For businesses that are heavily reliant on technology, it is evident that to integrate technology and continue to develop and disrupt. But if you’re a large global corporation in manufacturing or agriculture, it’s less obvious because of an immense legacy actually to move forward. In general, the traditional corporations still drive up safely to say more than 90% of our economies today, and these are not Apple, Microsoft, or all the modern high-tech companies we love but traditional big corporations, which are also the main focus here in this article.
To understand better, we must look at some of the traditional corporations emerging as future leaders, which seem to have integrated new technologies seamlessly in their operations and are performing some tremendous developments to improve their customer experience, business model, and overall business operations. Those future leaders do exist, which is good news. But the problem and the bad news is that there are few and far between companies with success, so they are a minority.
Who are the emerging future leaders: Let’s briefly look at some examples of our future leaders. These are the companies that are getting tremendous benefits, not just through performance Improvement, but with financial gains, and they are developing some great customer interactions and engagements. Examples:
- Danish Oil / Ørsted
- Keller Williams
1. Danish Oil / Ørsted
Back in 2012, Danish Oil and Natural Gas was Denmark’s biggest enterprise. In the same year, natural gas prices plunged by approximately 90%, sliding Danish Oil into financial crises since the company’s energy mix relied mostly on fossil fuels. Moreover, S&P, following the company’s financial situation, downgraded its credit rating to negative. To recover from the crises, the company’s board replaced its CEO by hiring a LEGO’s former executive Henrik Poulsen. Henrik’s approach was opposite to the usual play of crisis-management, staff layoffs, or cutting the costs. He instead recognized the potential for fundamental changes and took this moment as an opportunity.
“We saw the need to build an entirely new company,” says Poulsen.
Here are a few radical transformations he did:
- He renamed the company to Ørsted after the legendary Danish scientist Hans Christian Ørsted, who discovered electromagnetism’s principles.
- Divesting from the oil and gas business, which shifted the focus heavily on renewables.
- Investing in moving away from coal and towards biomass, enabling the company to exit coal in 2023 and have carbon-neutral power generation by 2025.
- Went for an IPO in 2016, which helped in fueling the growth & flexibility.
- Diversified the technology mix by re-entering into the onshore-wind market, storage solution, and solar PV.
- The company also started to utilize Microsoft advanced analytics, artificial intelligence (AI), and cloud to improve overall production efficiency.
“When we engineer new wind farms, the computations for the foundations alone used to take weeks. Now with the cloud, it takes between four and eight hours,” says Michael Judén, head of digital strategy at Ørsted
“It had to be a radical transformation; we needed to build new core business and find new areas of sustainable growth. We looked at the shift to combat climate change, and we became one of the few companies to wholeheartedly make this profound decision, to be one of the first to go from black to green energy.” Henrik Poulsen.
That strategic impulse—to identify a higher-purpose mission that galvanizes the organization — is a common thread among the leaders at several other enterprises emerging as the digital leaders of this age.
Next is a company from a very classical business sector and part of the world which you probably won’t expect to lead on the technology transformation side like Asian paints which is one of the biggest paint manufacturing companies in Asia, how exciting a coating company can be on this topic right? yet they have been doing some tremendous things with digital technology.
Company Background: Asian Paints, founded in 1942, is known as one of India’s most technology-savvy manufacturers and was named by Forbes as one of the world’s ten most innovative companies in 2017. Information technology has long played a central role at the company, where computerization of operations began in the 1970s, followed by the deployment of a series of innovative IT applications for supply chain optimization and customer engagement.
Let’s look at a problem they solved as an example: Not more than a decade back, Asian Paints realized that they did not have comprehensive visibility into the interdependent factors affecting production. The complex interdependencies between machines, process parameters, and materials made it difficult and time-consuming to determine the root causes of the issues and optimize production cycles. This problem leads them to business innovation.
How did they solve: The company chose to transform by adapting an enterprise-level smart solution Sight Machine for its unique ability to use AI to combine production data from hundreds of assets into digital twins of the production process.
The deployment of Sight Machine’s data analytics platform by Asian Paints across its network of manufacturing plants in India was intended to transform production data into insights for increasing productivity and efficiency.
The initiative helped Asian Paints collect and analyze the data produced by machines across the company’s Indian manufacturing footprint, searching for insights leading to better business decisions and increased returns.
“As an insight-driven company, we searched the world for the most advanced and scalable manufacturing analytics technology to use across our facilities to drive better decisions,” said Harish Lade, Vice President, Supply Chain for Asian Paints. “Sight Machine gave us unique insights into what is happening in our production lines in the first factory where we deployed the solution. The proposition is to deploy this across our factories, which will enable us to be a more data-driven and agile organization.”
Another great example from Asian paintings was the reinvention of itself as a home decor company from being just a paint manufacturer. The company believes that reinvention is the key to unlock the next phase of growth and customer-centric innovation.
What they did there: Asian paints, on their path to reinvent itself, transitioned from a product company only to a services company providing a wide range of home improvement solutions. One of the key offerings is their Ezycolour Consultancy where they offer color, decor, and Vastu inspired solutions to customers.
Let’s look at another example, another classic business industry which is mining. A company to notice here for its business transformation and innovation is Codelco.
Quick background: Codelco is the largest Copper selling company in the world with its last reported revenue in 2017 being the US $14.6 Billion. In the last 2 decades, Codelco has been on the innovation path incorporating Information Technology, Telecommunications, Automation, and Robotics into its production processes.
What drove the innovation there: In 2016 the mining industry suffered from pricing crises. China and emerging markets like Brazil slowed down dramatically in their demands for things like steel, iron ore, and crude oil where the more developed markets like Europe were underperforming, and in the US the manufacturing activity was significantly contracting.
