Four years ago, I downloaded an article that I keep coming back to. It was called “Managing Disruptive Change Be Ready for What Is Coming”, written by Estevao Seccatto Rocha. At the time, Estevao worked for KPMG in São Paulo as a transformation and turnaround advisor. Today according to Estaveo’s LinkedIn, he works for Stone Partners, still in São Paulo.
I think he wrote this article while studying at RWTH Aachen University, and he references Professor Malte Brettel, the head of the Innovation & Entrepreneurship Group.
I kept coming back to this and decided to try and pick out some of the points here in this post. The work is either Estavao’s or Professor Brettel. I am trying to translate it in a way that works for me, and hopefully, you as a reader of this posting site to bring disruption far more central in your thinking.
Digital is one of the most disruptive forces we have to face. This is why I decided to summarize some points, remind myself and appreciate what we really mean when we advocate and encourage going disruptive.
Understanding the basics of disruption
Disruption is constant; it simply disturbs all we do. If we ignore it, we lose what we have; if we determine how to meet disruption, we have a chance to survive and even come out better, certainly differently.
Estevao offers this “Disruption change people’s routines, the way people think, behave, do business and learn, it “displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.”
Much of the article attempts to apply a systematic approach to disruptions, which is why I partly like it. Disruptions come at you in different ways, and the ability to manage all the possible variables makes the management of disruption really tough.
The first need is to try and understand the disruption
Understand the disruptions. Why companies are disrupted, and what are the sources of disruptions?
Build patterns and try to understand in which pattern is causing disruption;
Start reacting to the disruptions in a general way;
Look more closely, understand the strength of the disruption;
React in a specific way;
Understand the changes in the environment and respond to them.
Disruptions happen as they are mostly triggered by 1) Regulative Environment changes, 2) Technology, 3) Customer Behavior changes, 4) Competition and New Players entering.
Professor Brettel established six specific disruption patterns, depending on how the disruption affects an organization.
Professor Brettel outlines each disruption pattern with clearly different intensities but lays out the reaction patterns, dependant on the degree of disruption, in this useful visual.
The article looks at different disruption patterns by Speed, Stage and by Impact. It then concludes with the actions to be taken dependent on the degree of disruption. by describing the actions, action pattern, action manifestation and rationale.
I have not brought these into this post. For me, it is the structured approach, not so much the specific questions that were applied (at the time), so if and when disruption hits, I have the basic thinking framework shown above and the suggested reactions to these. I think each disruption might have different reactions to consider.
The conclusions from the article are:
Success will come from being faster and flexible, anticipating and responding to drastic transformations, with an innovative approach, embracing change and capitalize on disruption. The organization must have dynamic capabilities to transform it into sustainable advantages.
One in three CEOs says their organizations have failed to achieve the value they anticipated from previous transformation initiatives due to:
Failure to understand the complexity of the operating model: The most commonly identified barrier to success is underestimating the significance of operating model changes necessary to effect transformation across the organization;
Inability to innovate: organizations are incapable of implementing formal innovation processes, management, and budgets;
Missing the cultural connection: existing organizational culture is a barrier to execution;
Failure to take a “business value first” approach to technology: organizations’ legacy technology/systems are a barrier to success. Transformations that begin with a specific technology (rather than with strategic objectives) are twice as likely to fail;
Inability to execute: organizations are incapable of executing an implementation plan to build and operationalize a new target operating model.
It is sobering that embarking on transformation change, mostly forced upon you, ends up as a failure. The five summary points are as relevant as the outline to manage disruption shown above. These five aspects doom the changes if they are not really focused upon. All the structure in approach is only as good as the ability of the CEO and team undergoing change can avoid these five failures.
So I wanted to capture this article or paper of Estevao’s as it has been on my mind for several years. I needed to place it in a post to be reminded, and as digital disruption is becoming the higher constant, it is good to be logged here to refer to.
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We have companies like Dassault who have been focusing on digital for many years, taking a specific focus on the human being and commercially releasing their “Living Heart”.
This “living heart” digital twin is the first realistic model of a human organ that actually accounts for electricity, mechanics and blood flow in the heart into a personalized full-dimensional model of the heart. Then users can practice and manipulate it to place pacemakers, reverse chambers, cut out cross-sections and run all sorts of hypothetical scenarios before the physical heart needs to be touched.
Then we have the digital twin that will learn all about you and what you do, think and work upon to provide you with a closer replica of your daily life to help you.
No, the digital twin is alongside us in multiple ways. It is not just a shadow in a mirror, mimicking all we do in life and real-time, but also finding better solutions to improve the actions being undertaken. It helps to predict, suggest and improve on our current activities.
