While individual skills and cultures keep adapting to the increasing deployment of digital strategies in businesses, indicators show the need to also maximize non-digital assets of projects and teams, such as sense and leadership. Both technical and strategic recommendations favor agility and diversity at all levels of hierarchy to ensure the right skills and tools match the appropriate challenges. In the meantime, experts estimate the overall revenue, costs and adaptations needed to benefit from the digital economy. Security, disruptive business and new financial models through open innovation remain critical capabilities to develop. While most experts agree on the systemic impact of the digital disruption occurring across sectors, it also seems clear through their analyzes that a cultural shift towards creativity and adaptability needs to take place among individuals, organizations and communities for the digital economy to be developed closer to end-users reality.

Agility and diversity at stake

The difficult recovery from economic turmoil and business disruption are leading specific sectors to analyze the discontentment of workers engaged to carry the vision of leaders throughout their daily work. Those analyses highlight the need to work with more sense as a result of a growing disconnection between efforts demanded and rewards.

Seventy-three percent of respondents cited “company leadership” as the main contributor to low morale. “Lack of advancement” was second, with 45 percent, while “dissatisfaction with work” took third, with 38 percent.

Read more: “Agencies have a morale problem“, Dillon Baker, The Content Strategist

Agility is identified as a critical component of developing new leadership capabilities, with tangible business benefits that can be identified on the bottom-line.

Their research supports learning agility as the greatest predictor of leadership success resulting in executives that are five times as likely to be highly engaged, promoted at twice the rate and leading companies with profit margins 25% higher than their less learning agile peers.

Read more: “The University Class of 2020: An Agile Mindset Imperative“, Robert E. Johnson, Huffington Post

To generate this level of agility and business efficiency, supervisory boards are encouraged to show equal representation as opposed to one-third representation.

Indeed, studies have found that equal representation on the supervisory board (versus one-third representation) reduces the market-to-book ratio – a measure of firm performance – by 31% on average (Gorton and Schmid (2004).

Read more: “Codetermination: Boosting cooperation between management and employees“, Bennet Berger, Elena Vaccarino, World Economic Forum

Another sign of job insecurity is found in the fact that French graduates are mostly hired in major companies when SMEs represent a vast majority of potential employers.

This feeling of professional insecurity can be found in figures: among interviewees, it appears currently employed graduates are working in majority for  large organizations (66%). 

Lire plus: “Les grandes entreprises privilégiées par les jeunes diplômés“, Alain Ruello, Les Echos

In the midst of this uncertainty, specific HR indicators also highlight discrepancies between opportunities offered by a data rich environment and internal capabilities that are still missing to define the right approach for businesses. The lack of sense and skills to match a digital transformation participate to create additional frustration among employees and leaders.

Only 55% of L&D leaders agree that their people understand how their work is linked to the organization’s performance. 33% still report that a lack of IT skills hold their staff back

Read more: “In-focus: Transforming formal learning“, Levi Phillips, Towards Maturity

On the other hand, businesses can benefit from knowledge and skills brought by younger generations, provided that they create the appropriate environment for them to express the right level of creativity.

As Y and Z generations represent 50% of business employees this year and since digital transforms practices, it is urgent and necessary to reinvent our collaboration places. 

Lire plus: “Management: les nouveaux espaces collaboratifs“, Talentis Coach

On top of agility, it seems critical for businesses to develop diversity as a way to reach out to more talents and ideas. A broader approach to management, talents and leadership through various cultures, genders and visions would enable project teams and supervisory boards to reach higher level of efficiencies and develop more distinctive innovations.

A 2015 study by McKinsey showed that companies with ethnically diverse workforces do better financially. For instance, they’re 35% more likely to financially outperform their competitors who do not emphasize diverse hiring practices.

Businesses who have gender-diverse workforce are 15% more likely to financially outperform less diverse companies.

Forbes reports that 85% of 321 large international corporations believe diversity is important to innovation.

Read more: “Employee Diversity Increases Organizational Performance“, Andrew Deen, People Development Magazine

The Digital Workplace and beyond

The digital transformation occurring across sectors is leading experts and leaders to identify new growth engines. As a result, they clearly favor digital strategies that lead to generating higher revenues, influencing internal and external roles and responsibilities for stakeholders engaged in digital activities. 

A recent Gartner survey found that 75% of executives expect digital to help double revenue. This creates a huge opportunity for the CIO to become an invaluable source of wisdom and advice.

Read more: “5 Things CIOs need to lead digital transformation“, Jason Hilner, Tech Republic

This strategic development unfortunately comes with higher risks, including data security. The potential revenue loss implied by such risks represents a serious threat businesses need to balance by developing an appropriate security policy.

Research by defence and security contractor, BAE systems recently found that one in ten UK organisations that suffer a data breach will face a financial loss of up to £1 million.

Read more: “The global ethical dilemma – moral standards vs actual value“, James Maynard, Data Economy

From an end-user viewpoint, the growing volume of data shared on a global basis reinforces the trends showing heightened opportunities, as well as heightened threats. The globally connected society is transforming and challenging tools and infrastructures necessary to ensure data security in any point of the globe.

Currently, the world generates 2.5 quintillion bytes of data every day.

Read more: “The global ethical dilemma – moral standards vs actual value“, James Maynard, Data Economy

As a result of the systemic change generated by the digital economy, new business models could generate additional market growth and competition. Consequently, experts to estimate high potential value for this new market opportunities.

In our work with the World Economic Forum, we attempted to measure the value these new digital models could unleash. Our analysis put the figure at $100 trillion.

