The next focus area in this closer look at transformation is the fifth and perhaps most critical forcing function: societal change. Wikipedia refers to societal change as an alteration in the social order of a society, including changes in nature, social institutions, social behaviors, or social relations. The base of such change is change in the thought process of humans. Digital is the primary driver of a societal change not seen since the first industrial revolution, impacting every aspect of society from business to war. It was digital (Internet) that accelerated globalization, and now the broader digital platform allows even a start-up to be global upon inception.
We’ve seen the collapse of dictatorships enabled by social networking, the birth of a generation that only knows digital, and a fundamental shift in power from business to consumer. Some of the primary drivers of this forcing function are:
- Ubiquitous connectivity
- Social Media
- A sharing-barter economy as it redefines the buyer-seller relationship
- Mobile computing
- Four generations of workers in our workforce
- Digital-savvy millennial’s and technology savvy employees
- Perpetual freelancers
- Power shifting to individuals via connectedness, openness, transparency and information access
It all starts with being connected, and never before has a communication medium been adopted as quickly or as widely as social media. We’ve all seen the numbers associated with Facebook, Twitter and others, but those numbers distract us from the true impact that social will ultimately have. This impact will be felt on two levels, as social shifts to the business world (social business as many call it), and at the same time drives more societal change by moving to its next phase. The next phase of social has been called the collaborative or sharing economy. This collaborative economy leads to potential revenue loss, as customers share products and services with each other. The impact reaches beyond the private sector, as bartering could have significant impact on Government tax revenues. You can read more about the evolution of social in this Altimeter report titled The Collaborative Economy.
Not to be outdone, mobile is a societal game changer, eventually enabling billions of new consumers to enter the digital economy. Everything digital is going mobile, as it shifts from a device to a platform. Mobile innovation is being driven by consumers and employees, effectively reversing the direction of innovation which historically started with large business and Government. Bring your own device (BYOD) is but one manifestation of this phenomenon. It is hard to underplay the broad societal impact of mobile as it is destined to change our business operations forever.
Digital has changed an entire generation (Generation Y or Millennial), which knows no other way to operate. Members of this generation were born between 1980 and 2000, and they are projected to make up 36 percent of the U.S. workforce by 2014, and nearly half by 2020. By 2030, the millennial generation is projected to make up 75 percent of the global workforce. Much has been written about the tendencies of this generation, and they will clearly have a big impact on many business practices. However, I believe we tend to overplay this impact and ignore the issues associated with the other three generations. Yes for the first time in history, our workforce consists of four generations of workers, and by 2020, there will be five generations. These generations are:
- The Veteran or Traditionalist Generation – these employees were born between 1922 and 1945 and are characterized by their experience in the Great Depression and World War II
- The Boomers – these employees were born between 1946 and 1964. This was the first generation exposed to television, mass communication and broadened access to higher education
- Generation X – these employees were born between 1965 and 1980 and influenced by the high divorce rates of the Boomer generation
- Generation Y, Millennials – these employees were born between 1981 and 2000 and came of age with the Internet
- Generation Z – these future employees were born after 2001
If truth be told, as we look at this multi-generational workforce, the enterprise has more digital immigrants than digital natives and companies are challenged to deal with that fact. So this is about more than creating an environment that incents the millennial generation to join our company. We have to deal with issues like having an entire middle management layer that could be ill equipped to operate in the future environment. We must address the fact that a growing base of technology-savvy employees is challenging traditional views of Enterprise IT. In addition, in today’s workforce, contract workers are the new dynamic group to watch for. These perpetual freelancers could very well be the creative engine behind many of our initiatives. Evidence of this growing trend can be found in analyzing workers that file their taxes under 1099 forms. In 2012, a whopping 92.6 million 1099 forms were filed in the U.S., up from 80 million in 2010.
