Leading in uncertain times and emerging stronger: A Roadmap for OEM Leadership

Abstract

Industrial OEMs are plagued by extended disruptions of routine practices during uncertainty. There are liminal periods where usual methods are put aside with no clear replacements. Leaders and employees in such a transition period get anxious. It's a roadmap for OEMs' leadership with respect to the view that can turn the present challenges into an unprecedented moment of growth and transformation of the digital roadmap. This journey is not just about accepting the potential for a more creative and hopeful next step; it also has the power to motivate leaders to aim for this grand vision instead of making incremental changes.  

Introduction

Today, there are more than 100 BILLION internet-connected devices. These include everyday items like mobile phones, smartwatches, and smart home gadgets, but also more specialized technologies, such as battery-free sensors woven into clothing, soil moisture sensors used in digital farming, CubeSats orbiting Earth, and countless devices embedded in manufacturing, defense, and climate-monitoring environments. This prominent web, the "Internet of Things" (IoT), is a keystone between the digital and physical world. Main directions of this field are presented in terms of high-performance sensing, security and privacy, low-power, AI and recent applications in different industries.

There’s never been a better time for OEMs to modernize operations by adopting new software and manufacturing technologies. Driving this opportunity are the pressures on them to build more resilient, regionally focused supply chains, paired with the decreasing costs and increasing accessibility of innovative solutions.

Industrial OEMs are at the pivotal stage of transformation, as traditional business models have faced disruptions and future paths appear uncertain. The change is not unique to industrial OEMs; it mirrors broader global disruptions: geopolitical conflicts, energy crises, climate change, and rapid technological change, including generative AI.

These disruptions have redefined organizational norms, from hybrid operations to new customer expectations, creating what we call 'threshold experiences.' These are moments that unsettle traditional behaviours but do not yet establish replacements. For OEM leaders, this ambiguity raises critical questions: How do we redefine value, adapt operations, and remain competitive in a world of constant flux?  

Arguably, AI is the most transformative phenomenon to have emerged in investment to date. Leaders in industrial OEMs often feel compelled to have definitive answers, yet the path forward is seldom straightforward. The goal is not to eliminate uncertainty but to use it as a driver for growth, aligning operations with core values and building resilience for future challenges.

Rethinking Capital Projects for OEMs: Applying Supply Chain Principles for Unprecedented Investments

As far as generative AI, new forms of restructured global supply chains, investments into clean energy, and its technology base are concerned, businesses can make capital investments that have not been witnessed before. From a traditional perspective, most organizations treat a capital project as a single monolithic structure that is then decomposed into several constituent components that must come together to deliver a successful project. Instead, think of a capital project as an integrated, end-to-end supply chain, where 'demand' (i.e., what the project is supposed to deliver) informs the 'supply' (everything upstream that the organization must orchestrate to fulfill demand).  

AI investment strategy: Determine funding required to align AI strategy with business objectives to focus investments where they can create value and ensure long-term success. In uncertain transitions, OEM executives play a pivotal role in guiding their teams. Their leadership is not just crucial but integral in answering three fundamental questions:

1. Where is their focus of value?
   Liminal periods provide OEMs with a chance to reset their priorities. A disruptor event usually reveals what matters most to operations: customer satisfaction, operational efficiency, or technology innovation. Leaders should not let this moment pass without restating their organizational values in alignment with digital transformation.
2. Where do we stand currently?
   Introspection is reasonable and required in an industry based on precision and results-oriented cultures. Executives must analyze their company's current position regarding market dynamics, technological capabilities, and stakeholders' sentiments. This clarity will illuminate the situation so teams can work together and find a way forward in uncertainty.
3. What is the way ahead?
   It may be the origin of inertia or cynicism bred by the uncertainty from the prolonged disruption. However, it can also be the breeding ground for challenging legacy systems and assumptions. The leaders must encourage and support the team in an environment where experimentation with digital tools and workflows is supported, as agility is not a weakness. Ambiguity will be turned into progress when the organizations concentrate on actionability.

Focus on the Fundamentals

During the disruption, leaders should focus on stability and direction through these three actionable fundamentals:

• Step Back: Amidst the storm of external pressures, OEMs must return to their true purpose: innovative solutions that reflect changing customer needs. Leaders should reassess their digital transformation strategies for gaps and misalignments with those goals.

• Stronger Ties: Strong OEMs are built around cross-functional collaboration for efficiency and innovation. The leader must create an environment where different teams work together seamlessly; they should eliminate silos and help to integrate organizational cohesiveness.

• Stay the Course: Leaders must stay the course in turbulent times. This requires fidelity to the strategic vision as pursued and intensity of commitment (that is, not dropping out) to the vision despite change. Effective communication and a good decision-making process can create trust and resilience among the group and partners.

Building Momentum Through Unwavering Backing

A clear vision is crucial in helping everyone, from sellers to customers to channel partners, understand and support the change. The sales VP at a leading company said it like this: "The 'aha' moment for our team happened when we asked reps for their thoughts on the transformation, and we realized they didn't get why we were making it. So, we took time to make the change story clear and open, allowing us to get full employee support." When Microsoft, for example, shifted its primary sales efforts from selling Windows-based software to focusing on the Azure cloud platform, it started a significant salesforce change. It used a simple story of "mobile first cloud first," moving away from the old "Windows first" plan. Later, aiming at new growth areas, the company moved toward an "AI/cloud first" plan. This kind of message works well. Moreover, everyone in the company can understand it, and it captures the core and size of the change. It became a key part of Microsoft's successful move to the cloud, which helped its stock value grow more than five times.

No rollout will succeed without unwavering backing from leadership. And leading by example proves more potent than executive backing. When salespeople watch their bosses adopt new ideas they've been pushing to the frontline, they copy that behavior in their sales teams, spreading it throughout the company. As one sales leader said, "Nothing matters more than seeing senior sales leaders do what they're asking the whole organization to do— when it's tough!" This level of teamwork needs to overcome internal politics, look at the big picture, and zero in on the best answer.

Looking Ahead

Industrial OEMs' resilience during past crises, including the global pandemic, provides a foundation for optimism. This leaves leaders to view uncertainty in a light that is instead an invitation to evolve under and through uncertainty. As this happens, industrial OEMs might be better positioned to conquer some of the challenges of their day while positioning themselves toward something more dynamic and sustainable going forward.

Conclusion

Industrial OEMs are facing a new reality where uncertainty isn’t just a temporary challenge but a constant part of doing business. Yet, this uncertainty also opens the door to reinvention and growth. By embracing the liminal periods as moments to redefine value, realign operations, and reimagine the future, OEM leaders can turn disruption into a driving force for a brighter, more prosperous future.

The success of the transformation demonstrated by companies such as Microsoft shows how storytelling and leadership through doing have the power to produce lasting change. OEMs can also use these principles to motivate their personnel, dissolve silos and promote cooperation.

The way forward demands a leap of faith in the spirit of innovation, a commitment to core values, and a desire to disrupt, break, and challenge entrenched systems. Through the lens of uncertainty as a driver of change, industrial OEMs can develop much more resilient, flexible organizations that not only embrace the shifts in the environment but also contribute to the industry's evolution.