Today one of my clients in China asked if we could provide them some training on digital. The corporate Head Quarter mentioned ‘digitalization’ as one of the training priorities for the year. “Of course “ – I answered – at Marco Polo Consulting it is already sometime that we are investing in understanding the digital transformation, designing new programs and initiatives to support our clients. What do you need exactly? What do you mean for digital training? – I asked. "Behind this “label”, you know, there are so many aspects we could touch. It is a very broad term. Much broader than just the technical aspect of it”. “Well, the first thing we need” – they said – “is exactly an help on understanding what Digital transformation means. We hear everywhere that digital is the new frontier but we do not know how this could apply to us.”
This is exactly the challenge that many companies are facing today. They are starting to understand that digital is important for them but they do not know how and why. For this reason I decided to write a blog series around this topic starting from the beginning and trying to answer some questions.
What does Digital Transformation means?
Let’s start first by saying what the Digital Transformation is not. Digital Transformation is not the usage of more IT, in order to take advantage of digital technology and data. Digital Transformation is much more. It is the change associated with the application of digital technology in all aspects of human society. It is called “transformation” because the digital usage inherently enable disruptive type of innovation and creativity, rather than simply enhance and support the traditional methods in a incremental way. The digital transformation impacts all sectors individually and implies also a need of more complex systemic/cross-sector approach. Below just some key examples:
- Business
- Politics & Government
- Education
- Society
Talking about business: which aspects are impacted?
I would tend to say: all. However let’s summarize here the most critical ones and reflect in other posts about the implications they have on other areas:
- The business model and strategy: digital savvy businesses are focused on integrating or using individual digital technologies in the service of how their business works and in the value proposition to customers. The digital technologies can be such as social, mobile, analytics, cloud, artificial intelligence, Internet of things, industry 4.0, block-chain, crypto-currency etc. For companies with high digital maturity, digital is not an island operating independently of business strategy; rather it is embedded in their core business. With the digitalization the engagement with the customer happens more and more through digital channels, the user experience and journey become a critical aspect for business success.
- The way the business operates: The open network and the digital platforms have enabled and stimulated innovative forms of work, organizations and talent management. You might have heard the terms: teal/self-managed/collaborative/horizontal/agile organizations. We will explain them in another post. They are form of organization that enable the adaptability and innovation needed in the digital era. High performing companies align their organizational structure with their digital priorities. Some set up a center of excellence for digital or appoint digital and innovation officer or create new “digital roles” to drive accountability and accelerate their digital transformation. No model suits all cases. It really depends on the best fit with the digital maturity and type of business and the right solution is likely to evolve over time. Rapidly also the talents landscape is changing. The digital natives (Millennials and Gen Z) are approaching work in a completely different way, influenced by the digital approach: they want to have open collaboration, digital nomadic approach to work, they search a open talent market, flexible working arrangements, new contractual forms of engagement with the employer, they want to use “digital tools”, remote working and are motivated by strong sense of purpose. They are entrepreneurial and often they prefer to choose a freelancing approach to work.
- The use of digital technology for productivity improvement: artificial intelligence, robotization, new digital collaboration tools etc. are used to improve productivity in the company in different domains. The digital initiatives in this case treat digital engagement as an aspect of execution, rather than as a central consideration in strategic planning.
Are all industries equally touched and prepared for the digital transformation?
Of course not. This picture summarize the results of a recent research conducted by McKinsey&Company about digital maturity in different industries.
Distribution of Digital Quotient by industry (Global), points, out of 100.
How Digital era and V.U.C.A are interrelated?
You may have heard the term digital era often associated to the term V.U.C.A era (acronym standing for Volatile, Uncertain, Complex, Ambiguous era). Why?
The digital transformation has brought dramatic changes in the environment where the business, and us – as individuals, we operate. The term V.U.C.A has born in the military field but is now used also in the areas of strategy, leadership and organization and represents the characteristic of our current context:
V= Volatility. It reflects the nature, the dynamics and the speed of the change
U=Uncertainty. It reflects the awareness of lack of predictability and the surprise component accompanying all aspect of our current reality
C=Complexity. It reflects the multiplicity of the variables and the confusion generated by problems that we are not able to explain with a linear process of cause and effect.
A=Ambiguity. It reflects the ambiguity of the reality, and the fact that is is very easy to make mistake in its interpretation.
How organizations and individuals can adjust and cope with this environment? How to adapt rapid change? This is the context that makes also the ability to innovate a life-saving quality for the business. It implies that urgent changes are required just to keep afloat. Fast innovation is critical because the digital transformation has create unique market place challenges and opportunities, as organizations must contend with nimble competitors who take advantage of the low barrier to entry that technology provides.
How to approach the Digital Transformation?
Clearly a digital transformation presents several challenges, such as understanding the “why we should embrace it”, how to develop a digital and innovation friendly culture, how to create an effective operating model and develop digital capabilities and also, how to approach the transformation from a “change” perspective.
We will discuss about this in future posts. See below the road-map. Stay tuned.
GIORGIA MADONNO
Managing Director at Marco Polo Consulting
Giorgia spent most of her HR career in senior positions in corporate HR in Europe, US and Asia with companies such as Fiat Group and The Nielsen Company. In 2008 she founded Marco Polo Consulting, a company specializing in Organization development/HR/Transformation professional services operating across Asia-pacific. She delivers facilitation, coaching, training, advise, OD temporary management. Recently Giorgia has been HR and Organizational Behaviors EMBA Adjunct Professor at MIP/Tongji University in China. She is a subject matter expert for Employee Experience re-design and innovation by collaborative approaches such as Design Thinking, Lego Serious play, Art of Hosting, Graphic Facilitation. She is currently based in Singapore. https://www.linkedin.com/in/giorgia-madonno-313b677/
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