Now stop and absorb that, please.
A real-time performance that builds the digital thread that gives this connectivity and context to the decisions you want to make will allow you to investigate alternatives in the digital world. These can then be a precursor to doing them in the physical.
My main focus here is more on the manufacturing world.
Lets firstly in this post, look at some history and definitions
I have been researching, collecting and slowly try to absorb as much as this tiny brain can. I already need a powerful twin that can collect, predict and suggest where I keep investigating to speed up the process and make it more efficient. In time something out there will do this—Que Google or Amazon who are getting there, as are others.
Origins of the Digital Twin
The term “Digital Twin” was defined by Dr Michael Grieves at the University of Michigan around 2001-2002. He originally defined this in the context of Product Lifecycle Management. In his paper, he introduced a “Digital Twin” concept as a virtual representation of what has been manufactured. He promoted the idea of comparing a Digital Twin to its engineering design to better understand what was produced versus what was designed, tightening the loop between design and execution.
The initial concept was to create a digital model of a physical system before building it. This way, tests and simulations could be performed beforehand but not in real-time but in predictive modelling. These designs were prototypes and commonly referred too as blueprints.
Jump forward to today. How do we presently define digital twins?
Looking through various papers, I like some of these definitions of the digital twin.
Srivathsan Govindarajan, Vice President, SAP Digital Twin, summarized it best:
“A Digital Twin is a dynamic digital representation of a live physical object and needs to represent specific aspects of physical objects like shape, working state and structural behaviour. Digital Twins will dynamically change in near real-time as the state of the physical object changes.”
Within the same article I was reading, one summary was made: “A Digital Twin is simply a virtual representation of all the information users need to supplement their work—no more, no less. It’s a question of scope. Sure, an organization can gather more data than that one user might need. But that would simply mean there are more Digital Twins for each asset, user or relationship or one Digital Twin that filters data accessible by a user’s role.”
I think this is the one really valuable thoughts not often mentioned.
One useful insight has been: “Different people interacting with the Digital Twin might want different lenses of it” Hold that thought; it extends out digital into a very different era of future relationships.
One other suggested definition I read was by Tom Maurer, withSiemens PLM Software, and he/they define the Digital Twin as “a digital model that accurately represents a product, production process or the performance of a product or production system in operation.” Now that definition fits more tightly into where a manufacturer might go in their definition.
I know definitions are evolving; for instance, I have been reading how Siemens has been evolving their Digital Twin, linking it into a Digital Thread and working this ultimately into a complete “Digital Factory” concept.
Actually, Siemens has a dedicated “Digital Factory” division as part of their Digital Industries business, focusing on all things “digital” and automation. It makes sense. It has been set up to offer a comprehensive portfolio of seamlessly integrated hardware, software and technology-based services to support the manufacturing world. It extends the Enterprise out beyond even a “digital enterprise in different solutions that connect the internal and external worlds”.
The digital twin has evolved from its PLM roots. For instance, much of Siemen’s current digital business comes from a strong PLM focus’s legacy over many years. CAD and CAE tools have been working and aiding in designing and simulating hardware performance for years.
The difference today with the digital twin lies in its more dynamic form. The digital representation captures the mechanical, electrical, software and system aspects. It simulates any physical performance by using sensors and controllers ‘fixed’ on or embedded in the asset or specific moving parts to provide ‘real-time data’ back to the digital twin to allow an accurate ‘mirror’ of performance.
So the digital twin is as closely representing the physical entity that it is ‘connected up too’. This virtual representation can also build two-way interactions, so remote parties can control the physical machine to change some of its parameters to optimize its performance. The digital twin becomes the basis for the factory of the future.
The more you collect, the more you have a digital thread.
If you can imagine, a digital twin is never static; there is always something changing. It is this historical trail that is seen as the digital thread. It can slice and dice to give the ability to view and inspect the digital representation of the product, asset or entity, at different points in time.
The digital thread becomes an increasing asset to refer to and use throughout the product’s lifecycle. You can predict, disclose, and document it. More importantly, you can measure the lifecycle far more accurately by having a digital twin in place. For highly valuable assets, this becomes very useful for future design, predictions, and new innovations.
The digital thread builds the communications framework, and you can dip in and dive into the right information at the place and time you want to explore. To make for a more effective and optimization of your assets.
Having the digital thread allows you to simulate performance under different conditions, loads, or environmental changes. As you learn, everything should get smarter.
