Reinventing traditional industries
New realms and areas of innovation can be daunting for individuals and organizations alike. Navigating through the maze of prospects and opportunities, and then recognizing the viable ones to pounce and build on, makes the Industrial Internet of Things a jungle of locks for the shrewdest of locksmiths to take on. Anja Hoffmann, the Founder of Copenhagen based strategy and innovation consultancy company Sentio Lab, is convinced that industries are full of such locksmiths, however, she holds that too often those clutching the keys don’t have a clear mindset as to what locks they ought to open. For Hoffmann, companies across industries must first focus on themselves, before venturing to capitalize – and make sense of – the countless opportunities made possible by new data and technology.
“As increasingly many industries are becoming tech-driven, I always start by looking at the mindset of the company looking to shift their focus to technology, regardless of their industry,” says Hoffmann, who also works as an Innovation Mentor for High-Tech Companies at Scion DTU. “In general, I think we have a lack of mindset across industries when it comes to understanding both the opportunities, and challenges in developing business models using new technologies,” she continues.
Hoffmann’s call for a more measured approach is far from baseless. She has been working closely with a wide range of industries for several years, thus gaining a unique vantage point. For her, more “traditional” industries often struggle to reinvent their approaches internally, especially when it comes to customer relations. However, there are exceptions.
“The pulp and paper industry, which I’ve been working with for some years, is an interesting example of a sort of hybrid between tradition and innovation. When it comes to the production process they remain very traditional and even historical, but because many of their customers are creative and innovative, they have been forced to think about new ways for longer than for instance the steel industry.”
In the case of the pulp and paper industry, mindsets have thus been revised by partners and other actors within an ecosystem, something Hoffmann feels very strongly about. For her, ecosystems and value chains represent one and the same thing.
“Companies need to look into their ecosystem, meaning their partners and so on, and ask themselves: what kind of an ecosystem will match our business ambitions in the future? Ecosystems are so important not only in regards to discovering and integrating new technology, but innovation in general. If you consider some of the companies who have asked questions, and succeeded in answering them, they are companies which have recognized that they are more of a service company than a manufacturing company.”
“Companies need to look into their ecosystem, meaning their partners and so on, and ask themselves: what kind of an ecosystem will match our business ambitions in the future?”
Reconciling tradition and innovation
Finding a balance between the two is easier said than done. According to Hoffmann, there should nonetheless be no reason why more “traditional” companies and industries wouldn’t be able to successfully implement a tech-driven agenda, and thrive from what the Industrial Internet promises. She mentions German elevator manufacturer ThyssenKrupp as a great example of a manufacturing company looking beyond its own industry, and desiring to be part of something what would traditionally fall outside the operating parameters of an elevator manufacturer.
“Although ThyssenKrupp manufacture what is essentially a technical product, their latest Industrial Internet developments have not been oriented for a traditional elevator business, but instead more for a service business. Because they have built an intelligent ecosystem around their solutions, ThyssenKrupp are transforming not only elevators, but elevator services to be a part of a smart-city movement.”
Living in the present, preparing for the future
Considering the popularity of the phrase “we live in a constantly changing world,” and other variations of it, Hoffmann reminds us that while this certainly remains the case, it’s vital to focus on the here and now.
“If companies pursue interesting and innovative partnerships across corporate investors and start-ups, they can minimize how much they change at once. Sometimes we focus too much on the fact that we live in a fast-paced business world, which is of course true, but we also need to do remember to experiment in the present, especially with already existing businesses. In order to do this, companies must assess how they can change their own DNA by looking into their value chain or ecosystem.”
When it comes to introspection into ecosystems, the role of the Industrial Internet can’t be understated. One prevailing innovation concerning manufacturing companies has been the increasing integration of co-bots – or “collaborative robots” – into joint working environments with humans.
Not too long ago, robots being used in the automotive industry for example, were kept in cages. Since then, co-bots have emerged and are forcing manufactures to rethink the structure and processes of their value chains. According to Hoffmann, this brings the need to question the necessity and future value of certain skills within the entire Industrial Internet landscape.
“When it comes to co-bots, what will be a challenge in the near future not only for the manufacturing industry, but also for the retail industry, is the demand for new skills from workers. The Industrial Internet is affecting business models as well as society, without forgetting the potential drawback of information overload and issues of security.”
Thus, the impact of co-bots should be assessed from a workforce and societal perspective. Co-bot technology will undoubtedly assist in driving profits and quality via reduced margins of error and sustained performance capabilities, however, as Hoffmann notes, companies “will no longer need programmers with specific technical skills to work with these robots.”
Despite new workforce demands and implementation possibilities in terms of what the Industrial Internet offers – and as long as leaders acknowledge the challenges and opportunities, without “just pushing a certain agenda forward,” – Hoffmann is certain that companies across industries will prosper from IIoT solutions on many fronts.
Anja Hoffmann is the Founder of Copenhagen-based strategy and innovation consultancy company Sentio Lab.
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