Digitize or Die book extract: The importance of leadership and middle management for IoT

Even though the digital transformation has been building up for over a decade, most businesses have yet to recognise it as a high priority. This is especially true of larger corporations with solid, apparently unassailable channels and markets.

It is true that some businesses will not be impacted by what IoT brings to the table. But are you truly confident, as you read these sentences, that your business is immune to the IoT revolution?

Many leaders may not see the threats to their business and are blinded by their current analog profitability. Our brain is ‘inherently lazy’ and will always ‘choose the most energy efficient path’ if we let it, writes Tara Swart, a senior lecturer at MIT, in her book Neuroscience for Leadership. “[The brain’s] need [to survive] focuses attention on the sources of danger and on trying to predict where the next threat will appear, on escape or full-frontal battle rather than on an innovative or creative solution, on avoiding risk rather than managing it towards a new suite of products, market or way of doing business,” Swart writes.

If leaders don’t see the threat and opportunities of the IoT and fail to understand how they can leverage that for their company’s benefit, then they are in danger of becoming yet another case study like Kodak, Nokia, and Polaroid.

On the other side of the coin, there are leaders who fully acknowledge that there are some risks and that those might be potentially deadly to their business. They struggle to raise the urgency of change and the associated orchestration among their employees. When properly tackled, digital transformation can ignite a sense of purpose among your teams, and more importantly raise the overall satisfaction and therefore increase buy in from them which often increases productivity. Studies show that when a clear digital strategy is being established and shared with employees, the satisfaction of those employees raises from 10% to nearly 90%.

The importance of leadership

John Kotter, professor of leadership, emeritus, at the Harvard Business School, author of numerous books on leadership, highlights this importance of leadership and the difference between leadership and management when dealing with change management:

  • Management gets the regular work done well, reliably and efficiently, even in exceptionally large and complex systems
  • Leadership sets the vision and the associate strategy. They have the capability to energise their troops to trigger innovation despite the recognised changing problems and opportunities.

Both are important when dealing with a digital transformation strategy in a complex environment and organisation. Leadership is a key success factor when dealing with market niche or in a world where opportunities and technological trends can change greatly. Good management is a key success factor in large organisations operating in protected markets and environments that changes little.

The importance of digital mine canaries

Another important aspect when dealing with people in a digital transformation environment is that there is often someone who will understand the necessary steps to digital transformation before the rest of the peers and thus challenge the status quo. Those within the corporation who recognise the need for change often face marginalisation from the minds of the ‘analog’ leaders and scepticism from peers.

Carl Yankowski joined Polaroid in 1988 as vice president in charge of the business imaging, US consumers and industrial marketing.

He quickly identified the necessity for Polaroid to embrace the digital transformation by acquiring electronic imaging technologies. Unfortunately, MacAllister Booth, his CEO, vetoed the plan and gave clear ‘analog’ feedback, “Anyone who says instant photography is dying has his head in the sand.” Even the next CEO, Gary DiCamillo, had a very similar analog approach. He stated in 2008 at a Yale interview that “People were betting on hard copy and media that was going to be pick-up-able, visible, see able, touchable, as a photograph would be.” A couple of years later he analysed the situation: “We knew we needed to change the fan belt, but we couldn’t stop the engine. And the reason we couldn’t stop the engine was that instant film was the core of the financial model of this company.” This is very similar to Fujifilm’s model; the major difference is that Fujifilm’s management made a clear strategic choice to cannibalise their own market in order to enable the transformation to happen and build a longer term success.

Such an environment unleashes the opportunity to get early warning detection systems for your business, much like a canary in a coal mine. So, keep in mind that the canaries are not the problem. Rather, it’s the way you, as a leader and as a company, leverage them to create value for your customers, your channels, your company and its employees and the shareholders.

Carl Yankowski was Polaroid’s canary, and unfortunately for them, he was ignored.

Polaroid could have been a pioneer in digital photography if the leaders had embraced original ideas and set a vision that included the understanding that failing fast, protecting teams that challenge the status quo, embracing culture change can create the conditions for successful digital transformation. Unfortunately, Polaroid failed in those areas mainly because they did not have the conditions for its employees to embrace change and accelerate the needed digital transformation. This example highlights the importance of the people side of digital transformation and in particular the role of middle management when dealing with change and adaptation of organisations.

The importance of middle management

When dealing with digital transformation, leadership must first set a vision and clearly state and envision the result of the changes that are necessary. But vision and leadership is not enough. The Polaroid case clearly shows that even though they had performed thorough market research, even though they could have acquired the technology and even though they had leaders that had perceived the opportunity behind the risk, they did not realise the importance of middle management in digital transformation.

