30. Everything is in place – what happens now?

Everything is in place – what happens now? 30.

Now it’s time to execute your own story. You and your team are now well prepared and ready for this digital transformation. Being well prepared provides you with the necessary courage and self-confidence to improve your business model and help your customers to fulfill their change, their needs of today, and demands of tomorrow.

Adding new digital values to your existing analog business will increase your customer relations and your own profitability. You have already started to establish a new and open dialog with your key customers, the VIPs. You have shared your plan and explained how new digital tools can add value to them. In turn, the customers have explained their needs of today and future plans. They have showed you which new directions they see and want to explore and their demands for the upcoming 3 to 5 years. You can both benefit from the many new digital tools that will disrupt and add a lot in today’s process: shorter delivery time, more variations, producing on demand instead of filling the stock, etc. … to start with. The first test production has maybe already been made and examined by your customer and you both feel euphoric and exalted with what you now can offer and deliver to the market. All hardware and software are underway or already installed, the first part of the training session is done and the ramp-up time to trim and set the system together with your existing one is almost there. Expectations are sky-high. But most of the job requests coming in are still the same as before. It’s long runs and in many cases best still produced in the conventional machines. Yes, you are already about to move most of the short ones to the new digital, but these small volume jobs, maybe as low as 5% of the

total volume, in digital take less than an hour but can represent as much as 40- 50% of the number of jobs. It will free up a lot of capacity in the analog presses and give you new space to fill with new long runs. A lot of focus now turns to redirecting resources into supporting the increasing analog volume. Also, resources trained and prepared for the digital might have to move and support in the old position. The organization can get defocused and rumors start to spread. Was it right to invest in digital? Suddenly you’ve got a lot of new business, so much more to do, and another fear starts to grow. Every single possible problem that now can arise from the digital will feed your fear and your defense system will start eating plenty of your resources. People will ask you: “Look at our growth and at what we already know and master, was the digital investment really necessary?” The real reason behind this is that your customers also need time to do their transformation after receiving knowledge about what they can do and gain from all new opportunities. If it took you a long time to prepare yourself it will take your customers even longer. First, they’ll have to understand the possibilities and how it will fit into their own supply-chain, see the opportunities and then transform that into their own products and processes. That’s why it is ever so important to involve your customer as early as possible in this, the transformation concerns both you and them – let that strengthen your relationship.

You are now more attractive to your market. Suddenly, it’s now easy to setup meetings and you have a lot of new things to talk about with your customer. A good sign is when they understand what you can add in terms of new value compared to the past and your competitors; they’ll want to join you on the new ride. You are in focus and at least get more orders then before, yes, first your analog business will increase. It will take some time before new and existing customers get up to speed and are able to utilize your new toolbox. For you, this will be the beginning of what we can call the famous S-curve.

Transition

Curve 2

Curve 1

A

Curve 1: Existing life path Curve 2: New life path

The S-curve says: first it has to go down before it goes up again and again. At the same time, you increase your relations and get feedback from the new meetings, your total business increase, still with the same low margins. Simultaneously, you’ll see a very small move in the digital. Now it’s important to keep sight of the horizon and understand that growth on the analog side comes first and before the whole chain lines up. You have to count both technologies as one cost pricing – not as separate P&L (profit & loss) analog and digital. They support each other both in production (short and long term) and by sharpening the company’s competitive edge today and tomorrow. Here it’s very important to keep focusing on your own plan. Stay tuned and monitor the start of the S-curve and how the growth will become more in balance between the two technologies – instead of spending too much effort on the start-up time. That’s built into the S-curve and a part of the transformation. A change starts by default downhill and negative, no matter how good and positive the result will be.

“So, everyone is positive for a change. Everyone wants the change. But changing yourself is different – and to lead the change is even worse. Come prepared.”

Your business grows, your turnover goes up, but still with low margins and then your cost of investment enters the picture. The lower number of employees maybe won’t get as low (and not as fast) as you’ve planned. It takes more time to slim and relocate internally then what you’ve planned for. There are many open wounds in your organization, similar to soreness. If you don’t feel anything now you haven’t really done the change yet and the organization is still stuck in the old way of doing business. Stimulating the change is like stimulating the employees to do more exercise, stay within your plan and coach your team. If you train more you will feel less soreness, less discomfort, and distress, and you will be better on what you really want to do. The wounds will heal, the organization will find its new setup and a balance will be achieved. A slimmed line organization that produces more value through less production and more customized products, all in an organization that understands both new and old added values represented from a market-value perspective.

The next phase will be to copy the best experiences you had so far to more of your VIP customers. It’s time to make “sisters and brothers”. We’re still working within your existing base of customers and I still think that’s the best way forward. It’s cheaper and will add value to your customers and your own business. It will provide more profit than by aggressively hunt/steal other customers, which costs more and normally provides less profit as well. When the first steps are done you can expand further, hopefully with a lot of new sisters and brother. You’ll then have the possibility to request the market value of your services instead of bargains on margins.