Posts

Karin Maria Schertler

The Disruptions Triad – Your source of power for the digital transformation

You’re probably sick of hearing it again and again. This buzz word that’s always mentioned in the same breath as the digital transformation. Sometimes the disruption takes the form of a threatening scenario, sometimes as a utopia of unlimited possibilities – depending on who takes on the topic or for whom the message is intended. This is almost always accompanied by the urgent plea that we must step things up at the forefront of the digital transformation. The basic tenet is that we require more disruptive technologies. We require more disruptive business models. So let’s get on with it! Come on all you corporations, medium-sized businesses and startups!

But focussing on disruptive technologies can quickly lead to tunnel vision

There is no question that disruptive technologies and business models can be a powerful source of value creation. But what the current discussion fails to address is that, besides the phenomenon of disruptive technologies, there are two further starting points for disruption, which also carry a high value-added potential in themselves – and which are in the limelight much less frequently. Interestingly, these three disruption potentials are strongly interconnected, and so I have coined the term “Disruption Triad” – a triad of technology, organisation and people.

It is important to understand the mechanisms of this triad in order to fully exploit the wealth of value inherent in disruptive technologies. Because, at the end of the day, a new technology only reaches its full value creation potential if there are actors (the people) and areas of action (the organisation) that make it possible. As technology advocate and Harvard professor Vivek Wadhwa puts it so well: “Technologies like Blockchain, AI and peer-to-peer are just buzzwords. What counts is developing real solutions.”

As such, we need people who are able to anticipate the future and who have learned to practise disrupting their own thinking – without tumbling into a state of panic. True to Friedrich Hebbel’s assertion: “It often requires more courage to change your mind than to remain true to it.”

In order for these people to be effective in their role as value-creation catalysts, they need to operate under the right conditions. As such, organisations are also called upon to question their beliefs and decision criteria, which may have led to a silo mentality, long-winded decision processes and unproductive activity. Consequently, disruption of the classical organisational structure and culture is also a very important lever on the way to a digital future that safeguards value creation.

Beliefs really are very subtle

So far so good. Maybe you think you’re on the right track because new work is already on your agenda. Before you start patting yourself on the back, let’s delve a little deeper into the subject. The beliefs of individuals and organisations have a very subtle effect – an external observer is usually required in order to uncover them.

Take, for example, the question “How does an organisation assess good work and make this assessment visible?” In a Tayloristic system, the hierarchy and a portfolio of status symbols are used (the size of the individual’s office, which company car they have, who is invited to which internal events, etc.). In an agile, self-organised organisational unit you won’t find any of this – sometimes not even titles.

When an organisation now serves both worlds – often referred to as ambidexterity – it is exciting to see how the old Tayloristic approaches continue to work. An employee of a large traditional company recently formulated their observations as follows: “The realities surrounding self-organisation of large companies can sometimes be absurd. Particularly where non-hierarchical structures meet top management, the degradation game that takes place isn’t very subtle. The question arises as to whether employees in agile models – alongside female managers – represent a new minority in everyday corporate life with low acceptance.”

This simple example shows how powerful beliefs are. And how important it is to track them down and ‘reprogramme’ them in the sense of a cultural change. Even the best disruptive technology is useless if it is met with counter-productive attitudes and views.

But this is not only a task for the much-discussed cultural change in organisations. At the individual level, we are also challenged to deal with our own value and coordinate system and to critically question established opinions and points of view (our own and those of others). Collective cultural change is made up of a multitude of individual contributions.

The triad of disruptions broken down into a simple formula

When it comes to finding a common denominator for a holistic approach to disruption that best describes the innovation triad of technology, organisation and people, this proverb hits the nail on the head:

We sow a thought and harvest an action.
We sow an action and harvest a habit.
We sow a habit and harvest a character.
We sow a character and harvest a destiny.

Or to summarise it even further: “Matter follows mind” (Einstein).

So it is not superficially our actions, but our thoughts, beliefs and attitudes that shape the future. Einstein’s maxim applies to individuals, organisations, and nations alike – and ultimately to all of humanity. Thus, our future is not left to fate, but can be consciously shaped by disruptive thinking.

Value creation is the foundation of our prosperity. It ensures the future viability of our society as well as the peaceful coexistence of humankind. For our own good, this resource should not be used lightly. So let’s cultivate disruptive thinking together – in ourselves and in our companies. For the common good!

P.S. If you still have doubts about the effect of thoughts and words, I recommend the three-minute film “Words can be weapons“. This should take care of any remaining doubts you may have. Promised.

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Klaus Schwab

Digital Transformation: Bye Bye Buzzword Bingo!

Would you like to speed up the transformation process in your company by fast-forwarding the change using disruption and out-of-the-box thinking as the ultimate goal for 2017? Or perhaps pursue the end-to-end process, through programmatic advertising, with first, second and third party data, with marketing automation and immersive marketing, to achieve customer centricity? And are you also convinced that virtual reality and live content are the next big things?

