I am officially pleading guilty — in the court of manufacturing innovation.
Guilty of encouraging manufacturing leaders to experiment and ‘pilot’ new technologies, to not fear failure, to learn by doing, and to rapidly iterate until they achieve the technology-enabled business transformation they are after.
Guilty of encouraging this without sharing part two of what the journey looks like.
In my defense, my enthusiasm was and is not entirely misplaced. While I admit my guilt, I’m not suddenly discouraging agile, iterative, and entrepreneurial pursuits of transformation in business. What I’m really after is educating technology buyers — and updating my record! — on what happens after they have started to experiment. I want them to know what they should do next in order to successfully deliver on the transformation story without getting stuck in what’s known as ‘pilot purgatory’.
Despite carefully planned digital transformation initiatives, ROI assessments, and technology selection, manufacturers are beginning to grapple with the unfortunate reality — too many projects begin with so much promise yet end up in a suspended state due to challenges such as failed ROI, mismanaged expectations, or scalability concerns. It was McKinsey and Company who coined the term pilot purgatory in a recent report and highlighted that two of every three companies piloting new technologies fall into this static state.
While McKinsey’s article should be an important resource to learn which topics you should align on before you start the pilot, manufacturers should also consider the following four early planning strategies and recommendations. I have compiled this list based on conversations with manufacturing leaders as well as my own experiences piloting and launching transformational business technologies.
1. Get the correct people involved
It is often extremely enticing to ‘go it alone’ when piloting new technologies, especially if the price point is low enough to not require senior level buy-in. The thought that buy-in will be easier once ROI is proven is a noble thought, but rarely works out in practice.
Competing initiatives, strategic direction changes, budget cycles, colleagues leaving the team — these are only some of the realities that derail technology pilots. We’ve seen this play out over and over again, no matter how “mature” the innovation culture is at a company.
- My recommendation — even if you don’t need buy-in for budget, involve the senior leadership team early and get aligned. Make sure there is long term viability if or when the ROI is proven out. If you’re a senior leader, remember that giving your teams space to innovate is encouraged, but you should also make sure you create a safe environment for your teams to share early ideas, concepts, and failures. That is the only way you will be able to clear the path for success.
2. Get ‘enough’ people involved
As I’ve previously written, the biggest barrier to the successful adoption of new technologies is the resistance to developing new habits. Proving ROI isn’t enough to go from a pilot to enterprise-wide adoption. Your users need adopt the technology, work with it regularly, and yes, even enjoy it.
There is a certain critical mass of adoption that is often required in order to build enough momentum around new technology pilots. The benefit, of course, is the accelerated capture of requirements and feedback from various stakeholders that will eventually drive enterprise rollout. Establishing early alignment between IT, operations, maintenance, quality, and executive teams also goes a long way to building comfort and familiarity with the technology – keeping pilots contained to a single functional group is a sure shot recipe for pilot purgatory.
One manufacturer I worked with several years ago chose to ignore multiple warnings from our IIoT solution, signaling impending failure of a critical air handling system in their facility. The system failed as predicted, and in the post-event analysis, we uncovered their reason for ignoring multiple signals: The users weren’t accustomed to looking at real-time data streams from the machine and, as a result, didn’t always trust the recommendations of a new system.
- My recommendation — Create cross-functional technology pilot teams early and encourage as many stakeholders to get engaged as possible. It might appear to slow progress at the beginning, but it will accelerate the path from pilot to rollout. If you’re a senior leader, don’t simply encourage and align cross-functional behavior, but help the team address competing priorities and identifying short-term vs long-term targets.
3. Change management is key
Short-term technology pilots can seem deceivingly straight forward; if things go well, you bring in a new technology, test it in a sandbox to prove value, and make a recommendation to purchase or implement on a broader scale. But that is when things are most likely to fall apart.
If you haven’t properly planned the change management process, you may realize that not all stakeholders’ needs were accounted for. Or you may find that competing priorities and timelines slow down the rollout, or that some aspect of the technology, such as integrations into existing systems, weren’t fully thought through. Even worse, you may find that the disruption caused to existing processes — often creating a need to re-train employees — will be more harmful than helpful. Alas, companies then find themselves dragging out pilots to fully validate and test the change management processes. Be warned: this drags on for a while.
- My recommendation — Plan the change management steps and process early. Make sure you understand this process deeply and intimately, and ensure that it is incorporated in your pilot execution plan and success criteria. Senior leaders should consider how they can support this change management by aligning priorities from the top down.
4. Just do it. Or don’t. But do something!
Sometimes the simplest ideas are the ones most easily overlooked.
Bringing in new technology comes with its own set of risks, and pilot programs are a good way to de-risk these efforts. Manufacturers de-risk by limiting scope — such as running a pilot in one facility or one production line — by limiting investments, or by limiting exposure or time. Often this opens up bandwidth to de-risk decisions by piloting multiple technologies or even vendors at the same time.
But make no mistake — though you might de-risk the license fees, technology pilots can be expensive. They require a large investment in time and resources, require careful planning, diligent execution, and firm decision making.
That last point is key — firm decision making really matters. Pilot programs often drag on into pilot purgatory as organizations keep expecting to ‘100% de-risk’. What organizations may not realize is that by not taking decisive action, they are still taking on risk, albeit a different type. They continue to bleed without realizing, as pilots drag on and on and on, all because they’re always ‘so close’ to addressing all open risk items.
- My recommendation — Define success criteria and agree to move forward once the success criteria is met. Address any new risks identified in phase one of the rollout process. Repeat for subsequent phases. On the contrary, if criteria is not met, be comfortable saying, “This did not succeed,” and move on. If you’re a senior leader, enable your mid-management team to feel safe in making bold decisions. While none of us want projects to fail — especially later in the game — the fear of repercussion paralyzes decision making, especially in the mid-management layers. Pay attention when you see this happening.
The bottom line
We need to begin to see technology pilots not just as ROI proving grounds and de-risking initiatives, but as the first step in a broader, longer-term digital transformation. As you would with any such project, remember what’s important. Involve the right cross-functional leadership team, build critical mass, create safe spaces for failure, manage change at all levels of the organization, and enable the teams to make bold decisions.
Do these things, and pilot purgatory won’t leave your digital transformation in limbo.