Why it is important to see digitization as a cultural change
Contrary to the widespread assumption that the main consequence of digitization will be the loss of many jobs, the real challenges we face lie in the fact that the world of work itself is changing. It is already clear that machines will soon be able to do certain tasks better than humans can. This development is not, however, to be equated with a decrease of human value in the economy. Reactions to digital change must not be based on fear or a fixation with maintaining the status quo. Rather, they must focus on actively shaping cultural change in the new world of work. Throughout this process, the focus is on the individual, as well as their needs and behaviour patterns.
Culture as a catalyst for digitization
New skills such as those involved in human-machine interaction are just as vital as those needed for teamwork and networking, which are increasingly important in the new working world. For this reason, both medium and long term adjustments in the education and vocational training systems, and an adaptation of the corporate culture are necessary. In this respect, a study carried out by Capgemini worldwide is thought-provoking, given its claim that the majority of the companies it surveyed suffer from "a lack of digital vision". The study surveyed 1,700 employees from 340 companies. Seven criteria were selected to assess digital corporate culture:
Type of cooperation
Digital first approach
Innovation
An open business culture
Agility and flexibility
Focus on the customer
Data-driven approach
What is remarkable about this list is that five of the seven criteria are primarily concerned with cultural change and not with technology-oriented aspects. Upon deeper consideration of the relationship between business culture and innovation, it becomes clear just how closely these two issues are connected. Companies without a digital business culture implement their innovations either very slowly, with difficulty, or not at all. According to the study’s authors, there is a lot of catching up to be done in Germany especially.
„Culture is either the greatest obstacle or the strongest catalyst for digital transformation and innovation. Many managers believe that the culture of their business is already digital. Yet when their staff are asked about this, they see the situation in a very different light.“
Brian Solis, co-author of Capgemini’s study
Startups as an experimental laboratory
When it comes to cultural change and innovative business culture, large corporations and medium-sized companies can learn a great deal from startups. Taking their encouragement from the great accomplishments of startups all over the world, teams with innovative business models are also making startups a trend in Germany. In recent years, the German startup scene as well as more established, innovative companies have benefitted from the increasing interest of international investors. It is, however, not only the prospect of great success that makes the "startup" model so attractive. In particular, the opportunities provided by the startup world to test out new forms of work and organizational structures such as holacracy are a great attraction. Thanks to their size and loose hierarchies, and, above all, their new ways of organizing work, startups create the ideal conditions for the rapid implementation of innovations.
What can be learned from startups
Moreover, startup structures are considered to be particularly adaptable and agile - characteristics that contribute significantly to the success of companies in a dynamic market environment. At times it can be vital to react quickly to changes, particularly in situations where competitors compete with products worldwide and the market is affected by "disruptive" changes. If a business culture is characterized by rigid hierarchical structures, it is more difficult to make adjustments in the shortest possible time and to react flexibly to new situations. Some large corporations such as Bayer and Microsoft Germany are already exploiting the potential of the "startup model" by founding individual business units within their own corporate structures, or through collaborations with young startups by providing them with space, funding, and expertise. There are also numerous initiatives that create space for dialogue, bringing together companies of different sizes and sectors.
Cultural change as the key to digital transformation
In this way, digital change is far more than just a technological development. It changes us humans in a myriad of ways. Digitization has made information and knowledge available everywhere and at any time. This opens up a plethora of new opportunities in the areas of education and training, but also in the organization and practical implementation of work. Digitization also speeds up processes enormously, and thereby changes our needs and expectations. When shopping online, our experience as consumers shows us that all the products in the world are just a click away. Closely related to the retail industry, the logistics sector is also constantly improving its processes so that most of these products need only two days to reach our homes. Thanks to social media, too, it is not only easier to interact with companies than ever before, but customers now also expect someone to be sitting at the other end, ready to give them answers.
Triggered by digitization, this cultural change is also the key to digital transformation in companies. Companies must also learn to deal with the changing expectations of their customers, as we are not only affected by the cultural changes as customers, but also as employees or business partners. Cultural change is the answer to the challenges of digitization. Companies that succeed in adapting to these developments will emerge from digital change as winners.