Yes, I‘m exaggerating, of course. It isn’t that bad, fortunately. But anyone who has to deal with digital topics knows that they abound with specialist jargon. And that is not at all bad. We only have a problem if we can’t guarantee a common understanding of these terms – if everyone understands something, but not necessarily the same thing. And from time to time you can’t help feeling that some people also like to hide behind technology, abbreviations and abstract technical terms, in order to hide their own ignorance of the details.

Take a term like ‘digital transformation’. Do you as a businessperson think that digital transformation is important? Of course it is. And now ask your employees and colleagues what they mean by this term: The answers will surprise you. From an app for the canteen plan to crowd-based product development, they could cover just about anything. If there is no common understanding here it will be difficult or impossible for everyone to be on the same page. But how can they be, if no-one knows what is to be changed by this digital transformation? On top of that, a recent study has found that just a third of German companies feel well prepared or very well prepared for the digital revolution. Those who play Buzzword Bingo at this stage risk having this process fail for their company. Not because employees and service providers are fundamentally reluctant, but because announcing changes generates feelings of uncertainty, fear and the feeling of a lack of competency in established company structures. Abstract, difficult to understand language, suggesting great complexity, can cause additional resistance among the employees. But these are the most important supporters – or to put it in buzzword-speak, the ‘enablers’. So the ultimate maxim for decision-makers must be: Make things understandable and create a common understanding of what you mean by certain terms.

Another example? You make the fundamental decision for your company that ‘customer centricity’ will be part of your future strategy. So you want to ‘focus on the customer’ in future. This may be particularly important because your company has collected a large amount of customer data at the different contact points where customers engage with the company and its products (‘touch points’). You already have various databases, where customer information has gathered over time, but they are rarely compatible and cannot be ‘matched up’ with each other easily. If all the departments involved, such as the IT, marketing and sales departments, define customer centricity separately, they will all suggest quite different approaches with very disparate requirements. You could, of course, buy a software solution as an all-in-one solution because a strategy consultant has promised you double-digit savings. It would be more sensible, however, to allow all departments involved to exchange ideas – perhaps even moderated by an external, software-independent consultant – on how the goal of absolute customer orientation should be achieved in individual steps: what content, at which points of contact, how often, etc. And only then should they make subsequent decisions on structures, responsibilities, budgets, and maybe software as well.

In our experience, common understanding is achieved best when things become tangible for all concerned – and ‘tangible’ is also to be understood in the literal sense. Take for example a workshop where you can test new technologies and try them out yourself. Or you can talk to start-ups in your own industry, getting to know them from the inside, or ask experts from other sectors who have mastered certain aspects of the digital transformation in their company. And don‘t worry, you won’t have to book a trip to Silicon Valley! You can also gather such insights in a metropolis of your choice. You probably won’t draw up a total transformation strategy for your company after one such workshop. But in the best-case scenario, you will have jointly identified the most important fields of action for such a strategy, and established a common vocabulary.

It is just as important to find a common basis of understanding with your service providers. Don’t hesitate to ask what is meant by a certain term and what is behind it, along the lines of: “There is no such thing as a stupid question.” If you also encourage your service providers to do the same, you can greatly simplify and speed up the exchange of knowledge, allowing yourself and your counterparts an optimal learning curve and thus creating a good basis for efficient communication and co-operation.

Once you have achieved this, the practical implementation in your company will be many times faster. And then even buzzwords are no longer a problem. After all, everyone will then be reading from the same page.

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Klaus Schwab

Digital transformation – In the end it’s all down to the individual

When companies contemplate digital transformation, they usually concern themselves first of all with business models, technologies, platforms and processes. This is not wrong but yet not enough. That’s because companies need to focus on the individual if digital transformation is to be successful for them. She or he is the greatest hurdle and at the same time the best opportunity in this process. And this applies in two respects: on the one hand, companies have to understand the impact of digitalisation on the needs and behaviours of their own customers and future target groups. This is the only way that digital offers, platforms and communication can develop, which are relevant for current and future users and thus have the prospect of success. On the other hand, change projects can only be sustainable if the company’s own employees understand the effects of digitalisation on the company and the sector and support the corresponding changes required.

Admittedly, we receive private messages via newsfeeds or from Facebook, we stream films, music or TV series when and where we want. We communicate via social networks and messenger, book travel online, do our shopping over the net and control the heating via an app. Progressive and all-pervasive digitalisation has changed our everyday lives – and is continuing to do so at an increasing pace. Whereas yesterday we were still fascinated by being able to order groceries online, now we get news of political upheaval via Twitter, meanwhile tomorrow we will of course use Echo to order toilet tissue. We are experiencing and witnessing change in practically every area of life. When it comes to our job and our own company, however, the attitude and perception of many people change.

From onlooker to stakeholder

Notwithstanding the fact that digitalisation affects almost every sector, managers and employees can nevertheless be found at all hierarchical levels who still quote various reasons why this topic is not at all relevant in their sector or professional life – regardless, incidentally, of industry and age. Complete rejection, major scepticism or the general dread of change – especially change processes – is only too human. Anyone who shuts out this aspect and believes that digital transformation can be decreed “top down” – in the truest sense – will in all probability fail.

