Digital Business Competence: Focus on people

Steinbeis Groups show how digital transformation within companies can be mastered

Digitization is accompanied by a fundamental transformation process in companies. It only succeeds if the employees concerned will help shape it. Future competition will be about people, not only about exceptional products and services. But it is also about shaping participation, meaning new models and formats of cooperation. There will be no transformation without it. This makes New Work a crucial factor in corporate culture. Companies are well advised to develop their own strategy here. The experts from Steinbeis Consulting Group Personnel (SCGP) and Steinbeis Consulting Group Digital Business Transformation (SCG DBT) provide support from development to successful implementation.

Digital technologies have a tremendous impact on the organization of companies, the people there and their skill requirements. If we understand competence as a well-rehearsed process for activating, bundling, and using personal resources, in order to be able to successfully deal with demanding and complex situations, actions and tasks, then we will be able to locate company-specific competences beyond the personal level of employees and management in every functional area of companies. Taking digital technologies as a driver of business competence, it ultimately leads to digital business competence.[3] This requires digital business models as well as employees and managers who implement innovative digitization activities. Digital business competence is characterized particularly by the human factor, but also by the factor information technology, both building the basis to implement digital transformation.

Human-centered approach as a basis

Within the network of Steinbeis, both groups, SCGP and SCG DBT, deal with these two dimensions when supporting companies holistically to implement digital transformation with simultaneous consideration of their business competence. Together, the Steinbeis experts digitalize and transform business processes, especially those of medium-sized companies in manufacturing, engineering, and public administration. They apply data-driven consulting methods, by optimally using needed and occurring data, and by breaking down areas of overlap between data silos. With a human-centered approach, the Steinbeis experts want to develop a user-friendly software solution by using the latest methods of UX/UUX development. IT solutions should support users in their daily work by relieving time. The users will feel more competent and will experience their work as goal oriented. For users to be able to carry out their daily work as precise and efficient as possible, user interfaces must be task oriented. The two groups offer employee-centric digital transformation in partnership: Starting from the business model to digitized processes through business excellence, business process excellence, IT excellence, data excellence and technology excellence.
Digitization must also be kept in mind when developing modern qualification concepts in a VUCA environment. VUCA is an acronym for “volatility”, “uncertainty”, “complexity” and “ambiguity”. Above all, living in a VUCA environment means that facts can no longer be planned, as they occur suddenly and in many ways. This makes digitization so important in continuous training. Goal orientation in a VUCA environment can be kept up when considering long-term visions. Steinbeis experts rely on the Steinbeis company competence check. Regarding to strategy, to organizational and personnel development, it is important to continuously focus on the future vision of a company over several years. Respecting future company goals the main focus of organisational development is to be broken down to the operative level of personnel development.

Continuing professional development ensures digital business competence

According to the continuous training report of the German Government, three quarters of further training activities are organized by companies and are commissioned and documented by employers. It is essential that staff trainings are up to date and customized and, by extension, training offers must be of high quality, and they must satisfy employees.

SCGP and SCG DBT have developed special training and qualification programs in order to take the chance to use digitization in companies. As a first step, an awareness of openness, creativity, and the willingness to tolerate mistakes is raised in the company. This is often a major challenge for management. Furthermore, developmental possibilities for employees are designed with the aim to find together new ideas in the company, as well as trying them out in safe areas of learning and experimentation, and to learn the required skills for the transformation process and New Work. In a moderated incremental work and learning process, digital skills and digital mindset are developed for all employees. Moreover, human, organizational, and technical requirements are created to digitize work processes. As a next step, requirement specifications for the use of mobile and digital work and learning tools are formed, digital networks between people, people and machines and between machines are created, which are then placed as a factor of success for New Work – because checked, valid and transparent information is a basic element to achieving objectives. The data obtained is processed and combined into decision-oriented knowledge for the purpose of making operational and strategic decisions.

At the same time, crucial motivators for New Work are used in learning and experimentation rooms. Also, important skills are trained, such as building teams that mutually trust another and teams that collaborate, or such as improving the teams’ communication, presentation and negotiation skills. Leadership happens by competence and recognition of the team, considering defined principles as a clear goal orientation. Self-organization and responsibility of everyone for the result of the team, as well as networking and transparency among the team members are also trained. Due to this, added value increasingly develops from within the team. As a framework for decisions and actions, values and meaning are defined by all employees with whom they want to work with and for each other. As a result, thinking remains with the people and is not only set by rigid rules.

