Siemens Successful Digital Transformation (Part 2 ) – 13 – by Space Dreamer M.Temel Aygun

The following cases give you a deeper insight into how we applied aspects of our Integrated Change Management approach aligned with its three imperatives.

INSTITUTE AN INTEGRATED APPROACH TO CHANGE MANAGEMENT

CASE

A large industrial goods conglomerate developed and unveiled a digital transformation plan to its employees. However, post announcement, the company ran into several roadblocks during implementation. Operational staff were either confused or did not fully believe in the vision, some departments started making changes in silos without considering the effects across the organization, talent was not available to fill in new roles, and approvals from labor unions were hard to come by, to name just a few challenges. This led to major implementation delays, leading in turn to higher investment costs with later realization of benefits, thus significantly reducing the expected return on investment. In short, the conglomerate did not sufficiently consider the “people” side of the undertaking.

IF YOU LEAD PEOPLE IN THE  FIRST PLACE, YOU DO NOT HAVE TO MANAGE PROBLEMS LATER

In its next wave of digital transformation, the conglomerate took a different approach. It learned from its earlier experience and met transformation expectations.

WHAT IT DID DIFFERENTLY WAS

  1. Establish a cross-functional Executive Action Team (EAT) composed of business/product leaders, key influencers and company role models including both leaders and key operational staff. This team was involved from concept development to implementation, which ensured
    1. Buy-in from operational staff  
    1. Effective integration across functions/department 
    1. Deeper involvement of company leadership throughout
  2. Consider Change Management right from the start of the transformation beginning with concept development. It was an integral part of all the business and technology considerations, resulting in 
    1. Transparency on all operational constraints for technology, process and people 
    1. Clarity on the impact across technology, process and people. Hence, leadership was better prepared with analyses to answer queries from operational staff 
    1. Concept phase deliverables for not just technology and process, but also for  people – with transparency on future roles and a roadmap for development, resulting  in less anxiety at the operational level

LIVE AN AGILE CHANGE MANAGEMENT APPROACH

CASE

A cement manufacturer drove major digitalization initiatives across its organization with significant investments. One such initiative included partially automating operations by using sensors, data analytics applications and remote commands managed in the cloud. These initiatives would result in changing the roles of existing operators from manually controlling cement manufacturing to primarily performance monitoring and maintenance.

However, during a 2-day pilot phase workshop in one of the factories to communicate the complete digital vision and concept, the limitations of cloud-based operations became prominent due to volume of data, available bandwidth and required latency.

The change team was comprised of personnel with a good blend of experience in manufacturing, technology and business, so it quickly comprehended the situation and extended the workshop to a third day to develop alternative solutions with factory personnel. Also, they included new participants from the innovation department and technology suppliers, who attended via video conferencing. The management accepted the change of plans since they were already trained in making agile responses to new circumstances by continuously prioritizing new demands instead of adhering to classic business KPIs. As an outcome, edge-based solutions were developed by the workshop participants which could be easily implemented and were more effective. The change team also made necessary adjustments in the overall concept to include this alternative.

“Agility in adapting to  new circumstances in new situations beats rigid plans.  It is not the strongest who survives, but the one who adapts the fastest to new environments.” according to Charles Darwin

KEY SUCCESSFUL PRACTICES BY THE  CHANGE TEAM IN THIS CASE WERE

  1. Adapted digital roadmap based  on technology changes by 
    1. Having a flexible concept in the first place  and a process to update 
    1. Updating concept based on new information
  2. Adapted the change measures  immediately when needed by 
    1. Prolonging the workshop by an additional day given the new developments 
    1. Identifying and adding right participants and using digital technology to participate, since travel was not possible on such short notice 
    1. Accepting a way of measuring success outside of business KPIs that focus on scope, costs and delivery time, and also considering agile ones that measure the flexibility of the development process
  3. Adapted technology design plans  immediately based on feedback by 
    1. Changing cloud-based operations to  edge applications

The above practices demonstrate the agile approach to Change Management. An agile approach corresponds to developing flexible strategies and plans, and continuously adapting them while already implementing them. This contrasts with a traditional approach that would involve setting fixed goals, detailed upfront planning and rigorous implementation towards a fixed target state.

The evolving nature of digital transformations renders classic Change Management approaches ineffective. The change in digital transformations follows an iterative journey.

TRANSFORMATION CHARACTERISTICS

Fixed target state : Clearly outlined target state  such as in a carve-out, merger, restructuring, etc. with planned and certain milestones

Top-down push of vision : Vision defined by senior leadership with negligible awareness or participation  from operational staff

One-time change effort : Change effort along  pre-defined predictable  one-way journey towards  target state

Evolving target state : Changing technologies, processes, business models  and roles lead to a continuously evolving target state

Enterprise-wide impact : Changes in technologies, processes, business models  and roles have an effect  across multiple functions

Continuous change effort : Continuous adaptation required due to changing technologies, processes, business models  and roles

ADAPT CLASSIC CHANGE MANAGEMENT LEVERS TO THE CONTEXT OF DIGITALIZATION

The following three cases illustrate potential adaptations to the set of classic change levers based on real events. Each case is a unique event  and shows how responsible change  leaders react differently but effectively using the adapted levers.

CASE

Several attempts by a leading European utilities provider to launch software products failed. Coming from an electrical hardware manufacturing world where 100% quality is a must-have prior to release, taking a more future-proof 80/20 approach to launching digital products was not in the organization’s DNA.

In an innovative initiative headed by the Chief Digital Officer (CDO), a new unit was created with a different branding and location to separate a group of willing, open-minded venture and software developers from the traditional organization. The venture developers were a blend of juniors (~five years of work experience) and experienced professionals.

Selected software developers from this unit were also sent to a different location for training by external partners. The training mode was agile, in which a developer and a trainer sat side-by-side in front of a computer for live coaching on software development. Although there was feedback on the relative performance of the developers, the CDO backed all of them strongly during the training.

Post training, the developers came back with new approaches to training and scaled up their knowledge across the entire unit. For example, the sales reps were trained differently in a 2-day workshop, where the reps were given demonstrations by software developers, followed by the reps providing live demonstrations to potential customers. The entire training process was recorded and served as further guidance for improvement for the reps.

Some of the software developers were also given additional administrative roles in the unit. Within 12 weeks of program launch, the new software-based service was launched successfully – a first for the “traditional” utility company.

See you in next blog with the following topics :

  • Empower people to makequick decisions
  • Coaches multiply your chances of success

28.06.2020

Kadıköy, İstanbul – TURKEY

Author : M. Temel AYGÜN, Ph. D. in Aerospace Eng.https://www.linkedin.com/in/mehmet-temel-aygun-1066a514/

Copyright belongs to author.

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