It allows for the engineer to understand the physical asset in real-time or in simulation, at different times, optimal or imposed conditions, to build better future solutions or manage the physical product today in better ways, to learn about performance, and how they will perform in different operating conditions, or providing predictive conditions in the future.
The key enablers to having digital twins
There are many; the basic ones are recognizing the value of being digital. Achieving a digital Enterprise allows for exploiting all the value in digital technology. The growing need is to place all that is digital onto a common platform to build a new learning system of your physical world. You collect massive amounts of data that need translating and evaluating.
We can visualize, build, refine assumptions, troubleshoot and manage complexities and linkages within systems-of-systems without even going onto the factory floor, although those physically managing the “asset” often have years of wisdom to incorporate in any future design.
So, a digital twin really is often ‘born’ before the physical end product. When you have got to this point, you have reinvented your business around digital operations, and you are talking the language of systems-of-systems within a digital thread. You exploit hidden dependencies, seek out optimal intervention and integration points, and really innovate within your ‘operating’ environment, pushing the product or physical asset in better design, performance, and optimization.
Wrapping up this introduction to Digital Twins
To finish this brief introduction into digital twins, they form the basis for digital enterprises; they build the digital threads and combine to build the digital factories. Still, I want to add two more definitions to hold in your mind as we finish.
Firstly, “the digital twin is the virtual representation of a physical object or system across its life-cycle. It uses real-time data and other sources to enable learning, reasoning, and dynamically recalibrating for improved decision making.”
Secondly, “an evolving digital profile of the historical and current behaviour of a physical object or process helps optimize business performance. It is the exact replica of the physical entity. It becomes a digital avatar that combines modelling and simulations with sensors and big data” Deloitte “Expecting digital twins.”
In the future, I will explore these digital twins, threads, enterprises, and factories as these will all have a profound effect on us, in manufacturing, in-service environments, in critical and equally hostile environments in their growing use to build our lives differently. We will all need to re-imagine having “digital twins” in different ways.
The smartphone changed our lives; the digital twin has the same potential.
We will all need to become comfortable with “digital avatars” all around us. Our future factories will all be modelled well before they are in actual operation by design beforehand in a digital twin environment.
Start getting really comfortable with your digital twin; it saves you time, money and costly mistakes as it visualizes and simulations a world of possibilities that can then be built and more effectively managed. A digital twin offers so much before, during and after the physical design; it builds out future possibilities.
So we are about to enter the next phase of these galactic wars from the IIoT Digital Solution Providers?
This for me will centre around developing the complete suite of transparency between product development and manufacturing and communicating this “connected” story. The information and knowledge source that connects the customer demand with the delivery of their need with their custom solution.
This has been promoted as the new “experience economy”.by Dassault’s CEO Barnard Charles. He suggests this is “the new economy that drives the value of the usage first, as opposed to the value of the product or the things we produce, or even the services we provide” He feels the center of gravity in value creation is taking place to the emphasis on usage as paramount to serve. This makes sense to me.
This becomes the next battle point where the leading solution providers have to emerge, offering the connected solutions to this new “experience economy”. It is combing data and insights across the entire value-creating process. Does Siemens, PTC/Rockwell or ABB/ Dassault today have this capability in-house to achieve this? I think no. They are missing the front end, they are missing the ability to design a completely new Digital Enterprise Resource Planning without real assistance or lots of fresh investment. Do Microsoft, Oracle or SAP hold part of this solution? Perhaps but they don’t really have the Industrial depth of understanding to apply “actual” solutions of physical with virtual..
It is now about the entire scope of product realization.
This is covering all the aspects of industrial activity from capturing ideas, validating them through customer insights and prototyping, then transforming them into designs, breaking down the visualization of their parts and value, distributing these to the respective solution providers to take product design to manufacture.
That is increasingly moving this through the virtual and physical world of visualizing the finished product, validating it with “selected customers” then moving this into production (virtual and physical), where concept thinking has been finally turned into reality, and the building of flexible production design is built-in to customize solutions, that respond to the customer needs in faster, more adaptive ways.
This entire process chain being “seamlessly” connected up is huge to achieve the synchronization that is needed. Imagine all of today’s different systems built up over years needing the individual resolution to make this synchronization to happen, let alone keeping pace with technology advancements, occurring every day. Mind-boggling.
It is the solution provider who can deliver this total solution across multiple industries is going to be the winner of this round of the digital transformation. How it is communicated, validated and constructed in roadmaps that clients can finally get their heads around. Is this Siemens, or the partnerships/alliances of ABB / Dassault and or PTC/Rockwell one? Perhaps the outsiders of Schneider Electrics, Bosch or alliances of HPE, IBM, Microsoft, Amazon, SAP, Oracle all forming imaginative alliances that can “leapfrog” over the others, in the capabilities each can bring to the Ecosystem of the design needed.
