The impact of technology in industrial settings today is transformative, but in the coming years, we’ll see unimaginable advances in automation, precision and analytic insight.

A wave of technology innovation has disrupted industrial sectors in recent years as sensors, automation, enhanced connectivity and data analytics have transformed the possibilities for virtually every industry. Real-time monitoring and the ability to track progress and measure just about every imaginable parameter provide opportunities to improve quality and efficiency in industrial processes, transportation and overall business operations. This is truly a renaissance, and while companies that specialize in industrial technology are already making exciting developments today, it’s only a taste of what’s to come.

As Co-Founder and CEO of acceleTEQ, an acquisition and investment firm focused on industrial technologies, I’ve had the opportunity to advise and work with companies that are producing some remarkable technology. Whether the focus is sensor technology, electronic components, process monitoring or metrology, we counsel these companies to master a set of core capabilities and disciplines to position them for success over the next five years.

The best way to resist the hype and identify real opportunities in industrial technology is to prioritize profit, speed-to-market and customer need.

Listen to the customer.

The best way to resist the hype and identify real opportunities in industrial technology is to concentrate on the market need. What does your customer—and your customer’s customer—actually want? What is driving the market? Talk to your customers and conduct market research. Then stay one step ahead of them by aggregating that information and look for the underlying trends, anticipating the market needs that are going to emerge in the next five to 10 years, not just those that are top-of-mind for users today.

Prioritize profit over innovation.

The field of industrial technology has never seen this kind of attention and momentum before. It’s energizing, but it can also misguide companies to follow avenues that aren’t necessarily going to be right for them in the long term. A lot of companies are chasing the data revolution and looking for ways to monetize that data. But a data strategy should only be one small piece of the overall strategy. Staying focused on what’s profitable (and will remain profitable), not just what’s possible, will keep your company on track and market-aligned.

Be agile.

The companies that will grow the strongest presence in this market are those that get there first. Take a page out of the software development playbook: get to market first with the minimum viable product and then improve on it with every successive product launch. Products don’t change as rapidly as software, but the same principle applies. Build a product that’s as good as you can make it today, and then work on the enhancements that will be ready to launch a year or two in the future. This is where having a strong product development roadmap is crucial, enabling you to maintain that long-term vision and walk it back to the product that you’re ready to deliver today.

Hone your distribution plan.

Distribution channels often evolve in an ad hoc, opportunistic way. But today, those decisions need to be made strategically, not reactively. The decision to sell directly or through channels (or a mix) depends on the industry, product type, sales geography (national or global), sales complexity and sales type (one-off or repeat business). Create a distribution plan that makes the best use of your internal resources and shores up those areas where you lack the connections, resources or market knowledge to succeed. And, be ready to adjust and adapt as your business grows, and market conditions change.

Think globally.

Every company’s business model should include global expansion, even those that have a strong local market and room to grow nationally. A global orientation is as much about defending your home turf as it is about finding new markets: if you don’t track industry activity in China, for instance, you won’t know how to address the risks that Chinese competitors pose when they reach the U.S.

To strengthen your global awareness:

  • Attend overseas trade shows. The Internet is a powerful tool, but nothing compares to being on the ground and talking to people that are in your space and selling in different geographies.
  • Visit overseas customer locations. If you sell within the U.S. to multinational customers, visit some of their facilities overseas. Is the product set designed for your U.S. customers also the optimal solution for their overseas businesses?
  • Visit overseas counterparts. Find overseas companies with complementary technologies to see if there are any partnership opportunities. Could you help each other break into new territories?

Every company’s business model should include global expansion, even those that have a strong local market and room to grow nationally.

Know your pricing strategy.

Are you using automation to produce a product at a high volume and the lowest cost, or are you making a differentiated product that delivers value to a specific market that no one else can match? Virtually every company in the U.S. will say their product supports a differentiated strategy, but few have tested the assumption. Assess the elasticity of your pricing: if you raise your prices by 10, 15, or 20 percent, do you lose customers?

Simplify the strategy.

Every company claims they have a strategy, but very few have one that is simple to communicate and execute. If your strategy is a long and complicated document, it can’t communicate the way forward to people within your organization. I ask CEOs to define their strategy in three sentences or less. If they can’t do it, the strategy is too complicated, and it needs to be rethought.

Here’s the bottom line.

The current wave in industrial technology continues to develop as the tech that support data connectivity and communication mature and the ubiquity of sensors grows. The impact of this technology in industrial settings today is transformative, but in the coming years, we’ll see unimaginable advances in automation, precision and analytic insight. The companies that lead this renaissance will not rely on innovation alone but will also bring discipline, strategy and vision to their markets.