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(Editors Note: This opinion piece is a follow-up to an an earlier article titled How to Avoid ‘Pilot Purgatory’, a Major Impediment to Industry 4.0 Manufacturing Technology Adoption that was published in Robotics Business Review in September 2020. That earlier article focused on the negative impact of Pilot Purgatory on start-ups, and included recommendations to address the challenge.)

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I recently wrote about what startup companies need to know to avoid ‘Pilot Purgatory‘, the state where pilot projects are not deemed unsuccessful, and remain in place, but with no real hope of rollout or seeing upfront expenses recouped (to say nothing of the lost time). Pilot Purgatory is often cited as a key reason for the slow pace of adoption of Fourth Industrial Revolution (4IR or Industry 4.0) technologies into the manufacturing sector.

Having been fortunate enough to work in both startup companies and large global corporations, I would like to share my experiences from the other side of the table, and explain why large companies must know the pitfalls to avoid and best practices that will make new technology adoption a success, including manufacturing technologies such as robotics and automation solutions.

Global Lighthouse Network
The World Economic Forum’s Global Lighthouse Network has identified best in class transformation cases and published both the transformation story and the tangible results from these efforts. A key takeaway in this ongoing work is “E2E (End-to-End) front runners have demonstrated that having clear governance to provide value assurance for an enterprisewide programme is essential to success. Lighthouses that achieve scale across E2E and sites have established governance models to support exchange and prioritization of best methodologies, with a focus on impact and solutions, as opposed to focusing principally on technology.”

Let’s dive into what this means in practice.

In my career, I have worked on many mergers, acquisitions, and divestitures efforts. A common predictor of success is how well developed the company strategy is prior to beginning the external acquisition activity. In successful deals, the company has a thesis to expand to geography, acquire new technology, or enter a new market.

When doing postmortems on struggling deals, I often find the strategic rationale to be weak or misunderstood across the organization. With successful deals, alignment and execution are clear.

Digital and Manufacturing Transformation
So, how does this align with Digital and Manufacturing Transformation? Corporations who have done this successfully share a common mindset, namely the focus is not merely upgrading current manufacturing infrastructure. Instead, it is the acquisition of a new manufacturing and/or operational capability. Successfully acquiring a new capability, or a new company, is remarkably similar in practice.

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A common predictor of success is how well developed the company strategy is prior to beginning the external acquisition activity.

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Cross-functional Participation Key
Just as successful acquirers map their strategy, develop a thesis, and only then develop a target list of companies to engage in the deal, the same process is critical to acquiring new technical capabilities. An executive who is exploring digital transformation should build a cross-functional team to identify and rank their technology gaps and needs. Cross-functional participation is critical to ensure the financial, operational, IT infrastructure, and people’s needs are part of this process.

Once the capability gaps are identified and ranked, a target list of technologies to pilot and companies to engage should be developed with a plan of action. This targeting will provide the blueprint for technology pilots with agreed-upon success metrics, go/no-go criteria, and next steps. A pilot scorecard will track these initiatives and provide visibility of progress to the cross-functional team and sponsoring executives.

This strategic, transparent, and cross-functional execution will ensure the visibility of effort, investment, and timely success. The key antidotes to ‘Pilot Purgatory.’