Digital transformation for materials testing manufacturers: 5 mindset shifts to spark success
Digital transformation in the industrial sector is not purely a matter of swapping out on-premise servers for the cloud. It’s not just about replacing analog processes with digital technologies. And it’s not about launching a single product or technology that will transform an organization.
In fact, digital transformation at an ITW Test and Measurement company is as much about culture as it is about tech. It’s as much about the mindsets with which employees and leaders approach their work as it is about the products they sell.
For the last 20 years, we’ve been working side by side with Dickson as their team transformed the company from a powerhouse of analog environmental monitoring to a leader of Industry 4.0. One reason Dickson’s digital transformation strategy has been and continues to be a success is that the entire team has embraced these five mindset shifts that let it innovate on an ongoing basis:
Embrace data and analytics.
Prioritize customer needs.
Be willing to collaborate.
Strive for continuous improvement.
Read on for a closer look at each of these mindset shifts, a glimpse into how they manifest at Dickson, and a look at how you might embrace them for similar results.
1. Embrace data and analytics
For digital native companies, data and analytics are often core to the operation: decision-making is fueled by data, leaders from every department lean on insights from business intelligence platforms, and everyone is working toward optimization.
For 85-year-old manufacturing companies, though, the digital transformation journey is an enormous undertaking. These companies were founded before desktop computers (never mind smartphones). It’s hard work to transition their core operations to modern technology.
One struggle many organizations like ITW Test and Measurement companies share is finding ways not just to collect data and analytics but to use those metrics to power decision-making at every level on an ongoing basis.
Let’s take a look at how Dickson embraced a data-driven mindset as part of its digital transformation and how you can do the same.
How Dickson embraces data and analytics
In the early days of our engagement, Dickson’s sales team wanted more insight into how people used the company’s brand-new website: what were they clicking, how long were they staying on pages, etc. Today, we take for granted that websites can and do collect those kinds of metrics––and that organizations will use them to power business decisions. Not so back then.
We worked with the sales team to understand the behavior of website visitors and used that to track which campaigns were successful. We tied orders that came in to both web activity and legacy catalog campaigns.
Crucially, we helped the Dickson team interpret this data and understand how to use it as a source of business intelligence to fuel decision making–– like when to ease off catalogs and ramp up their web presence.
Over time, as the use of data and analytics became more universal, we recognized that these metrics were not just back-end utilities that could power Dickson’s own decision making; they were also potential features we could incorporate into the products Dickson sold to customers.
One big data opportunity might be unifying data that lives in various silos from around the organization and from other divisions of the organization. Another might be finding ways for equipment to track use and performance in real time (e.g., via cloud-connected sensors), feed that data to software, and translate it to recommendations for customers (e.g., when to recalibrate, when to contact your company about servicing, how to forecast new equipment purchases, etc.).
Data and analytics takeaways
Ask everyone on your team what they need to do their job better.
Translate needs to metrics.
Build a data-to-insights toolset.
Empower decision makers with access to insights.
Make decisions based on data-driven insights.
Of course, this is all easier said than done. If you’re not sure how to, say, translate your team’s needs to specific metrics, consider working with an innovation consultant who has done this work before and can help you navigate the data analytics process.
2. Embrace change
One reason Dickson’s digital transformation has been successful in the last two decades is that the company has enthusiastically embraced change.
The classic fable about the oak and the reed helps explain why agile companies are better suited to survive periods of disruption: when the “winds of change” blow, large, rigid organizations are likely to blow over (or be seriously damaged), whereas flexible organizations (like reeds) bend in the wind but do not break.
So how can large, ITW Test and Measurement companies become more “reed-like” so they’re positioned to seize new opportunities? Let’s take a look at Dickson’s experience.
How Dickson embraces change
The Dickson of today is a very different organization than it was 20 years ago when we started working together. But it’s important to recognize that the company’s transformation has been gradual and ongoing––and those two things are key to its success.
Dickson’s team didn’t update one product and decide they were “done” with modernization. They recognized that their industry was entering an era of ongoing disruptions and that, if they wanted to be able to stay competitive and meet customers’ needs, they’d have to explore new ways of doing things.
Also important is that they started small, with the goal of solving a straightforward problem: understand what people were doing on their website.
That first change gave them access to a world of data and analytics that they then used to power ongoing changes and updates.
But not all ideas came from the data. Salespeople were consistently vocal about customer feedback, making product suggestions to integrated, cross-functional teams within the larger organization that included folks from TXI.
You can enjoy similar results by following employees’ curiosity and by asking for customer feedback about your products. Employees and customers who work with different facets of your products every day are often best positioned to identify pain points that can be corrected and opportunities to make things better.
Takeaways for embracing change
Start small. Ongoing incremental changes are easier on people and organizations than drastic changes; a ubiquitous culture of accepting change can also greatly reduce the need for dramatic change.
Stay attuned to new technologies. We all have that relative who resisted getting a smartphone and then was stranded at the airport and unable to call an Uber. New technology may seem like a luxury until suddenly it isn’t––it’s a necessary foundation for seizing new opportunities.
Listen to new ideas. Even if you don’t yet use artificial intelligence (AI) or machine learning (ML), your customers no doubt have heard of these things. Your sales team may be fielding questions about them. The industrial firms that win in industry 4.0 will be those that see these questions as a jumping-off point to learn more.
Try new approaches. Not every experiment will work, but an organization set up to continuously experiment, learn, and move forward will constantly be learning things that can lead to improvement.
Embrace experimentation. This applies to every part of the business: products, technology, pricing, business models, customer care, and beyond. Embracing change means practicing it constantly so that you don’t grow too large and rigid to adapt when conditions shift.
