I have been often returning to scaling, struggling with finding the best answers. Many organizations struggle with scaling. This can be scaling their organization, their capabilities or more often, taking an idea into a fully scaled delivery.
Maybe I have been looking at it all wrong?
The complexities of scaling can’t be lightly dismissed. You need very often, size to scale. This could be in a new plant, in where production should be situated, so it can be allowed to scale at a later date, in resources able to achieve scale or more importantly you scale according to the type of goods or demand so they can be readily available, closer to the market they are needed.
When you work in a global organization, scale takes on even a greater set of dimensions; one that needs coordinating and managing.
So I was thinking through some points on scaling a little differently. They are partly ‘open questions’ or some thinking out loud. You can say they are “half-baked”, perhaps in more than one way!
Can we make scaling up more systematic? I know that a good colleague and friend of mine, Ralph-Christian Ohr spends significant time on this to crack. He is a joint facilitator to “Scaling-up: From Corporate Startup to Business Impact” along with Frank Mattes. You can follow their work over on innovation-3, where they help companies to set the Scaling-Up of a fully validated innovation concept up for success.
I am thinking scale differently here, So let me explore this, it is only emerging for me. I have found much on scaling-up as specific to a certain point of need, such as a startup to a new business outcome. Can we think of scaling-up differently?
So a series of questions first.
Are we placing the emphasis of “scaling-up” too far down the delivery chain? Should “scaling” be broken down and modernized? Can we scale-up firstly in the digital world and then take this into the physical world. I am questioning scaling-up and much of this might be mumble jumble or is it? So some opening thoughts and I will want to come back to this at a later time.
As we scale and become more outward in chasing global trade, issues move from being simply complicated to be far more complex. Past experience can be enough to assist complicated but complex becomes more problematical as it is ambiguous, uncertain and presents a uniqueness in its challenges. Scaling-up does have the potential of opening up new places to play, or the dark holes many of us often fall down into. Getting scaling right is hard and having it available at the right time even harder. How can we reverse engineer scaling up to reduce complexity?
This growing uncertainty we face in the world that has become (overly) reliant on the continuance of open borders, will add to our scaling up dilemmas. We are seeing risk management become increasingly important in any assessment on where, how and why we need to scale-up and more importantly when. This growing complexity to manage is increasingly moving organizations towards the very traits innovation also requires. Those of dealing with greater ambiguity, of building in the needs of agility, higher levels of flexibility, curiosity and the willingness to explore and experiment, and take increasing risk.
For many, it is a very uncomfortable place to go, when they have invested millions in their supply chain. They naturally want to channel everything into their supply chain to optimize and utilize it. They have obtained high levels of visibility but in this pursuit of optimization traded off many levels of flexibility. Supply chains have become reliant on high levels of predictability. This reliability has been working well for the established organization, set up to extract maximum efficiency and effectiveness out of the investments they have made in predictable markets. Careers have been made previously on stability, exploitation, and extraction, not risk and exploration. Yet, what if this changes? Scale will be dealt with differently if unpredictable conditions come towards us.
Yet, as markets become increasingly uncertain, new competitors entering the markets with very different ways that they see the supply chain and delivering their solutions, will be better positioned to leverage on a more volatile set of market conditions. Emphasizing delivering on customer needs will be placing uncertainty back into the previously honed supply chain model or production model of many companies stuck in the old model of generating demand for their solutions, not those of the marketplace. The risk of being highly scaled is fast becoming a point of disruption for others. Scaling up needs a different lens than in the past perhaps.
The shedding of legacy can equally liberate innovation
Legacy, leadership, cultures, and processes, are inherited from the past industrial economy of standalone businesses, where the scale was achieved through mass production, tailored to the producer’s needs, of providing products that worked but not necessarily in alignment to the customer’s needs. That was fine when you had a limited choice available. There is a shift going on today. Supply is exceeding demand and demand has simply become that, demanding. That is reversing part of the thinking towards scaling up, the consumer expects and demands a solution to their own specific problems, and organizations have to adjust accordingly. This is where innovation comes into play. Supply has become more tailored and focused. It needs to be more agile and flexible. It is being forced back in the production process to meet rapidly changing demand. The scale has to respond accordingly.
To get supply closer to demand, you need to be closer to your ultimate consumer, in the market and through a more personalized, focused dialogue to shorten “the response to change,” to keep in pace with customer requirements. In many ways we need to scale-up understanding, the front end of innovation, drawing in the knowledge and insights quickly enough and then process these at speed to keep pace. Today scaling-up has a different point of resource emphasis, it is not so defined as the end point but more as “adaptive” scaling, at the appropriate point of need. We are shifting from applying standardization and searching for increasing flexibility. Scaling needs a more modular set of solutions.
