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Digital is everywhere, and there is seemingly no way to escape technologies like social media, mobile devices, smart embedded digital sensors, and cloud-based computing. These technologies fundamentally alter how we make decisions, because our wealth of information helps unlock new insights.
Digital technologies open a wealth of new possibilities for what companies do, but they also create both challenges and opportunities for how that work gets done. As a result, companies need to consider new roles and responsibilities, skills, relationships, and organizational and management practices.
Becoming Digital Involves Multiple Dimensions of Change
Research suggests it can be helpful to characterize the organizational journey of digital transformation in terms of interdependent and iterative changes in mindsets, practices, and resources.
Changing Mindsets: Becoming Open to Learning with Digital Resources
At the heart of the transition from “industrial organization” to “digital organization” are new attitudes, beliefs, and values towards digital tools, information, organization, management, workers, and the work itself. How employees think about digital changes is important because people will resist changes that feel threatening rather than enabling. In contrast, a “digital-first” mindset is an instinctive, positive, and proactive attitude toward digital possibilities.
When is a digital-first mindset evident?
- Employees throughout an organization tend to explore digital solutions before manual ones, use digital tools to seek out expertise, seek opportunities to use technology for advantage, and approach data systematically.
- Employees understand the opportunities and risks of engaging with digital solutions and proceed confidently.
Changing Practices: Becoming Skilled at Innovating with Information
As enterprises digitize their operations, new behavioral norms and routines need to become widespread and consistent.
Two complementary practices make a difference:
- Data-driven decision-making means consistently using data – rather than intuition or the highest paid person’s opinion (HiPPO) – to guide decisions. Data-driven decision-making ensures policies and processes are rigorously developed and information-based, expanding the explicit knowledge of the organization.
- Collaborative learning involves teamwork and partnering without regard to discipline, geography, ownership or other traditional parameters. Collaborative learning enables people to access and apply tacit knowledge and ensures that insights and solutions move rapidly and readily across boundaries.
Changing Resources: Enabling Insights Through Collected and Connected Information
Organizational capability also depends on structural and concrete elements, such as digital and physical tools, skills, formal structures, and infrastructures.
Instrumental resources in the digital journey include:
- A digital-ready workforce of engaged and self-directed workers who can take on the challenges that automation cannot (yet) address.
- Broad-based access to digital communication, collaboration, and coordination tools to enable collaborative learning and exchange across internal and external boundaries.
- Integrated operations data to enable employees to actively monitor, measure, and improve operations.
- Real-time customer data to help workers customize services while also supporting them in sensing subtle but important external shifts.
Collectively, these digital and human resources support intense information processing and broad social connections. This combination of capabilities enables an organization to quickly sense, successfully shape, and powerfully respond to a constantly changing external environment.