Building An Organizational IoT Competency: What You Need To Know

Thomas Fuller, an English churchman and historian from the 17th century once said, “All things are difficult before they are easy.” In fact, we know thanks to Malcolm Gladwell's Outliers that the journey for an individual to obtain mastery in a subject takes roughly 10,000 hours.

Building an organizational competency is even more complex and requires a multitude of components: people, processes, products, market knowledge, new skills in new areas and effective communication up, down and across the organization.

Based on firsthand experience helping numerous organizations digitally transform themselves to support smart connected products, this article introduces the idea of internet of things (IoT) competency for organizations, enumerates four case studies that illustrate distinct approaches and concludes with a set of steps I have seen companies take to get on the right track.

The Road To Unconscious Competence

In the field of psychology, the “conscious competence” learning model describes how individuals move from incompetence to competence in a certain subject area as they move from unconscious incompetence (naiveté about the competency deficit) to conscious incompetence (acknowledgment that there is competency deficit) to conscious competence (demonstrated competency through a concerted effort) to unconscious competence (competency as second nature).

This same model of “conscious competence” is true for organizations faced with the task of digital transformation through smart connected products, a visual depiction of which appears here.

There is no shortcut to mastery. Identification of gaps followed by planning, execution, growth and institutionalization of process and behavior are necessary waypoints on the journey to IoT competency.

Here are four examples of large, multidivisional industrial organizations my colleagues and I are working with right now:

1. Company A, a decades-old industrial air handling equipment company, is beginning their IoT journey by asking, “Why IoT?” and “Who cares?” Through an organizational IoT skills assessment as well as a series of collaborative learning seminars to identify competency gaps, market opportunities and competitive dynamics, this company is taking the task of learning about the impact of IoT on their business seriously.
2. Company B, a multinational electromechanical gas and filtration company, is planning for IoT success by getting organized and asking, “What should be done?” and “How best can we proceed?” This company has identified IoT as a key strategy for growth over the coming decade and is driving a top-down initiative consisting of processes, business models, security standards, user interface guidelines, partnership strategies and a scalable enterprise technology platform for the rest of the organization to adopt.
3. Company C, a market-leading consumer and commercial products company, is building momentum through repeated success. This company is using a bottoms-up technology-driven approach to digital transformation and is encouraging leading divisions to pioneer new offerings that make sense for their part of the business. Corporate leadership is then highlighting divisions that have demonstrated market success and using those examples as archetypes for future IoT deployments.
4. Company D, a multidivisional materials science and medical products company, already has numerous IoT products in the market and is now optimizing organizational efficiency with learnings from IoT deployments. This company is leveraging their historically strong innovation practice to add connectivity across their diverse portfolio of products. Because this company has already demonstrated IoT success, they are now incorporating data from commercial IoT products to derive additional interconnected product experiences and services.

Resolving Cognitive Dissonance

There is a big difference between theory and practice as we’ve seen throughout history. Vincent Van Gogh apprenticed with an art dealer before becoming a famous artist; Plato was a student of Socrates; Henry David Thoreau studied under Ralph Waldo Emerson. Even something as simple as reading a book on electricity is much different than spending a month working side by side with an electrician. It’s highly likely that if you have mastered a skill, you have spent time with someone else who had already mastered that same skill.

And so it is with organizations. Merely talking about IoT is the same thing as not doing IoT. Also, industry-leading organizations look outside the four walls of their companies to other advisors, influencers and partners that have previously been through the digital transformation journey.

So how should an organization get started? Here are five key behaviors that I’ve seen successful organizations incorporate on their journey toward building an IoT competency:

1. Have a baseline current IoT competence in the areas of digital innovation, technology maturity, business model clarity and market readiness.
2. Develop and communicate a clear, compelling, actionable IoT strategy across the organization that includes executive support, funding from the top and a mandate for cross-departmental collaboration.
3. Start small with early wins targeted at reducing business risk while addressing pressing questions early.
4. Look for opportunities to standardize and reuse common components across divisions and projects.
5. Close the knowledge gap by building the organization from the outside in. Start with external help and, simultaneously, develop and grow internal core IoT competencies over time.

Smart connected products will redefine entire markets and the very nature of competition over the coming decade. The key to success tomorrow will be directly proportional to an organization’s ability to navigate IoT competency barriers today.