With every sector beset by challenges that a fast-changing world and global economy are thrusting on them, nothing is keeping these firms more on their toes than the digital enhancements they need to make, just to stay ahead in their business. Actually, just to stay in the business too.
Industries like mining, farming and construction have also had to look at adopting a digital strategy which improves their bottom line. To do this, any equipment manufacturer who helps meet this requirement is going to become a favoured partner, irrespective of whether they did business in the past with a customer or not.
Mining and construction will need technology to make operations safer and employee-friendly. Farming will need technology to improve crop yields. As one heavy equipment manufacturer told Egon Zehnder in a report, “In 20 years, we’ll need to produce 50 percent more food. Farmers also need technology to share information for compliance for environmental sustainability purposes.”
Equipment companies are going about this in two ways:
Developing technology internally and building a proprietary platform, that they hope will be accepted and set the standard for the rest of the industry.
Going outside the firm and bringing in partnerships so that open platforms may be used. This is because it can be difficult for OEMs to innovate on their own.
Once this is set in motion, the issue of who owns the data also crops up. Customers will feel they do, as they have paid for the equipment that is collecting and generating the data. Hence, there is bound to be pressure on original equipment manufacturers (OEM) to be open with their data and platform (if they have built one). They are aware of it and are still trying to deal with this. As Head of Global Business Services and CIO, Global Mining Group, said: “For a long time, large OEMs thought they could develop the technology themselves and innovate faster than other tech providers. But we’ve seen OEMs struggle to transform themselves.”
This lack is as much about skill sets because young techies may not be enamoured with this line of work, as compared to software or computer engineering. Plus there is a need to know something about two streams of engineering - mechanical and electrical - and this combination is not easily available. Earlier, the issue was also that salaries may not match Silicon Valley levels. But as the Group CIO of a construction and agricultural machinery manufacturer stated, “Our edge is we can offer talent now working in Silicon Valley a chance to stand out more and have more highly visible personal impact.”
Hiring fresh talent
So while things are far from hunky dory, these industries have begun hiring talent from places like Google, where they are learning about creating a connecting platform, and the Google geek is learning about keeping regular 9-5 office hours! A common meeting ground has to be in place and adaptability and flexibility will be very much needed.
The winning OEM will be the ones who offer their customers the extra digital edge and to become such a top player, they will need to pursue a mix of strategies, such as:
Pursue both defensive and offensive digital strategies. Have their fingers in both open-outside and in-house proprietary technologies. Realise there is a need to work more closely with everyone: customers, suppliers and partners, where collaboration and shared learning are encouraged within a safe environment. Digital talent will have to be sold on the idea that they can make a huge impact on reshaping the future of an OEM. This is the time to emphasize that they can create something useful, which has the scope of making a difference in people’s lives. Digital brains need to be involved in what they do, so forcing them into pre-defined slots will backfire. Instead give them meaningful roles that will give them personal fulfillment. This will have the dual benefits of adding maximum value to the company, while also creatively catering to their desires. In order to build teams that perfectly blend mechanical and digital expertise, this is what the Egon Zehnder report suggests that the equipment manufacturer’s team ought to focus on: Balance: How well a team understands the importance of diversity of skills and strengths and is willing to incorporate them. Energy and resilience: How ambitious the team is, and how much it takes the initiative and maintains long-term momentum at a high level. Also, it’s important that the team is able to hold on to their vision/goal/plan even under severe stress (both internal and external) and remain effective. Alignment: How well aligned are team members and whether they understand the larger team purpose? This is very important because they will need to focus their actions and those of the team on certain non-negotiable targets. E ﬃ ciency: This is important because the team needs to understand the need to optimize resources and time. Openness: The team should realise the need to engage with the entire organisation and the outside world, and build constructive connections to do so.
Equipment company CEOs should convey to their employees, at all levels of the organisation, that now is the time to move ahead with a bold, new, game plan if they want to stay in the reckoning, and retain customers and attract new business as well.
Manali Rohinesh is a freelance writer who explores financial andnon-financial subjects that pique her interest.