9 – The seven digital transformation realities
In the previous post, I focused on reconciling the changing nature of careers with the changing nature of business. In this final post in the Biz 4.0 series, I will lay out the key realities of digital transformation. The earlier posts in this series explore each reality in more detail.
The world is changing
For a few centuries, the industrial era managed to cultivate a sense of certainty. There was no risk in building a car factory back then as the need for cars in the decades to come would have been guaranteed. But for the majority of time we have been on the planet the world has been an uncertain place. Such is the nature of Nature. New technology has given rise to great connectivity across the world and this has yielded great benefits for humanity. However, it has created what might be called hyper-uncertainty.
Parochial issues on one side of the world can now have significant reverberations on the other side.
The certainties on which strategic planning is based no longer exist. Strategy in its traditional sense is dead. We need a new approach to business. Simply applying new technology to your business model (digitisation) will not cut it.
Assets are key
I believe assets are more important than profit. The latter focuses on short term gain and exposes the organisation to the risk of long term pain. Amazon barely makes a profit. That is because it is too busy growing assets. The primary assets being us, the consumers. If you build your assets, the profits will follow. Ultimately businesses need to focus on financial capital. This is grown by paying close attention to brand capital, intellectual capital and data capital.
In the digital age, you need to jettison your physical assets. On the digital journey, organisations need to travel light.
People are central
I predict that humans have another decade in respect of economic relevance before technology will outpace us in cognitive matters. So, the focus now should be on building your organisations around your people using new technologies to augment their productivity. Much of the tech will serve to handle the tedious aspects of their role (“over to you virtual assistant”) and some of it will be used to make better decisions without requiring ‘sign off’ from several layers of management.
If you are talent, then you need to be delivering value through your ability to do what the latest tech cannot do.
This will likely be some blend of creativity, emotional intelligence and weak signal pattern recognition.
If you are a talent acquirer, you will need to create a workplace that meets the anthropological drivers of your people, so that their cognitive capacity is not squandered.
Best to be tribal
The tribe is the most successful business model of all time. It has been test-driven over thousands of years in very unforgiving environments / markets. Behaving like a tribe requires us to pay attention to what is happening around us and within the tribe. Tribes need to be ambitious and adaptable.
They value artistry, which might be considered the convergence of talent and creativity.
Smart tribes recognise the importance of adding value. The provision of goods and services to other tribes enables them to acquire assets and resources that will enhance their chances of survival and possibly even their chances of thriving.
You need an innovation engine
Ultimately success in the digital age will be determined by the organisation’s ability to set up a mechanism by which ideas can be captured, filtered, ranked and implemented to produce organisational value. The filtering mechanism in particular will require a leadership team that understands the true meaning of digital. Thus, it is important to ensure the leadership is ‘digitally competent’ before turning on the innovation engine.
The innovation machine will work best when it is fuelled by a steady stream of ideas from the staff.
As well as the traditional incentives, crowdsourcing and gamification come to mind in respect of building and maintaining idea throughput.
Don’t leave your people behind
It is no mean feat to assemble a digitally-competent executive team who can reach both a common vision and a set of goals for the organisation. But it is not enough. Ensuring that the people are also onboard for the digital journey is key for the vision to be achieved. This needs to be handled with great care.
Staff are continuously bombarded with macroeconomic news, largely designed to create anxiety.
Thus, whilst stepping into the unknown might be fairly exciting for you, it is more likely to engender fear in your people.
You are encouraged not to engage your people in the digital journey until you have alignment at boardroom level and a well thought out internal communications plan in place supported by the appropriate people developmental services.
Embrace the changing nature of careers
Coupling an old business model with new work practices or coupling a new business model with old work practices is a recipe for corporate self-destruction. We need to recognise that the nature of careers is changing and establish how our new business model(s) can embrace the emerging work models. Played carefully this could be a win-win for employer and talent.
My concern is that the changes I am advocating in respect of digital / business transformation will not happen fast enough. Many businesses will become ‘burnt platforms’ because they didn’t act when the initial plumes of smoke first appeared. This will likely trigger a global economic downturn in the next few years.
Some surviving but distressed organisations will be reluctant to lose their talent and so will offer part time opportunities, enabling the staff to pursue other interests / side hustles on the days of the week they are not required.
This will likely spawn a new generation of reluctant entrepreneurs, who over time will be grateful that they had their ‘security blanket’ partially pulled from beneath them.
In conclusion
These are exciting times in both a positive and a negative sense. Negatively, we can no longer ‘go through the motions’ whilst enjoying a high quality of life. This reset is well underway. We are working harder for less each year. Whilst we might be maintaining a steady-state in terms of materialism, we are in great deficit from a time perspective.
The trick is not to work harder. It is to review your value proposition in respect of market demand and raise your game accordingly.
In many respects the digital age is forcing us to be more human, because that is where our value proposition lies.
In that sense, we are returning to our true pre-industrial nature. This has to be a good thing for both employers and their people. We are designed for survival, not simply for comfort. This is not going to be to everybody’s liking. Those of us who come to terms with the realities of digital transformation, both corporately and personally, and act accordingly will truly thrive in the digital age.