George Caspar Homans was an American sociologist (August 11 1910 – May 29 1989), founder of behavioural sociology and the Social Exchange Theory. He expressed in his different publications the importance of middle status of individuals in social organisations as well as their capabilities to absorb and drive creativity.

He considers that any hierarchical social organisation is constituted of:

  • ‘Low status individuals’: individuals do not fear status loss as they feel that they do not have anything to lose. Status can be defined as respect, honour, influence on other groups with the associate benefits such as credit, control, attention, influence as well as material benefits.
  • ‘High status individuals’: interestingly high-status individuals have a very similar reaction to their social status in that they are not afraid of losing social esteem, but not because of the same reasons. The consequence of being at the top of the social pyramid are the associate advantages such as ego satisfaction, financial freedom and well-being which in turn gives those individuals a lot of freedom in their everyday life and decisions.
  • ‘Middle status individuals’: Those individuals are on the opposite side, when talking about fear of losing status, of both the low and high-status individuals. The threat of status loss is the highest in this category of individuals as they are respected and can influence the low status individuals while at the same time dealing with the high-status individuals that are more respected and influential to the whole group.

If you apply those categories to a standard medium size company, you could categorise the groups as follows:

  • ‘Low-status individuals’: skilled or semiskilled workers, administrative personnel, transversal function with low influential power, etc.
  • ‘High-status individuals’: executive teams and their associate N-1. Transversal functions with influential power.
  • ‘Middle-status individuals’: middle management that refer to high status individuals to seek for approval and or final decisions, etc.

Middle management and innovation

Recent studies seem to show that when dealing with innovation and transformation and change in a social organisation such as a company, the middle status individuals will be more concerned than other groups to follow the rules at the cost of creativity and innovation. From an innovation point of view (organisational, R&D, process and so forth), being criticised and negatively evaluated for suggesting creative ideas may be particularly salient to middle status individuals. Middle status individuals tend to be less creative than those with high or low status but on the other side they can boost the group’s performance by focusing on productive tasks and filtering out irrelevant information.

High status individuals seem to have more willingness to risk the expression of creative ideas due to the fact that they are well established as high status individuals and do not fear losing the position. Interestingly Michelle M. Duguid and Jack Goncalo in their article “Squeezed in the Middle: The Middle Status Trade Creativity for Focus” seem also to show that, even if the high-status individuals’ creative ideas are objectively not more creative than ideas from the middle or low status individuals, their status and associate confidence makes them more confident to persuade the rest of the group.

In the Polaroid case, middle management didn’t embrace the high-status individuals’ beliefs and because of that they were pushed to the side. This caused major issues with innovation, digital transformation, cohesion and keeping digital talents in the company.

Analog company leaders willing to embrace the IoT should help the company’s middle management to understand the goals and outcomes, as well as the risks and threats to the existing business.

Setting a vision and giving a sense to the mission is not only about defining what needs to be done but also about creating the environment in which employees can challenge the status quo such as the business model, processes, products and services and to the corporation itself and creating enhancements to those.

Explaining the ‘why’ to middle management and more importantly enabling innovative action in the edge of the ‘mothership’ creates the environment for change and adds a sense of urgency and accountability amongst the middle status individuals.

Editor's note: This is an extract from Digitze or Die, by Nicolas Windpassinger. You can find out more about Digitize or Die and purchase it here. All benefits from the book will be donated to the Alzheimer’s Association and Fondation de France.

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Predictive Maintenance And Service: The Proactive Approach To Asset Management

You know the old saying: If it ain’t broke, don’t fix it.

Until recently, this was a philosophy the industrial asset management industry lived by. When a piece of equipment broke, you fixed it. When something malfunctioned, you replaced it. And service schedules were based on estimates rather than data.

The result of this reactive approach? Fluctuating costs, unreliable service, and unplanned downtime – not good for your reputation or your bottom line.

But what if you could track the health of your assets over time, then use that information to identify the optimal maintenance frequency for them? And what if you could predict exactly when a particular asset was going to break down so you could preemptively service or replace it?

Now, it’s possible. Thanks to data science, the Internet of Things (IoT), and machine learning, asset management is rapidly moving toward a predictive maintenance and service (PDMS) model – and this could lead to major benefits for your business.

How does PDMS work?

Let’s say you’re a wind farm operator in Montana. With 50 turbines to monitor, it can be tough to keep tabs on each one. And while your turbines are equipped with hundreds of sensors measuring things like rotation speed and temperature, that information is only relevant if you can use it to make better decisions.

