Business is entering a new era, Industry 4.0. Is your business embracing digitalisation or are you one of the many UK businesses that is lagging in the race to adopt innovation and change? Roy Spencer of Iskra Consulting Ltd tells me about the pitfalls that businesses face in staying competitive.
What’s Stopping your Business from Moving Forward?
Some businesses have a low appetite for risk, wanting to be second to market so that they can learn from the mistakes of early entrants. Others have managers who fear punishment if an innovation fails or who have no incentive to take risks.
Appetite for risk and change within a business culture will affect the adoption of any innovation. “It is important to have the right people in the right positions, rewarded in the right way, in an organisation with the right leadership,” Roy says. “It might be a case of a poor fit between the individual manager and the role that he is expected to fill. Is it a family business where shareholder value is of little importance? Are the leaders setting the right example? The most innovative and highly productive companies are or were led by people who epitomise the culture, for example Steve Jobs, Jeff Bezos, or Elon Musk”
Lack of innovation occurs in all kinds of organisations and it is often caused when departments operate in siloes, with management unable to work across functional boundaries. Without senior leadership taking a holistic view of a business, the company can become set in its ways, and will lose out on opportunities to take full advantage of the benefits that automation and computerised systems can offer.
Consequently, these businesses will fail to fully reap the benefits of the innovations associated with Industry 4.0, and will fall behind their competitors.
Adopt New Technology
Too often spend on IT is about cost savings and keeping the business where it is rather than providing new business models. When businesses are not strategic, they continue to do what they have always done without changing with the technology available.
Some organisations deliberately appoint board members to act as a so-called ‘safe pair of hands’ but these people will never bring innovation and new thinking. What really marks out forward-thinking businesses is their ability to adopt innovation and change and to continually improve performance.
Any business that does not keep pace with the move towards Industry 4.0 will be left behind outstripped by competition with a firmer grip on their systems and processes
“Instead of spending money on technology to stay where you are,” says Roy, “look at the bigger picture. Instead of using a traditional Cost-Benefit Analysis, look at how your technology spend can create new business models that can generate the greatest value.”
If your business is stuck, it is time look at your organisational structure, culture and how to work across functional boundaries.