Building a digital ecosystem to fit

By Alistair Jones

SMU Office of Research & Tech Transfer – We are in the throes of the Fourth Industrial Revolution, a new digital era characterised by rapid shifts in the way we live, transact and relax. The growth of the global economy is increasingly powered by digital technologies.

Innovations such as cloud computing, mobile devices, IoT platforms, smart sensors, big data analytics and augmented reality present opportunities for businesses and organisations to transform the way they operate, but the deployment comes with challenges and risks.

More often than not, such an organisational change may not work initially and can be expensive to fix – in lost money, resources, time and credibility.

So it's apposite that Hoe Siu Loon, who recently joined Singapore Management University (SMU) as an Associate Professor of Information Systems, has published a paper offering advice to organisations on how to become successful in this new digital age: Digitalisation in practice: the fifth discipline advantage.

Professor Hoe’s goal is to help organisations design change strategies for the digital future. Motivated by the belief that people, through culture, is one of the most critical factors driving digital transformation success, he is keen to explore the topics of digitalisation, process transformation and people management. Professor Hoe’s on-going investigations have been centred on issues related to smart health and smart nation, and he also teaches a course on Information Systems and Innovation.

“We live in a world where digital disruption is commonplace and is constantly on our lips and minds,” says Professor Hoe.

“Very often, when businesses and governments refer to digital transformation, the emphasis is on 'digital' rather than 'transformation'. Technology seems to take precedence. While it is absolutely all right to harness digital technology, data and human-centred design for innovation, it is the people who make things happen through business model transformation.”

It's an observation backed up by numerous industry studies, including from McKinsey & Company which found that 70 percent of change programmes fail to achieve their goals, largely due to employee resistance and lack of management support. It underlines the need for a cultural revolution to match a technological one.

Leadership for change

Professor Hoe advances the view that a management strategy put forward by American systems scientist Peter Senge in his 1990 book, The Fifth Discipline: The Art and Practice of the Learning Organisation,is particularly relevant today.

“What Senge has done is to introduce a way of thinking, or an approach, most notably systems thinking, to assist organisations to learn and adapt in a fast-changing environment. One of the main purposes is to connect the dots and build an ecosystem to tackle wicked problems involving many stakeholders,” he says.

Systems thinking, which refers to the interdependence of various parts within and connected to an organisation, is the key to developing a holistic view. It overarches Senge's other four main disciplines.

These are personal mastery, which refers to the improvement of individual competencies; mental models, which are the basic assumptions held in an organisation; a shared vision, which is the united common goal; and team learning, which means groups sharing knowledge.

A shared vision is essential for a company embarking on a digital transformation and it can also serve to break down silos among existing mental models. So what can an organisation do to better foster the necessary collaboration?

“Firstly, the leadership needs to give more thought and effort in explaining the purpose for embarking on a digital initiative,” notes Professor Hoe.

“This is because once the 'why' is made clear and internalised by the employees, the 'what' and 'how' become intuitively easier for managers and the rank and file to implement a digital transformation plan. In a complex environment, it is impossible to anticipate all the scenarios. A clear and well-explained purpose serves to provide some guidance in uncharted waters.

“Secondly, management could better encourage intrinsic motivation in employees. For example, allowing for greater freedom in performing one’s tasks and providing ample learning opportunities for self-development.”

Growing the talent pool

The improvement of individual competencies within a company seems particularly pressing because top digital talent is in short supply globally. A recent MIT Sloan study of 300 large companies found that, on average, 60% of their IT employees had to be sourced externally.

And these technical experts are always prey to a better offer. So, too, is internal talent. A chance to work in Silicon Valley, for example, would be an attractive career move.

“Whether we like it or not, fast employee turnover is an increasing trend, though the current COVID-19 situation has somewhat slowed it down,” observes Professor Hoe.

“Nonetheless, employees are jumping ship faster than ever and one retention strategy could be to provide more opportunities for professional development. However, organisations would have to switch from an expense to an investment mindset in training and development.”

With the bottom line being an imperative for most companies, investment in training and development is not always given the emphasis it deserves. But this is changing with what is sometimes called the corporate academy model. A shining example is Singapore's DBS bank which has retrained and realigned its entire workforce to become even more successful as a digitalised operation.

But for many other companies, there's an ongoing and competitive hunt to hire experienced digital transformation professionals.

“There is a clear market shortage of trained personnel who are both business savvy and technically sound. This is the category of mid-level managers and executives who could support the C-suite in strategising and executing a digital transformation plan,” says Professor Hoe.

A way of thinking

Professor Hoe sees an opportunity for universities to “grow the overall talent pool” by providing training in areas such as digital leadership, digital product management and applications of digital technology.

“The graduates could then take on such roles as digital transformation lead, digital business consultant, digital product manager or digital transformation architect, locally or in the region. With experience, they could become chief digital officers or assume other senior roles,” he says.

We live in a hyper-connected world where every individual counts. The challenge is how to foster collaboration and enhance the level of trust to improve performance. The systems thinking and organisational learning approach of Senge provides a positive direction towards a solution.

The internet had barely been invented when Senge published his seminal text. How is it that his methodology could still be a good fit for our more advanced digital age?

“Unlike a skill which becomes obsolete easily, a way of thinking is more able to stand the test of time,” Professor Hoe says.

Back to Research@SMU Aug 2020 Issue