by Nils Boeffel, Friedemann Derndinger and Dr. Claas de Groot

At a glance

Many companies are working intensively on the challenges of Industry 4.0. They are facing the task of meeting the ever faster change in customer demands, business models and technologies. The adaptability of the companies themselves therefore becomes a strategic core competence in the ability to shape their future. To stay ahead, develop your own Strategy 4.0 in this demanding environment.

  • Stay on top of technological changes: Above all, Industry 4.0 means rapidly developing technology. The ever accelerating technological changes will force you to stay up to date. You can’t be in all places at once and therefore you have to make informed decisions and choose between different options for action.
  • Monitor your customer involvement: Industry 4.0 is also the answer to changing customer behavior. The Customer 4.0 no longer buys just an isolated product, but rather his expectations of your company relate to his own personal lifestyle. Have you integrated your customers’ expectations enough to understand changing customer needs and have you aligned your company with them?
  • Establish the necessary ability to innovate: Technology-based customer interactions add an important new dimension to your company’s innovation potential. Focus your innovation strategy on delivering customer benefits in short-term periods. This requires increasing the flexibility of your organization.
  • Develop Strategy 4.0 for your area of responsibility: Focus, flexibility and innovation are the keywords for your Strategy 4.0. Give your existing strategy a complete make-over.

The Industry 4.0 is happening now. That means ever faster changes, e.g. in customer requirements, business models and technologies. No company remains unaffected. They have to acquire the adaptability to master the necessary transformations vital to their survival. Industry 4.0 therefore requires companies to adapt Strategy 4.0 as they face the threat of losing touch with their more agile competitors due to their often system-immanent slow adaptability.

All paths lead from customer 4.0 …

Are you tired of the buzzword “Industry 4.0” yet? Everybody is talking about it and it is in danger of being overused. Nevertheless, the current developments are real and lasting.

From Industry 3.0 to Industry 4.0: While a company may have been able to satisfy the Customer 3.0 with a quality product that did its job and was manufactured inexpensively and automatically, the focus of Industry 4.0 is on operating “cyber-physical” systems. This involves the interlinking of different technologies and processes with the aim of digitization and wide automation.

From Customer 3.0 to Customer 4.0: The Customer 3.0 just bought a fitness tracker. He was satisfied when the product was elegantly designed, and when it did its primary job: pulse measurement and step counting. And he still remembered his time as Customer 2.0, when only professional athletes could afford these devices. Customer 4.0 no longer expects a simple tracker. He wants a Smartwatch that integrates fitness measurements into his own aspirations and ambitions, in that nutrition, weight control, training plan, peer-to-peer comparisons, etc. work seamlessly together.

In short: The Customer 4.0 expects a personalized solution for his lifestyle choices, instead of just a product with an associated service. Additionally, there is the here-and-now mind-set expecting fast delivery times, no delivery bottlenecks, without errors and of course as part of a network, online, paperless and almost for free.

In almost all cases, this places completely new demands on companies. They have to adapt to the speed of technological change and utilize it in their offer to their customers. They need to establish the ability to work closely with other companies to deliver comprehensive customer solutions. They must be able to integrate new and extensive data from the Internet of Things into their offering in real time. Plus they also have to ensure increased transparency, because the Customer 4.0 is increasingly paying attention to criteria such as corporate social responsibility, fairness and sustainability when making purchases.

A company has to face this complexity on the customer side with correspondingly flexible processes, but it must also ensure that flexibility does not become synonymous with chaos.

The world …… from 3.0 …… to 4.0
Customer Good product with corresponding serviceIndividual offers for lifestyle requirements
Technology Separate IT and communications infrastructureIntegrated systems and Internet of Things
Organization Silo thinking in top-down and matrix structuresFlexible, agile, goal-driven organization
Strategy Planning capability of product and marketingDirection from signposts and rules
Examples for the dimensions of change from the 3.0 to the 4.0 world: Customer, Technology, Organization and Strategy // Source: LAP

Stay on top of technological changes: Today’s technology is an important part of almost all offers to customers. This means that you need to keep up with technological changes and understand the technology landscape relevant to you over a 3-5 year time-span.

Monitor your customer involvement: If you want to be relevant to the lifestyles of your customers, you have to integrate them into your innovation processes. The needs of your customers must also be reflected in the results of your innovation processes, you can’t manage them for other, supposedly higher-ranked internal reasons. Ultimately, the key question is whether you are close enough to your customers to offer them timely, tailored products and services.

Establish the vital ability to innovate: Long planning cycles and complicated processes are a thing of the past. Your organization must be able to integrate the ever faster technological change and customer input into your offers. You have to be faster than your competition.

… towards a future-proof Strategy 4.0

Develop a Strategy 4.0 for your area of responsibility In order to give direction and structure to the future development of your company in times of Industry 4.0, you need a Strategy 4.0 for your area of responsibility. It has to examine and include focus, flexibility and innovation.

Focus: Even a ship on the high seas needs a direction that everyone on board knows in order to reach its destination. Set the course for your company and make sure everyone follows the same compass: become a navigator.

Flexibility: Make sure that your area of ​​responsibility reacts flexibly to changes. This means not only the external change driven by the customer, it also means the ability of your area to constantly reposition itself internally: become an agile manager.

Innovation: Strategy 4.0 demands a high level of innovation from you. You will have to take risks with your decisions, it should become less important to avoid mistakes. Rather, it is about making the decision to do the right thing in a world without security, learning from mistakes, and looking at the associated uncertainty to uphold efficiency and effectiveness as virtues of the manager: become an innovation manager who dares to innovate and win by doing so.

The customer will not wait for you. Technological change causes customers to have ever more demanding needs. With Strategy 4.0 you remain relevant to your customers and thus secure the future for yourself and your area of responsibility in the Industry 4.0 environment. You set the direction with your strategy, since without strategy there is only chaotic diversity. Tackle it now and make the present of your company the consequence of the expected future.

About the authors

Nils Boeffel, Friedemann Derndinger and Dr. Claas de Groot are partners and managing partners of the management consultancy Leader’s Advisory Point GmbH & Co. KG.

LAP is a management consultancy specializing in innovation, efficiency, leadership and strategy.

The partners of LAP have gained many years of experience in management positions as well as in leading management consultancies, thereby ensuring the quality and targeted implementation of concepts.

Their services in terms of duration and capacity are geared exclusively to the needs of the customer and range from long-term projects to “sprint studies” and to individual coaching.

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Email: info [at] leadersadvisorypoint [dot] com

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