By Lisa Caldwell There’s no denying that the manufacturing industry is going through a period of near-unprecedented change. Across the board, the rapid emergence of new technologies and the growing influence of big data are disrupting traditional operating practices in a way not seen since the Industrial Revolution. For manufacturers, the question posed by this era of transformation has shifted almost as quickly as the technologies around them. Whereas 10, even 5, years ago they may have been asking, “Should we innovate?” today the question has become, “How fast should we do it?” Evolution or revolution? Yet even in a world where innovation is table stakes, there’s an important distinction to be made between evolution and revolution. Indeed, while a willingness to reinvent and challenge the status quo is key to future commercial success — a fact 48% of manufacturers recognize, according to the recent EY Industrial Products Survey — it cannot come at the expense of the present. Why? Because transforming at a pace or scale that customers feel unsettled by or that jeopardizes the reputation of the organization in the short term is almost as dangerous as not transforming at all. This balancing act is at the heart of the challenge facing today’s manufacturing companies. How quickly can they evolve their business to set it up for success tomorrow while retaining the trust, loyalty and confidence of key stakeholders today? Customers must be part of the journey It may sound obvious but a great place to start is with customers themselves. After all, they’re the ones who pay the bills. Before setting out on any program of organizational transformation, companies must understand how it will deliver better experiences for those they serve — both now and in the future. In many cases, this comes down to communication. Rather than innovating behind closed doors and presenting a ready-made fait accompli to the outside world, manufacturers should work with customers to identify their needs, define what they see as added value, and understand their preparedness and appetite for disruption. For example, a growing number of manufacturers are forming co-innovation partnerships with customers (as well as partners and suppliers) to offer hands-on experience of new technologies and promote a sense of openness and best practice. This allows their business to evolve at a speed customers are comfortable with while helping protect — and even enhance — critical relationships by making them feel part of a shared journey of change. Crucially, it also helps manufacturers keep their eye on the ball when it comes to delivering the same quality of products and experiences that brought their customers to them in the first place. Defining innovation Yet while customers must be front and center of any manufacturer’s transformation journey, what of innovation itself? Often, there’s a temptation to think of it as a free-flowing, limitless art of the possible. A kind of blank canvas waiting to be filled with the newest and most unexpected idea. In fact, the most successful innovation programs are the ones that come with a clear sense of purpose and parameters. That’s not to discourage creative thinking and pioneering spirit — both of which are vital to changing the game in any industry. Rather, it’s about guarding against innovation for innovation’s sake and, instead, harnessing emerging technologies to deliver tangible benefits for the business and its customers alike. First and foremost, that means defining what innovation actually looks like — something that can vary greatly according to factors like an organization’s size, product type, legacy, customer base and location. Does it, for example, involve using advanced data analytics to streamline the supply chain or develop a smarter pricing strategy? Is it about introducing new elements of automation or 3D printing? Is it something else? A road map for change Whatever the answer — or answers — to that question, the most important thing for any manufacturing company is to have a clear road map for change. The road map should tie the overall vision of leadership to the actual steps the organization must take to get there. As far as is possible, this road map should be transparent, accessible and backed up by a team charged with evaluating ideas and prioritizing tasks to keep the day-to-day in check and innovation on track. This makes it easier for employees to understand and buy in to the outcomes the organization is working toward. And therein lies the rub. Perhaps more than any other sector, manufacturing is about outcomes — about delivering the goods and materials that make the world’s daily life go round. Yet it’s also an industry with a long history of innovation — from the first moving assembly line to the introduction of industrial robots. This is a sector well-accustomed to having one eye on the present and one on the future. For today’s manufacturers, striking that balance has never been more important.