Could the IoT Spark a Management Revolution?

Written By: David Stephenson

Anyone who reads this blog knows the Internet of Things will have a revolutionary effect on business: heck, who would have thought we’d have a smart lawnmower?

However, when I read in Jim Heppelmann & Prof. Michael Porter’s second HBR article that: “For companies grappling with the transition (to the IoT), organizational issues are now center stage — and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.”

I had a sudden inspiration. What if the IoT could in fact have far more impact, actually sparking a significant revolution in corporate processes and even basic organizational structure?


It’s because the IoT lifts a barrier to efficient management that was so common in the past we just accepted it and designed work-arounds to cope: we simply didn’t know how products actually worked (or didn’t!) once they left the factory dock. Come to think of it, aside from the occasional pressure gauge, we actually didn’t know how manufacturing equipment was actually functioning either. Since so little data was available, it made sense for senior management to control it, creating departmental “information silos” and parceling out the data as it saw fit. The result was many layers of hierarchy and linear processes in which departments functioned in isolation, then passed things on to the next department, often with disastrous results.

Apocryphal or not, one story illustrated the problem. There was a new car back in the 70s with a spiffy design and selling well. Then a customer took his in for its first routine oil change. The mechanic slid under the car & slid right out: this simple procedure would require dropping the entire engine, a costly and time-consuming process. Why? they hadn’t bothered to include a field mechanic in the design process, and none of those who were involved, working in isolation, had noticed this obvious flaw.

The IoT will lift that veil of blindness. We can foresee a time in the near future, with real-time sensors fully-deployed, when everyone will be able to share (that’s important!) access to real-time data for the first time. Operating from this shared “ground truth,” they’ll be able to design integrated processes linking every department as never before. Hierarchy and linear processes will give way to a seamlessly-integrated circular organization revolving around a shared, real-time data hub.

 Every function will be inter-related and will benefit:

There’s an added bonus to gradually restructuring our companies to operate in a cyclical, rather than linear or hierarchical fashion. There’s a growing realization in Europe, and to a lesser amount in the US, of the benefits of a “circular economy,” which emphasizes raw materials conservation, reuse and remanufacturing of products rather than a linear one in which products are eventually landfilled or incinerated. It not only reduces waste, but also improves operating efficiency, and circular companies within a circular economy will benefit even more.

The transition to circular companies will be difficult, because we must dismantle operating systems and unlearn management styles that have existed since the beginning of the industrial revolution. However, benefits from operating precision to better customer relations to increased creativity made possible by real-time sharing of data warrant investment in IoT processes today, then experimentation with new circular processes revolving around real-time IoT data!

W. David Stephenson, of Stephenson Strategies, is an IoT thought leader and consultant. His blog is ranked by Google as a leading non-corporate IoT blog. He will be speaking at LiveWorx 2017 about ThingWorx: Platform for Management Revolution. Register to attend LiveWorx 2017 today!

  • Industrial Internet of Things
  • Industrial Connectivity
  • Service & Parts

About the Author

David Stephenson

W. David Stephenson is an internationally-recognized Internet of Things thought leader, strategist, theorist and writer, and long-time futurist. He is principal of Stephenson Strategies and Google ranks his blog as the top non-corporate one on the IoT. He founded the 2,500 member Boston-New England Internet of Things Meetup, and currently heads a crowdsourced/crowdfunded campaign to create a free, citywide IoT data network in Boston. Stephenson is the author of an e-book, SmartStuff: an introduction to the Internet of Things; Managing the Internet of Things Revolution, an i-guide introduction for C-level executives to managing the IoT (sponsored by SAP); and of Data Dynamite: how liberating information will transform our world (Data4All Press, 2011).