How digitization is affecting corporate culture

Get off to a good start with the right personalities on board
Most companies still have not made this shift and quite a few underestimate its importance. The biggest challenge is that digital processes are rarely flexible or easy to apply to traditional business and existing structures. The pressure to challenge traditional business models and adapt to the new age is also correspondingly high. “This can succeed only with external expertise. We have found digital experts for various different companies, who have supported them during the change. Many of our customers have brought in the right personalities at just the right time to get off to a good start rather than being deluged by the digital wave,” explains Martin Krill.

“Enterprise architects” and “digital agents”
Anyone who is still at the very beginning of the digital transformation would be well advised to bring in so-called “enterprise architects” and “digital agents” as IT professionals to initiate and support processes as well as to get the workforce as involved as possible. The Chief Digital Officer needs to play an important key role in this, as a digital leader at management level who is responsible for enthusiastically driving change within the company.
A fundamental change is necessary in corporate culture
To allow the opportunities of digitization to flourish, a fundamental change in corporate culture is needed. Instead of rigid hierarchies, the priority is now agility and flexible structures in which the focus is on working in autonomous teams. Every single employee is given a lot more freedom and autonomy than before. At the same time, leaders need to delegate more responsibility to employees and redefine their role: away from traditional roles like ‘decision maker’ and ‘chain of command’ and towards ideas such as ‘facilitator’ and ‘motivator’. “In some companies, this change has already taken place. From the very start-up, they have had structures that create digital units and virtual workspaces,” says Martin Krill.

Those who believe, however, that simply providing a new technology platform is sufficient are on the wrong track. And technical progress which is merely seen as gimmicky will not be accepted by the staff. “New programs can be explained through training courses, but changes won’t occur in workers’ minds and in their daily routines unless there is a specific need and a recognizable benefit. When departments are suddenly able to collaborate via virtual workspaces, then employees begin to recognize the tangible benefits of digital networking,” Martin Krill explains.

Digital literacy: new demands on managers
Digitization makes particular demands on executives – regardless of what area they are working in. So far, they have been able to score points with traditional skills such as assertiveness, empathy, complexity management and technical know-how. Today, however, new hires require yet another important component: digital literacy. After all, managers must implement the strategic restructuring of a company in their respective divisions. Once digital transformation is on the agenda, they need to implement this in their segment, to guide their staff and inject enthusiasm for the subject.
“This is hardly feasible without digital literacy,” says the Managing Director of Hager Unternehmensberatung. If the expertise is not available in the company, these gaps need to be closed by further education and training. And with new hires, too, the additional qualification of ‘digital literacy’ is increasingly becoming a key factor.

Differences between corporations and SMEs
Digitization is not cowed by a company’s size and is being introduced by large corporations as well as SMEs and start-ups. Of course, there are differences in implementation. Medium-sized companies have the advantage that they can usually implement the necessary processes more agilely than corporations. However, they often do not have the appropriate budget to get involved in digital experiments. By contrast, corporations have a higher financial ceiling but are usually much more cumbersome in the implementation due to their structures. “But in the end, it is imperative for both medium-sized and large corporations to trim their business models for digitization,” says Martin Krill.

Summary:
In future, the trend towards digitization will be inescapable for every company employee and manager. The opportunities and risks are, however, heavily dependent on the industry-specific business models. For example, a financial institution will face very different challenges to a machine builder or retailer. But the bottom line is that everyone will be affected eventually. That is why digital literacy also plays an increasingly important role as a selection criterion in the recruitment of specialists and executives.

Authors:
Martin Krill has been working for Hager Unternehmensberatung for more than fifteen years and was made a managing partner in 2004. He fills top sales and management positions in the technology industry as well as a number of other sectors.