Frida Pemer is assistant professor at the Department of Management and Organization and House of Innovation at the Stockholm School of Economics (SSE). She leads an international research project on the digitalization of expertise and lectures on digital transformation and organizational change.
"Digitalization is going to transform all industries. But the speed and manner of the transformation will depend on the industry. It’s not something you can opt out of – but you can influence how it happens."
Digital transformation needs to be managed both internally and externally. Internally, it is a matter of reviewing your existing structures and systems and seeing how you can use digital technology to work in new and smarter ways. Externally, the focus may be on developing new business models and on interacting with and contributing to your particular ecosystem.
The two main challenges of digital transformation
Frida Pemer sees two common challenges with regard to a company’s digital transformation:
1. Expertise
Securing the right expertise internally is a challenge. Even if a company has many employees with knowledge, experience and important supplier relationships, some of these employees will not have the digital skills to match. This can be solved through recruitment and by training existing personnel, but helping your employees to become better informed about digital tools and technology remains the greatest challenge, according to Frida. It is therefore important to de-dramatize the digital world and improve general technological competence.
2. Structure
Digitalization puts pressure on managers and leaders to keep up with developments. At the same time the systems, culture and processes within an organization create an inertia that makes it difficult to implement changes with any great speed. Old structures, organizations and systems are no longer fit for purpose, as they were created such a long time ago. It is a slow process, but Frida suggests that you start by studying and beginning to change minor processes. For example, look at the remuneration systems within the organization – how are they structured and what characteristics are rewarded?
How do you know what is best for your business?
As the lively debate about digital transformation continues, companies need to decide how they want to adopt new working practices and develop their offering and business models.
“You have to look backward and forward at the same time,” says Frida. “There is a lot of talk about the future at the moment, but you also need to understand where your company comes from, its history. So on the one hand, you need to look forward and consider where you see the company’s future. And on the other hand, you need to look back and try to understand what kind of organization you have as your starting point and how it works. Above all, you need to identify the structure and culture, and see how you can put them to good use.”
Examples of successful digital transformation
Scania and Essity are often held up as poster boys for digital transformation, but Frida Pemer also highlights accountancy as an example of an industry that is currently undergoing exciting changes.
Many accountants feel that their industry is being challenged by new technology, says Frida. There are already sophisticated technological solutions that can be used to perform traditional tasks. Robots and AI have begun being used to analyze clients’ data, for example. But although this opens up opportunities to create new services, such as predictive and prescriptive analysis, it also requires the accountants to change the way they operate in order to remain relevant and continue delivering value for their clients. They have launched several exciting initiatives on this front:
- They have begun to recruit digital experts at both senior and junior level.
- They have developed various methods to improve the digital skills of employees, for example through gamification.
- They have begun to adapt their remuneration and career systems in order to recognize and reward digital expertise.
- They have created internal channels to capture local innovation initiatives and scale them up.
- They work in cross-functional teams where accountants and digital experts cooperate to meet clients’ needs.
Digital transformation – tips for managers and leaders
Frida Pemer shares her tips for managers and leaders who want to lay a solid foundation for digital transformation.
- Conduct scenario analyses and try to understand what the world looks like now and how it will look in the future. Talk to many different actors – not just people in your own industry. Consider what the market and customers will look like in 10 years and what you need to do to be relevant at that time. It is not about conducting a perfect analysis, but about looking forward and setting up a clear, attractive vision for the organization.
- Establish what skills the company has internally and consider what new skills are needed to keep up with developments. If existing performance indicators and reward systems do not support the activities, skills and behaviors that are needed – overhaul them.
- Be open and listen. There will be a need for more leaders with high emotional intelligence who understand their employees and can help them deal with the uncertainty, and ensure the organization achieves its vision.
"Digital transformation is about understanding both technology and people, and getting them to interact successfully – thus generating good forward momentum."
Frida Pemer is an assistant professor at the Department of Management and Organization and House of Innovation at the Stockholm School of Economics (SSE). She leads an international research project called ‘Digitalization of Expertise’ and is a frequently engaged speaker on topics related to digital transformation.
She also teaches in the new Accelerating Digital Innovation program at SSE Executive Education.
New: Accelerating Digital Innovation
– An online program with focus on innovation
Organizations can no longer rely on lasting business models and extensive digital changes on a global scale demand an understanding far beyond one’s own business and operations. Creating new business opportunities generally requires an expanded customer focus and a greater understanding of the customer, at the same time that digital channels are becoming more important. New key activities are to ask the right questions, quickly find new ways of learning and “unlearn” some old truths.
The program is designed for executives or leaders in need of exploring and exploiting digital business opportunities, internal as well as external. You want to obtain broader and deeper knowledge of business development, innovation and digital transformation, and develop both professionally and personally.
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För mer information, kontakta Carl Klingborg, 070 368 66 22, carl.klingborg@exedsse.se eller ladda ner information i formuläret.
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