Digital Transformation Is Not all about Technology It's about Change
By Eric Acton, Head of Innovation Ecosystems, R2 Data Labs, Rolls-Royce
Eric Acton, Head of Innovation Ecosystems, R2 Data Labs, Rolls-Royce
Eric Acton is an entrepreneurial digital business and technology leader. In addition, Eric is navigating the cultural and bureaucratic landscapes of Global 100 enterprises — anywhere where he can demonstrate his professional expertise. Currently, Eric serves as the Head of Innovation Ecosystems, R2 Data Labs at Rolls-Royce, by matching outside partners with the company’s internal expertise and engineering excellence to unlock new value from data with a collaborative ‘co-creation’ approach.
COULD YOU ELABORATE ON THE CHALLENGES THAT THE ORGANIZATIONS WILL NEED TO ADDRESS RELATED TO DIGITAL TRANSFORMATION?
Firstly it’s dependent on the company; each company has its own culture and its own way with dealing with change. From my experience I would suggest an individualistic approach. It’s not a general approach for a certain industry or sector; it comes down to the nature of the company itself. Sometimes even if we're talking about a large global company that is built up over the years with different functions and business units, even then it has to be tailored to that environment itself. Also, the term digital transformation is great because it is short; everyone “understands” it, however at the same time, everyone has their own definition of what it means. And so you need to level-set very early on so that everyone understands exactly what you're talking about. Everyone needs to be aligned to the definition for their organization. With digital transformation, most people focus on the word “digital,” translate that to “technology” and look for a technology solution. But the key is the second word i.e. the “transformation. So you have to focus on this transformation and then you look at how the digital or the technology aspect is applied to the transformation.
WHAT ARE THE TRENDS DEFINING THE STATE OF DIGITAL TRANSFORMATION?
It depends on the sector. I am currently working in an industry that is very much rooted in the physical world.
At Rolls-Royce, we build engines; engines that sit on wings of airplanes that transport people around the world. So the biggest pain point that I find in our industry that extends out to manufacturing industries is bridging that physical to digital gap. For instance, I talk to someone who is on the shop floor who manufactures an oil pump; that’s very physical. I get a lot of people looking at me and thinking what’s digital about an oil pump or about some component that fits into another component. So that is one of the pain points that we have in our industry. But I also look at it as a fantastic opportunity; the industrial engineering and manufacturing industries are probably, on a scale of 1 to 10 around a “1or 2” in terms of their digital transformation journey. So there is a lot to learn, but there is also a lot of opportunity.
"With digital transformation, most people focus on “digital,” translate that to technology and look for a technology solution. But the key is the second word i.e. the “transformation"
Now on the flip side I've also worked with financial services companies; even though it is a very old industry, they are already well on their way of their digital transformation because of its transactional nature. And those transactions are already in a digital format and digitalized. That transactional information is granular; it is in a digital format that you can run analysis on and can already do something with. So they're much further along in their digital transformation journey. So depending on your industry and company you need to self assess your readiness in your digital transformation journey. Not only in your own environment, but relative to your peers in your industry and then other industries.
WHAT ARE THE STRATEGIC POINTS OF DISCUSSION THAT GOES ON IN YOUR LEADERSHIP PANEL?
I'm part of a small team within my organization and we're called R2 Data Labs. We are the catalyst and the accelerator for Rolls-Royce's digital transformation. There are a number of things that we do specifically. We are focused on building out our innovation ecosystem. In today's world there's neither the time nor the funds to do everything yourself. You have to look out for partners; startups, peers, academia, vendors, customers, etc. and look to partner with the minimum order to accelerate your way forward.
This is not something that can be done in-house and not all innovations are going to come internally—most internal innovations are what I call incremental innovation. You’ve got to look outside the organization to start to see the potential (or threat) for either step or disruptive innovation. That's largely what our group is doing; building out this ecosystem of partners that we can work with and learn from as we go through our digital transformation journey.
HOW DO YOU SEE THE EVOLUTION A FEW YEARS FROM NOW WITH REGARDS TO ALL OF THESE POTENTIAL DISRUPTIONS AND TRANSFORMATIONS HAPPENING?
Ultimately the goal is to get rid of the term digital transformation. Digital should just be assumed; just like with a flick of a light switch we assume the light's going to turn on because there's electricity. So we need to assume that going forward, for a large part of every organization, even ones that create widgets and physical components, that they will be largely digital in nature. So whether that is a supply chain, a process of design, build, quality assurance, delivery logistics, etc., largely everything is going to be digital. So ultimately we want to get rid of the word digital from the lexicon and then it's just a process of transformation and continual improvement. Everyone has talked about continual improvement and all organizations want to keep the lights on and want to improve a little bit on what they did last year. But at the same time, you've got to be looking for transformation. These are the disruptive changes that can either be forced upon you from an outsider or one you can force internally to protect yourself from the outside threat.
WHAT WOULD BE THE SINGLE PIECE OF ADVICE THAT YOU COULD IMPART TO YOUR COLLEAGUES TO EXCEL IN THIS SPACE?
From an organizational point of view, when you're looking to embark on the digital transformation, look to bring in some outsiders, as you need a fresh set of eyes (perhaps even from a totally different industry). So you’re thinking in a broader context and with the context of what others have been able to perform. Another piece of advice, as an outsider coming into a company, it's often very difficult. There's a learning curve and so don't expect things to happen overnight. Take the time to learn your organization; in particular learn the culture of the organization and develop techniques to leverage that culture. Embrace your inner 3 year old–the most used word in your vocabulary has to be ‘why’; ask why, and listen.