With PDMS, your system will not only aggregate the sensor data, it will also analyze it, using machine learning algorithms. These insights empower you to home in on a specific turbine and get insights like how much wear and tear it was exposed to over the last year and how many times it broke down last month. From there, you can refine your service schedule, determine an optimal maintenance frequency, and predict when a problem’s likely to occur – helping you optimize costs and avoid headaches.

In fact, whether you’re a wind farmer in Montana or a utility company in Detroit, PDMS can enable your organization to:

  • Optimize maintenance costs for increased ROI: Reducing maintenance costs by even a few percentage points can result in hundreds of millions of dollars saved. With PDMS, you can figure out exactly when to service your machines to extend their useable life, optimizing spend and maximizing ROI.
  • Avoid unplanned downtime and schedule service to minimize disruption: The ability to predict and resolve issues before they become problems helps you avoid unplanned outages that burden your customers and adversely affect the bottom line.
  • Improve quality standards and deliver better service: With the help of real-time analytics, you can adjust and improve products and evolve your business model based on market and customer demands.

Unlocking the real-world value of PDMS

The benefits of PDMS aren’t going unnoticed. As new PDMS technologies enter the market, companies around the world are tapping in – and achieving measurable success.

Here are two organizations currently realizing tremendous value with PDMS:

  1. Trenitalia: Italy’s leading rail transport operator recently developed a dynamic maintenance model that combines sensor data, anomaly detection, and maintenance optimization to assess its trains’ batteries, brakes, and motors. With the help of data and the right PDMS system, Trenitalia has been able to define required maintenance actions, allowing the company to reduce errors, increase efficiency, and deliver better service. Ultimately, the organization expects an 8–10% reduction in maintenance costs – which is nothing to scoff at when its average maintenance spend is 1.3 billion Euros a year.
  1. Kaeser Kompressoren: By leveraging IoT and PDMS software, Kaeser – a German manufacturer of compressed air systems – can now monitor compressed air stations at customer sites around the clock and identify usage patterns. Not only has this enabled the company to predict when and what equipment needs service, it’s helped Kaeser decrease unplanned downtime, improve service, and optimize its supply chain.

Leveraging PDMS has also pushed Kaeser toward a new services-based business model. By studying its products in the field and analyzing the gathered data against market behavior and trends, Kaeser has shifted its focus to delivering solutions alongside products. This has helped the company secure its market position, improve margins, and develop new products.

Resolving issues is only the beginning

Staying ahead of problems pays off. By adopting PDMS technology, not only can you resolve issues before they occur, you can increase productivity, improve services, maximize ROI, and create new business models that ensure a bright future.

Eager to learn more about PDMS? Download our free report, Leverage the Internet of Things to Transform Maintenance and Service Operations.

The amount of repair and maintenance expenses have a huge impact on profitability. This is why in the past many companies have moved from a fixed-interval preventive maintenance strategy to a more agile approach based on condition data. In order to take the next maturity level, manufacturers and operator of assets are now moving towards a predictive maintenance strategy which also takes into account sensor data from machines. This will allow them to develop optimized maintenance and service schedules as well as more precise failure predictions.

Learn more and start your free trial of SAP Predictive Maintenance and Services for Cloud today by clicking here.

Internet of Things – Digitalist Magazine

DJI launches FlightHub for drone fleet management

DJI launches FlightHub SaaS for drone fleet management

DJI is making a major play in the commercial drone industry with FlightHub, a web-based platform for drone fleet management. 

Chinese drone giant DJI is thought to have at least a 70 percent market share of all global hardware purchases in the drone industry. That share is only expected to grow as competitors struggle to match the company’s aggressive pricing and iteration strategy and fall by the wayside.

The fact that the Chinese manufacturer is turning its hand to enterprise software will be worrying for even established software-as-a-service drone management platforms in the industry. In short, DJI is fast becoming the behemoth of drones.

FlightHub: Drone operation management

DJI’s enterprise software announcement is, on the one hand, a bold step into new territory. Although the company provides the hardware for the majority of commercial operations, it’s essentially still consumer-focused. Providing the deep insights and flexible tools required for enterprise is another matter.

On the other hand, the move is a reflection of where the market is going. New commercial use cases are opening up all the time as regulations evolve, and companies large and small are realizing the potential of the technology. DJI is simply joining the dots.

The central theme of DJI’s FlightHub platform is connectivity. Disparate teams can work together in one place in real time. For any business operating multiple drones, the software provides a centralized view of all missions to enable collaboration between pilots and offsite teams.

“As commercial use of drone technology increases each day, businesses need a solution that lets them scale their operations quickly and efficiently manage their growing fleets and teams across multiple locations,” said Jan Gasparic, DJI’s head of enterprise partnerships.

