Digital transformation or the hunger to reinvent

Because I work in a company that carries the word digital in its name I thought I might have enough credibility to write a piece about digital transformation – whatever that is, right?

If you are working in the media industry you very likely stumbled on the term digital transformation, heck you probably even sell people consulting services to help them transforming their businesses digitally. But what does that even mean? Let’s start at the beginning. The transition from the industrial age to the information age started at the beginning of the seventies. During that time it was more on more common to digitize information, meaning you would not save every information in a book, you would start to type something in a computer. It is also said that around the year 2000 humans for the first time saved more information digitally than analogously. This lead to an enormous growth of communications and informations saving capacity – Wikipedia says from 1986 until 2007 the capacity grew around 25% every year.

During the last couple of years the term digital transformation became more and more popular and started to pop up as a buzz word in every kind of talk or panel discussion around digital work or the like. Companies working in the digital field realized the potential to consult other, more traditional businesses, with knowledge about this new kind of work. Digital transformation is hard to define, as it includes a lot of buzz words and hot air to simply explain that traditional businesses need to adopt digital tools and workflows to remain competitive in a world with new start ups every day that are built on a digital DNA. First and foremost digital transformation plays a role in big consulting agencies or networks like McKinsey, Deloitte and the like. Helping companies with digital transformation grew 17% last year. The traditional consulting services only grew 5% in comparison*.

If companies are unwilling to adapt to these new conditions, there is a high probability that they will simply die.

These facts support the idea of a new business revolution. If companies are unwilling to adapt to these new conditions, there is a high probability that they will simply die. Maybe not right now, maybe not next year but they will die in the end for sure. And digital transformation also will kill those companies who lack the hunger to reinvent, who are reluctant to move forward and include new ways to do business.

So far so good (or bad whomever you will ask). Digital transformation is on everyone’s lips. But the digital revolution not only transforms the tools with which companies work, it also changes the way how we work. Companies like Apple, Google, SpaceX or Tesla are completely rethinking the corporate ladder. In the past if you are an eager employee you could follow a simple concept to step up the corporate ladder, to get that new title or that new senior role. Work more, do night shifts, be nice to the decision makers. These days it becomes more an more complex and as I am the co-founder of a growing company, we surely ask us everyday, how we can structure the company or what kind of processes we need to install to face growth. While more traditional companies follow a clear hierarchical structure, the companies mentioned above try to build smaller, more agile teams with clear mandates and roles for every team member that follow a more democratic and interdisciplinary approach. The idea behind this is to define more open spaces in which employees can grow and thrive without feeling suppressed by a senior role all the time. Time for the next buzz word – new work. Basically you could say that digital transformation also evokes a change in company structures because with new tools, new ideas can and will happen. That also means that traditional businesses, if they refuse to adapt, have problems to attract new employees, because the new generation is used to have more working benefits, to have more freedom, and is used to work from everywhere at anytime. That is a heavy burden on the traditional companies shoulders.

Politicians are under pressure because digital transformation makes most of todays jobs irrelevant in a few years from now.

Now traditional companies are looking at politicians to solve their problems. But most politicians are either too old to understand the effects and possible results of digital transformation or too ponderous to do something about it and to do it fast. Politicians are under pressure because digital transformation makes most of todays jobs irrelevant in a few years from now. And the populations of strong economic countries are afraid to loose their job, to loose their right to exist, to stop being able to feed their families and as a result, are afraid of digital transformation. This is a huge issue as it prevents people from being open minded about this new situation, it prevents people from coming up with new ideas and it slows down progress. This is understandable because politicians have no answers yet and as a result we are more focused on preventing new forms of nationalism. Because life got so complex during the last years people are longing for simplicity again. Europe is in danger because the idea of something bigger than just one country is too difficult to understand and populations are starting to vote for nationalists again under the belief to finally understand their surrounding again. All these facts slow down digital transformation and we forgot that digital transformation can make people feel irrelevant.

Digital transformation is positive, transforming the way we work is positive.

So what should we do? Of course I can only speak from my own experience and knowledge but I would start with the politicians. An unconditional basic income for everyone is an idea that feels like a first reasonable step towards the right direction. It accepts the fact that more and more jobs will be accomplished by computers and/or robots. This is first of all a good thing, because most of these jobs can be automated and could be done more accurately by a robot than by a human. Second it helps people who have or had a hard time, because it ensures that they are not faced with loosing everything. Also it helps people to have a creative pause, where they just need to recharge and think about what they should do with their life. A lot of people still like to differentiate between work and life, but how awesome would it be, if you could all call it life!? So the unconditional basic income is a first step. The second step will be more complicated and is a result of the first. We have to change our economy and redefine how to create value. How can we make sure, that people who’s job is gone still feel relevant and still feel that they add to society? I don’t have an answer for that but history shows that with every industrial revolution where jobs became obsolet, new jobs appeared. I am sure that, in the face of digital transformation, the very same thing will happen. The biggest task for politics is to not leave anyone behind and to create a hunger for reinvention.

Digital transformation is positive, transforming the way we work is positive. Democratization (in parts) has a positive effect on companies. The biggest challenge of digital transformation is its dependence on social and economic systems and to generate a common understanding in society. I am looking forward to these changes and I am excited for my three month old daughter to experience a totally different world from the one we know right now.

*Source: Financial Times, January 18, 2018