Companies that want to successfully master digital transformation must encourage understanding of the transformation among their employees as well as a willingness and desire to change. The switch from onlooker to stakeholder is essential.

The buzzword “digital transformation” very rarely means anything definite to employees. The word is too unwieldy and at the same time can be interpreted in any number of ways. It is considerably easier to approach the issue by asking concrete questions and communicating and discussing these openly. How is media usage by our customers changing as a result of digital transformation? How are their needs and purchasing patterns changing? Are new target groups emerging and what makes them tick? Is there a significant demand for our products in new channels and platforms? Do we need to reassess the role and mix of communication and sales channels? How are our existing competitors dealing with the new situation? Where are new competitors emerging, who perhaps offer just part of our value chain but at a previously unknown level of quality? It is only when answers can be found collectively to these questions that change processes in the company can be justified in an objective and transparent manner. If decisive changes are the result of analysis, all employees have to know the reasons for this. Digital transformation can only be successful for companies if they take the anxieties and any reservations of their employees seriously.

Digital expertise you can touch

Gather together the employees you need in the first step to initiate the transformation, preferably using different training formats. Only by experiencing something in practice and trying it out is it possible to properly grasp a subject. This is true for mobile payment options for your own company in the same way as for deliberations on introducing agile forms of project management. For example, introduce new tools and approaches using concrete use cases in a two-day workshop – with external support too. Visit start-ups together from outside of the sector also and test and try out technologies in practice. Exchange information with digital natives on their media usage and consumer behaviour. The aim is to allow things and developments to become touchable, tangible and therefore intelligible so as to identify the opportunities and challenges for your own company. Jointly elaborating specific goals and visions in workshops can also be helpful to dispel any trepidations that may arise from any sense of lack of expertise. Play planning games with a very practical orientation and, wherever possible, avoid using jargon. Buzzword bingo is counter-productive in everyday life. The draft of a digital strategy for your company can result at the end of the introductory and conceptualisation phase. This is of course just a first draft that has to be substantiated and revised in detail. But you will get a collective view of exactly how the concept could look in practice.

It is also clear: once the strategy has been developed and fundamental decisions made, these will not remain correct and valid for years to come. Only one thing is certain: the next update will definitely come. The iteration should therefore be planned in as a principle from the outset and be made a permanent feature of the strategy and reflection process.

Internal communication as a key success factor

Active and open communication must therefore be an integral part of all processes. Include employees – in decisions, new ideas and strategies. The feeling of being taken seriously and having a say, at least in one’s own field, can break down resistance. So that ultimately everyone in the company understands and is convinced that change is a constant part of the new work environment.

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Manfred Klaus

The Opportunities of Digitisation

“It is time to expose the heinous nature of the phone, and condemn its many inventors.” No, this critique is not aimed at the smart phone. This is not about digital detox or the NSA. The citation comes from an 1877 edition of the New York Times. The author was already worried about the privacy of citizens. But criticising technology has not stopped its development: more than three-quarters of Germans now have a smart phone. For those under 30, it has superseded the television as the most “indispensable” device. Digitisation has reached our pockets and handbags, and even our bodies.

This fact has far reaching implications, and has created many opportunities, but also risks. As with every important technological development, there will be attempts to misuse these new capabilities. However, the opportunities created by digitisation far exceed the risks. We will learn, as a society and as individuals, to deal with it and we will mature in the process of digitization.

Opportunities for the Individual and Society

Today we take completely for granted that we can use our smart phones to buy our bus ticket, read the news or weather forecast, listen to music, time our jog, and chat with friends. For individuals, this digital transformation means more comfort, quicker access to information and new forms of communication. According to Statista, around 14 percent of Germans meet their partners through online dating sites. We pay for this comfort with our data. How we deal with this new currency in the future will be a social and individual learning process. Data protection is an important topic in politics, business and for each individual.

Before the discovery of printing, knowledge was hoarded in monasteries, where information was copied by hand. Reading was a privilege for those who could afford books. Today, everyone with an Internet connection has global access to information and educational resources. The democratisation of knowledge includes not only the consumption of information, but also freedom of expression: via commentary, blogs and social media, we can take part in public and political life. But we must also be able to cope with the fact that these capabilities will be used to every degree of stupidity. More importantly, in a networked world, social mistakes get visible more quickly than ever before. The Wikileaks revelations, for instance, could never have happened without digitisation.

Opportunities for Business and Marketing

In many markets, digitisation has allowed companies to provide service without spatial or temporal restrictions. This will give a boost to all industries. And digitisation will help processes to become even more efficient. A recent Bitkom study estimates that the potential for increase in productivity (keyword industry 4.0)  in Germany could result in a gain of up to 78 billion Euros by 2025.

For marketing and brands, the digital transformation means they can, and must, be more relevant and employ more targeted communications. The right message at the right time in the right place requires data – not necessarily personal information, but also anonymous information are sufficient. People, users and consumers expect brands to offer more service in the future, as well as clear added value and to take meaningful action.

Criticism of technology is always an important part of societal debate. However, the past has proven that it is much more useful to make market developments than to reject them categorically. This is especially true for the digital transformation.

This article was also published in Horizont, edition 40/2016.

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