There is an awful lot to play for but there is a significant number of twists and turns along the way. Who will lead, be fast followers or lag behind? It is a race to design the “total” solution to offering industry 4.0 solutions that connect the current or break the mould for the new manufacturing approach.
It is fast becoming the decision time for the manufacturer, or is it?
Do they make major investment decisions in investing in “greenfield sites” purposely built on new Digital Factory designs or continue to invest in existing infrastructure, where the continued and ongoing challenges are optimizing the present investments, not knowing when the investments stop? Both are choices of “return” and will be the decisions that make Industry Revolution 4.0 a make or break, like other revolutions before. Full of emerging winners and plenty of losers that chose wrongly.
The manufacturer cannot leave decisions of investment to IT alone. The growing cost of offsetting redundancy, of bridging the existing with solutions based on complete connectivity of the whole system should not lie in the IT / OT management hands. The decision for the future of the whole process of a company should lie at board level. They need to decide to continue to invest, decide to write off the cost of redundancy or invest in something completely new, fit for this century in digital design which becomes the cost of opportunity. These are decisions that will make or break many companies. The board needs to equip itself with all the impact of what the Industry Revolution 4.0 actually does mean.
Whose solutions will sway the decision? Will Siemens determined to keep development in-house through acquisition, or ABB / Dassault or PTC/ Rockwell through their recognition that partnerships that give powerful combinations will move them ahead. It is all to play for in this emerging “galactic war of IIoT platform solution providers” or will the reliance on strategic consulting advisors (McKinsey, PwC, Deloitte) determine the decisions or will the alliances formed at IIoT platform level with Accenture, Cap Gemini, HPE, Atos, Tata etc. So who will influence the choice? Who will be the partners of choice in this journey
I can’t believe anyone is still “playing” at the edges, caught in digital purgatoryand the IT / OT senior group is not seriously attempting to get the critical attention of the board for the (huge) level of investment this will mean. Building the business case needs to be highly compelling and needs “grounding” in a realistic time frame.
Let the further battles play out in the IIoT platform war we are witnessing. It is a very combative place to be, expensive but eventually very rewarding, hopefully for all involved
Digitalizing has a positive impact on our innovation activities, it opens up new exciting possibilites, to first question what are doing, looking at the data to begin to see there are potential ways to change this and then to apply that innovation thinking along with technology understanding.
We then begin to make the changes within the process, be those incremental, radical or even revolutionary to change the processes operating today.
We have distinctive ways to treat data and digitalization that leads to distinct new value points for innovation. A useful view was provided by the IBM Institute for Business Value identified five distinct opportunities where digital innovation provides additional value:
We gain new insights that augment products and change our thinking by the generation of real-time or constant flows of market and customer-driven data
We improve our assets by digitalizing them. We can connect up machines, whole plants and complete organizations can be designed around the flows of data. This has an enormous impact on the potential to collaborate, to liaise, learn and build from this data, a new fresh knowledge insight. This can trigger ideas and new concepts to be evaluated as well as gain from having full oversight over the assets generating data or that coming into the company.
The ability today is to combine data within and across different industries. Within our move towards platforms and ecosystems the exchange of data allows for a “greater whole” to view it, add insights and knowledge and from this combined effect those within the ecosystem can gain a commercial and competitive advantage to build appropriate products, services, and business models in response
Each party is building up its own data. We are in times where trading data has become a highly valuable new source of revenue. Knowing weather patterns helps farmers, utility and those dependent on delivery to know and plan far better. We can trade audience data, interest in articles or newsworthy stories so others can associate with these to build more of a profile of who is engaged so they can offer products and services more tailored to their possible needs. The business of trading data is the new oil in the economy
Lastly, we can begin to organize data into more distinctive patterns, service capability options and build more sustainable systems where you build increasingly an accepted language that becomes codified in some way that gives new value. We can systemize thinking through data that allows for uniformity and allows multiple systems to exchange and see patterns. This is where algorithms have increased value. They can predict change.
Each of these new ways to use the evolution of digitalization to add completely different levels of innovation potential. Seeing this value is one thing, achieving the connecting aspects it requires is another. As we continue to make deeper and deeper connections into manufacturing sites we do need to consider not just the value of digitalization and what it connects up, we need to study and review the data to look for the innovation opportunities to make this an ever greater impact on productivity, efficiencies but more import allowing us to think and design differently, to begin to think changes in technology and innovation.
