European School of Governance, position paper #140 by Prof. Dr. Michael von Kutzschenbach.
Over the past few decades, rapid technological development has resulted in the digital transformation of communication, business, governance and much more. These innovations, which are changing both value creation processes and our working life, have not as yet been the subject of public reflection about our desired digital future.
In the “Internet of Everything” world, innovative digital technologies aim to reduce variable costs through process automation, quality assurance and a range of other more subtle information management applications.
The impacts of digitalization on a company or organization are systemic. With the goal of achieving more with fewer financial resources, companies are betting that significant investments in new technologies will lead to falling costs. Automation will replace humans in routine work. At the same time, companies will need employees with increasingly specialized expertise to operate the “digitized organization.”
Digitalization not only impacts production and creates new management challenges, but also intervenes at the cultural level with significant effects on everyday activities. Therefore, digitization is no longer simply a technological trend but a social phenomenon. Thus, digital transformation is restructuring society in both positive and negative ways and will continue to do so to a greater extent. For sustainable success in this changing society and work environment, it is critical that all stakeholders be involved in the digital transformation process.
As L. Rafael Reif (President of MIT) argues:
“If we want the advance of technology to benefit everyone, however, we need to take action right away: We must proactively and thoughtfully reinvent the future of work.
[…] Automation will transform our work, our lives, our society. Whether the outcome is inclusive or exclusive, fair or laissez-faire, is up to us. Getting this right is among the most important and inspiring challenges of our time – and it should be a priority for everyone who hopes to enjoy the benefits of a society that’s healthy and stable, because it offers opportunity for all. In this work, those of us leading and benefiting from the technology revolution must help lead the way. This is not someone else’s problem; it is a call to action” (The Boston Globe, 2017).
In the face of massive transformation, one might expect extensive public debate, reflection and exploration of the purpose and impacts of digitalization. Unfortunately, it feels like most of the debates about digital transformation among company leaders focus on “how to do it;” how to implement innovative technologies or to improve the existing business processes via digitization. The remainder focuses on considering “what to do,” which framework to choose in order to develop the best transformation roadmap for the organization. Only a minority is concerned about the “why”, the purpose and impact of digital transformation.
I say “unfortunately” for two reasons:
While the uncertainty of this new digital future brings understandable doubts and fears, those that are most affected by the transformation must be engaged in creating the vision of their desired digital future and bringing it about. Too often, technology providers and business consultants’ pressure for a quick buy-in from desperate business leaders try to maintain their competitive edge or simply avoid catastrophes. These reactive behaviors may bring about survival, but not much more. That is a failure of vision, or even a vision of failure.
For systemic success through the digital transformation and beyond, organizations must engage those who are most affected by the transformation. Doing nothing is not an option; as Buckminster Fuller said once: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete”.
But what kind of model could this be? What kind of (digital) future do we want? What kind of clear, feasible, socially shared goals are we collectively willing to work for?
Successful navigation of this transformation requires the combination of digitalization and sustainability, systems thinking and collaborative learning (and unlearning). This strengthens the capacities of companies and governments to be innovative and responsible, to enable fair cooperation and fair taxes, and to foster democratization and a new independence. These essential capacities and goals are only possible through joint experimentation and collaboration, or rather, our willingness to work and learn together.
This is already taking place in some areas. Although forgotten by many, the original purpose of the Internet was to create a place for people to work together to create a greater consciousness by bringing people with different backgrounds and perspectives together to proactively engage in their future.
From my experience, decision-makers must be willing to invest in creating spaces for collaborative learning and thus facilitate public reflection on the purpose of digital transformation. Some businesses are already doing this. However, much of the burden is carried by individuals who are willing and “able to take the risk” because they are financially and socially protected or privileged. The vision of collaboratively creating a vision for a digital future with socially shared goals means that everyone must be included in joint experimentation and collective reflection.
By effectively engaging those most affected by digital transformation in developing a shared vision, organizations need to foster transdisciplinary collaboration, stimulate collective sensing and empathy, unleash collective creativity, and thereby catalyze all transformational efforts. Doing nothing is not an option and keep in mind, the necessity of taking the world to its next stage of evolution is an amazing opportunity.