The message in mixed metaphors
"Two sides of the same coin" and "Six or one-half dozen" are similar.
So are the challenges facing the leadership of industrial manufacturing companies.
These companies are typically very linear - in operations, R&D and business development. Often the "radical innovations" are simply incremental improvements in long standing market accepted solutions.
That's not bad - many great, profitable businesses have been built that way. And over the years the objects being manufactured have changed (typewriters to computers for instance) but the nature of manufacturing has remained the same. Companies bring raw materials and components in one end of the building and ship finished goods out the other - handing them off to distribution.
Similarly the business development (digital marketing and B2B sales) piece of the business has remained pretty staid.
Both are likely to be fundamentally disrupted.
Traditional manufacturing faces trends including:
- 3D printing
- Internet of Things (IoT)
- Sharing economy
- Batches of One
All have the potential to eliminate and create new business models.
One the business development side trends include:
- Changing buyer behaviors
- Ubiquity of the internet
- Globalization
- Role of referrals, influencers and reviews
- Changing economics that disrupt traditional justifications
So both general corporate AND revenue growth strategies are facing acute disruption. And industrial manufacturing companies are hesitant to address either.
Digital marketing - easier of the two
This is the easier place to start - because it feels like a tweak of an ancillary function.
The deeper you dive, the more you realize that your company's digital footprint and understanding of buying habits is actually integral to nearly every aspect of your operation. But that comes later.
You know you buy differently today than ten years ago - and so do your buyers.
Generally revenue is harder to predict, leads are harder to generate and sales teams have a harder time explaining quite what's happening in the market. Additionally sell cycles are less predictable, margins are compressed and buyers often don't give you the chance to discuss their requirements - asking instead for you to submit a quote.
If you experience these issues, there's a solution, but it will disrupt your traditional sales & marketing model. The good news is that if you take the step you'll actually create a manageable pipeline.
General strategy and management consulting
This is harder for many SMB owners because it gets uncomfortably close to the core business model. Traditional manufacturers are accustomed to inventing as their interests and aptitudes lead them. Then buying materials and components, combining them into products, and selling those to people who understand the inherent value to their businesses and products.
What happens when any company can simply invent and print precisely what they need - when they need it? What's the role for industrial manufacturers who have built businesses on creating components, sub assemblies, automation and other products that feed the traditional manufacturing environment?
It really is, potentially, an existential challenge to many manufacturing companies. And that's uncomfortable and overwhelming to envision and prepare for.
Or what about the impact of IoT? When the value your company adds to the ecosystem is no longer primarily about the physical product, but rather about the data it collects and interacts with, your whole business model is disrupted.
Are these changes happening in 2016? In some industries, yes. In many, no.
Will they happen? Many industries will assert that they are somehow immune - and a few may be. But most are not, just as nearly 4/5 of the 47% of Americans whose jobs will be lost to automation and technology insist that the trend is real, but their jobs aren't in jeopardy.
Prudent companies are at least watching changes. Proactive companies are experimenting and planning. But most need outside perspective and bandwidth to drive this internal disruption.
Trolling for insight and indicators
But how does a busy manager who's buried in email, fighting personnel fires, keeping the bank satisfied and trying to be a reasonably engaged parent and spouse supposed to manage to find the nuggets of valuable data to help guide their proactive disruption?
Start with a great article in the November 2014 Harvard Business Review "Managing Yourself: Where to Look for Insight." The authors identify seven "insight channels" where managers in any role can "focus imagination, organize thinking, spur creativity, and find valuable ideas for growth." The seven include:
- Anomalies - where are things diverging from what you would expect? Is it just a blip or something more?
- Confluence - intersecting trends create fresh conditions
- Frustrations - what could be & should be simpler, faster, cheaper?
- Orthodoxies - the quicksand of "it's always been done this way"
- Extremities - what prospects, customers, employees, competitors, vendors or partners are seemingly way out on the edge? Are they nuts or foresightful?
- Voyages - escape your orbit and dive into others. Learn a customer's strategy and model for instance
- Analogies - applicable ideas that haven't made the leap into your industry yet
Of these I find particular value in confluence, orthodoxies and voyages. Confluence and voyages require the ability to open ones mind. Orthodoxies are tougher because not only must the mind be opened, but the head trash must be dumped first.
Make it habit
This won't feel natural. In fact it will likely feel exhausting and distracting. But kind of like "one more cookie won't make a difference" the "we just need to get through this rough patch then we'll get to that" is a slippery slope.
The best approach is to change the questions you ask. For instance, instead of asking which competitor is closest to copying your XYZ gadget, ask which may be most likely to evolve their business model to a product/service model. Or instead of asking what end users are requesting today, ask what they would be asking if they could see ten years into the future.
Obviously you'll be wrong. Often. This isn't an approach that's suitable for bet the company decisions in most cases. That's not the goal. You want to be aware of changes and trends happening around you so you can simultaneously avoid being surprised and find opportunities to leverage insights.
That's not a quarterly or annual task - that's an every day (or at least weekly) requirement.
Maybe an outside perspective and mutual accountability would help? If so, let's chat to explore whether there's a potential fit.
