Introducing wild new ideas takes a bit of thought. If you want to get someone’s attention on a topic that appears to come in from left field, put it in a reasonable context.
Take, for example, Smart Connected Products (aka the Internet of Things, or just IoT) – a widely talked about mega-trend promising to overrun the world with acquisitive, connected, and chatty devices. Many are jumping on the bandwagon – the topic is getting lots of play in engineering labs, customer conversations, and the executive wing. We’re also seeing some maturation of thought – voices from different industries are laying out their own versions of a similar story. But don’t dismiss these vertical analyses as derivative – it’s important to put new ideas into context, and give your team a reason to devote some of their precious attention, by laying out the imperative – why should we care?
Top Line / Bottom Line
A good first step might be to clarify which end of the Income Statement has your focus – are we talking about Top Line or Bottom Line?
- Cost Savings and Operational Efficiency: For some organizations, IoT technology promises to drive efficiency along the entire Supply Chain. Cheap, everywhere monitoring can enable data-driven optimization of the plant floor, the distribution channel, even the end-user service arm of your business. You are a consumer of IoT technology; point-of-use tech is typically inexpensive, and your value comes from adding domain expertise to target the biggest areas of opportunity.
- Revenue Growth: Other businesses will create value by adding information to their products. In reality, they are changing the nature of their offering, from manufacturing and selling widgets to fulfilling a specific job for the customer. You are a creator of IoT technology – applying existing tools, but remixing into a new value proposition for end customers (and profitable top-line growth).
Getting focus on what you are trying to achieve does wonders – but don’t limit yourself to the “easy out” of cost savings. Sustainable revenue growth is the kind of value creation that ownership really needs – a great opportunity to move the needle.
This focus helps, but it may not be enough to sway the powers that be. Why should IoT be any different from the multitude of past data-based advancements (data acquisition, RFID, eCommerce, CRM, etc.)?
- Information as a Feature: In many industrial markets, incumbent vendors enjoy stable market share due to high switching costs; it’s just easier to stick with the established solution. That’s great for your baseline revenue, but growth into adjacent markets is very difficult. Information becomes a new, compelling feature that overcomes market inertia and high switching costs; value doesn’t come from the information directly, but from incremental share gain for core products.
- Information as a Strategic Weapon: The real promise of gathering lots of data is the application of Machine Learning to look for signals amidst the noise. The tools and techniques are quickly coming down to earth – it’s not rocket science anymore. And applied correctly, with the right amount of domain expertise to guide the models, organizations can develop actionable insights. Predictive Maintenance? How about Predictive Investments, in applied technologies, vertical niches, geographies …
Open your mind and think big – but when talking with the decision makers, make sure your “big ideas” connect with their understanding of the forces that make and move the markets you play in.
Making Change Happen
Big ideas are great – but the real magic is getting from idea to implementation. New ways of thinking will impact the people, process, and technology in your organization, and you need to work through these topics in that order. Change is typically met with a wary eye – especially when the incumbent thought feels things are well-established, and under control. The transformative change implied with information-enabled strategies for products and operations can appear daunting; start the journey with a clear vision of the Possible, in a context where teams can see their success.
Why should I care? Because it’s something we care about!
# 3 September, 2015