Now let’s consider societal changes in the way we view work. The virtualization of work continues to change our traditional view of the workplace. Yahoo aside, having an office or “going to work” does not mean the same thing that it did a decade ago. As systems of engagement mature, they allow us to use a distributed workforce; much like the movie industry uses an assembled crew. You can start to see the early seeds of this phenomenon in the crowdsourcing of product design, ideation, and any number of enterprise functions. As this plays out over time, the perpetual freelancer will play an increasingly important role within the value ecosystem. Our very view of what it means to be an employee could change dramatically over time. Coupled with the broader movement towards value ecosystems, the implications to the way we manage tasks or projects can be profound.
The challenge does not lie with employees alone, as our connected world with its openness, access and transparency has shifted the power to the individual. Yet many companies still hold onto their traditional view of digital as a marketing issue and fail to grasp the enormity of this societal change. Our customers have shifted, and we can’t shift with them if we are inhibited by traditional views of digital. This societal change drives the enterprise to place the customer at the center, and this will have far reaching implications to business as we know it.
Here are some of the initiatives and tactics that increasingly support programs to deal with societal change:
- Re-imagine everything – this one will come up in almost every transformation program. These societal changes impact the core of long standing business structures. In the end, it is either a proactive planned transformation, or a reactive scramble to remain viable
- Create a work environment that attracts next generation workers – and this does not apply to just Millennials. For example, I am from the Boomer generation, yet my expectations for technology in the workplace are very high. I live on Facebook, Twitter, and LinkedIn among others, and mobile is a way of life for me. Beyond technology the work environment must enable employees to succeed. Working in a command and control environment, when what is required is empowerment at the edge is the fastest way to frustrate a next generation worker
- Embrace Bring Your Own Device (BYOD) and Bring Your Own Applications (BYOA) – this tactic is really part of the work environment tactic above, but it gets so much attention these days that I listed it separately. If you look at BYOD/A in the context of this broader discussion, then it is easy to see how futile it is to resist. We get caught up in the hype and lose sight of the big picture and the role that each of these tactics play in creating the future enterprise. Suffice to say, that using consumer technology and moving towards a consumer-like app experience are critical enablers – regardless of what we call it
- Create next generation stakeholder experiences – consumerization has not only affected our views as employees, but as customers as well. As mentioned in the opening paragraph, the base of societal change is change in the thought process of humans. Some of those changes manifest themselves in our lack of patience – how many of us get frustrated when we don’t get an immediate response when we click the mouse? If we don’t get the seamless, easy to use experience that we have come to expect, we move on. This will drive every company to create consumer-like experiences
- Move towards pervasive social features – social features will be woven into the fabric of business over time. This is a natural response to many of the needs and expectations created by the societal changes described earlier. Again, let’s look beyond the hype. Social technology provides a very effective way to communicate, coordinate and collaborate across a growing value ecosystem
- Develop a roadmap to bridge the digital native/immigrant divide – this one is not easy. Increasing the digital literacy of a company will not happen overnight. Understanding what drives members of each generation is critical to managing and motivating in this multi-generational environment
- Re-train employees impacted by disruption – this piece of the transformation program applies broadly across companies and into public policy. As the various disruptive forces intensify, the day-to-day jobs of many employees are likely to be impacted. Companies should proactively seek to understand these impacts, and plan accordingly
- Move from a product-centric paradigm to a customer-centric paradigm – the consumer train has left the station and is not likely to return. It’s one thing to talk about customer centricity; it’s another thing completely to place the customer at the center of the enterprise. This paradigm shift – whether from a product paradigm or other – has to form the foundation. Functional silos don’t matter – the customer does
- Explore participating in the sharing economy – this growing phenomenon represents both a challenge and an opportunity. Many companies will feel the disruptive force of this rapidly expanding model. For some, their core business will be completely disrupted (playing out first in Travel, Auto, Media, and Electronics). But this can also be an opportunity, as companies find creative ways to monetize underutilized assets. In either case, companies should assess implications to their current business models
That wraps up this look at societal change as a forcing function. The goal once again is to identify those compelling reasons for a company to embark on a transformational journey, even if it is not currently clear why you would do so. Traditional approaches to determining where to invest will not work in the face of the biggest transformative period in history.
To summarize to date, here is a link to each of the previous posts on forcing functions:
Part 1: Growth
Part 2: Effectiveness and Efficiency
Part 3: Differentiation