– human Resources and current organizational development.
An example of my approach can be seen in the second book in the chapter on digitalization strategy.
Organizational changes in digitalization
For example, in my practice there was a case when the company changed its organizational structure three times. Smart plans came from Moscow, orders were issued, posts were renamed. However, did something change in the work on the ground? No!
Just the paper was one step further from life. Well, some were «optimized».
What kind of changes should digitalization and digital transformation lead to?
– Transition from complex hierarchical structures, that is, transition to 3—4 levels of management – from the general director to the master of the site.
– Review of policies, structure of units, number of staff and complexity of procedures.
That did not imply a reduction in staff, but a redeployment of staff to improve efficiency.
People must be sure of tomorrow. Only then will they accept the changes and be willing to share ideas.
– New roles, functions and needs for new competencies and skills emerge.
Currently, there are no employees who have all the necessary skills. And there are not even requirements for new roles. It is necessary to consider this.
– Change of organizational. culture – new approaches to personnel management, new system of values, withdrawal from management from the position of force and punishment, fines.
Transformational change will require more skilled human resources that are highly mobile and do not adopt outdated management models.
Here you will have to combine softness and discipline, to be able to fairly punish and manage employees depending on their level of «maturity». In my opinion, this is one of the key issues. We cannot go into anarchy or, on the contrary, into dictatorship. Which means you have to learn from the CEOs.
Skills are needed to manage staff using both financial and non-financial motivation. The use of financial motivation alone is very inefficient, has short-term effects and leads to stratification within the company.
Additionally, most importantly, you can’t change culture without changing the first people. If the Chief Engineer can’t use the IT system, but charges everything to 1—2 engineers and asks to print help – it’s just fiction and money in junk.
If you implement a complex asset management system to verify the execution of the budget, and all «opponents» just punish, then the approach to planning repairs from this will not change, but the turnover of personnel you provided.
In addition, it is necessary to actively work with external innovations, launch a large number of pilot projects. Why? Because it tells you that you’re willing to take risks and experience experiences, even negative ones. It’s important to be able to accept it, to analyze it, to learn, not to blame it. Then competences will be not only in the company’s reports and knowledge bases, but also in people.
Middle management must be actively involved in the change process. Many projects do not achieve their objectives at the level of middle and technical management. People are busy with their linear activities and do not know how to manage projects. As a result, we get combined resistance. Breaking this cycle is difficult, but necessary.
At least 30% of the people engaged in innovation have to undergo special training. This helps to form a common vision of where the organization is going, as well as to avoid conflicts and thoughts from the category «again something was invented above, now they will move and let’s go back».
Possible models of digitization and transformation
It is possible to digitize one of four models.
– Informal model
Someone at the company is doing the numbers for some reason. For example, the department of repair or maintenance began to implement digital tools and did it successfully. The downside is that the model does not cover the whole organization and the full potential of technology, but for many companies it becomes the starting point.
– Centralized model
The head of the organization or board of directors understands that digital technology and digitalization are very important for the company. They hire the CDTO, assign it a large unit, empower it – and it digitalizes the company.
The vast majority of companies in Russia are at this stage with an IT or Transformation Director at the head.
The advantage is that you can coordinate the movement and work of the whole organization.
Minus is the speed. The bigger the company, the more regulations, rules, restrictions, the more communication you need to conduct inside the company to launch a pilot project. After all, there is also resistance, as many leaders do not need this digitalization. As a result, companies invest in technology, and business customers simply ignore new tools, they impose them.
I participated in the project on this model and I can say that if the curator at the head of such a project does not have the necessary competencies, it can bury the whole project. Of course, in the reports everything will be shown beautifully – we can report like nowhere else. However, if you go down to the level of those who work «in the fields», you will understand how much money is wasted. The project in which I was involved, with a total budget of more than 1 billion rubles became my personal pain, forcing to learn from the mistakes of the curator. Additionally, communication with colleagues on the floor shows that such a model often only increases the time frame and budgets.
– Distributed model
Each division has its own digital office, which determines its own solutions and services.
In this case, the CDTO functionality is crushed and embedded into the existing structure so that these small offices start transforming their units from within. Then each division has its own «small» head or leader in numbers, and the big director of the number becomes unnecessary and leaves the company, because all can develop their own competencies. It’s a new culture.
Plus is the speed of deployment and how fast the changes are coming.
Minus – duplication of costs. Often such teams begin to push elbows, in terms of the cost of the whole organization they are not very effective, constantly «invent bicycles», and they always have something to optimize.
– Hybrid model
It’s that all small digital offices need a focal point. His task is to build uniform rules of work, development, to form processes and tools, to develop a common strategy, so that local offices already use his knowledge. It becomes a methodological centre and coordinates all the centres so that they work towards a common goal and are synchronized with the strategy.
As an analogy you can take the company Google, which develops its «market place». Developers do not create apps from scratch, and use many proprietary ready-made applications from Google. For example, if you want to use maps in your app, you take ready-made maps from Google.
If you want to do local digitization, you need to understand the level of organizational development of your company. If you have a centralized organizational environment with a large digital block, you can assume that there will be problems with speed. If you have a distributed environment, there will be a problem with duplication and unnecessary costs to develop your products.
Always keep your structure in mind – this will protect you from irrelevant actions.
Risks
The introduction of any changes is risky, and digitalization and digital transformation projects are no exception. With dozens of projects of different sizes behind me, I can confidently say that risk management is a key element.
What risks do we have?
– Information security
New information systems, huge volumes of data require protection from losses and «hacking», as well as from incorrect operations. New levels of security are needed. New requirements for personal data protection are emerging. However, it should be remembered that if you start to ban everything that is not allowed, your people will look for workarounds, thus increasing the risks. Then it looks like you’re protecting everything, and the data is still compromised. And the key here – the ability to evaluate what is really valuable, and what you need only or becomes obsolete at the moment of appearance.
– Resistance to change and company culture
In the process of transforming your business, you will inevitably encounter staff resistance to innovation and in a favourable scenario you will lose 10—15% of employees.
There are many reasons for this. A special chapter will be devoted to working with resistance. It is worth noting the issue of culture, because culture has a strategy for breakfast. If you don’t know how to work with change and teamwork, nothing good can come of it.
– Terms
