Let’s Go Digital

Digital transformation has a huge influence on business’ future – five steps lead to success.

If entrepreneurs want to plan responsibly, they have to react to the digital transformation. Illustration: Daniel Ramirez Perez

If entrepreneurs want to plan responsibly, they have to react to the digital transformation. Illustration: Daniel Ramirez Perez

Welcome to the world of VUCA! This is the acronym for the Volatility, Uncertainty, Complexity and Ambiguity, which are among the consequences of rapid digital change, whose surprising level of disruption is leading many to fear for the future. When searching for guidance through this minefield, they are then bombarded with vocabulary such as Scrum, Design-Thinking, Working Out Loud, Effectuation, Social Collaboration Software. Never heard of any of this? Don’t fret, just trust your common sense. Once you’ve read this article, you’ll be able to join in with the conversation.

A question of sustainability

Ignoring this revolution is no solution. If entrepreneurs are to plan responsibly, they must react. Connectivity is increasing, both in business and in private, and markets are adapting to this. In order to reach customers in future or develop products that the market will bear, businesses must invest in learning and development processes. The times of optimizing a couple of processes and then resting on one’s laurels are long gone. Nowadays, corporate culture is decisive. It can be an accelerator of, or barrier to sustainability. Most effective is a step-by-step approach. How to successfully instigate change in your business:

1. Put Theory into Practice

The current societal change can be best described using a model referred to as Spiral Dynamics. It’s based on decades of research by Development Psychologist Clare W. Graves. More and more often, this model of human development is being applied to organizations and firms.

Spiral Dynamics is brilliantly suited to explain the transformation from hierarchical and formal to flexible and connected. The associated value-oriented approach is more sustainable than simply introducing agile methods such as Scrum or Design-Thinking. If you want to explore the existing value set in your business, you may do this effectively with questionnaires based on Spiral Dynamics. A simple Internet search will quickly provide what you are looking for. Forms tailor-made to the business are worth recommending. The employees should fill them in openly and impartially. It is then clear how change must be effectuated. Strategic development can then be pushed accordingly.

2. Remember, Corporate Culture is a Key Factor

In fast-moving markets, many corporate leaders feel more committed to short-term results than to sustainability. This leads to hasty decision-making. Even if the boss recognizes agile working methods as a solution, they must ensure that the appropriate framework is in place before implementation. Changing the mentality of a workforce takes time, as do the corresponding learning processes. This applies to software as well as to methods. Only a successful change in corporate culture will determine whether the measures taken can ultimately have the desired effect.

Changing the mentality of the workforce takes time. Illustration: Daniel Ramirez Perez

Changing the mentality of the workforce takes time. Illustration: Daniel Ramirez Perez

Cultural development affects all levels of a company. It includes the firm’s training climate as well as the system for reward and recognition. This does not have to be through salary alone. It also includes answers to the questions: What makes me a ‘good employee’? How do I receive appreciation from my colleagues? Simply by dealing with the corporate culture, a great deal of progress can be achieved.

3. Initiate New Thinking

To make the transition from linear top-down thinking to more agile New Work structures, the Working Out Loud (WOL) method is well suited. Under this, employees are to ensure their work is more transparent for their colleagues. The model calls for a willingness to share competencies, expertise and one’s own approach with a group of four or five colleagues – one’s peer group. By exchanging goals and working methods, all members of the group benefit from the valuable learning effects.

Initially, the WOL program is pegged for twelve weeks. During this time a new learning culture should develop. In addition, mutual appreciation should increase through the intensive cooperation. WOL makes it easier to make one’s own work visible and to share knowledge with others. This promotes self-confidence and team spirit in equal measure. An advantage of the method is that it makes New Work tangible and can pave the way for further developments. It integrates elements such as decentralized leadership, spontaneous exchange of knowledge and united, goal-oriented thinking.

