In the field of DX in manufacturing, many project leaders face daily obstacles and struggles.
Macnica, we have consistently supported those working hard for their organizations. Based on that experience, this series will categorize DX promotion leaders into three types and explain their common mistakes and solutions.
We hope this series will provide some helpful hints for those of you struggling with DX (Digital Transformation) initiatives, helping you move forward again. (This is the second article out of three.)
Three types of leaders promoting DX in the manufacturing industry
In the previous article, we categorized leaders promoting DX in the manufacturing industry as follows, and asked Abe, Deputy General Manager of the Digital Industry Business Division, who has been supporting DX in the manufacturing industry for many years, about the "strengths, weaknesses, and common mistakes" of each type.
This article will begin by introducing solutions to common mistakes of each type.
Common mistakes are discussed in Part 1 of this series.
Solutions to common mistakes by type of leader
Type A solution: Teaming and communication design
—To get straight to the point, how can we solve the common pitfall of Type A (where a business unit takes the lead in promoting DX) which is "individual optimization"?
Abe: For Type A leaders to avoid failure, the starting point is how to compensate for the "overwhelming lack of time" that I mentioned as a weakness of their leadership.
Because they are extremely busy, it is essential for them to build a team that acts as their "right-hand man" and "left-hand man." For example, if they lack IT knowledge, they should bring in someone with expertise; if they don't have time to develop strategies, they should bring in someone to conduct research on their behalf. Creating a system that can operate according to the leader's strengths and weaknesses, and securing the necessary physical resources, is key to success.
Next, to prevent "individual optimization" where one's own business unit takes priority, it is important to bring in sponsors who will evaluate from a holistic perspective and to involve the IT department early on. By including sponsors and the IT department, who can provide feedback from a holistic perspective, from the planning stage, you can prevent evaluation problems and future conflicts.
Furthermore, when involving the IT department, it's crucial to design communication within this teaming process as "part of the project." Instead of simply sharing tasks, create time for workshops and other activities to share each other's backgrounds and "what problems they're currently facing." Asking someone to do work before a good relationship has been established can be perceived as "troublesome," but once people get to know each other, a cooperative system will emerge.
However, in Japan, building these kinds of relationships tends to be left to outside of work hours or to the field staff. In fact, business people overseas, where hierarchical structures are more clearly defined, are very careful about collaborating with other departments. This is because they understand the difficulty of overcoming organizational barriers.
Japan tends to have a weak awareness of this issue and is prone to overconfidence, assuming that "they'll understand without me having to say anything." That's precisely why management must understand its importance and intentionally set aside time for communication.
Type B solution: Systematizing one-to-many communication
— Next, how can we resolve the common pitfall of Type B (where the IT/information systems department is the leader driving DX) which is a mismatch with the users of the system?
Abe: For Type B to avoid failure, it needs to work more closely with the business divisions from the planning stage than the IT department might realize.
However, this is not easy. This is because the IT department, as a single organization, has to deal with numerous business units, each with its own diverse circumstances—a one-to-many structure. This is structurally very different from the one-to-one communication between business units and the IT department, which was the solution in Type A mentioned earlier.
Humans tend to only talk to people they find easy to talk to. For example, they might only deal with departments that have a small sales volume but understand IT, while neglecting departments that are difficult to deal with but have high sales. This will not lead to company-wide results.
To prevent this, a conscious system needs to be established. For example, objectively check "who to talk to and what to talk about" in all departments, and "whether there are any gaps in communication." It is necessary to create such a system and implement it thoroughly.
Furthermore, the development process itself needs to be changed. Instead of building exactly as initially planned, it's important to adopt an agile approach where you build a little bit, show it to the users, and then make adjustments based on their feedback.
However, it is extremely difficult to accomplish all of this using only internal resources. The IT department is not familiar with the business operations, nor are they experts in navigating complex conflicts of interest.
It's often better to question the assumption that "we can do it all ourselves" and instead utilize external experts skilled in facilitation during crucial phases such as project launch and initial consultations.
Type C solution: Inner branding
—Finally, how can we solve the common pitfall for Type C leaders (those in the DX Promotion Department/Management Planning Department who drive DX) that is "exhaustion due to authority and coordination"?
Abe: To avoid failure, Type C leaders need two main approaches.
