Over the next five years, new digital technologies promise to dramatically change work outcomes and work experiences for employees of all sorts — manual workers, knowledge workers and managers alike, across a wide array of industries. The digital difference — or what we refer to as the difference between “looking digital and being digital”— derives from the ability of a new generation of technologies to augment, rather than to replace the cognitive, collaborative and the physical capabilities of human beings. To reap the benefits of digital technologies, managers must be prepared to undertake deep shifts that are as much cultural as they are technical in nature.
Digital is transforming the future of work
Digital refers to an ensemble of new technologies that enhance the collection and analysis of information in ways that dramatically augment the capacity of human beings. Six underlying components of digital will have the greatest impact on the design of work:
- Ubiquitous data streams: Physical and virtual sensors combined with high capacity networks that make it possible to process and store many large streams of data.
- Advanced analytics and modeling: Tools that transform information into scalable process improvements.
- Rich digital representations: Software that translates physical objects into data files that can drive programmable tools, robots and 3D printers.
- Cognitive augmentation: Technologies that learn by observation and offload routine knowledge work to automated assistants.
- Physical augmentation: Advanced robotic devices that sense and adapt to their environment and are small, safe, and flexible enough to be inserted into human workflows.
- Collaborative augmentation: Software that directly improves the ways employees coordinate work and co-create new products. These technologies are coalescing into “intelligent digital processes” that change the key aspects of work design, including the when, where, and what of how work gets done.
As a result, we continue to see disruption of traditional ways of organizing work, driving open operating models and seamless collaboration. Digital is breaking down silos and hierarchies, fostering the need to evolve into more fluid and networked organization forms. We also expect to see continuous transformation in work practices as analytics tools and ‘know how’ enable greater human robot collaboration.
Most importantly, we can expect to see evolution of workforce where organizations will be able to tap into global talent pools anytime, anywhere.
Emerging work practices
With the diffusion of intelligent digital processes, four new work practices will become much more prevalent in the next five years.
- Edge-centric decision-making: Information and decision-making authority will increasingly be pushed out towards the boundaries of the firm where intimate knowledge of context resides. Empowered by intelligent tools, employees will combine rich data streams with their contextual knowledge to make significant decisions — about inventory, pricing, and even product design — at a local level. Decentralized decision making will increase employee autonomy and engagement and allow companies to respond precisely to changing market conditions, resulting in higher customer satisfaction and sales.
- Real-time adaptation: Digital technologies will help companies respond to changing business conditions in real time. Pervasive digital connections between systems, people, places and things — sometimes referred to as the “internet of everything”— will produce a dynamic flow of digital information about machines and people, what they are doing, and how they are doing. Intelligent assistants will use this information to help employees make smart decisions even when they cannot calculate the implications of all that data themselves. The potential for dynamic and speedier decision-making will bring greater levels of operational flexibility and productivity to industries.
- Human and digital recombination: Advances in digital technology — including robotics, software and machine learning, sensors and analytical tools — will lead to newer, creative ways for humans to work in concert with intelligent machines. Humans will be able to “project” themselves into a wide variety of situations through remotely-controlled avatars and vehicles. Flexible robots will participate directly in human work processes by sensing and adapting to their shared environment.
- Experiment-driven design: As digital modeling and simulation make design iteration less expensive, work processes will increasingly be structured around a series of “design-build-test” cycles that generate early feedback to uncover risks quicker, and align to user preferences and needs than traditional design approaches. As a result, work will become more fluid, with higher levels of improvisation and experimentation.
Becoming a digital enterprise requires deep shifts
Research on early adopters strongly suggests that becoming a digital enterprise requires deep shifts — changes that cross-cut skills, roles and even culture. Three dimensions are key to the move from looking digital to being digital:
- Employing the right tools in the right way: Enterprises need to empower workers at all levels by providing them with data and tools for making sound business decisions. Moreover, organizations need to get comfortable with decisions being made in real time, in a distributed way, with emphasis on consistent and informed decision making rather than centralized planning and control. The net effect of these shifts will be to replace dominant paradigms that emphasize up-front planning and then sticking to the plan with the ability to re-plan frequently in response to new data and changing conditions. Making this change means having a much higher level of comfort with ambiguity and uncertainty and a willingness to move in the absence of complete agreement.
- Developing and deploying the right talent: Four core talents will prove vital to being digital: the ability to experiment, the ability to learn and adapt, the skill to exercise judgment and the power to collaborate. Being digital presumes that employees are able to absorb new knowledge and data, adapt as needed, experiment and learn. Intelligent digital processes will have the greatest impact when employees are motivated to use data to improve products and practices rather than merely to execute rules and procedures handed down from above.
- Evolving the right management mindset: Managers will need to be both literate and enumerate if they are going to support employees in making the most of available data. They are going to be called upon to exercise judgment in reconciling what the intelligent tools recommend and what history, culture and customers demand. They will need to encourage responsible experimentation, deal with inevitable failures or breakdowns that experimentation produces, and translate strategic direction into operational action. Indeed, the transition of management to “being digital” means giving up tight controls, granting a measure of autonomy to operators and designers, shifting the focus from one of rule-following to value-finding, and getting comfortable with experimentalism (the foundation of a data-driven culture).
The benefits of being digital are clear. However, the deep shift from looking digital to being digital is predicated on intentional efforts to employ the new digital tools in new ways, to develop and deploy the right talents, and to drive new management mindsets. Talent management and development needs to extend beyond traditional workforces opening new sources for talent, and employees expecting seamless and tailored employee experiences in line with their individual needs. Therein lies the challenge for leaders and HR: to recognize that a deep shift is necessary and to start building the foundation for it right away. Such organizations will become truly digital, faster and more effectively.