Where to focus in 2022: The 5 great shifts driving digital transformation

There are decades where nothing happens, and there are weeks where decades happen.”
Lenin

In our Breakfast Briefing, in Feb 22, Alan Brown who is a Professor in Digital Economy at the University of Exeter’s Business School share with us his view on the 5 Great Digital shifts leading to change. Here is his blog on the Great 5.

The unprecedented events of the past two years have increased the pressure on organisations to accelerate the delivery of their digital strategies. Effective use of digital technologies has been a cornerstone of maintaining business continuity, connecting supply chains, gaining insight into performance, and building flexibility in service delivery.

Through a combination of hard work and heroism, most organisations have found ways to expand their digital footprint to maintain operations and move to digital-first. The costs have frequently been high, but, for the most part, they have emerged damaged but not broken.

As we start 2022, organisations need to overcome a variety of challenges to deliver on the promise of digital transformation. This year, their focus will be dictated by five major shifts. Future business success will be defined by how they address these shifts to survive in the near term and thrive long term.

1. The Great Acceleration

The rapid deployment of digital technology over the past two years has been referred to as “The Great Acceleration” of digital transformation. From the roll-out of collaboration tools to the broadening of online channels, we have seen substantial investments in digital-first ways of interacting.

Yet, it has become clear that the focus on digitisation is insufficient to deal with the scale of the challenges being experienced. A more substantial transformation in working practices is necessary. This realisation has had deep consequences for many aspects of organisations requiring new approaches to leadership and a significant redesign of organisational structures and processes.

Key takeaway 1: These changes are already having a significant impact on organisations already destabilised by volatility in their operating environments. Over the next few months, we can expect to see a great deal of energy and investment in adjustments to redefine organisations’ structural characteristics and leadership approaches. The impact will be particularly acute within core elements of an organisation’s management infrastructure, budgeting activities, and HR practices.

2. The Great Disruption

Although digital strategies have been a high priority for some time, the slow progress of digital transformation has been recognised as a critical weakness by senior leaders in large organisations. Faced with substantial organisational inertia, many such efforts have been labelled as failures.

The shockwave caused by the pandemic has changed all that. The “Great Disruption” initiated by the pandemic has shaken up our way of life and acted as a significant wake-up call to many business leaders. The current crisis has highlighted their digital shortcomings, particularly at senior levels. Digital upskilling initiatives have been underway for some time. Whether rolled into corporate learning programmes, or discrete events intended to create excitement in a jaded workforce, many of these learning activities have struggled to make difference.

Completion rates for self-initiated learning using the plethora of online resources have also been disappointing. Far from leading a digital skills revolution, their take-up has been disappointing and frequently considered only essential for limited parts of the workforce.

Key takeaway 2: Over the coming months, leaders in all organisations will be scrambling to educate themselves further on the capabilities of digital technologies, hiring digitally savvy consultancies to guide their tactics, and driving their strategies toward the introduction and support of new digital business models. Educational programmes will be redesigned to be open to everyone in the workforce, to increase engagement, and to be more effective in delivering business results.

3. The Great Resignation

Many organisations are currently facing a critical challenge to maintain staff numbers, address unplanned staff absences, and hire new employees with the right skills to support their increasingly digital ways of working. These concerns, broadly described as the “Great Resignation”, are driven by three factors: lack of motivation in low-skilled working environments; stresses introduced by the digitisation of the workplace; and shortage of key digital skills.

Increased adoption of digitally-driven activities such as remote working and pervasive digital connectivity is important to enable business continuity. However, they have also been associated with increasing levels of stress caused by an “always-on” culture, expecting an instant response to queries and increasing unpredictability in workload. One consequence is that there has been a steep rise in those looking to change employment, seek new kinds of roles, or leave the workforce altogether.

Key takeaway 3: Often described as a “war for talent”, increasing digital skills, rebuilding employee satisfaction, and hiring people with appropriate digital experience will undoubtedly be the dominant activities in many organisations over the coming months. Many adjustments will be required in pay, incentives, working practices, and hiring processes as the challenges to support existing staff and hire new employees experienced in digital delivery approaches to become more severe.

4. The Great Dispersion

The forced shutdown and ongoing travel uncertainties over the past two years have had a major impact on many of the collaborative activities essential to personal and business engagement. The result can be seen in a “Great Dispersion” in many aspects of our way of life, from where we choose to live to how we want to interact, communicate, educate, exercise, entertain, and much more.

This change particularly affects workplaces where daily activities have been redefined over recent months. This has been enabled through the adoption of digital technologies to support remote collaboration, the introduction of new internet-based support services, and the establishment of streamlined processes for many kinds of distributed decision making.

Understanding the ramifications of a more dispersed workforce is becoming a major emphasis for organisations. While significant doubts remain in how extensive and pervasive the dispersion of the workforce will be, most organisations now recognise a more hybrid form of home and office-based working style is inevitable. So far, however, most of the support for remote workers has been reactive and rather ad hoc. The focus now is to anticipate employee needs and to provide more rigour to emerging work patterns.

Key takeaway 4: Many organisations are still very early in their understanding of how to carry out these adjustments and will spend much of the coming months redesigning their working practices in response. As organisations adjust to these new working patterns, they are looking to redesign the workplace to support emerging needs. The increased stress and inefficiency that surrounded the somewhat chaotic approaches employed during the pandemic are being replaced by more responsive techniques that guide and support workers in the short, medium and long term. Furthermore, beyond the physical needs of workers, effective management post-Covid requires that organisations also adopt the working practices in light of remote collaboration, shorter planning cycles, and flexible partnering styles.

5. The Great Reset

Beyond the challenges being faced by individuals and organisations, many analysts and commentators now also highlight the instability and uncertainty of the current period as an indication that society is in the midst of a major transition to a new set of values and concerns. In what has been declared as the “Great Reset”, organisations undergoing a digital transformation are reviewing their obligations toward issues such as sustainability in a digital era.

Much of the attention has focused initially on increasing our understanding of the impacts of our organisations on the physical environment. Consequently, improving operational practices to gather data and intelligence to meet environmental targets will be the focus of a lot of attention for years to come.

Key takeaway 5 : As the world adjusts to this great reset, the implications for all organisations will be considered in how they define their strategies, deploy their resources, and deliver products and services to meet the new expectations being set. Undoubtedly, organisations will be asked to justify digital transformation activities to reduce their negative impact on the environment. However, they will also need to be more explicit on the choices made across three areas of sustainability – planet-profit-people.

What Matters Now?

Without a doubt, adjusting to the massive shifts of the past two years will take time. The changes we have seen have affected all aspects of business and society. As we emerge from this crisis it would be reckless to assume we can return to the strategies and operational practices of the past.

In spite of this uncertainty, perhaps one thing is clear: organisations ignore these shifts at their peril. The role of digital technology in this new future will be substantial. It is now incumbent on us all to expand our understanding and ensure we live up to the responsibilities for delivering digital transformation in whatever “new normal” awaits us.

This blog originally appeared on Alan Brown’s Digital Economy Dispatches platform. A digest of the latest digital transformation news can be found at Digital Economy News.

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