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Blog by Dr. Arndt Pechstein

  • Writer's pictureDr. Arndt Pechstein

The Human Face of Digitalization

As innovation managers, HR and talent directors, and strategic and digital officers, we keep hearing about exponential technologies, disruptive innovation, and digital transformation. We know that we need to act, and that we need to act fast. But how do we know that we are doing the right thing? How do we decide which direction to take and which priorities to set, in a world where predictions are almost impossible to make?

Digitalization is not a matter of one-size-fits-all; in fact, the time of best practices is over. Certainly, many innovation providers and consultants know a lot about emerging technologies, new trends, and strategic positioning. Based upon their number crunching, they advise your organization on how “best” to take action. But should this give you enough confidence to place your strategic bets? Take a moment to consider all the scenarios they cannot advise your organization on, because they cannot possibly know about them. Take a moment to consider the things which cannot be predicted, even with all the impressive statistics and latest business jargon. All organizations are now facing the same level of uncertainty, because the world as we know it is changing more rapidly than ever before.

In addition to this, each organization and company is unique — each has its own DNA, created by the people and values which drive it forward. You and the people you work with are the ones that inspire change and the hunger for success. So, in times of rapid socio-economic upheaval, those are the people that need to be involved in a collective transformative journey, such that your organization can continue to thrive.

Is there a way to equip an organization to deal with uncertainty and change with greater confidence? Is there an approach that is human-centered and that transforms today’s threats into tomorrow’s assets; crucial assets that most methods fail to recognize as being the decisive factor when talking about digital transformation?

In short, yes there is such an approach. It demarcates a new 21st century mindset adapted to human needs and companies who clearly understand that they won’t survive the next generations without bringing people back into the center of everything they do. We call it Hybrid Thinking and it combines the four most relevant innovation tools to adapt and lead in volatile times.

Hybrid Thinking — why people and nature matter in a digital world

The classical, assembly-line company structure, and the way of thinking in silos which emerges from it, are doomed to fail. They simply cannot cope with, let alone adapt to, changes in society and technology. We are entering a new paradigm, where all organizations and individuals need to assume a mindset that allows boundaries to dissolve, where they can embrace diversity and interdisciplinarity and embark on iterative problem-solving approaches. But we cannot achieve this as individuals: the effort must be a collaborative one. In a working structure that is not so different from the human brain, in which billions of neurons build powerful networks, organizations need to become learning organisms where information and ideas flow freely and new things can emerge. That requires a systemic approach to problem solving, experimenting with new methods, learning from one’s own experiences and successes, as well as those of others, and finally transferring explicit and tacit knowledge throughout the organization. To help make this a reality, an array of integrated methods are necessary. Hybrid Thinking combines agile processes, value-based disruptive innovation methods, business modelling adapted to the digital age, and the neuroscience of creative change. It fuses together people’s skills, biological principles, and digital approaches to create a powerful hybridized toolkit for a hybrid era.

#1 Biomimicry: From linear cause-and-effect to viable systems

Illustration by Johannes Fuchs

Biological systems have been successful for billions of years due to their incredible capacity for adaptation, resilience and complexity management. Learning from these models of success through the Biomimicry approach can teach us disruptive new ways of conducting business and building products and solutions. Biomimicry condenses eons of evolutionary wisdom into a process and a set of design principles that can spur radical but sustainable changes in today’s business architecture. Have you ever wondered for instance how bees combine hierarchies with dynamic network behavior in their hives?

#2 Neuroeconomics: From analytic control to integrated creativity

Illustration by Johannes Fuchs

Our brains are capable of doing far more than we are currently using them for. By converging the analytical with the creative, intuitive capacities of our brain, we can leverage the full potential of human cognition. Imagine this in each of your employees. Each one has the potential to drive powerful change and innovation in your organization. Your organization is (or could be) full of people that are driven by passion, curiosity, and an innovative, entrepreneurial mindset. Through neuroscience-based interventions and tools that empower people to recognize and apply their skills, a new level of employee engagement and depth can be reached. Think about it: you have at your disposal the most elaborate organ on our planet multiplied by how many employees you have — we’ll let you do the math!

#3 Lean Startup & Design Thinking: From experts to networks, from knowing to probing

IQ to WeQ concept by Peter Spiegel | Illustration by Johannes Fuchs

Experts were the predominant source of innovation in the late 20th century, but the digital era has new rules. Regardless of how smart they may be, individuals alone cannot transform organizations. In a hyper-networked world, our connectivity is key to our survival. Teams and teams-of-teams that collectively shape futures and solutions will outperform rigid structures and outsmart job profiles. Diversity, interdisciplinarity, a culture which encourages experimentation and learning from failure, and an entrepreneurial mindset are the building blocks of a resilient 21st century company. Indeed, the overwhelming success of many startups proves the value of agile, user-centered approaches. If we examine the current socio-economic landscape, it is clear that taking risks, learning by doing and iterating to refine solutions and processes are no longer optional strategies, they are imperative. This can be put into action by combining creative idea generation with hypothesis driven business model validation. At phi360 we like to call this “German creativity” — a reliable, structured process that gives space for creativity and allows new solutions to emerge.

#4 Circular Design: From value chains to platform models and business ecosystems

Exponential technologies are leading to demonetization, dematerialization, disintermediation and democratization. All of these are radically disrupting traditional business models. To adapt to that change, we must begin to start thinking in systems. Understanding interdependencies, valuing feedback, and perceiving circularity as an asset will determine which companies and organizations will survive, and which will not make the transition. Digital business innovation does not necessarily mean relying heavily on technology, but rather looks at the broader value offered by an interconnected, digital world, such as the integration of circular economy principles and platform creation. Have you ever wondered how your organization can leverage resource scarcity to your competitive advantage?

Toward a new culture — the “100-year-old startup”

In an exponentially changing environment, products and services may change from one day to the next. The most important pillar for the survival of your organization is its culture. In an interview with FastCompany, Phil Libin, Evernote’s Co-Founder and Executive Chairman pointed out that: “If you’re thinking in 100-year terms, the culture is the only important thing. The culture is everything in the long-term. The culture is much more important than the current product. The product is the current product, the culture is the next hundred products.”

Customers, young talents, and skilled employees are increasingly turning away from old-fashioned, mechanistic, assembly-line organizations. Digitalization happens first and foremost within our minds and habits, which in turn manifest themselves in a company’s culture. You cannot change the culture, but you can design the right conditions to encourage a new culture to emerge. Make sure you anticipate transformation, and make sure you chose the right tools to handle it. It is time to make change real, with approaches that enable real change. Are you prepared to take the next necessary steps and enter the hybrid age? We are here to accompany you, and help you harness your potential- think hybrid!


Author: Arndt Pechstein. Text & images: creative commons licence CC-BY-NC-ND


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