[This article was published in german in Markt&Technik, 2/19 in May-19.]
“The automotive industry is undergoing a total transformation where vehicles get connected, electrified and autonomous.” This is a quote from a Volvo representative at a panel discussion I sat on at the SXSW tech festival in Austin a month ago. The automotive industry is considered to be in the forefront of the technical evolution of traditional industries. And sure, they are.
Fast forward two weeks and another stage appearance with another customer, Husqvarna, at the Sweden Co-Lab Pavilion at the Hannover Messe. Husqvarna is a global leader in garden, park and forest care products, and have sold millions of robot mowers. “We’ve transitioned from gasoline to electricity, our products are connected and even AI-controlled, and fully automated.” Sounds familiar? Yes, it could just as well have been the quote from Austin a few weeks earlier.
The fact is that every company is going through transformation. Digital transformation has been getting the most attention, but in our work with companies in different industries we also see electrical transformation, automation, a shift in focus from product to services, and new business models based on sharing. And while everyone is transforming, some are a little faster in doing so, and some are a little louder when waving the flag. Others do it less public. But no one can hide from transformation in 2019. The reason is that several major technology shifts are occurring at the same time – IoT, AI, AR/VR, blockchain etc. At the same time we have realized that we all have to pitch in and take our environmental responsibility to save the world. But change is rarely comfortable.
Husqvarna is a 330-year-old company. They have shifted out their entire product portfolio five times, killed their darlings, and made big bets on new technologies and emerging product categories. Constant transformation is what has kept them alive. Big bets are inevitable when aiming for a future that is unknown, and especially today when change is faster than ever before, and “wait and see” is a dangerous strategy. So, let me share some advice based on my own experience.
First, don’t boil the ocean. With a lot of “unknowns” it is close to impossible to correctly predict every aspect and detail. Break it down into small incremental steps. The success of the smartphone is the aggregate result of many apps, for many different purposes, to make the smartphone as vital as oxygen. You have probably heard the Bill Gates quote that “we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”.
But instead of creating a grand and detailed plan, it is important so set an aim. To set a target. To define a “man on the moon”. When NASA made it the sole priority to put a man on the moon, it aligned all efforts to support this goal. This way they could solve one problem after another to eventually get there, and know why they did things and prioritize properly. Search for “Husqvarna Solea” on YouTube. You will see a film where a mother drone flies in over New York, drops a number of AutoMowers in Central Park, who return to the drone when done and fly off to the next job. Certainly visionary, certainly within Husqvarna’s core business, and certainly a challenge. But this is great justification of projects that collect data for operations reports, for solving how several units cooperate, and for the mowers to quickly scan and self-learn a new area. All of these are individually innovative and valuable features for today’s household customers. Get through the checklist and Husqvarna will continue to be the technology leader. Add the drone and you are done.
And guess what; Maybe the world changes while you’re going through the checklist. Maybe you were wrong on one or two assumptions. And probably you’ll come up with even better solutions on the way. This is why it makes sense to add one brick after another.
Second, don’t do everything yourself. With all companies going through simultaneous transformation it will be impossible to attract the best data scientists, and the leading AR or blockchain specialists. Instead, become a superstar in collaboration with expert companies. Startup-enterprise collaboration is a hot topic at most tech conferences these days. Besides getting access to the best, you get the speed, inspiration and agility, and you can easily kick the vendor out if the collaboration doesn’t work, which is not always the case with employees. You reduce the risk, and can easily argue benefits through risk and reward.
The internal risk for the enterprise is small. The reason is that the enterprise sits on the core assets – domain expertise and the customer. Technology, as in all these new technologies, is no end in itself, but just means to solve a problem and alleviate the offering to the next level. In my experience, technology is rarely the problem when you have set a goal and identified the key success metrics. See all these new technologies as enablers, as a source of inspiration, where things that were impossible ten years ago are doable today.
In the process we make the world a better place. I’m convinced that new technology is required to meet the UN’s Agenda 2030 goals, to decelerate global warming, and ensure a future for coming generations. Electrification is one step, but once electrified we have to optimize the use. A good example is building automation. At Ekkono we have done a case with our customer Systeminstallation to apply machine learning on a per-apartment basis to avoid energy leakage and handle comfort climate in the most efficient way.
Systeminstallation has a global logistics company as a customer and has automated their warehouses for optimal energy consumption. The solution received the Regin Energy Saver Award for saving €10M over 10 years at an investment below €1M by automating lights, heating and loading dock gates. This does not only feel good when looking at the P&L, but also in the heart.
Have I given you enough reasons to get you started or boosting the transformation of your company? I hope so. The power of many is incredible. Once you get beyond the tipping point where something new becomes commodity for the big majority, then the acceleration is amazing. Geoffrey Moore was right when calling it a tornado. Windy times ahead!
Jon Lindén is the CEO of Ekkono Solutions (www.ekkono.ai). Ekkono is a software company that does machine learning for IoT (Internet of Things), a.k.a. Edge Machine Learning. This enables product companies to learn their surroundings and normal state based on sensor data and predict what will happen, which enables automation, predictive maintenance, self-configuration, and entirely new data-driven business models. Ekkono makes connected things smart. Learn more at The Smarter E in Munich May 13-15.