The first step is to conduct "internal branding" in parallel with project execution to build a cooperative system within the company. This type of department doesn't have the sales performance of a business division or the system authority of an IT department. Therefore, it has a weak position in internal politics, and no one will move forward unless it is justified.
Specifically, it's necessary to have the CEO communicate the importance of the project and to celebrate even small successes. Before creating the content of the project, you must first create the "environment and justification" that the organization will accept; otherwise, even the best plan will fail.
The second point is to select the right "partners" who can complement your company's weaknesses. For this type of company, which often lacks both driving force and technical capabilities, it is not realistic to try to solve everything in-house.
The key to selecting a partner is choosing a vendor that not only builds systems but also understands business collaboration and organizational culture reform. Choosing a partner who will work alongside you as a "companion," not only providing technical support but also handling the more mundane aspects such as internal consensus building and branding, is the shortest path to success.
— I think not only is selecting a partner important, but how you interact with them is also crucial. It's not good to just hand everything over because you're busy, but are there any tips for working well with external vendors?
Abe:The key to working well with external vendors is to build an equal cooperative relationship, neither treating them as subcontractors nor completely outsourcing the work.
This is because digital transformation (DX) involves change, and therefore requires not just one-off development or advice, but continuous support.
Furthermore, simply issuing instructions unilaterally without utilizing external objectivity and expertise can lead to a longer and more difficult path to achieving digital transformation (DX). Conversely, if you stop thinking critically and rely too much on others, you won't accumulate know-how or decision-making frameworks within your own company, and you won't cultivate the ability to transform your own organization.
Therefore, relationships that are merely about assigning tasks or those that involve complete reliance on the other party should be avoided. It is essential to treat them as a partner with whom you can discuss issues on an equal footing, while maintaining the stance that you make the final decisions yourselves.
What are the key points for providing support that helps overcome failures and achieve results?
So, how does Macnica, which has supported the DX of manufacturing companies for many businesses, work alongside each leader, tailoring their approach to their specific characteristics?
Points for Type A: Speed
— First, what kind of support does Macnica provide to help Type A achieve results?
Abe: The most important thing when working with Type A clients is "speed." That's because they're more interested in how to accelerate their current business than in developing a system infrastructure.
Therefore, rather than explaining theories or overall optimization, it's essential to focus on solving the immediate problem and working together to achieve short-term results. Earning trust is the first step.
On the other hand, they tend to focus on individual results, often losing sight of the overall optimization. To prevent this, it's necessary to agree on a roadmap from the outset—how to expand on this success.
You don't need to create an elaborate plan. Just declare in advance the procedure: "First, we'll build a track record here, and then we'll expand it company-wide." Otherwise, when you propose "now doing it company-wide" after achieving success, people will be confused and ask, "Why do we need to do that?"
In other words, a two-pronged approach is important: increasing enthusiasm through short-term results while simultaneously ensuring that everyone understands that these results are a stepping stone to the next overall optimization.
—Regarding the Type A solution, which involves communication between business and IT departments, I think it would be difficult for a company to bridge the gap between domain knowledge and IT knowledge on its own. Since Macnica understands both the manufacturing site and IT, is it possible that they can support smooth communication?
Abe: Our strength lies in the fact that we originally came from a trading company, a business-oriented company. We not only understand the logic of creating systems, but also the pressure of being a business leader and have firsthand experience of the business world.
Because we are not tied to specific products or constraints, we can act as a bridge between the IT department and the business department with a neutral perspective, focusing purely on what needs to be done to achieve business objectives.
Another key feature is our ability to leverage our unique trading company network to propose the most suitable solutions from a diverse range of technologies worldwide. Because we don't adhere to specific technologies but instead offer objective knowledge and expertise as alternatives, we can communicate effectively with business units, making our services more readily accepted.
Key points for Type B: Communication mechanisms and translation for the business side.
Abe: The most important thing when supporting Type B is how to involve the business division.
Given the communication structure between the IT department (1) and numerous business units (N), it's unrealistic to reconcile their respective requests and interests through individual communication or personal effort alone. Therefore, we support the creation of "objective mechanisms" and "common processes" that enable collaboration without relying on individual coordination skills.
By defining clear rules for reaching consensus, we can avoid emotional conflicts and create a foundation that makes it easier for business departments to participate in projects.
Furthermore, we have extensive experience supporting business divisions, so we understand what benefits motivate them. To allow IT departments to focus on their core strength—system planning—we translate the significance of system implementation into benefits for business divisions, playing a complementary role in facilitating smooth internal collaboration.
