Disruption is a “process, not a product or service, that occurs from the fringe to mainstream,” according to Wikipedia.
Now consider the following: In the face of the COVID-19 crisis, manufacturing supply chains have been upended. There has been a host of new state and federal regulations. Customer and buyer behavior have been radically altered.
Most distributors and manufacturers are considered essential businesses — so office workers are now working from home. But warehouse, shipping, and delivery employees are working and staffed to the max.
For those that distribute janitorial and sanitation supplies and serve medical customers, their employees and programs are stretched beyond belief. Others are just trying to hold on for the next few months. Whether commercial and residential building products are still moving forward depends on the state — with many local authorities banning all or some construction projects.
COVID-19 is a disruption of the highest order. Like most disruptions, it has accelerated certain trends by an unforeseen magnitude, forcing companies to urgently prioritize some initiatives that only weeks ago may have seemed like they were three to five years away.
In business-to-business (B2B) manufacturing, that initiative is undoubtedly digital transformation.
Digital Transformation Is Now the Top Priority
In recent weeks, I have had many conversations with industrial manufacturer and distributor customers about how COVID-19 has impacted manufacturer and distributor priorities, projects, and budgets in the short- and long-term.
With social distancing, ecommerce and digital shelf programs have logically moved to a high priority. However, most of the leaders I have spoken to tell me a broader category of digital transformation has taken root at the top of the priority ladder.
While they have cited a wide array of initiatives, they can roughly be broken down into the following categories:
- Predictive risk mitigation
- Work-from-home preparedness
- Enterprise resource planning (ERP) abstraction, lowering dependency on private networks
- Distributor and manufacturer integration and collaboration
- Warehouse automation
- Ecommerce and web
When most companies think of “digital,” they immediately think ecommerce, websites, and mobile experiences. At its core, digital transformation is really about two things: speed and agility. Leverage technology to ensure teams and programs can operate in ways that allow them to achieve success — even when the world around them evolves at a continually accelerating pace.
Particularly in these uncertain times, speed and agility — the ability to change and adapt fast to market changes — can make or break the short- and long-term success of manufacturers and distributors.
7 Ideas for Your Digital Transformation Program
Here are seven concrete ideas for how you can begin to accelerate your digital transformation programs today to best meet the chaotic and unprecedented nature of today’s economic circumstances.
1. Digital Transformation Is Not a Project
Digital transformation is a program adopted by all and led by many. It is made up of many, many small and large projects. There is no start date and certainly no end date.
2. Transformation Is Every Leader's Problem
If you are a leader in your organization, you need to ask the question: What is my plan for Digital? Don’t rely on a transformation leader to define the plan for you. If you are the digital transformation leader, start your meetings with other leaders by asking what their plan is so you can support and guide them.
3. Digital Transformation Must Start With the Customer
The outcomes and results you measure must be tied to customer impact. Describe what delights your customer in good and bad times. Use customer impact to prioritize projects.
4. Align Compensation With Behavior
When the whole company wins and achieves its company-wide objectives — like digital transformation — everyone wins. The most successful transformations have been led by CEOs that align not just their people’s compensation, but also their own to corporate objectives.
5. Customer Satisfaction Is Not the Goal
Customer satisfaction leads to operational excellence. Customer satisfaction plus operational excellence leads to innovation and business model evolution.
6. Operational Excellence Is the Foundation for Customer Experience
Delivering on customer expectations and competing in the digital era are enabled by operational excellence. Every process, customer experience, and function should have an improvement plan and roadmap for improvement.
7. Bureaucracy Will Kill Your Transformation Program
John Rossman, author of “Think Like Amazon: 50 ½ Ideas to Become a Digital Leader,” says it this way: “Bureaucracy is insidious. It can grow and flourish like a cancer. It can creep through your organizational charge with a grim determination until it has choked your company’s efficiency and innovation.”
Blow up your organizational chart and set up strategies to counterbalance organizational structures.
Disruption for Tomorrow and Today
Disruption is for the future and today. While experiencing the last few weeks, I think most of us understand that disruption will now be part of our new normal. Set up a plan for digital transformation today. Be agile. Be fast.