So standardization is giving way to customization. Large-scale product runs are being adapted to meet more specific opportunities; response rates and customer engagement are being hugely advanced by technology and constant exploring the full customer journey with data and analytics helping the understanding. Hierarchy and delegation are flattening out and seeking engagement. The whole doing and thinking, is based far more on this dependency on growing real-time feedback and ongoing knowledge flows. Digital application throughout the organization to speed up understanding and provide visibility, where ever it is needed to shorten ‘response’ time.
The changes we are undergoing play towards innovation outcomes seen differently
Strategy today, is far more on grasping the essence of a constantly changing situation and equally on anticipating the future. It is forward looking not backward filled. A primary goal of growth requires innovation to be the catalyst so as to create the future. For this to happen we do need to recognize that innovation must become a greater instrument of strategy, far more central or core, in organization application and understanding. It is the best means of gaining a strategic advantage and often the basis of survival in how innovation creates and this leads to new growth and profits.
So by us recognizing innovation as the means of gaining an advantage, we need to think more creatively on where and how we scale.
Unfortunately, innovation is largely made up on “unknowns” that we need to manage differently and much of the innovator’s job is to make these “known” as soon as possible. Any plan of future actions needs to be designed in different ways. We need more modular thinking and this is where scaling can be achieved differently. We are seeking emergence, this is the key.
Today we are struggling due to these legacies. We are attempting to scale out, often on a current path of decline, or organizational design; one that is too rigid, static and we chose to ignore many warning signals as the understanding is not well connected up. The route to new scaling needs to be built on a fluid design, dynamic and based on constant discovery so we can be in this ’emergent mode’ as quickly as we can, to translate this.
The value of the digital twin may offer some resolution to scaling up (of everything)?
The smaller the component to build, the quicker you can scale it and optimize it. In the age of the digital twin, we can build the virtual product by specifying and validating it, we can prototype it for increase verification and greater digital/physical engagement and interaction. Then we can go into a virtual production to simulate, to map product concepts out, to validate and begin to commission and structure the physical as you can provide better understanding, structure, and behavior your innovation concept will have increasingly “down the innovation concept/validation” process.
We are moving the front-end of design into a virtual one, more and more, to enable products and then eventual production to simulate, test and optimize concepts in a virtual world before it enters the real world. As we work in this digital twin world we continually gain new insights from concept designs, from customer feedback and then when it does enter the real physical world there is a well-established continuous loop of improvement.
We can design production, facilities and a host of other things through digital twins. I wrote “have you got your digital twin strategy sorted out yet? This thinking more holistically about how and where digital twins can be applied does make a significant contribution to thinking “scaling-up” accordingly in very digitally connected ways.
Scaling up comes from focusing on real points of value, these being optimizing, enhancing, digitalizing and streamlining, on a continuous basis and digital process design, might do this well. It is for me, the combinations we can achieve from engineering the innovation value chain through connectivity, through increasing intelligence and feedback, and by constantly validating this, by automating this innovation process of design in this digital (virtual) world, as well as in its physical one.
We need to build more into our front end to model different scenario’s so we can “scale” and ask “what if?” accordingly. We are surely building designs that by going through this digital /physical process that gives us flexible, are scalable and upgradable as the designs evolve. We then adapt our scale as we validate.
As put forward by some of the suppliers of PLM software, we do need to think far more about Product Innovation Platforms that offer enterprise-wide foundations to build and design the concept, to scaled out the solution. To achieve this we do need to creatively think where a digital twin can play their part, recognizing the digital thread that is occurring in all our future innovation activity. Going fully Digital offers us an evolutionary path if we choose to take it. It connects much more than we have connected today.
We must recognize “just” physical assets are actually less important, they are becoming increasingly dependant on digital being part of their offering, an increasingly valuable part, as more of our solution components are software related. It is in the software we have the potential to scale out in different ways, less in the physical assets that house them. The value of software giving outcomes and insights is increasing the value of the assets. The physical assets are the delivery mechanism, the host, and it is the value “extracted” from data that is rapidly giving the “return on investments”. So what should we be thinking about to “scale-up?”
Many “stand-alone” manufacturers would gain by considering platforms and joining forces in ecosystems that can design and share more complex solutions. This allows for a shared scaling up design. This fresh thinking of ecosystem design gives different scope, architecture, and capabilities. Having smart, connected products offers the ability to scale differently.
Innovations and Strategy need to be tested constantly in a different time and space.
Re-thinking design, applying digital solutions can provide the connecting mechanism to explore, relate and test assumptions, to relate your context to the higher level ones. You have brought back “scaling up” to the front end.
By designing your innovation through greater visualization and digital “twinning” you can cascade your innovation views quicker. By building innovation concepts digitally, you can to make better assumptions, predictions, solutions, and decisions; it is drawing in all involved, specifically customers into the strategic process. It allows for conscious awareness, it becomes the method to examine, test, validate and improve on the assumptions. Then you can scale-up with increased levels of confidence.