As the use of digital technologies and data to create new value propositions and operating models becomes more commonplace, workplaces across the world are being affected across sectors, from manufacturing to local government. Almost all areas have been touched by the megatrend, whether from own initiatives or to keep up with competitors. However, Arthur D. Little’s Digital Transformation Study reports that almost 80 percent of companies surveyed were only “digitally adaptive”, with digital efforts limited to products and services at best, and no comprehensive approach to adapting their mind-sets. To help traditional organizations adapt sufficiently to compete with digitally minded start-ups, we have identified four key questions to consider when developing digitalization strategies and the creation of a fully digital workplace.
How can we adapt organizational structures to accelerate transformation?
In order to match the agility and customer focus of digital players, traditional companies need to improve communication and collaboration between their departments. Processes, such as product development, need to flow seamlessly across departments. Collaboration also needs to extend outside the organization to partners and customers.
The choice of which organizational model to adopt to facilitate digitalization depends on multiple factors, including current adoption of digital technologies, intended target picture, urgency of change and risk aversion.
Digitally aware organizations may start with central models. This brings clear accountability and transparency at the expense of a possible “us-and-them” relationship with the wider organization.
An integrated model overcomes this issue, providing greater momentum for change. However, it risks creating alignment issues due to unclear accountability and the difficulty of following a common vision.
The hybrid model combines the positives of the central and integrated models, but is more complex and difficult to deliver.
The end state for many newer, digital-centric companies is a centrally facilitated and fully integrated model. Here digital is fully embedded in the business model, products and services, processes, and mind-set of the company.