4. Define a Vision and Set a Budget

For companies it is helpful to orient themselves by strong role models. Illustration: Daniel Ramirez Perez

For companies it is helpful to orient themselves by strong role models. Illustration: Daniel Ramirez Perez

Of great assistance for change are role models, be these other companies, departments or individual employees who act as multipliers. Make sure to identify the formative people in your organization. These are often – but not necessarily – managers. Who wields influence? Whom do your employees align themselves with? Whom do they look up to? Winning over these multipliers for your project is one of the strongest levers for further development. Role models should be integrated first. They lead the change by their own example. Very good supporters often come from generations X to Z, as they have grown up with global networks and have experienced new ways of working through their training and studies. Change is often more effective through bottom-up initiatives than enforcement via the usual top-down process.

In addition, one should budget resources and time for the workforce so that they may prepare for the new challenges through training. There are platforms on the Web – such as Masterplan.com and Sunlight.is – which specialize in learning materials for the digital age. It may be interesting for managers to look through these, however instead of prescribing solutions, it is more advisable to provide each employee with a budget that they can freely dispose of. This approach is particularly interesting for small and medium-sized businesses that do not want to build expensive learning platforms; but is also valid for corporations, as more personal responsibility is an important goal of New Work.

One should also consider project-related teamwork beyond one’s own company boundaries. If work is predominantly computer-based, freelancers for many projects can be found through platforms such as Upwork.com and Fiverr.com. This allows for increased flexibility and provides new inspiration. Collaboration with external parties and partners makes it easier to develop new solutions.

5. Provide Technical Support

At the technological level, social collaboration software such as Coyo or SAP Jam – which provide a combination of social intranet, team messaging and digital teamwork – support cultural change within companies. There are also more project-oriented programs and tools such as Monday.com or Stackfield.com. These increase connectivity, support informal learning processes and give employees more transparency surrounding events in their company.

The Structure Behind New Work

The revolution referred to as ‘digital transformation’ is not a trend specific to a single industry or our professional lives, but a societal development that is being accelerated by technology and is currently also changing the traditional role of work in our lives. The graphic below shows an extract of the Spiral Dynamics model, adapted to suit development processes in organizations and companies. According to this model, many companies are currently transitioning from stages 1.0 and 2.0 to stages 3.0 and 4.0.

Illustration: Daniel Ramirez Perez

Illustration: Daniel Ramirez Perez

Focus of Organizational Development:

Processes afford greater efficiency. The Command and Control principle, coupled with clear structures, allows effective management.

» Leadership Role Process and Subject Matter Experts
» Organizational Principle Linear Organization

 

Illustration: Daniel Ramirez Perez

Illustration: Daniel Ramirez Perez

Focus of Organizational Development:

Growth is the main premise and driver of constant progress. KPIs and individually agreed targets help management.

» Leadership Role Manager & Doer
» Organizational Principle Matrix Organization

 

Illustration: Daniel Ramirez Perez

Illustration: Daniel Ramirez Perez

 

Focus of Organizational Development:

Increasing internal networking. Focus on exchange and flat hierarchies for higher agility.

» Leadership Role Cluster Expert & Intermediary
» Organizational Principle Network Organization

Illustration: Daniel Ramirez Perez

Illustration: Daniel Ramirez Perez

 

Focus of Organizational Development:

Opening up, co-creation of needs-cluster solutions with common suppliers and clients (New Work).

» Leadership Role Entrepreneur & Coach
» Organizational Principle Fluide Organisation

Barriers to Transformation after 3.0

Ability to delegate required; long-used management and learning behavior needs to be unlearned, without devaluing what has already been achieved; structures and processes need questioning to create more space for agility, learning and innovation.

The corporate orientation that prevailed in recent decades has been both dominant and very successful, and still prevails to this day. Typical elements include multiple departments and hierarchical structures. The organizational principle may be described as ‘Command and Control,’ by which the leadership strives to hit key performance indicators and individually-tailored targets. In the context of the industrial era, with its predictable and stable growth markets, focusing on efficiency and efficacy brought a lot of prosperity and progress in a short space of time.

For faster-moving and more complex markets, the model describes a different trend: the higher requirements become, the faster companies will seek more fluid types of organizations such as those of 3.0 and 4.0. They operate in networks and are more adaptable and agile with their flat hierarchies and increased employee responsibility. Fledgling organizations such as start-ups already employ such thought patterns from the moment of founding. Companies that arrive at these levels are better positioned to understand new market forces than those employing classic structures.

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