Centering around people

The main driver behind every transformation is people. Without the buy-in from the business itself and the belief in what digital transformation and innovation can bring to the table, the process will fail with limited impact across the organization. The responsible professional behind a digitalization program must spend sufficient time building the foundational trust from the business in such new ways of working. Leadership support and commitment go hand in hand as this is going to motivate the rest of the employees to participate and become part of the change. As mentioned by McKinsey & Co. “When people in key roles (both the senior leaders of the organization and those in transformation-specific roles) are more involved in a digital transformation than they were in past change efforts, a transformation’s success is more likely” [1]. Industry leaders must be equipped with the right skillset, which would speed up the process of fostering the innovation and digital transformation culture within an organization. These skills include but are not limited to being open to fresh thinking, being able to accommodate diverse perspectives, being passionate about the subject, having hunger to learn new ways of working, being motivated to establish changes, and many more.

Furthermore, industry leaders must bring into the picture the right stakeholders. They must start to gradually grow the ecosystem, taking into consideration government initiatives, related industries’ directions, and countries’ focus and vision. Additionally, chemical industry leaders must empower the youth within their respective organizations as they are the catalyst of change in the transformation programs. They are the fresh seeds of new ideas allowing the discovery of greater value. The youth brings diverse perspectives, inspires leaders to think differently, and challenges the normal processes. With the youth, there will be a wealth of opportunities and innovative ways to try ideas, fail, start again, and scale.

Fostering a fail-free culture

Innovation and digital transformation intersect in the new ways of working. This intersection resonates across the business and how it usually operates, allowing people to freely state their ideas and manage them effectively to become market-leading solutions. It is crucial to foster the right atmosphere for collaboration.

This involves a journey that includes:

• Identifying a business’ core pain points and challenges
• Mapping out the stakeholders, who may potentially influence these challenges
• Linking the challenges to the department and company goals
• Ideating on possible ways to solve the addressed challenges

The digital transformation is a whole new culture that the industry is trying to foster, which relies on people at its core. People need to feel welcome to try out new ideas using different techniques, technologies, processes, and solutions. According to McKinsey & Co., “most companies value unconventional thinking, assuring brainstorming participants that there are no bad ideas and urging them to think outside the box.” [2]. A company that creates a fail-free culture, empowers its people to think outside the box and have confidence to deliver solutions which will unlock unprecedented opportunities for organizational profitability and growth, propelling the business to new heights. It can also expand the company’s horizons into new business streams and elevate its position by starting new or joint ventures.

Adopting an open space environment

Providing the space designed for such practices will enable the business to collaborate effectively. The open area transforms the experience of internal employees, stakeholders, and customers. It will create the right environment to cultivate and test ideas, share diverse opinions, develop new initiatives, showcase findings, and generate new products and services. The open area may contain different components such as movable writable boards to allow ideation, smart screens to showcase final solutions such as dashboards and products, and adjustable tables to provide flexibile working while standing or sitting. Taking the next step of activating the space is essential so that people start using it. A chemical company can activate it by introducing a real business challenge and invite cross-functional participants to come and ideate on that particular challenge. Another way is utilizing the space for prototyping and designing an initiative with the end user, allowing creativity and innovation within the digital transformation solutions. Creating a purpose for the open space is also crucial so that people can relate to this area, speeding the process of change within the organization. People will start feeling that they belong to the transformation journey when they are part of every step until receiving the final product.

Intersecting with agile implementation

In digital transformation implementation, companies typically take two paths, depending on multiple factors, including complexity, in-house capabilities, and available infrastructure, among others. Companies either start with identifying business gaps and buying an existing solution from the market or they build a customized solution that best fits their needs using the emerging technologies. Sometimes, chemical industries go with the hybrid approach in which they are buying a ready-to-go solution from the market while developing part of the solution from scratch simultaneously. The implementation process overall relies on testing at a speed, which involves taking a small portion of the project and collaboratively developing it with the end-user. If it meets the expectations, then a team can develop another feature, followed by another one, and continue scaling the product up until completion.

The beauty of digital practices is hidden in innovation, that is to deliver value to the market quickly and test the impact and reaction of the end users, gathering their feedback to incrementally improve the provided solution or service. The implementation process also relies on cross-functional teams to drive the solution or service referenced to its requirements taking different perspectives into consideration. These agile practices harness the power of digital transformation through different forms of collaboration, adaptability, and flexibility.

Embarking on new era full of benefits

There are enormous benefits that the industry can gain from such transformations. The major one is staying relevant over the years whether to internal or external end users by addressing their demanding needs. For instance, the maintenance department is looking for a solution that enables them to track critical equipment, indicate potential failure beforehand, and avoid shutdown.

A predictive maintenance use case can enable the team to monitor the critical equipment, flag potential abnormality (in sound, high temperature, vibration, and lubrication levels), highlight main reasons, schedule maintenance, and many more. This can lead to huge financial savings for the companies, maximizing the lifespan of assets, increasing production times, and overall better performance and utilization of assets. As stated by Siddharth Patil, implementing predictive maintenance initiative can yield a potential 10%-20% increase in equipment uptime and availability, 5%-10% reduction in maintenance cost, and 20%-50% reduction in maintenance planning time [3]. Staying relevant to the market, ahead of the curve, through both innovation and digital transformation ensures that the chemical industry will hold its position and resilience over the years.

