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Making the Leap to Artificial Intelligence: 4 Keys for Manufacturers

May 2, 2017
It all starts with getting the culture right. 

It seems everywhere you look, traditional original equipment manufacturers (OEMs) are investing heavily in artificial intelligence (AI). Ford recently announced its plans to invest $1 billion over the next five years in Argo AI, a start-up formed just in December whose focus is the development of autonomous vehicles. Similarly, last year GM invested $1 billion when it acquired Cruise Automation, another AI start-up.

Of course, the decision to invest in AI is not limited to traditional OEMs, as demonstrated with Intel’s $15.3 billion acquisition of Mobileye.

Once organizations make this type of investment, they face some serious talent concerns: How can they make sure the new employees from the startups they acquire assimilate smoothly into their organization? And how can they attract the right talent from outside to maximize their investments?

It all starts with getting the culture right.

Do your cultural due diligence: Take the time to study the start-up organization’s culture and how it handles delegation of authority, work environment, budget and cost approval, travel policies, values and style of communication. Ask questions like: How many people are needed to get something approved? Who needs to decide which customers, suppliers, markets, products and technologies will be priorities?  How many cost and profit centers are there, and how well do they work together?  What is the span of control for managers? How long does it take to approve a job opening and get someone hired and working? How hard is it to gain access through purchase or licensing of new technology or software?  How complicated are contracts with the company? 

Comparing these answers to the existing policies, processes, and practices at the established enterprise will identify gaps in culture that will need to be bridged to enable motivation and success for the acquired business.

Design for success: In their book Leading Innovation, authors Jeff Degraff and Shawn E. Quinn explore how to unlock innovation, identify and remove barriers, and align business practices to the value propositions across various elements of the enterprise. To design for success and encourage the creation of cutting-edge ideas and applications requires an environment that rewards risk-taking, experimentation, failure and innovation. This means going beyond a traditional R&D model of a big corporation which often focuses on incremental development with proven markets and services that substantiate a return on investment case.  There may even need to be an entirely different business model to support experimentation and innovation within the enterprise ecosystem. That may mean changes in: organizational design; hierarchy within the organization; policies and practice; levels of approval; span of control; compensation; reward and goal setting; and basic ways to measure progress, performance and outcomes to enable and foster the innovative outcomes desired. And, as the outcomes from the new capability centers begins to integrate into the legacy business operating model, the entire enterprise may need to adapt and transform to be more agile to unlock the value of the innovation and compete effectively.

Apply right-minded leader or mentor: Key to successful integration is having an integration leader from the legacy organization assigned to the new team. This person needs to be of the right mindset and perspective—someone who has a strong sense of emotional intelligence, flexibility and agility to have a foot in both the traditional and evolving worlds and be credible in both organizations within the enterprise and know how to “get things done” when dealing with non-conventional decisions and actions. And this person will need to understand the objectives of both and be able to manage and make both the new and legacy elements succeed, with the goal of bringing the two worlds of the organization together to help maximize potential towards joint success.

Communication is key: Over-communicating will be crucial, so that both organizations understand one another and get to see the mutual benefits in each other. Communicating the shared joint success, and celebrating the strengths and contributions of both, needs to be kept front and center every day. This will help foster a sense of teaming, by acknowledging what each group is contributing to jointly create this new team and culture and tapping into the energy of that promise and celebrating for everyone involved. 

Brian Heckler is national sector leader of Industrial Manufacturing at KPMG LLP. The views expressed are his own and do not necessarily represent those of KPMG LLP.

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