Innovation and digitalization are as powerful as innovation and knowledge in their combination. They both combine to give new insights, new options to generate significant new and greater value. The sooner we can bring in digital solutions and processes into the innovation process of the industrial process, the better to realize some of the real potentials that this combination can give us, as fresh opportunities to add new value
How do we find answers to knowing what measures give us for success in any digital transformation? Are today’s measures relevant to tomorrow, are they still based on our legacy system of measurement, when a business was operating in a stable, predictable environment?
Yes, we can measure success in our progress but these are in both multiple and equally personal ways.
Each organization is unique. Never has this become crystal clear that when you face your own transformation journey. You can learn from others, you can adapt but you need to clearly understand where you are in your own evolution and capacity to undertake change as it is simply your journey.
This digitally transforming has not been as well recognized as it is today when we attempt to make any transition, from the old ways of doing business to the new one; that is highly connected, collaborative and based on our growing reliance on technology and ‘everything’ digital. It can become life-changing, changes the scope and opportunities within the business and it is highly individual.
Each business makes a judgment, on speed, scale, and scope of their digital transformation.
How they evolve, in new growth, in their changing business model, in their innovation, in their capabilities to manage the “spread” of activities required to transform. How do they upgrade or re-orientate their people, their customer-facing activity for example?
The world is moving at different speeds, technology is being implemented in unique ways. We are all making and leaving our digital footprint, each very differently depending on our own situations. Judgment becomes personal, relative to your own situation.
We need to measure in those “measured steps” what you need to determine as a transformation journey. Of course, once we have our ideas, we can begin to find ways to measure.
We should always calibrate but we need to seek our own pathway
It is not a bad thing that we must calibrate this against others, in seeing the outcomes feeding back from our customers and markets but it is a journey that you can undertake as you and only you, have the best grasp of what is needed or required. It is your journey.
Can we look out and give it a ‘hard’ quantification in five or say ten years? Does digital transformation have any easy answers? We can take some broader measures as a business is still driven by growth, growth in revenue, in product mix, in-country development, in market share. Or equally how the perception of the company is beginning to change and how the market ‘sees you’ as different and adapting to volatile conditions. You hear the word “exponential” often and that seems a high validation point today.
Seeing the digital transformation story in different ways
I am involved in a community that supports Siemensand attempts to contribute as well as relate to a better understanding of their transformation journey.
This involvement is being part of their external influencer community called SIEx. We influence in different ways but more increasingly shape perceptions and undertake exchanges. This is not a community for social media influencing alone. It is where there are engagements in deeper meaning and relationship growing, that can only emerge from sharing other’s perspectives.
We have two perspectives for this community to thrive in, the insiders working within a business such as Siemens, and those that are outside, looking in, mutually engaging, offering their experiences and views on how they see change occurring and impacting their area of specialised focus.
These views within the community can have creative tension, they are sometimes a little uncomfortable, often challenging ‘relationships’ when someone outside challenges the management of an organization to give it a different perspective.
You can face “push back” or simply a rejection, or moments where you can openly exchange and gain from conversations. Or, you simply add a new dimension to a particular challenge or problem, that is if the other party is prepared to listen or learn. The value is in having time to listen, learn and adjust if the argument makes sense.
Diversity is allowing different perspectives to have a voice
Many companies talk of diversity, in who they attract within their company but this diversity of opinion, of different perceptions, is as increasingly important. I think Siemens is recognizing this and exploring what this means in value and contribution. It is a privilege to be part of this. I learn constantly and I hope they gain from my contributions equally.
The initiative for this building of a Siemens Influencer Community is driven within Siemens Communications Group, initiated by Clarissa Haller (@clarissahaller), the head of Corporate Communication within Siemens, and driven by Ellen Schramke ( @ellen_schramke). Ellen aims to connect the internal with us as this external resources to aid the Siemens digital transformation. We explore, discover and experience change as it is occurring all the time and I believe makes discussions relevant and valuable to all involved, it adds to the journey of Siemens.
The journey of discovery is the digital transformation one we all are undertaking
Digital transformation and digital maturity must be understood through the lens of business focus, which in turn prioritizes investments and defines success. It is knowing what outcomes you wish to achieve will help enable that transformation process but this is not a “static” process, it is dynamic, highly interactive and being able to listen intently and learn so we all evolve in the journey of digital discovery.
As I suggested earlier “Each business makes a judgment, on speed, scale, and scope of their digital transformation. These are highly individual.