Key points for Type C: Inner branding and objectivity
Abe: When supporting Type C individuals, the two most important things are ensuring the legitimacy of the project and achieving objective consensus.
First, because they lack the sales figures of business divisions and the system authority of IT departments, they tend to structurally lack the cohesive force to drive change within the company. Therefore, we support activities that build a story explaining "why we are doing this now" and instill the significance of the project through internal marketing (inner branding).
Specifically, we create an atmosphere of support for the project throughout the entire organization through various means, such as sending messages from management and producing videos.
Furthermore, it provides objectivity from a third-party perspective when coordinating between departments with differing interests. If discussions are conducted solely based on internal relationships, decision-making tends to be influenced by political power and the volume of voices.
Therefore, we bring in an objective external perspective based on other companies' examples and market standards, ensuring fair and unbiased communication free from emotional arguments. In particular, we have extensive experience supporting both the business and IT sides. It is this experience that allows us to create an environment that truly promotes DX, even for Type C projects that require coordination between both business units.
Leaders freed from the "loneliness" that robs them of their driving force
— I think there are many leaders who are fighting their battles day by day without relying on external partners. What do you think are the benefits for leaders of having a partner like Macnica?
Abe: I think it's liberation from loneliness.
There are two main reasons for this.
The first reason is that it helps to break down the "language barriers" between departments and gain understanding from people within the company. In DX projects, coordination between departments is often difficult due to differences in position and priorities, and leaders often end up isolated.
For example, the speed of Type A is often misunderstood by the IT department as reckless and uncontrolled, but we translate the intention and supplement it with information on its technical feasibility.
Type B's overall optimal and robust rules are often perceived as inflexible by business units, but we communicate this as a benefit, a guardrail to protect the business.
Furthermore, Type C initiatives can be difficult to gain acceptance from departments that possess deep knowledge and pride in their operations and IT. Therefore, we provide a third-party perspective based on our experience in promoting DX in a wide variety of companies, acting as a bridge to facilitate dialogue on equal footing with members of each department.
In this way, by acting as a neutral translator, we prevent the emotional isolation that comes from feeling like no one understands your true intentions.
The second reason is that it allows for the strategic distribution of organizational structural pressures that a single leader cannot bear alone. Every type of leader faces structural limitations that cannot be overcome by individual ability alone.
For Type A companies, we create a roadmap to overall optimization, which they struggle with, and proactively prevent the risk of future isolation (siloing).
For Type B, in the challenging situation of one-to-many adjustments, we reduce the burden on those on the front lines by introducing an objective mechanism rather than relying on individual effort.
For Type C individuals, we compensate for their lack of authority by creating project legitimacy through internal marketing and providing them with the weapons to fight.
In other words, we believe that by not letting leaders bear the responsibility for change and the political pressures alone, but by sharing that burden as partners, we can free them from fighting a lonely battle.
In addition to the collaborative support described above, Macnica provides support for the introduction and development of Mendix as a tool, as well as the 5Ps as DX know-how.
In the next article, we will introduce Mendix, a powerful tool for leaders to achieve results, and the 5Ps of DX know-how, in detail, taking into account the characteristics of each leader.
Previous Article | "Real-world failure cases of DX in manufacturing | Explained along with the characteristics of three types of DX leaders"
Next Article | "How to Achieve Results with Manufacturing DX | The Leader's Tools: Mendix and the 5Ps"
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Digital Execution Factory: Making DX a part of organizational culture in the manufacturing industry
At Macnica, we provide manufacturing DX support services that work as a partner, helping each leader overcome setbacks by tailoring our services to their individual strengths and weaknesses.
Specifically, we provide "Digital Execution Factory," which helps to make DX a part of your organizational culture, through the following support:
- Strengthening governance systems that involve the entire company
- Accompanying the CoE, which spans business and IT departments, from concept design to launch and establishment
- A training program for specialists who can lead DX promotion on-site
- Development support using Mendix, a low-code development platform that allows you to gain small successes through agile development
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"Digital Execution Factory" is a know-how that only Macnica can provide in Japan, which has been optimized for the Japanese manufacturing industry based on practical knowledge established in Europe and the United States, where DX is advanced. We will accompany our customers, aiming to create a state in which the optimal DX for each customer is "spontaneously and continuously created."