3. Focus on customer needs
Customer experience is a contemporary buzzword for something ITW has cared about forever. And that’s incredibly savvy: between 2007 and 2019, public companies with the best customer experience performed 307 percent better than CX laggards.
But in an era of evolving expectations, meeting customers’ needs is about more than slapping a few sensors on your hardness testers and precision cutters. Let’s take a look at how Dickson has consistently focused on customer needs and how you can create new value streams by doing the same.
How Dickson focuses on customer needs
Industrial companies may sell mostly to businesses, but it’s still individual people who use, interact with, and depend on their products.
Before wifi connectivity and digital solutions were the norm, for example, it was standard practice for medical employees to manually check temperatures on medication refrigeration units. There was nothing “wrong” with that system. But as customers grew accustomed to real-time data in other parts of their life (say, to track the location of a pair of shoes they ordered online), the Dickson team recognized that they’d expect the same level of visibility into loggers and chart recorders.
Reimagining its analog products to include digital sensors with wifi connectivity and data visualizations empowered Dickson to meet a much more pressing customer need: peace of mind.
Now, a lab director can get a temperature change notification while they’re watching TV at night and take immediate action to investigate and address the cause. This makes it much easier to not only protect the valuable components of an organization but also relax and enjoy life with the knowledge that, if something goes wrong, you’ll know right away.
That’s what it means to cater to customer experience.
We might start by asking customers about their day-to-day work to identify places where they experience frustration. From there, we’d explore ways to alleviate that frustration, including via product updates.
Takeaways for focusing on customer needs
Ask for customer feedback regularly.
Be proactive about customer experience; don’t wait for “problems.”
Recognize that customer experiences with consumer products affect expectations for using ITW Test and Measurement company products.
Remember that business buyers and users are also individual people.
Understand that listening to and acting on customer feedback will lead to deep, abiding customer trust.
4. Be willing to collaborate
One of the main principles underlying product innovation is that collective wisdom is more powerful than any “lone genius.” Practically, this means that organizations that want to innovate consistently and for the long term must find ways for stakeholders from various disciplines to work together.
In many traditional industrial organizations, such cross-functional collaboration is difficult because of operational silos and even incentive structures that effectively pit departments against each other.
But breaking down silos, integrating internal teams internally, and collaborating with external partners is worth doing: when experts embrace a collaborative ecosystem of teams, they earn more revenue and drive higher customer loyalty.
As companies embark on a digital transformation journey, they can benefit from partnerships with firms that can help them set strategies and prioritize projects. Let’s take a look at how Dickson’s collaboration with TXI has powered two decades of digital transformation and how similar collaboration might benefit companies like yours
How Dickson powers digital transformation with collaboration
From the earliest days of TXI’s collaboration with Dickson, the teams have brought different knowledge to the engagement.
Dickson’s team has deep customer knowledge: buyer and user personas, use cases, pain points, etc. TXI’s team understands how to innovate and how to build digital products. Together, through 20 years of collaboration, these areas of expertise have informed the products Dickson has developed.
More than that, though, the commitment to collaboration has positioned Dickson for collaboration more broadly. For example, the company recently merged with a French competitor to help it deliver environmental monitoring services to the European market. Having a culture of collaboration can facilitate M&A-powered growth and reduce the time to value for customers.
ITW Test and Measurement companies are in a similar position to Dickson: the company recognizes the value of innovation and the potential for innovative approaches to developing materials testing equipment. Working with a partner who understands innovation and your understanding of materials testing would lead to developments that add new value and improve customers’ lives sooner.
Takeaways on collaborating
More perspectives lead to more valuable solutions.
Internal partnerships (among teams) and external partnerships (with consultants, subject-matter experts, and others) can lead to increased revenue.
Meaningful collaboration requires skill and practice. If you’re inexperienced here, an innovation partner can help.
Ongoing collaboration is essential to continued innovation and digital transformation.
5. Strive for continuous improvement
Digital transformation is a bit like fitness: it’s not a matter of training for a marathon and then being in shape forever; rather, it requires ongoing effort and commitment to the things listed above (leaning on data and analytics, embracing change, focusing on customer needs, and collaborating).
The good news is that an ongoing approach is generally easier and more enjoyable than a single huge project every 10 years or so. And thinking of digital transformation as an ongoing, constantly evolving process better positions organizations like yours to operate in flexible, agile ways that let them respond to changing conditions in the real world.
How Dickson achieves continuous improvement
From the beginning of our engagement, Dickson was well positioned for continuous improvement because it embraced the curiosity of its employees. That’s led to the development of major software, the implementation of significant product updates, and a series of smaller, less-dramatic tweaks and adjustments.
This approach has been successful in part because we never attempted more than what made sense for the business. We started with relatively small improvements, demonstrated their value, and continued from there.
Frontline employees interact with your products and customers every day, and so have the best view of opportunities to make your products and processes better. If you’re not already asking them for their ideas on that front, today is a great time to start.
Takeaways for continuous improvement
Start small (again).
Measure the impact of each change (on customers, employees, supply chains, etc.)
Commit to learning from every change, whatever its impact.
Think of digital transformation as a mindset rather than a destination.
Seek out partnerships with experts in areas where you have knowledge gaps.
Industrial digital transformation is human as much as technical
Industrial digital transformation is not solely a matter of shifting DiaMet and LabConnect to the cloud or introducing AI capabilities to your hardness testers. It’s an approach to running a business that involves responding to constantly changing realities in the environment, the marketplace, and the customer population.
To succeed in digital transformation and lead in Industry 4.0, ITW Test and Measurement Companies must adopt new ways of thinking, operating, and delivering their products. When they do, they’ll win deep customer trust and loyalty and a culture that propels the company forward.
Are you interested in revving up your digital transformation? Get in touch.
Published by Jason Hehman , Andrew Horner