About 3 billion people are now connected to the Internet. By 2020, it is estimated that 4 billion people will be using the Internet and more than 30 billion devices will be connected to the Internet of Things[1]. Why is this important and what impact could this have on companies? How does this affect the manager and how can they react? Here is an overview of the issues at stake.
The digital transformation of companies
Computers and everything related to them are no longer relegated to IT departments. At the start of the 21st century, being connected on the web became a societal phenomenon. In fact, thanks to the growing number of smart phones and tablets, the average Joe has been able to fully take advantage of this digital revolution. First, as a consumer, whether for music, books, newspapers, banking transactions, or any other item easily purchased online. Second, as a communicator, whether through personal email, texting, or even watching videos published in the myriad social networks used by seven out of 10 adults in a developed society such as Quebec[2].
For their part, companies have been using management information systems for more than 40 years. However, it is only in the past decade and a half that organizations have begun relying on digital systems. The degree of penetration and level of intensity greatly vary by economic sector, with media and technology being the most advanced.[3] Digitization also varies by country and economic structure. Furthermore, it can also create or destroy jobs[4].
The penetration of digitization in advanced sectors is related to the aforementioned societal phenomenon. For example, Amazon began selling books in 1994 but released its e-book reader Kindle in 2007, Apple created the iTunes application for music in 2001, and La Presse launched its La Presse+ platform in 2013 in Quebec.
Moreover, beyond technological advancements that have occurred as a result of digitization, breakthrough innovation is increasingly shaking up traditional business plans. For instance, La Presse+ is available for free and its readership is growing. However, La Presse will cease publishing a paper edition by the end of 2017. In the music industry, iTunes, and more recently music streaming services, have significantly impacted the physical distribution of music[5]. In the transportation industry, the launch of Uber in 2009 completely upset the taxi industry and the concept of putting users into contact with drivers via a mobile app has now extended to the transportation of goods and even other economic sectors. This sharing economy has become known as Uberification[6]. The self-driving car is no longer out of reach; the millions of autonomous vehicles that will be deployed on our roads in the next decade will have an enormous economic and social impact[7].
Over the past decade, the transition to digital has picked up enormous speed and most large organizations have now turned their attention to developing digitization strategies[8]. The concepts of digital strategy and digital maturity have now become the subject of numerous university studies[9] and have been implemented in large organizations[10]. Depending on the sector, country, and organization, strategies[11] range from “doing nothing” to overhauling the business plan through digitization[12]. Within companies, the work itself, the relationships with clients and suppliers, as well as the talent management processes are increasingly being reassessed and even rewritten[13].
The manager and their role in the face of digitization
Let’s take the following example: a middle manager works for a large organization in a developed country. The assumption is that this manager clearly sees how technology has progressed in society. But what do they think of digitization within their own company? According to the factors listed above, digitization can be an opportunity, a threat, or an issue of low importance. Even if they are not in charge of devising their company’s strategy, their overall managerial responsibilities mean that they will be confronted with courses of action in the face of this digitization. One choice is to simply not do anything and wait for instructions from senior management.
Mintzberg’s model of the 10 management roles[14] provides a useful frame of reference for evaluating how digitization can impact and affect a manager.
Managing information
With regards to managing information, two roles are worth noting here. As a monitor, the manager is responsible for searching for information related to the internal and external changes pertaining to their work environment. As a disseminator, they are in charge of communicating any useful information to members of their team and colleagues.
Managing interpersonal relationships
When it comes to managing interpersonal relationships, the following two roles are relevant to our thesis. The role of figurehead implies that they are expected to conduct themselves in an exemplary way. In their role as leader, the manager listens and relies on emotional intelligence to understand the expectations and worries of collaborators and guide them toward an improved shared vision.
Making decisions
Regarding the decision-making process, three distinct roles of the manager are worth considering. As an entrepreneur, they are responsible for creating and controlling change within their organization; they must solve problems and come up with new ideas. As a negotiator, they must manage conflicts within their team and mitigate risks. Finally, as a resource allocator, they must optimize their team’s financial, human, and material resources.
Self-management
In my experience as a coach, this model must be supplemented by taking into account the individual’s self-management approach to digitization. Here are a few useful questions that can help them begin or refine their professional reflection on digitization:
Do I know enough about digital technology?
Will my position be affected by digitization within the next 3 years? What are the possible impacts?
How am I professionally reacting to digitization? What do I feel?
What resources can I mobilize to help me prepare for the rise of digital technology in my job?
In line with the seven roles mentioned above, I suggest the manager make a choice among the following options to better prepare for digitization, beyond simply not doing anything.
- Make their team more aware of the issues related to the phenomenon of digitization and make a note of their reactions.
- Have their team members assess the issues at stakes and implement avenues of action.
- Develop a more structured approach that also involves colleagues and members of the senior management team.
Digitization is a powerful, irreversible phenomenon. The manager should be prepared to understand its reach on their organization and begin or refine their reflection in order to come up with informed courses of action. The mindset they will adopt in the face of this challenge will determine how open they are to the threats and opportunities and their consequences.
Jacques Gaumond, ACC, M.Sc.A., Acc.Dir.
Professional business coach at Ocean Coaching
[1] Boston Consulting Group, March 2015 https://www.bcgperspectives.com/content/articles/telecommunications_public_sector_infrastructure_needs_digital_economy/
[2]Cefrio, June 2014 http://www.cefrio.qc.ca/netendances/medias-sociaux-coeur-quebecois/
[3] McKinsey Quarterly, February 2017 http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-case-for-digital-reinvention
[4] World Economic Forum 2013 http://www3.weforum.org/docs/GITR/2013/GITR_Chapter1.2_2013.pdf
[5]Cefrio, May 2017 http://www.cefrio.qc.ca/netendances/le-divertissement-en-ligne-au-quebec/
[6]https://fr.wikipedia.org/wiki/Uber_%28entreprise%29
[7] Intel IQ, August 2016 https://iq.intel.com/autonomous-cars-road-ahead/
[8]Forrester, 2016 https://www.forrester.com/report/The+Digital+Maturity+Model+40/-/E-RES131801
[9] Dartmouth College, 2017 http://digitalstrategies.tuck.dartmouth.edu/wp-content/uploads/2016/10/The_Digital_Enterprise_-_Overview.pdf
[10] McKinsey, 2017 http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-next-generation-operating-model-for-the-digital-world
[11] McKinsey, 2014 http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/strategic-principles-for-competing-in-the-digital-age
[12] McKinsey, 2016 http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/an-incumbents-guide-to-digital-disruption
[13] Deloitte, 2017 https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html
[14] MindTools, 2017 https://www.mindtools.com/pages/article/management-roles.htm