Airbus’s procurement leader Thierry Larroque shared his four top tips for successful digital transformation at ProcureCon Europe.
Larroque, who is VP procurement digital transformation at the aerospace giant, told delegates at the conference in Prague that he was leading the supply chain function in 2016 when the CPO asked him to lead a digital transformation for procurement, in line with a wider company transformation.
“These are the four secrets I wish I had known at the time,” he joked.
1. Digital leadership is different
“If you want to drive the business to its digital future, you need to be a leader who will keep the team committed and engaged, drive cultures of innovation, take on risk and who has multidisciplinary expertise,” Larroque said.
You must select team members who have learning agility, and who understand that digital transformation is a journey, which doesn't happen overnight. “You can’t just grab people and tell them to change,” he said.
When it comes to creating cultures of innovation, Airbus has an incubator – Airbus BizLab – where it co-develops ideas with start-ups, and it has set up its own business in Silicon Valley.
“Failure needs to be part of the learning journey,” said Larroque. “If you want to innovate, you will need to experiment, and it’s not an experiment if you know it will work.
“Digital leaders need to accept the end result may be different from what they had in mind,” he added.
2. Educate senior management
Larroque quoted figures from an MIT survey, which found that while 87% of leaders anticipate their industry will be disrupted, only 44% feel their organisation is preparing adequately for this disruption.
“Creating a sense of urgency [among senior leaders] is of upmost importance,” he said. “We need to make everyone understand that the ‘Uber’ for your industry is around the corner. Every business will be disrupted.”
Engaging senior executives is also critical given a digital transformation will impact every function and every employee.
3. Change across two dimensions: customer experience and operational efficiency
“Start with operational efficiency,” Larroque advised. “Learn the value of your data.” At Airbus, procurement and supply has focused on areas like mapping and visualising risk and digitising contracts. “That convinced management of the value of the transformation.”
At the customer experience end, Airbus has created an online data platform (Skywise), bringing together suppliers, customers and the company.
“Collating operations data on the platform helps us [all] to better understand how the process behaves,” he says.
4. Create a digital culture
Digital transformation is not about technology as much as it is about people and organisation design. “In functions, we have created the devil,” Larroque said. “With digital transformation we need to break down silos.”
Digital cultures need to have appetite for risk and a relentless focus on customer centricity, he added.
“Having risk tolerance means learning from failures,” he said. “Help employees learn to fail, and use data not just to measure past experience but to look to the future.”
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