But the question is whether digitalisation will ever have a central location as a stand-alone management tool?
In my view, there are two possible explanations for the low ranking. One explanation is that management simply does not recognise the need for digitalisation and is unable to relate to the somewhat indefinable concept. This is in line with the results of a survey from 2015 from DI Digital and Monitor Deloitte on the IoT readiness (Internet of Things) with some of the largest companies in the country. The survey found e.g. that 76% of the companies believe that IoT will cause radical changes in their business within the next three years. But at the same time, only 60% of them have started IoT initiatives compared with 79% abroad. This could indicate a somewhat tentative stance in the Danish business world.
The other explanation, which I find more likely, is that digitalisation is not really a separate management tool but rather a mindset, which should be taken into account in all aspects of value creation and should be a natural part of the business development. If management has a true customer focus, which was the management tool with the highest priority in the survey, this focus will automatically ensure that digitalisation is included in the change process as the customers focus on digitalisation and demand this.
The case is the same with the second management tool, “Set the right team”. If focus is on the customers, and the company has hired the right competences with respect to the current challenges, this team will automatically take digitalisation into consideration in the company’s development process.
To put it differently, it is in fact not surprising to find that digitalisation has such a low ranking on the list of prioritised management tools. The other parameters, such as customer focus, the right competences in the company and understanding of the value creation process, are all necessary prerequisites for value creation in the company and also necessary for a successful digitalisation. The digital challenge is rather to ensure that digitalisation is a natural part, as a mindset, in the other prioritised management tools.
Beginner course in digitalisation as the way forward?
What we see with our clients is that companies are unsure of how to handle the digital challenge. And this uncertainty is caused by lack of knowledge of the digital opportunities. I would estimate that up to 75% of Danish executives and board members need a “beginner course” in digitalisation. A good place to begin for executives and board members is to follow the behavioural patterns of their children and grandchildren, the apps they use, how they act in the digital social universe, and how they interact on the digital stage. The younger generations do not regard digitalisation as a transformation. Digitalisation is already a natural part of their way of interacting with the world around them. To them, digitalisation is just a mindset in their everyday life. The children have never experienced the analogue world.
With the digital mindset, I think that digitalisation will also not be regarded as a critical stand-alone management tool in the future. Instead, digitalisation will be a natural element in the many other critical management tools mentioned in the survey.
Originally published in Børsen Ledelse.