Five steps to drive sustainable digital transformation for your business
This presents a significant opportunity for industry leaders, but many are confused about where to start. How can they transform in a way that has a positive impact on their business and the climate crisis? Where to start?
For insight, Forbes spoke with Greg Tink, head of industrial digital transformation at Schneider Electric. The industrial technology business was recently recognized as one of the world's most sustainable companies for the 13th consecutive year for designing innovative, climate-conscious solutions that power organizations on their modernization journeys.
Below, Tink shares a series of practical steps to help enterprises envision and realize their digital transformation ambitions.
1) Clear goals
Before researching new technology or fine-tuning your budget, first identify what sustainability issues your operations and customers care about most. From there, define what “digital transformation” means for your business—in terms that are clear, specific, and tailored to your goals. "It's about setting the tone and having a common goal. If you start a journey without knowing the destination, you'll never get anywhere," Tink said.
This includes mapping out specific sustainability goals – such as reducing water use by a certain amount each year or switching to renewable energy by a set date – and aligning the business’s mission, values and culture accordingly.
Defining your transformation approach in concrete language (such as Schneider Electric's description of its own sustainability impact programming) will ultimately help colleagues and employees understand and buy into your plans.
2) Own first, then concentrate
C-suite leaders need to be the driving force behind transformation initiatives before efforts can be delegated and dispersed throughout the organization. “Leadership’s job is to set the tone and enable the reorganization—the kind of new enterprise neural connections that are needed to transform the organization,” Tink said.
When CEOs own digital transformation, they can unlock the inertia across teams and put their big ideas into action. This ultimately builds trust through shared data and experiences, improves retention and job satisfaction, and drives smarter business decisions. Tink said this is the approach Schneider Electric has adopted within its ecosystem to continually be accountable to its vision and stakeholders.
With senior leadership leading the way, you can equip teams across levels and business functions to collaborate and contribute to your initiatives. "You need a core group with a strong mandate," Tink said. "Just appointing someone as a transformation leader doesn't necessarily transform the organization. You have to have the structure and momentum behind it."
3) Prioritize people
When you modernize, your most important investment is your people. By giving them the necessary skills to navigate and build new processes, it means they, too, can be part of the effort. "As you automate, empower your people to learn and get the right training so they can move forward with the organization," Tink said. “They need to see themselves in this transformed way of working – that’s the cultural incentive.”
When Schneider Electric set out to build a transformation plan for a 65-year-old factory in Lexington, Kentucky, in 2017, it retained employees by prioritizing education and upskilling. By early 2024, the business was named one of America's Best Large Employers by Forbes for its continued emphasis on empowering its workforce.
Tink said that to successfully move away from traditional mechanistic and siled systems, companies need to implement a "lean continuous improvement mentality" into their employee culture, which cannot be achieved if teams cannot understand and engage with the changes happening around them.
4) Keep your finger on the pulse of progress
Start by setting performance metrics and then implement systems to ensure your business is accountable to its sustainability goals, says Tink.
This may include process studies to identify process bottlenecks, for example. He said: "Ask yourself, where are we least efficient? Where can we drive efficiency, reduce energy consumption and do more with less impact everywhere? Where can we reduce waste? There are no shortcuts: you have to analyze the entire process to understand what needs to change.”
Accurately benchmarking performance in areas such as energy conservation, carbon emissions and water use requires continuous monitoring and a bird’s-eye view – only possible through strong digital underpinnings. Schneider Electric uses industrial software with artificial intelligence (AI), including the AVEVA system platform, which provides real-time trend analysis and standardized data management to help organizations optimize. AI and machine learning are now used across industries to improve sustainability performance, providing reliable, actionable insights to drive efficiency and reduce waste.
As the business modernized its Lexington plant, Schneider Electric's earliest goals included setting climate-conscious goals and then taking a holistic snapshot of plant operations to evaluate improvements. By easily tracking important metrics like energy usage and power quality, factory employees are able to detect operational efficiencies and collaborate on opportunities to improve production and increase agility.
5) Use data to demonstrate results
Once your business has data to validate its digital transformation and sustainability investments, share those numbers widely. “Put the data out there so everyone in the business can see it and make it part of the culture,” Tink said.
AVEVA tools make it possible to capture Kentucky Smart Factory’s achievements, including a net annual reduction of 30% in CO2 emissions and 3.4% in energy savings since 2012 – results highlighted as proof that transformation and sustainability go hand in hand. Schneider Electric uses its own automation technology in all its smart factories and reports a 10-30% reduction in overall energy costs and a 30-50% reduction in maintenance costs.
By establishing a similar data architecture and integrating technology, automation and AI capabilities, organizations can manage, access and utilize data more flexibly and efficiently.
Tink recommends that once you understand what works in one facility, replicate the solution across your factory network. “That’s very powerful: to make it take root in the organization and scale the success so that everyone can make it happen together.”
At the same time, expect that some changes may not succeed. "A key part of innovation is being able to try and fail," he said. Measure and validate your improvements, learn from your experiments, and move on to the next stage of your journey. Working with a partner with industry expertise can kick-start your transformation and take the guesswork out of rolling out a digital initiative.
Tink said: “Becoming more digital drives sustainability as well as business goals. You use less energy and drive efficiencies in the workforce, which ultimately leads to profitable sustainability over time. The world is transforming, Industry can lead this shift.”