How new tech and new ways of thinking have powered Panasonic’s digital transformation

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TechRepublic Managing Editor Bill Detwiler spoke with Panasonic System Solutions SVP and CDO Faisal Pandit about how IoT, big data, and strong customer relationships have been the catalysts for Panasonic’s transformation from a hardware business to a holistic solutions provider. The following is an edited transcript of the interview.

Bill Detwiler: How have technologies like IoT, AI and the cloud been part of Panasonic’s transformation/transition from the consumer product space to the B2B market?

Faisal Pandit: That’s a great question. That’s something we talk about literally on a daily basis. That’s become part of our DNA now. I think it’s important to set the context for where we are in terms of looking back at where we were. If you go back 20 years ago, it was all a consumer electronics focus. CES was all about being a big TV show. Then in the early 2000s, with the whole internet emergence and things like that, there was a shift from consumer electronic focus to more of a B2B focus.

Our presence in the automotive, avionics, entertainment systems on the automotive side, in-flight entertainment on the avionics side, mobility platforms, ruggedized laptops, industrial equipment and so on and so forth started getting a lot more emphasis in the last 10-15 years. We’ve done really well in these markets. We have strong market share, tremendous amount of penetration across nearly every market that I just talked about.

Now, what’s happened is currently where we are is great market relationships, great presence, great relationships with some of the leading players in these respective market segments and industries and a lot of hardware capabilities. The markets that we play in are changing. IoT, big data, cloud is creating a new set of needs in these markets. The technology trends coupled with the shifts, the various market shifts that are happening within each respective market are creating a new set of needs and requirements that span beyond the hardware.

Our hardware relations, as I said, are very strong. The conversations that we are having with our customers are changing. Hardware is one element of the ecosystem that our customers are seeking. If we just continue to focus on that, we won’t be able to stay relevant in these markets in the long run, the conversations that are taking place are more focused on how can we help improve workflow efficiencies? How can we help drive process automation? How can we help optimize end user experience? There’s various reasons, some of them being where IoT and big data were a catalyst to drive those changes.

For example, if we talk about the food services industry, we’ve done very well in being a hardware provider on the POS side. That’s worked out quite well for us. Today, if you talk to a quick service restaurant owner, their focus is on how do I manage the incoming demand? Few years ago, there was one way to buy a hamburger at a QSR, or two ways, maybe the car and the front desk.

Now, it’s kiosk, it’s Uber Eats, it’s my mobile platform so the demand is increasing. The question that the QSR customers ask is how do you help me manage this demand? How do I make sure that my food is fresh? How do I make sure that I can be ready for the Uber Eats guy when he shows up to pick up the food?

These are a new set of requirements that are emerging. As I said, a lot of these changes are being driven by obviously the change in demographics. Underlying, if you peel the layers, it’s all about IoT, it’s all about big data, ability to analyze, collect data from all these devices, analyze these device, analyze the data and be able to offer some meaningful recommendations to our customers.

Our focus is on changing this hardware only position to more of a holistic solutions position. The good news is we have the relationships. We have a good understanding of these markets. How do we create an additional layer of software and services and build an ecosystem, either through our own offerings or in collaboration with third parties, to deliver to these new set of needs?

It all revolves around delivering strong IoT capabilities. It all revolves around having cloud capabilities. It revolves around knowing what machine learning is all about. It’s not just a one time solution. It has to fine tune and evolve over a period of time.

SEE: Hiring kit: Data architect (Tech Pro Research)

Bill Detwiler: Was that a difficult transition for Panasonic internally? It’s a pretty big shift from a hardware company to… You see it more and more with companies going from purely hardware to hardware and services, right? Just talk a little bit about how that happened from an internal basis within Panasonic. As you look to help other companies through their digital transformations, it seems like that was Panasonic’s own transformation.

Faisal Pandit: There’s multiple elements to it. There is your markets are evolving. It’s not like they have a blueprint of their requirements, a clear set of requirements. They’re changing, they’re evolving. On top of that, internally, a big chunk of your people go, “Why change? We’re doing well, things are going well. There’s still demand for what we do. Our relationships are great. Why change?”

Oh well, who cares about the future? Who knows about the future, right? It’s a very common response. It’s a classic example of change management. Our approach has been making sure we educate people internally about the challenges that our customers are facing. One of the strengths of Panasonic all along has been these strong customer relationships. It’s not like we are evangelizing the need for change internally just from our own perspective. Our people are involved with customers. They understand the customer voice. They hear the customer voice on a very regular basis.

We don’t shield our organization from our customers. Because of this tremendous amount of partnerships and collaborations we had with the market, there has been quite a bit of understanding of the market’s changes. That’s been seen. Then, on top of that, our top level management has done multiple levels, done a great job in communicating the need for that change. There has been enough time for people to understand, people to train, people to feel comfortable. The biggest pushback to change is what happens to me? Do I get transformed out, or am I part of the transformation into something bigger and better?

We had to sell that internally, that this is not about transforming an individual. This is about transforming an organization and the entire team as part of that. There was a lot of that communication from the executive team. There was a lot of communication from the marketplace, making sure people heard customer’s voice and understand this is real. This is not some executive in the organization driving a change for the sake of change. A combination of these things has helped quite a bit.

Now, that’s not to say that everybody, every employee is onboard. It’s an evolution. It’s an ongoing process. We make every possible effort. Because of Panasonic’s commitment to its employee base, we make every possible effort to bring people onboard. Unfortunately, there will be some who won’t be onboard in the long run. That would be disappointing, because this change is much needed and it has to happen.

SEE: Hardware decommissioning policy (Tech Pro Research)

Bill Detwiler: If there was a bit of advice that you would give to other companies that were going through a similar transformation of their own, what would that be? If there were one or two things that you learned from the process.

Faisal Pandit: I think you need to make sure that you communicate the need for the change from a market perspective. You highlight real reasons, real examples of what’s happening in the market. If you’re losing deals, for instance, because we don’t have the right set of products, if you have customers who are coming to you and communicating that they have a need for something bigger and better, or something different, communicate that to your team.

Most importantly, give your people space to operate in a new environment. What that really translates into is give them permission to fail. Again, how do you take people out from their comfort zone? They want to feel that this new zone, that’s not comfortable yet, becomes comfortable. You give them permission to fail with right due diligence. You don’t want people to go wild and try new sets of things. We’ve failed in certain areas and certain projects, and I’ve gone out and celebrated that failure.

What that does is that gives people enough desire, enough motivation to try new things. When you’re going from something that’s working to something intangible that’s not well-defined yet, you need to make sure the culture is innovative, culture supports risk taking, there is enough backup if a person tries something and it doesn’t work out well. What that will do is that will create that incentive, that will create that desire and, ultimately, take out the fear of uncertainty within people and they’ll try new things.

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