What does it mean to be an organisation in the digital age? How are companies transforming themselves to adapt to the fast changing environments in which they operate?
Those are the questions that I asked researcher Jane McConnell (pictured right).
Her annual study, The Organization in the Digital Age, started back in 2006, and seeks to understand how an organisation, its people and tools are shaping new ways of working.
A decade of digital insights
Ten years ago, McConnell was primarily working in the intranet space. “It was pretty much all that existed at that time!” she points out.
She realised that there wasn’t a global view of the digital transformation that was happening inside organisations. “There were vendors who had detailed information about their enterprise products, and there were some case studies. Yet, for what the majority of companies were doing on a global scale, the data was limited.”
So, she decided to fill in the void by launching her first survey. She sent a questionnaire out to hundreds of companies. “The idea was to share a reasonably accurate vision on the evolution of the digital workplace across the globe and give companies a sense of where they were at.”
She continued to conduct the study year after year. Some of the companies who participated in the 2006’s survey, are still doing it today. Other organisations use it as a working tool. “They do their own internal benchmark; they organise workshops and do the survey together in teams.”
60% of the companies that are surveyed today are in Europe. 25% of them are in North America. The remaining respondent organisations are in Australia and New Zealand. In future, McConnell would like to have a representation of Latin America and Asia too. “I am looking for ways to build that up.”
The capabilities of an organisation
But, what does McConnell measure, exactly?
“First of all, it is a self-assessment survey,” she explains. “People answer questions about the digital working environment of their organisations.”
She feels the assessments are reasonably accurate because the survey guarantees confidentiality. “No one but the respondent sees their own answers and no enterprise is identified in the reports, which are based on analysis of the consolidated data.”
For example, she asks companies whether they deployed a technology that lets workers share knowledge with each other without using traditional internal channels. She calls it “the deployment of individual capability.” Back in 2006, 20% of companies said they did that. Today, the number is up to 80%! This is of course just one indicator of the remarkable digital evolution that has been happening inside organisations.
Yet, for McConnell, it is even more important to survey the “enterprise capability.” In fact, she explores whether technologies have been deployed that facilitate people working together throughout the organisation. “Do they build things together, exchange ideas, and find each other from different locations?” Once again, the percentage of companies that this enterprise capability has been deployed has increased from 15% in 2006 to 80% today.
The survey asks companies about their working culture. Is the decision-making distributed or centralised? Are they open to the external world or are they closed? Do they share a sense of purpose across the organisation? Or, is the sense of purpose different in various parts of the business?
McConnell correlates the answers to those questions with the digital maturity of the companies. Over the years, she found out that digitally mature enterprises are decentralised in decision-making.
Since 2006, the survey has been asking questions about the leadership, too. Are they participative? Or do they have a command and control approach? Once again, McConnell found that the more digitally mature organisations have a management team that is open to other’s ideas.
Perhaps, you would think that those results are not surprising. But, she believes that “they haven’t been pointed out so clearly with data before.”
In fact, if there is something that digital does, is to empower people to take control over their work and make more decisions. Indeed, customer-centric organisations are learning to trust the employees who are working at the edges of the business with the customers.
“Hierarchy still exists. In some cases it is strong and it is a problem. But, more companies are encouraging autonomy and letting their people self-organise into teams.”
When assessing the work culture, McConnell asks companies whether they encourage innovation. Are the mistakes that are made considered to be learning opportunities? Or, must people absolutely follow the rules and comply with what they are told to do? “The organisations that allow experimentation to happen are more digitally mature than the others.”
In fact, she points out, “the only way you can innovate is by letting individuals experiment.”
But, innovation also happens at a company-wide level. For example, she talks about the transformation of the bank industry. She sees that some banks have two main innovation strategies. One is to work with startups outside of the big bank. Another way to innovate is by creating a startup inside the organisation that can spread an agile way of working throughout the business as appropriate, “keeping in mind the fact that not all IT services in banking are best developed in an agile way.”
The language of the digital workplace
Back in 2009, McConnell was among the first people to bring the term “digital workplace” into use.
But, in the past two years, she moved her thinking – and language – to “the organisation in the digital age.” The digital workplace is part of this. “When you ask me to define it, I would say that it is the entire environment of tools and services inside and outside the organisation that people use to do their work.”
However, what we really need to focus on today is larger than the digital workplace. “It is the whole organisation, and how the very shapes of organizations are changing. Practices and processes are evolving. Relations with customers are changing. Digital facilitates many of these changes, but is only part of this transformation.”
Digitally mature industries
According to the last year’s data, McConnell found that the Telecommunication, Media and Technology (TMT) sector is the most digitally mature. The Professional Services industry, which includes accounting, consulting and other services, follows next. The Financial industry scores average.
But, what is distressing for her, is to see the Education sector being the lowest. Just slightly above is the Government.
Fast forward to the future
For McConnell, in ten years time, we will not talk about the organisation in the digital age any longer. “Digital will be business as usual. It will become the natural way of working.” She also predicts that the role of the Chief Digital Officer – the person who is in charge of digital programs inside an organisation – will become obsolete.
But, the change will not happen overnight. “It will be a gradual evolution.” One of the major milestones will be when collaboration happens “not just in little pockets of the organisations, but throughout the company.” Indeed, that would mean that people begin to work outside of silos.
Yet, “there is still a lot of work to do on processes.” They need to be simplified and streamlined. “In some big companies, long processes make it hard to do things. People are looking for ways to get work done faster.”
A good example comes from a large enterprise that McConnell worked with recently. They experimented with a new system of expense reporting. “They no longer have their employees filing an expense report. They use a mobile app instead. Workers report their expenses from the restaurant where they have had the business dinner. They take a picture of the bill with their phone, click on it, and the reimbursement is done.”
That system is based on trust, which “makes people feel good,” and the transactions are visible to all the relevant people.
Transformation — a people-based process
People are at the heart of transformation. According to McConnell “organisational change scares the hierarchy. It challenges the traditional power structure, disrupts information flows and reverses decision-making.”
McConnell’s current survey also touches on big data strategies both internally for the workforce and externally for customers. “People talk a lot about big data and machine intelligence. Most of that work today concerns better understanding and serving customers.”
Based on what she is seeing, “we are still far from having true data strategies implemented internally.”
But, it’s clear there is a strong interest on the part of many organisations. And, it “is a topic that we need to follow closely in order to have a sense of what the future holds.”
If you would like to take part in McConnell survey, it will be open until 30th June.
Pictures courtesy of Organization Digital Age
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