why is this not simply the highest priority? Why is this not an imperative that everyone gets right? There are a variety of answers but let’s look at three aspects about the human side of the equation.

One: Leadership does not fully comprehend how important it is to embrace cyber-physical transformation

In many industrial companies, large and small, there remains a “Why fix something that isn’t broken?” mentality. As a result, leadership can often be exceptional at “knowing their business” but less impressive at possessing the intellectual curiosity to understand innovation and associated opportunities. Of course, this is human nature, but it can be a dagger to the ongoing competitiveness of a given organization, now more than ever. That said, top leadership doesn’t need to write code or opine on various artificial intelligence techniques; they just need to know enough to value the opportunity. Then they need to surround themselves with people who can drive forward.

Two: The staffing and culture do not adequately adapt to the cyber-physical transformation

As an extension of the first concept, even if the top leaders embrace innovation, the underlying team may not. If you are someone who has been in a role for 23 years, living a comfortable life, and content with the work you do, then being challenged by the 27-year old industrial engineer whiz kid is not your dream scenario. The companies who are best at innovation understand the importance of making it a part of the culture. And while this truly starts at the stop, it can never end there.

Three: Getting it wrong early taints a willingness to take additional risks

Most industrial companies are somewhere along the trajectory of industrial innovation. A few are leaders, many fall in the middle, and unfortunately, many more are lagging. Many companies will likely have executed failed proof of concepts or prototype projects along the way. There may have been several people who suffered career setbacks because they were a part of something that seemed interesting then turned out bad. There are numerous examples of this. Again, human nature would suggest that experiencing these failure scenarios doesn’t exactly rally the troops for more of the same. This is probably more the norm than the exception at this stage.

Top-level talent recruiters in sports are known to pay careful attention to how a prospective player responds to adversity. When they make a catching error, fumble a football, or throw an interception, the focus shifts to what happens next. The recruiters are looking for how a prospective player responds to adversity. Corporations should pay close attention to this as well. The notion that “it’s OK to fail” is probably overused and largely inaccurate. However, the greater sin is allowing a given failure to create a negative ripple effect in its wake. One failed IoT project is far worse if it precipitates two more. It is most devastating if it makes a culture less willing to look forward and embrace technological innovation.

Very Basic Prescription: Understand, Reset, and Act

Executives in industrial companies, especially larger ones, need to prioritize understanding cyber-physical transformation and the associated innovation opportunity. Again, this does not mean they need to become experts or write code. However, it does mean they deliberately take some time to learn more. Perhaps a series of executive half-day workshops are held once a quarter. Maybe they engage a minimally invasive individual consulting program to increase executive-level understanding of the technology and relevant industry innovation.

The second element worth considering is to analyze what IoT/Cyber-Physical initiatives have been engaged in in the past or are in motion now. The analysis should review what has worked well and what could have been better. It should pay particular attention to the teams involved, the executive sponsors, the results, and the responses to the outcome. There should also be an analysis of the state and direction of relevant innovation in the industry, emphasizing technology innovation in use by their closest competitors. Last, this analysis should look forward at specific technology trends and existential forces in the company’s market to determine those technologies and innovations that will likely increase in importance and how to leverage these better.

Last, companies should take this analysis and bake it into their forward execution plans, starting with their executives. Looking backward is only helpful to the extent you can understand and learn going forwards. If one looks at the industrial companies with the most positive outlook, they consistently embrace technology, including cyber-physical systems. They accept that the migration to a hyperconnected society will not stop. They recognize the value of innovation. They actively and deliberately make innovation a part of the culture, starting with the executives. And they act.

Read the first part of this discussion here.

Don DeLoach

Don DeLoach is an entrepreneur, author, board member, and a leading industry evangelist for the Internet of Things. He is Co-founder and Managing Partner of Rocket Wagon Venture Studios, creating innovative startups for the cyber-physical world. He co-founded the Midwest IoT Council, where he served as co-chair from 2015 – 2020. Don is a serial entrepreneur, serving as CEO for three companies, Youcentric, Aleri, and Infobright, spanning the last 20 years. He serves or has served as an outside director or advisor for multiple companies. He also serves on the executive committee of the Array of Things (US DOE smart cities project), the Illinois Autonomous Vehicle Association, and as a director on the Juvenile Protective Association. He is the principal driver of the "First Receiver" IoT architectural thesis addressed in his book "The Future of IoT", which he co-authored with Gartner analyst Emil Berthelsen and Hitachi/Pentaho executive Wael Elrifai, which was published in June of 2017. He is an Industrial Engineering graduate of Ga. Tech.

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