A practical example of digital transformation

For Wärtsilä, a Finnish headquartered firm that employs around 18,000 workers and which manufactures and services power sources and other equipment in the marine and energy markets, digital business transformation is a very practical thing. In fact, back in December 2016, Marco claimed that Wärtsilä was “embarking on one of the boldest, innovative and most exciting digital transformation programmes in the industrial, marine and energy sectors.”

The company is not the most famous of firms, unless you work in the marine or renewable energy business, you may have never heard of it, but in fact, roughly one in two marine vessels in the world are either serviced, powered, navigated or propelled by Wartsila’s technology. But what about today, how is the digital business transformation programme performing?

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“One of the things we’ve now decided to do is create a sort of digital boot camp, a digital academy, with a leadership programme on what it means to lead in a digitally-enabled business. This means considering:

• What tools you need to understand as a manager
• How you use data
• How you use analytics differently,
• The behaviours as a leader that you need to grasp
• And the sort of questions that you should be asking of your team to make sure that they are focused on the new ways of working.

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So how does this work specifically? Can we be even more practical about digital transformation and what it means?

“At Wärtsilä, we had over 300+ ideas submitted by colleagues in the last 18 months, of which about 50 or 60 have actually come into our incubation centres. We have three incubation centres, one in Singapore, one in Helsinki and one in our heartland, in Vaasa on the west coast. We work on cross-systems issues, focusing on specific areas, such as new business models, AI-driven solutions, core IT processes, and ecosystem development.

“In Singapore, we are working on an intelligent autonomous vessel, an autonomous tug for harbour operations.

“We tend to now focus on where the main expertise is, and then situate the capability there. And that makes a significant difference in adoption, in culture change and in pace.

“At Wärtsilä we created a self-paced learning app that has a series of learning paths and for completing each learning path you get points. Offline events around the training path can also be linked and gamified using the app.

“The learning paths follow a “Discover- Learn- Act” cycle. Each has an explanation, they have videos, they have examples of how this is actually happening in our company today, ie real tangible Wärtsilä examples. And they have tests, so you can test your learning. Each module takes you about 20 or 30 minutes, and you get points for completing, attending offline events, points for doing the course etc.”

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The digital IQ

Marco designed this around the concept of an individual digital IQ, and something staff can increase over time via taking these learning paths.

It’s about creating these digital skills in a fun way. “You can see who else in your team is active, who has got more points; you can discuss, you can share; and anyone can create an event and award points for people attending that.”

AI is a critical next stage in the approach “because the next version will have this AI algorithm behind it, it will be suggesting and learning and seeing what’s happening in the organisation, then recommending the next best learning path for you to get to a higher digital IQ.

“The next stage is then to integrate that into our HR processes and career development so that if you want to apply for a job, maybe you’re going to need a digital IQ of X and if you want to achieve that here are the learnings tasks that allow you to do so.

“So, we’re trying to link motivation to career development with digital transformation.”

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Marco also supports an idea called open innovation.

“Innovation is a generic process by which you come up with smart ideas, but the trouble with a lot of innovation is it very seldom leads to execution. There’s a lot of time spent coming up with ideas and then they don’t go anywhere. In open innovation, we turned it inside out. We effectively put in place an innovation tool, a best-in-class innovation portal.”

“As we implemented the tool, we used User Experience (UX)_ and Design thinking, to ensure the tool was implemented applying digital best practice. We designed it around different personas and different needs, so anyone anywhere can suggest an idea about anything, have a tailored and relevant experience, and yet the idea goes into one place. From there it is categorised, and then key business owners go in and groom the ideas that have been tagged as relevant to them, or that are trending, or got feedback that people think it’s a great idea.”

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Innovation theatre

Marco then introduces what he calls a Venture Board, which then looks at how ideas get executed. There are some interesting aspects to the Board, for example, an innovation fund, and what Marco calls a wildcard where “each year we have an Open innovation award where the board sits like a sort of Dragons Den, and people pitch their ideas.”

Still, on the theme of innovation, Marco says that “while we’ve got one portal, one place where every innovation idea is captured, it’s also about giving transparency and feedback to people that their idea has been seen and progressed, or whatever action is appropriate. We are already opening the Portal up to our partners, to universities, to our supply chain and to start-ups. So, we now have open innovation where we are crowd-sourcing ideas.

We are building a new state-of-the-art smart technology hub in Vaasa. We will be using the innovation portal to identify, clarify and report on ideas that we are innovating on together. We are using the new ways of working: the service design, data-driven, insight, action way of working in a smart environment, and the factory that sits inside that campus is then totally IoT enabled, with robotic manufacturing and so on. We’ve been using VR for example to design the design!

“So we are trying to combine culture change, open innovation and physical activities of changing behaviour in one physical place. In that way, we are not limited by different time zones and different processes, where customers, suppliers all work around the need and the issue.

And finally, Marco says the Smart Technology Hub has a total investment of around 200 million euros investment. “Some of that is from the city and the university, not all from us, but a significant investment.”

Why this approach?

“We had a challenging deadline, multiple stakeholders, we wanted to quickly capture and test all the ideas, before finding the optimal way to create this unique ecosystem. This was only possible with a digitally transformed mindset. We started with user experience design, we developed it in an agile way, we co-created with some of our future customers, internal customers, and we have got very agile development methodologies, we are constantly looking at improving the product roadmap.”

He says: “this is an example of best practice in digital business transformation.”

More importantly, “it means the people feel that they are part of the transformation. There are tools to support them in what they’re doing.

How has the Culture change programme performed?

Marco says: “We launched the weLEAP Transformation app in June of last year. We had targeted that we would have 1,000 users by the end of the year and 3,000 users after one year. Wartsila has 18,000 people. Well, after six months, we’re at 3200,000 active users. It’s outperformed everything.” Bearing in mind that a high proportion of those 18,000 staff work in areas where this course is less relevant — about one-fifth of the workforce works in factories, blue collar, so actually, it’s more like a take-up of 3,200 users from four-fifths of 18,000 – not a bad take-up.

“The feedback from our government and from some of our partners is that we are recognised in Finland, and to a large extent in Scandinavia and the Nordics, as undertaking one of the boldest, fastest and most successful digital transformations programmes. And I think that’s because we focus so much on incubating within the business, making it tangible and driving commercial value at pace.”

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Michael Baxter

.Michael Baxter is a tech, economic and investment journalist. He has written four books, including iDisrupted and Living in the age of the jerk. He is the editor of Techopian.com and the host of the ESG...

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