“FlightHub is the first solution of its kind that empowers businesses to manage their drone operations in one place, securely, within seconds and from remote locations.”

Read more: Can drones and commercial aircraft safely share airspace?

Informed decision making

FlightHub offers businesses two separate views of drone operations, Map View and Real-Time View. Both display telemetry, camera and sensor data.

Map View provides offsite teams with a live, map-based overview of operations. It’s been designed to help with the coordination of simultaneous flights and multiple teams. It also offers guidance regarding regulations and no-fly zones from DJI’s Geospatial Environment Online (GEO) geofencing system.

Real-Time View is more immersive and helps pilots collaborate with engineers and experts on the ground. It offers live video feeds from up to four onsite drones to enable unique workflows and quick decision making.

Read more: Drones and machine learning form shark safety system

Prioritizing data security

The past few months have been torrid for DJI from a PR and security standpoint. Hackers continue to evade the company’s GEO system in order to fly without restriction; both the US and the Australian militaries have grounded DJI aircraft over ‘cyber vulnerabilities’; a bug bounty program that was promised as a way to get security experts onside is yet to materialize.

With that in mind, the news that FlightHub’s web-based management tools will sync flight logs and statistics to secure US servers makes a lot of sense.

According to a statement from DJI, “FlightHub data management operations have been pre-assessed in accordance with SOC2 AICPA standards. Future versions of FlightHub will have the option to integrate with private clouds for organizations that demand the highest level of data security.”

Read more: How drones are helping hurricane recovery efforts

Out in the field

DJI has tested FlightHub with US railway provider BNSF, which uses drones to carry out maintenance inspections of tracks from above.

“When we first started the drone program at BNSF, we had to develop a lot of processes from scratch, including the tasks of manually logging flights and conducting checks to ensure each team out on the field was following maintenance instructions at all times,” said Nick Dryer, UAS field ops manager at BNSF.

“FlightHub has made our program significantly easier to manage by providing a full view of real-time operations and internal communications in one platform. This solution has given us the opportunity to further expand the use of this new technology in an old industry.”

Read more: Can drones and commercial aircraft safely share airspace?

The post DJI launches FlightHub for drone fleet management appeared first on Internet of Business.

Internet of Business

Digitalist Flash Briefing: How IoT And Connected Vehicles Are Redefining Fleet Management

Today’s briefing looks at how the promised benefits of connected cars as they scale from an individual car owner’s lifestyle to the complex world of fleet owners that manage dozens, or even thousands, of vehicles. All thanks to the Internet of Things.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist”. Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic


Internet of Things – Digitalist Magazine

The installed base of fleet management systems in Australia and New Zealand to reach 1.4 million units by 2021

The installed base of fleet management systems in Australia and New Zealand to reach 1.4 million units by 2021

The installed base of fleet management systems in Australia and New Zealand to reach 1.4 million units by 2021

The number of active fleet management systems deployed in commercial vehicle fleets in Australia and New Zealand was almost 0.7 million in Q4-2016 according to a new research report from M2M/IoT analyst firm Berg Insight.

Growing at a compound annual growth rate (CAGR) of 15.7 percent, this number is expected to reach 1.4 million by 2021. The fleet management market in Australia and New Zealand is today influenced positively by a number of market drivers including regulatory developments such as health and safety regulations, road user charges and electronic work diaries.

A wide variety of players serve the fleet management market in Australia and New Zealand, ranging from small local vendors to leading international solution providers.

“Industry representatives however argue that the Australian fleet management space is actually not as fragmented as many other markets considering its size”, says Rickard Andersson, Senior Analyst, Berg Insight.

He adds that though there is a myriad of very small players, the fact that there are few players with large installed bases means that the overall market is indeed comparably consolidated in terms of market share.

Mr. Andersson continued:

“The top-10 players in Australia and New Zealand account for more than half of the active units on the market. Almost 40 percent is even represented by the top-5.”

Berg Insight chart: number of active fleet management units in AU and NZBerg Insight ranks Teletrac Navman as the largest provider in Australia and New Zealand, having surpassed the milestone of 100,000 active units in the region in 2017. Other major players on the market incl ude EROAD, IntelliTrac, MTData, Smartrak and Coretex which are all based in the region, as well as international players including Verizon, Altech Netstar, Fleet Complete, MiX Telematics and Ctrack.

“Ongoing M&A activity in the region adds to the consolidation of the market and the emergence of a limited number of dominant solution providers with above-average growth rates”, concludes Mr. Andersson.

The post The installed base of fleet management systems in Australia and New Zealand to reach 1.4 million units by 2021 appeared first on IoT Business News.

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