“Technology marches in seven-league boots from one ruthless, revolutionary conquest to another, tearing down old factories and industries, flinging up new processes with terrifying rapidity”. This quote may as well be from today. It fits well into todays popular discourse on how digital technology is changing organizations, social structures, and economic structures. Rapidly. And the overall message is that organizations need to adapt, or a rapid death is predicted. This quote is not from todays’ news though, it dates back as far as1927, to Charles Beard, an American historian. Telling us something about the fact that we have been here before. Is there a lesson to be learned?
There is a common understanding that we are facing a new revolution, – a digital revolution, and entering Industry 4.0. Klaus Schwab, the founder of World Economic Forum, identified four major impacts on businesses with the development of Industry 4.0. 1. A shift in customer expectations that leads businesses to focus more on the users than the product or service they provide 2. Improvement in asset productivity through the use of big data, 3. increased importance of new forms of collaboration, and 4. the transformation of operating models into digital models.
One way organizations can use digital technology is to improve customer experience, like making a booking system digital, or by making an app that makes it easier for the customer to use your service or product. Another way is to make processes more efficient by applying robots to procedures that can be automatized. But it is the value organizations can create for the customers by transforming digitally that is at the center of the revolution. It is especially the digital technology’s ability to be flexible, individualized and adaptive that makes it a tool the organizations can use to offer more value in terms of experience to their customers. Those who are able to transform will win market shares and gain trust and loyalty from their customers and users.
Digital transformation can be defined as «the use of new technologies (social media, mobile, analytics or embedded devices) to enable major business improvements such as enhancing customer experience, streamlining operations, or creating new business models”. To use the term “transformation” rather than “change” implies that this is not about adoption of new technology, but a fundamental change in the way business is done.
This changes the role of technology in organizations. Traditionally technology has been used as a tool to support the physical organization to enhance productivity and efficiency within the organization. It is commonly standardized and bought by a supplier, and seldom customized for the organization or made by the organization. But technology is always made by someone. And that someone will bring their own sets of values, norms and culture, into the design of the technology. This will in turn influence the users of the technology in terms of their behavior. Digital technology is not just supporting the physical world, it is entangled with the physical world which makes it even more potentially powerful and influential on human behavior. And this means that we should pay a lot more attention to the behavioral and strategic features built into the technology in the first place.
As early as Karl Marx believed that technology was a major influence to make profound changes to society, determining the course of social change, political processes, the economic system, human’s way of thinking and so on. In this view, unconsciously adopted technology may end up changing our organizations and society for the worse. Even worse, technology can also be used as a conscious tool to benefit only the few by only focusing on efficiency and productivity and profit for the owners – or in public cases, for the government.
An opposing and maybe more optimistic view can be illustrated by a famous quote from Sartre: “freedom is what you do with what’s been done to you”. He believed that all humans are free and responsible for their own actions. According to this view organizations can transform their organizations in a deliberate way. Not as a result of the technology, but as a deliberate way to be able to use the technology as a value creator, for the benefit of both organization and society.
We have to remember that technology itself does not have the power to change anything. We may be mesmerized by the working capacity of robots and their abilities. But the fact is that robots are inherently stupid. They only do what you tell them to do. We need to remember that technology is made by humans, used by humans and that humans also have the power to change technology.
When we are choosing to transform our organizations from physical to digital we cannot fail to understand the reciprocal and complex relationship between technology and humans. Digital technology is not a determinant for organizations, but an opportunity for organizations to re-evaluate or re-imagine why they exist, for whom and how they work. Although technology have certain physical or digital properties, users have the option, at any moment in the situation to choose to do otherwise. In such possibilities lies the potential for innovation, learning and change”. Users are though limited by their own perceptions of technology. “What technology is does not change over space and time, but what it does can and often changes”. This perspective suggests that humans and technology can change together in an ongoing process of interaction.
A new definition for digital transformation could be “an ongoing process of strategic renewal that uses advances in digital technologies to build capabilities that refresh or replace an organization’s business model, collaborative approach, and culture”. In this view human, organizational and cultural development is an ongoing strategic renewal in relation to how the technology is being used and altered over time. Though, at the same time recognizing that the initial design of technology also influences this process from the beginning.
This process can be conscious or unconscious. And it can lead to poor or great results for society and organizations or value creation. This though, may be a better way of understanding how the transformation process could be encountered by managers to be able to use digital technology consciously for creating value.
The founder of World Economic Forum, Klaus Schwab, puts it in a nice way:
“The good news is that the evolution of the fourth industrial revolution is entirely within our power, and we are still at the very early stages. The social norms and regulations governing emerging technologies are in the process of being developed and written today. Everybody can and have a say in how new technologies affect them.
But standing at these crossroads means we bare a huge responsibility. If we miss the window of opportunity to shape new technologies in ways that promote the common good, enhance human dignity and prtect the environment, there is a good chance that the challenges we experience today will only be exacerbated, as narrow interests and biased systems further entrench inequalities and compromise the rights of people in every country”.
Management should therefore be very conscious of the why’s of digital technology. The start of any transformation process should be the purpose of the organization. In the design process managers need to make sure all employees are aware of this purpose (surprisingly most of them are not) and give employees, and users of technology, the opportunity to be actively involved in influencing, using and shaping and redesigning technology to help fit their work in the best way, so they can actively engage in fulfilling this purpose. The best fit may ultimately lie in the way this process is done in a systematic way, by allowing the users autonomy of their work and at the same time making the business manageable by making the purpose clear, instead of looking for the perfect technology.