Opinions & Interviews

2020-01-13 Simona Scarpaleggia

How Business Culture Changes with Technology

The digitization of many sectors, the use of artificial intelligence, robotization, and the frequent birth of startups are phenomena that have now become normal, and naturally lead to accelerations and changes in all fields, even in the most consolidated and traditional sectors

We are living in times of great, rapid transformation. In every area we see that people live, work, seek entertainment and consume goods and services with methods and tools that are increasingly different from those of the past. We see the world changing at an unprecedented speed.

The digitization of many sectors, the use of artificial intelligence, robotization, and the frequent birth of startups are phenomena that have now become normal, and naturally lead to accelerations and changes in all fields, even in the most consolidated and traditional sectors.

This is a process that we cannot stop or avoid. And why should we? Technological progress is not to be halted or ignored; rather, it must be understood and used in the best way possible. Companies must then equip themselves and be ready to seize all of the opportunities that can derive from the adoption of new technologies or from collaboration with other organizations through various platforms.

Today many companies have a hard time reinventing themselves, despite being aware that a change is necessary if they want to remain on the market and be competitive. It often happens that large investments are made, absorbing most of the financial resources to adopt new technologies and thus to change production cycles, operational methods, and sometimes even the business model.

Unfortunately, though, it is also frequent for these large investments not to produce the desired results, and thus companies find themselves having to recover efficacy and competitiveness in a situation with low cash flow. Regrettably, this leads to draconian recoveries of efficiency through reductions of personnel and operating costs.

One important reason that this happens is that businesses focus too much, or even exclusively, on technology, and too little, or not at all, on people.

The leaders of organizations tend to believe that new, revolutionary technologies are by themselves the trigger, engine, and vehicle of change, and the primary factor for implementing a new strategy. However, they need to know that many investments in technology run the risk of being frustrated if they are not accompanied by complementary and synergetic investments in people. An approach that is too technocratic risks leading to the loss of great opportunities.

There are three elements to consider to ensure that people can contribute to the success of investments: the psychology of people that produces resistance to change, the new skills and abilities that are necessary, and corporate culture.

Let us start with the psychological element. We cannot but recognize that such large and fast changes create a sense of anxiety, fear, and inadequacy at work. There is a concrete risk that people will become inflexible and resist this change, or adopt a passive and resigned attitude. Both of these responses would lead to negative consequences. In this case, leaders must be able to understand the fears and resistance and create a working environment where people feel understood, challenged but not threatened. Today more than ever, it is important to awaken and aggregate energy towards a common goal: this can be the corporate mission, the contribution the company can make to society, or the effective introduction of a new technology. People must not feel alone and defeated by machines; rather, they must feel able to work better and grow professionally thanks to machines.

This is where the second element to consider when investing in new technologies comes into play: competences and skills. Adequate investments in training, education, and upgrading are and will be increasingly necessary to have a workforce that meets the relevant operational and management needs. In addition, they will allow for using all – or almost all – the potential of investments in technology.

Lastly, we must consider, and leverage, corporate culture. The culture of an organization in times of change becomes a unifying and reassuring element, it describes the system of shared values to which the people continue to refer, in which they will find their identity and sense of belonging. When there is a need to maintain motivation and team spirit – so necessary in times of change – culture and values are more important and stronger than any training or speech or process. Culture influences attitudes: no change is easy, but it is amazing and fascinating to see how difficulties can be overcome when they are faced with a positive attitude. Moreover, there is another aspect to consider: the contents that the cultural message transmits, spreads, and posits as a reference. For example, IKEA has worked for decades on the concept of “democratic design,” a formula that entails the co-existence of 5 factors (form, function, quality, sustainability, and low price) to characterize its products. However, it was when the broader effort to spread this concept began – through publications, conferences, podcasts, and other events – that behavior changed significantly in both design and products, in the definition of the supply chain, in the way that employees propose furnishing solutions, and in the way that clients themselves see IKEA’s product assortment.

People are the lifeblood of organizations. The companies that are able to put people at the center of their process of technological change will be those that not only stay on the market, but that prosper in it.

Simona Scarpaleggia is Head of the global Initiative The Future of our Work at INGKA Group (IKEA)