Digitalization - what are we even talking about?

Digitalization has changed and continues to change how we work and how we structure our organizations. Companies are undergoing digital transformations to compete in the race and stay relevant in competitive markets. Digitalization is certainly one of the most hyped tendencies in the world of business, but also outside. We are all ‘becoming digital’. But what does that even mean?  

Let’s take a step back, because what is this ‘digitalization talk’ about? How are these digitalization efforts impacting our work and collaborations? Let’s start with digitization, not to confuse with digitalization. Digitization is the process of changing from analog to digital form. Digitization concerns the information – not the processes. So, you transform something that were once a physical product to something that is computerized. To do this, you need the process, and this is where digitalization comes in. According to Gartner digitalization is the process where you employ digital technologies and information to transform business operations. In general, digitalization refers to our use – in business and outside – of digital technologies. Digital transformation is the next step; here you are not ‘only’ digitizing products or implementing digitalized process, you are transforming your way of doing business, your way of organizing to meet the demands of the markets. 

So, when we talk about changing the present and future work, it’ because digitalization is transforming the world of work. This will naturally have implications for the work roles we possess or the business processes we have.  

To break this word-gibberish down to something tangible, we can have a look at a car manufacturer. They need to carry out crash tests before they send out the cars for final production. Today, the crash testing process has been digitalized. Crash tests are not (only) carried out with actual cars, but instead primarily through computer simulations. It’s not mechanics with their wrenches and screwdrivers but engineers with their zeros and ones that carries out the experiments.  

The digitization of this work process has great benefits. First, and maybe most obvious, you can save a ton of money by not demolishing actual cars in numbers. Second, some would argue that security is improved; although the experienced eye of the mechanics shouldn’t be underestimated, zeros and ones do often beat human expertise (in this category anyway). Finally, when the tests are digitized, it makes it possible to carry out the test anywhere in the world.  

It is in this last category that we however also start to encounter the first severe challenges. The tests can now be carried out behind a computer screen and you can gather the most skilled engineers to carry out the tests, no matter where in the world they are placed. This calls for new ways of digitalized collaboration – virtual collaboration between those with access to the ‘digital car crash’ and those with access to the actual car. This calls for new ways of leading.  

Whether you consider digitalization, are already engaged in a digital transformation or whether you’ve just been through a new technological implementation, our advice is: 1) Remember your people, 2) Review your collaboration processes and 3) Reorganize accordingly 

1. Remember your people 

No matter the scale – whether you are digitizing your products, running digitalization projects or undergoing complete digital transformation - you need your people on board. All levels of digitalization equal organizational changes, and even ‘just’ digitization changes your way of work. Success depends largely on the organizational maturity in terms of managing and using new digital technologies, but also the company’ ability to adapt its ways of working. It's not just a matter of implementing new technology. It is about engaging people and helping them get ready for change. 

2. Review your collaboration processes 

It is in collaboration that magic happens. High performance teams and units collaborate effectivity and reflectively. Any sort of transformation or change in your organization should be an opportunity to review how your people are collaborating. Digitalization especially impacts the way people achieve their work, the way they collaborate, either by changing processes or by making it possible to collaborate virtually across distances. These new ways of working together require new knowledge, new skills, or new practice – and you need to create space for the figuring out what is changed and what is needed in your organization. 

3) Reorganize accordingly 

Infrastructure influences structure. Digitization, digitalization and digital transformations introduces new technologies and new infrastructure to companies and with that the potential change of structure. Just as the introduction of machines in manufacturing (infrastructure) changed the role of the factory worker (hierarchal structure), or as the introduction of the typewriter (infrastructure) introduced the role of the secretary (organizational structure), new digital infrastructure in modern organizations (potentially) influence professional roles and how we organize our companies. When work processes become digital, rather than manual, and the work digitalized, our processes change and new ways of organizing are required. Rather than letting this happen uncontrolled or not happen at all (with problematic consequences), leaders of organization need to consider the organizational impact of digitalization and reorganize accordingly.