Read more: “Leading in an Unpredictable World“, Paul Michelman, MIT Sloan

Another consequence of this digital transformation is the difficulty to properly evaluate companies assets’ for merger and acquisition purposes. This market under evaluation may influence decisions and investment strategies for innovation. Evaluation models therefore need to be developed to better take into account digital and virtual assets of companies.

in 1975, on average the tangible assets of a corporation represented 83% of its value. Today that number is 20%. As a result, more than 50% of merger and acquisition exchanges can’t be accounted for.

Read more: “AIIM looks to change the way companies value their information“, Responsource

Examples show how successful digital strategies already deliver commercial and business value across sectors. They also help to define areas of potential improvement to drive more sensible approaches to market with a growing variety of data analytics tools being rolled-out as expertise spreads throughout businesses together with its financial results.

It proved to be a critical element in driving their international growth which translated to $7 billion of annual online sales, and also reinforced the company’s brand image in new markets.

Read more: “The Key Ingredient for a Successful Digital Transformation Journey“, Manish Garg, Thoughtwave

Because business models, priorities and experience drive businesses to adapt faster to change, open innovation appears as a natural step to take for many agile players, among which startups, accelerators and CVC. By spreading this flexibility and creativity within the economy, they enable a systemic agility to emerge.

Engagement overall is very high – about 80% of startups and corporates have already collaborated or are collaborating.

 

Corporates are most active in Corp-Ups (55%), followed by accelerators (45%) and CVC (41%).

Read more: ” Startup engagement in corporate innovation“, Ralph-Christian Ohr, Integrative Innovation

In the same way as a wider shared agility is needed on a systemic level, individual creativity and adaptability becomes a critical asset for innovation practitioners as the digital economy is also creating new potential jobs and skills. To anticipate this change, a cultural shift needs to occur, properly reflecting the level of systemic change taking place with the rise of the digital economy.

In the marketing function, competencies grow exponentially: from roughly ten basic competencies 10 or 15 years ago, we can now count more than one hundred (digital marketing, e-business, brand content, e-reputation and social networks, big data, data-mining, eco-conception, stakeholder management etc). 90% of 2050 jobs do not exist yet. The trend will continue accelerating.  

Lire plus: “Intelligence Interculturelle et RSE: leviers de l’innovation responsable“, Time to Planet

Transformation and readiness to disruption

The systemic side of digitalization reflects our ability to strike the right human and technological balance to sustain intelligent growth on the long term. The ability to properly adapt to coming digital disruption is conditioned by investment policy changes that need to occur within businesses as well as through their funding partners.

According to our baseline calibration, it takes 20 years for the productivity effect to outweigh the substitution effect and drive up wages.

Read more: “Robots, Growth and Inequality“, Andrew Berg, Edward F Buffie, Luis Felipe Zanna, IMF

She reveals that the financial system no longer funds new ideas and projects — only about 15 percent of the money coming out of financial institutions goes into business investment; the rest is spent buying and selling existing financial instruments.

Read more: “The danger of financialization“, Institute for New Economic Thinking

The technological disruption coming ahead demands an in-depth understanding of the systemic impact it will generate. The volume and reach of future equipment transmitting data will necessarily challenge our current economic, political, social and business approach to development and analytics. Innovation players should be actively assessing their readiness to disruption.

With an estimated 50 billion IoT Sensors by 2020 and more than 200 billion “Things” on the Internet by 2030, it is no question that IoT will be not only transformative, but disruptive to business models.

Read more: “Top 10 trends for digital transformation in 2017“, Daniel Newman, Forbes

IDC Research Inc. has estimated that by 2018, more than half of the teams developing apps will embed some kind of cognitive services in them, up from 1% in 2015.

Read more: “Digital Today, Cognitive Tomorrow“, Gini Rometty, MIT Sloan Management Review

At the same time, the analytical and intelligence power brought by new technologies are opening new innovation discussion types that clearly focus on developing human sense and favoring a smart integration of digital, automation, robots and current production assets. It is now time for businesses and organizations to properly combine their technological and human capabilities while creating an agile culture to deliver a positive value to their ecosystem.

“Real-time analytics will become 30% of the market by 2020.” The real-time analytics will feed into the next domain of the new infrastructure, intelligence.

Read more: “Gartner: digital business depends on core IT, IoT and AI“, Curtis Franklin Jr, Information Week

By 2020, algorithms will positively alter the behavior of more than 1 billion global workers

Read more: “Gartner top 10 Predictions for IT organizations for 2017 and beyond“, Louis Columbus, Forbes

The benefits experts foresee from a more intelligent use of digital technologies  include operational expenditure savings, decreased productivity and social cost. Although analyzed through differing interests and objectives, the overall list of costs and benefits of the digital economy shows how our current development strategies are unable to anticipate disruptive and systemic impacts. The progress those strategies have generated so far to sustain growth seems inadequate with the technological and human system they have engendered. In order to make a clearer sense of the outcomes businesses and individuals should expect from this digital turn, it seems necessary to adapt our thinking patterns to intelligently take human and systemic indicators into account.

By 2022, IoT will save consumers and businesses $1 trillion a year in maintenance, services, and consumables

Read more: “Gartner top 10 Predictions for IT organizations for 2017 and beyond“, Louis Columbus, Forbes

Figures quoted in the government report, Technologies Clefs 2020, confirm that global production robot sales drastically increase. They have seen a 12% rise in 2013, reaching 225,000 units in 2014 (+27% compared to 2013 whereas +15% had initially been forecasted) and the estimated annual growth rate from 2015 to 2017 would be 12% on a global basis. 

Presented as a tool allowing to reducing difficult working conditions, cobot is also better perceived in businesses as opposed to autonomous robots because it is a lesser threat to employment, just when the latest World Economic Forum in Davos estimates 5 million jobs could be lost by 2020. 

Lire plus: “La cobotique plutôt que la robotique?“, Benjamin Adler, Influencia

 

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Photograph: Nirina Photography