Contrary to popular opinion, maintenance and reliability can be a highly profitable investment, and not just a cost. But it takes courage to bridge the gap between the needs of the business and the ability of the workforce to execute in a secure and resilient environment.
That’s what John Schultz has spent the last two decades doing. Regarded as one of the world’s best reliability educators, John has helped over 300 manufacturing locations save millions in direct costs while increasing production, improving quality, and reducing inventories. John has personally benchmarked over 1,000 locations.
In summary, John has spent his entire career helping organizations to bridge the gap between the needs of the business and the ability of the workforce to execute in a secure and resilient environment. Or, in straight-talking language: Make more, break less, and don’t spend.
Schultz recently presented at Mainstream OnAir 2021, a two day event for asset, reliability and maintenance professionals. His focus was how to maximise the success of your digital transformation journey. Here’s a summary of his session, What is Bootleg Innovation?
Engage the three key Centres of Intelligence
To enact lasting, sustainable change, Schultz advocates engaging the three Centres of Intelligence.
- The Thinking Centre of Intelligence is about the brain and includes aspects of your business like subject matter experts, content and technology.
- The Emotional Centre of Intelligence is about engaging the heart, encompassing change management, leadership and workforce engagement.
“If you have an enabled and engaged workforce, you can tackle any problem,” says Schultz. “If you don’t, all problems will be seemingly insurmountable and the project will fail.”
- The Action Centre of Intelligence is about the body.
“This idea goes back to ancient Greek and Roman times,” says Schultz. “If you are unable to engage all three, the initiative will fail.”
At the core of these three centres lies the elements of governance, security and artificial intelligence. “There’s so much data that it’s impossible for any team of humans to consume it all,” says Schultz. “We need assistance from AI and machine learning.”
Drawing on research from a benchmark study conducted by MIT in the early 2000s, Schultz emphasises that if an organisation only focusses on new technology, the result will be a negative return on investment.
“Once you implement a little bit of technology, you have to freeze the organisation, allow it time to adapt to that technology and, only once it has been absorbed, you can unfreeze and introduce more technology,” says Schultz. “The organisation needs time to adapt to the change.”
“It’s hard to capture the hearts and the minds of the people on the floor but, ultimately, it’s influencing the way they think and believe that will affect whether the initiative is going to be successful,” he says. “If you try to cram too much tech too fast down their throats, you don’t get the stickiness.”
More pragmatically, Schultz describes how maturity curves indicate that, the more mature an organisation is in terms of business processes and culture, the more immediate the return that can be capitalised on. In simple terms, an organisation’s maturity speeds up the capacity to accrue dollars over time.
Will your digital transformation fail? The stats say “yes”
Schultz doesn’t beat around the bush when sharing statistics of failure. “Because of issues to do with governance, employee engagement and change management, 80 percent of digital transformation initiatives fail,” he says, drawing on figures from GainX, which Schultz describes as an amazing AI risk management package.
He breaks this down further:
- 65% have up to 150% in hidden costs
- 8% fail outright
- 30% never die and are never completed (these projects are knowns as ‘zombies’)
- 10% of projects are duplicative of other existing processes or initiatives.
With people at the heart of change, Schultz shares shocking statistics showing that, of every 1000 people:
- 90% of team members are not utilised for change
- 65% of people expected to drive change are not receiving critical information
- 5% of influencers are invisible to management
- 16% of key talent are at risk of leaving before the project is completed.
Leadership is key and needs to be strong across the three Centres of Intelligence.
“A digital transformation journey can’t just be led by IT, it can’t just be a technology program,” says Schultz. “If we don’t integrate change and only focus on the technology, we’ll likely be very disappointed with the result and see the project fail.”
Asset Management is ripe for disruption
Schultz’s take home message is that technology moves quickly from ‘hype’ to ‘mainstream’.
“Technology that drove a digital transformation journey I was involved in at Allied Reliability in 2015, like low-cost sensors, blue tooth low-energy, augmented and virtual reality, Edge and Cloud, are now mainstream,” says Schultz. “They have plateaued.”
This means that business is ripe for disruption again.
“It’s not a question of ‘if’ but ‘when’,” says Schultz. “If you’re not constantly improving, you’re becoming obsolete.”
For Schultz, the most important phases in any digital transformation journey are the early ones.
“In terms of culture, how prepared is the organisation for data analytics and data-driven decisions?,” he suggests as a key question. “Then, do you have clean and properly organised data?”
And, as a final and important message, Schultz encourages all organisations considering a digital transformation journey: “Take time to figure out what you want your data transformation journey to achieve.”