Another main benefit is holding a competitive advantage. Innovating in the industry’s final products by making new grades or adjusting current grades’ features such as purity level can boost chemical industries’ competitiveness. For instance, providing polypropylene with specific features to support customers in producing new form of nebulizers. Taking the next step of producing this grade by using recycled or bio-based raw material opens the margin for innovation and stretches the company’s position in the market, making it the choice for other companies interested in the same line of business.

Spotlighting observed challenges

On the other hand, there are some obstacles that chemical companies may encounter down the road. When the chemical companies implement digital initiatives by the responsible digital department away from the business, it can potentially cause significant process delay, add higher additional costs, and eventually lead to less ownership from the business. To realize the expected value from the transformation, the digital team should consider working collaboratively with the business subject matter experts (SMEs) and focusing the efforts on creating a clear digital maturity model that relies on the available human capabilities rather than only in the technology. The maturity model should cover all related aspects besides technology including people, culture, and process. This will clearly determine the chemical company’s current position from digital maturity standpoint and can serve as a guidance to revisit the ongoing roadmap and adjust it smoothly if needed to where it wants to be in the future. This can include reprioritizing the future planned digital initiatives, identifying missing focus areas, among others. Based on Deloitte analysis of a digital maturity model for chemical companies, 70% fell in the trap of being digital [4]. It is when the companies are busy bringing latest technologies rather than creating the actual value that the business needs which is hindering them from moving toward becoming and being digital. The chemical company can become digital when collaboration is encoded within its DNA. It is not only about letting companies become digital, but it is also about enabling them to innovate. Creating a collaborative culture can be done by running design thinking sessions where cross-functional teams come to ideate on related problems enabling the business to think from another perspective and taking into consideration other departments’ point of views.

Further, it is also essential to integrate collaboration by forming a delivery team in the implementation stage, consisting of a project manager, technical representative from the digital team, business SMEs, impacted stakeholders, and other related SMEs across the organization value chain. The chemical company can be digital when it transitions current practice or daily work of a business department to a next level, creating a form of business value. The form of value differs from one department to another, which can be maximizing safety, optimizing a process, creating an enhanced experience, generating higher return on investment, etc.

Another challenge that the industry is currently facing is accepting failure as part of the innovation and digital transformation routine process. Chemical companies expect to realize the value from day one of implementation or that the idea will work on the first trial. At early stages, chemical companies should aim to get quantity over quality of ideas. Grouping, selecting, measuring financial returns, and aligning it with strategy come at later stages. This allows the industry to capture all ideas, connecting the dots to make bigger value. The practice of battling ideas hinders creativity, kills innovation, and prevents the industry from moving forward whether in digital or innovation targets. The ideation stage is not the final destination. Chemical companies should create the right environment for testing ideas and accepting failure.

The failed projects with acceptable predefined margins should also be counted in the progress as they are the beginning of greater success and many lessons-learned areas. The chemical companies need to digest failure, have flexibility to try, fail fast, and learn faster. As stated by Micheal DePrisco “The only way to be a digital-first, data-driven, customer-centric organization is to get better at getting better. This requires creating a culture where experimentation is the norm, not the exception — where employees feel free to try new things, test new approaches and pivot, when necessary, to put key learnings into action.” [5]

Investing in preparing the workforce

The positive disruption that both innovation and digital transformation create requires huge change management efforts behind the scenes in order to prepare the business for such a wave. That is, both programs require direct interaction with every part of the business from sales, supply chain, logistics, and marketing to operation and production. In addition, both serve the business based on its needs and disrupt the status quo by re-imagining how they perform their daily work activities using new ways of working and technologies. It is essential to advocate and raise awareness on how innovation and digital transformation can open a lot of hidden doors to their respective departments and the chemical company as a whole highlighting the major impact that can play in re-shaping its future.

Moreover, a chemical company needs to invest in building the capabilities of its workforce and boosting their knowledge, continuously building their confidence in leading the journey ahead. When the employees understand how both innovation and digital transformation work, they start to realize its value and see how it can revolutionize their respective departments. As stated by Dr. Corrie Block “Humans by default fear what they don’t understand. The majority of your employees will reject new software, tools, apps and processes, even if they will improve their lives, unless they are slowly, consistently educated.” [6] Innovation is the heart of every transformation pushing the boundaries toward creating a brighter chemical industry.

Malak’s additional roles include Advisory Board Member, Chemical Engineering Department at Jubail Industrial College (JIC), Volunteer Ambassador Board Committee Member at Sipchem, and Mentor at Wathba.

References:

1. McKinsey & Company, “Unlocking Success in Digital Transformations”, 2018
2. McKinsey & Company, “Creating an Innovation Culture”, 2017
3. Deloitte, “Predictive Maintenance and The Smart Factory”, 2022
4. Deloitte, “Achieving the Next Frontier of Chemicals Excellence”, 2019
5. Forbes, “How to Transition From A ‘Fail Fast’ Mentality To A ‘Learn Fast’ Mindset”, 2022
6. Forbes, “12 Reasons Your Digital Transformation Will Fail”, 2022