Welcome to the new digital economy. One of the hallmarks of this entity is change – which, in theory, is nothing new. While change has always been an aspect of the economy, markets in the past were more benevolent to companies who hadn’t gotten on top of making the necessary adjustments. Those days are long gone – markets have become relentless, and if you don’t make the right decisions quickly enough, then you’ve already lost.
The reason for this – which I pointed to in my previous post – is that markets have never before undergone change so quickly. Development cycles are growing ever shorter. This doesn’t just apply to purely digital products like smartphones – the automotive industry has become subject to more rapid drives for change as a symbol for the analog world, for example, when it comes to steel or tin chassis, the limitations of mechanical inertia, and miserable efficiency rates. It’s simply not enough to merely exchange tin for aluminum or carbon, use flashy digital valves, or gradually improve the efficiency rate (or said more directly: consumption). This upheaval is much more profound, and the effects are more far-reaching. They relate to vehicle-related core concepts like the drive, but also entire transport infrastructures, political desires for change, societal adaptations to behavior, and competing mobility concepts. An industry that has slowly developed over the course of a century has to reinvent itself within just a few years, become more agile, and ultimately become part of an alien digital economy with totally new rules – in order words, it has to pull off a major feat.
Of course, all sectors have been affected by digital change, not just the automotive industry. Aside from creating new products or business models and needing to cover the requirements of current as well as future markets, companies take on immense risks whenever they make a radical change. High investments in reconstruction, paired with questionable market success, can lead to falling revenue or crumbling stock prices.
It’s not just external factors that have since made rapid change difficult. Psychological aspects also play an important role – if not the most important. Many managers (but really, all of us) are susceptible to unconscious bias and engage in subconscious, deeply engrained behavioral patterns that make us resistant to change. For example, they continue to hire new employees who fit the company culture and thus continue to tread the same path they always have. Instead, new perspectives are needed to address new markets. This also calls for fresh thinking, but this is only possible if what’s come before is called into question, and not just reaffirmed. This type of innovation is only unleashed if diversity becomes a mainstay.
Of course, adapted strategies and a greater awareness of diversity within a company go hand in hand with a change in the underlying organization. This concerns structures, as well as collaboration with small organizational units. Change management processes are not just necessary for IT – it’s the only way that a radical digital transformation can truly become a reality.
We at Dell Technologies posit that “We must make progress real.” We believe that IT and technology serve as motors for change, and thus also for societal progress. But if we don’t have the courage to challenge ourselves, then even the most sensational use of technology will all be for naught. We all see the need for change, but don’t want to rock the boat or shake up the status quo. And this is something that we need to overcome.