In 2017 it started to get a little better for the copper industry with the slow recovery however it was still not enough for big businesses to sustain and plan any solid growth for the future.
How was Codelco transformed: Codelco focused on a three-pillar strategy for their innovation that it is Automated, Untraditional, and Continuous. Some of the key changes they did were to incorporate driverless trucks and transport in their operations, shift from labor-intensive to on-site machinery, remote operation rooms, data analysis, real-time response, and improvement in coordination. They used large volumes of data analysis to improve their product quality (purity) focused on becoming an eco-friendly company and changed the operations to become a safer employment space for their people.
What did all result into The company reported the United States $623 million in net profits compared to the loss of $330 million and in 2018 the first two quarters only they reported to have achieved the pre-tax profit of $1.235 billion.
This was a quick look at companies from the manufacturing and mining industry but let’s take a look at some of the examples from brands that are most likely part of our daily lives.
We all know Starbucks (my favorite is their Iced Caramel Cloud Macchiato). When talking about business transformation and innovation incorporating Information Technology Starbucks clearly takes the front-row seat at the intersection of the physical and digital worlds like no other company in or out of retail business. The key to their digital transformation is in their data analytics capabilities. The company has tons of data about their clients and studies their customers to understand their buying choices so they can personalize their offers and the marketing materials.
Let’s look at their “Digital Flywheel” of their mobile app which is focused on four pillars: Rewards, Personalisation, Payments, and Orders. Which is a great example of a customer-first approach? By using machine learning technology the app’s backend is a system that learns to make automated decisions in complex, unpredictable environments based upon external feedback to provide a more personalized experience for app users.
Another key learning from Starbucks may be from their IoT enabled machines which collect more than a dozen data points for every shot of espresso pulled, from the type of beans used to the coffee’s temperature and water quality, generating more than 5 megabytes of data in an eight-hour shift.
Now, Starbucks is looking to expand this technology to the drive-thru experience.
“As an engineering and technology organization, one of the areas we are incredibly excited to be pursuing is using data to continuously improve the experience for our customers and partners,” says Martin-Flickinger. “Using data for personalization is vital to our mobile app, and now we are leveraging data to improve our drive-thru experience. Technology has to amplify that human connection, not get in the way of it. It is not about building cool, shiny technology. It’s about building technology that appeals to that connection and craft that is uniquely Starbucks”.
So imagine it is a coffee selling brand that identifies itself as a technology organization, heavily uses machine learning, data analytics, and smart technology to enhance the customer experience as the key approach for future business growth.
5. Keller Williams.
Let’s take a look at Keller Williams, the world’s largest real estate franchise ranked by agent count and no.1 in the USA in sales volumes and units sold. They started their digital transformation in 2015 until then they were depending heavily on third-party solutions so they decided to build their own proprietary software on their own. A good example of that would be KW labs, an innovation hub dedicated to transforming KW into a technology company.
The company invested in a CRM system, AI-based virtual assistance (like Siri but for real estate), and a consumer app. These apps help their agents with hyper-local market analysis to better advise clients, suggesting right offer parameters or estimating the probability of closing a deal. Behind it, there were more than 36 years of rich historical data along with utilizing the best-in-class machine learning capabilities to produce actionable and relevant insights.
“The businessperson who wins in the Fourth Industrial Revolution is the one who has the access to the most amount of data, powered by strong Artificial Intelligence. AI helps you make smart decisions and gives you (and your clients) a better experience.* Gary Keller, CEO, and Chairman of Keller Williams.
The digital transformation resulted in the continuous growth of Keller Williams with a stable 20+% y/y sales volume increase. All of this while receiving recognition as the World’s Most Innovative Company in real estate by Fast Company and one of the happiest companies to work for by Career Bliss.
All of this sounds great, right? but what about something recent, what’s going on today especially in the pandemics.
Let’s look into these slogans and see what’s behind these marketing messaging:
“Play inside”, “Play for the World”. “You can’t stop us” or the “New Normal”. If you haven’t yet guessed it right these are the recent slogans used by Nike in response to the COVID-19 pandemic.
It may seem opportunistic using the COVID-19 as a marketing campaign but it really goes beyond that, it is a matter of connecting to customers and keeping the business and the brand alive in the customer’s mind. Some of the key elements of the digital transformation at Nike are:
- Social commerce: The numerous mobile apps and platforms create an ecosystem that integrates the social component with shopping-centric apps and covert customer’s engagement into sales.
- Sneakerheads Platform: The launch of the SNKRS app intended for sneakerheads, offering limited-release, high-demand shoes for its most-engaged is being used as a key source of ideas and suggestions for new designs to a bigger customer base.
- Analytics: Nike uses its digital ecosystem to collect data in every interaction and in its different channels, to identify customers’ preferences, and to design new products.
“SNKRS app to me is really a signal of the future potential of how we connect with consumers in a deeper way with storytelling as part of the effort,” said Mark Parker, Nike Chairman, President, and CEO. “while many companies can build a technology stack, no other brand is able to leverage technology to create the kinds of amazing consumer experiences that only NIKE can.”
So in these shared examples of our future leaders which the most common factor we see in their future growth and development, that is technology integration into their business no matter which business industry they are in and there are two to three main dimensions to it. So, any organization now can do the same it just needs leadership tenacity, investment, resources, and so on so it’s not easy but everybody can do it and the time to do it is absolutely now. The first adopters of digital transformation are mostly the best-run companies in the world we know but we can learn from these companies, how do they do that, and what are their drivers of digital transformation.