Manufacturing executives want to know what digital transformation can do for their businesses, but an overall plan to find out is lagging for most.
George Westerman, Principal Research Scientist with the MIT Initiative on the Digital Economy, describes digital transformation’s immense opportunity and potential pitfalls with the following analogy: “When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” He contends that business leaders are often thinking only in terms of “fast caterpillars” without focusing on the butterfly that could emerge instead.
The results of the Manufacturing Leadership Council’s Digital Leadership survey seem to indicate that leadership teams are piecemeal in their efforts around digital transformation – they want to know what technology is out there and how it’s used, but for many organizations there is seldom a focus on building or developing a comprehensive digital strategy, there is no change management strategy in place, and no formal training plan to educate workers and leadership on digital transformation.
The takeaway is that many feel their organizations’ future success is vulnerable because of this lack of preparedness – and that an overall lack of strategy may indeed be creating more “fast caterpillars” than digital butterflies.
In terms of overall approaches to leadership, though, most say that there is no significant difference in skills required to be a leader in the digital era vs. prior ones – which could indicate that the tried-and-true qualities of fairness, innovation, assessing competitiveness, and having a clear vision for the future are still what most see as the hallmarks of effective leadership.
Below are more detailed results for the 2023 Digital Leadership survey.
Part 1: M4.0 Organizational Preparation
While the majority of survey respondents said their executive management team is at least partially prepared to lead in the era of digital transformation, a whopping one-third said that team was “not at all prepared” for such change. When this survey was previously conducted in 2022, only 10% said that their executive leadership was in such a precarious position. What may account for this?
Q: How prepared do you think your company’s executive management team is to lead and manage digital transformation? (Select one)
As many job roles of the future do not yet exist, it is understandable that many manufacturers feel they have only a partial understanding of the skills that will be needed in the coming years.
Q: How well prepared do you think your company is in understanding the new digital roles and skills that you will need in the next few years? (Select one)
Change management strategies are still lacking at many organizations – perhaps reflecting an overall lack of understanding on the changes that will be necessary.
Q: Has your leadership team created an organizational change management strategy to help support its digital strategy? (Select one)
Formal training for digital technologies is also nonexistent at many organizations, perhaps unsurprising given the lack of a change management strategy to underpin such transformation.
Q: Does your company have a formal training plan to educate workers and leadership around the requirements of digital transformation?
There is a measured level of anxiety around organizational vulnerability due to digital preparedness level (or lack thereof) – though a slight decrease from the 13% who felt their organization was “very vulnerable” in the 2022 survey.
Q: How vulnerable will your company’s future success be as a direct result of your company’s current level of preparedness for digital transformation? (Select one)
PART 2: The Current State of Digital Transformation Leadership
The most common person in charge of digital transformation typically resides in the C-suite, with the Chief Operations Officer coming in on top with the Chief Executive Officer not far behind..
Q: Who is leading the charge around your digital transformation efforts in your organization? (Select one)
As technology evolves and the associated use cases become more understood, it’s not surprising that executive leadership most frequently wants to know which technologies are best for their operations and how they can be leveraged to their best capabilities.
Q: What’s the most important thing your company’s executive management team wants to know about digital transformation? (Select one)
In addition to the related responses on a lack of change management strategy and lack of formal training for digital transformation, the vast majority of respondents also report that their leadership teams only occasionally or seldom devotes time or attention to developing or updating a digital strategy.
Q: How much time and attention does your leadership team devote to creating and/or updating its digital strategy? (Select one)
Collaboration may be something of a bright spot for digital strategy, as most say that their leadership team is at least somewhat collaborative in this area, with one-fifth saying they are highly collaborative.
Q: How collaborative is your leadership team across multiple areas of the organization in the development and assessment of its digital strategy? (Select one)
It appears that even with an increase in automation and other technologies that can contribute to a reduced headcount, most respondents feel their organization will still have a “help wanted” sign out front. Only 13% see technology having a significant impact on reducing unfilled job openings.
Q: What impact do you think the increasing adoption of automation and advanced digital technologies will have on reducing unfilled job openings in your company in the future? (Select one)
PART 3: A New Era for Manufacturing Leadership
Understanding of technology and its operational integration is cited by far as the best description of what leadership means in the digital era. Using data to make decisions, developing digital ecosystems and acting as a “digital evangelist” for aggressive technology adoption followed closely behind.
Q: Which statements best describe what leadership means in the digital era? (Select top 3)
The more things change, the more they stay the same? Only about a third of respondents felt that digital operations require a significantly different leadership approach vs. any other era.
Q: Do you agree or disagree with this statement: “The emergence of digitally driven operations and business models will require a substantially different approach and set of skills on the part of manufacturing company leadership.” (Select one)
Technological understanding is cited as the most important aspect of a digital leadership approach, followed by instilling a data-driven approach to decision-making throughout the company culture.
Q: Which leadership approaches do you feel are most important in the digital era? (Select top 3
PART 4: What Leaders Need for the Future
The ability to manage virtual and remote teams ranked among one of the more important skills that leaders will need for the future, followed by using data to make decisions and understanding process and functional integration across the organization.
Q: Looking ahead, what degree of importance would you assign to the following digital leadership skills and abilities? (Rate each on scale of Low/Medium/High)
While many respondents said that their organization did not currently have a clear digital strategy for the future, they clearly felt that developing such a roadmap was important for navigating the future, in addition to understanding how the company should be structured and organized to best take advantage of digital technologies.
Q: In thinking about the requirements and implications of digital transformation, what do you think are the most important challenges for leadership? (Select top 3)
About the author:
Penelope Brown is Senior Content Director for the Manufacturing Leadership Council
Survey development was led by the MLC editorial team with input from the MLC’s Board of Governors.