During this process, other needed competences for New Work are strengthened:

Being able to better deal with stress;
Strengthening of self-esteem and self-regulation;
Increased attention and the ability to focus on oneself as well as others and work;
Ability to flexibly adapt and having a clear goal orientation.

This increases personal and team resilience and promotes success-oriented work, decision-making and acting in the VUCA world.

Legal framework of digital business competence

§ 81 BetrVG (German Industrial Institution Act) stipulates that the employer must inform the employee about tasks, responsibilities, the type of activity and about how it is supposed to be integrated into the work process. Employees must also be informed about changes, health risks and safety aspects in time. Work performance of employees can be boosted by providing them with accurate information. Information also helps to build and strengthen trust. It vitalizes the relationship between employees and the company. § 81 BetrVG also stipulates that employers must inform employees about all aspects of their responsibilities. And employers are responsible for enabling employees to do their job competently. From this point of view, employers are obliged to act, whereas employees receive information and are entitled to comment this. Commenting applies in particular to the required training. But is that still enough, given the rapidly accelerated changes, which digitization is only one of, albeit important, driver in the process of change? If “New Work” is really filled with content, then it moves away from the dichotomy of employer and employee with sharply separated roles and in the direction of § 2 BetrVG, which postulates the cooperation of employer and employee representatives. Accordingly, both parties must work together for the benefit of the company and the employees, and both are responsible for this well-being.

New Work: Abandon old thought patterns

But what does the term “New Work” actually mean? Basically, it means to acknowledge that the accelerating transformation needs to be shaped and that this can no longer be dictated by the employer alone; the best way must be discussed by all stakeholders in an iterative process. Nobody has the sole wisdom anymore, but progress comes from the participation of everyone. This again means that trade unions and works councils must become active partners of employers in finding this way through transformation and also have to be recognized as such. Employees are increasingly becoming the designers of their work and their work environment, which might be a major challenge for many. But if it is true that for people competence, importance, self-determination and influence are decisive for their efficiency; if it is true that the experience of autonomy, experience of competence and social integration are the essential drivers for human activity, then this is no longer a challenge, but an additional gain through successful transformation. The role of a consultation within the transformation process must then be to introduce this point of view to all stakeholders, to focus on competence and creative will of others and to come together for work.

In this sense, agreed changes in work organization are to be considered as a living object that must constantly be adapted, even if they are “fixed” in company agreements. In this respect, even large-scale operational changes become a permanent task. Living and working in that kind of environment requires the courage of all those involved to go beyond previous limits in thinking, to always regard § 2 BetrVG as the most important paragraph while complying with legal regulations, and to abandon old thought patterns. This is “New Work” then and it is beyond hyped changes in work organization such as home office, working time autonomy and agile work group models. Instead, it is about active participation, about enabling a process of dialogue and a process of design to determine work organization and to define working conditions.

Diversity and versatility in corporate culture

Organizational development, in conjunction with education and promotion, forms personnel development in the broadest sense and is defined as a strategy of planned and systematic organizational change by influencing the organizational structure, corporate culture and individual behaviour with the greatest possible consideration of the affected employees. A characteristic feature of the transformation are new technological convergences that trigger always new mergers between organizations, hierarchies, specialist disciplines, working models and cultures. This leads to a large diversity, which is both an opportunity and a challenge. The origin of New Work is to be found in these cross-sector interfaces. Digitization works like an amplifier here. New Work influences the corporate culture through new models and formats of cooperation. Companies should pay attention to this in their strategy.

A modern, open-minded corporate culture is not just a figurehead for companies, it is the basis of every transformation competence. This fact is just as diverse as the group of participants with their expertise. Once the actors have been identified and are ready, it is important to establish equal rights for all those involved, across hierarchies and sectors. Without this, employees will not constructively support decisions and change. Every change requires both the technical qualification and the mental readiness of the employees, the much-cited “mindset”. Having knowledge of the diversity in a workforce is therefore a basic requirement for the successful development of New Work with target group-specific addressing, motivation, role allocation and participation. New Work therefore always means New Leadership, which analyses new management tasks and questions about personal assessments and experiences in relation to hybrid work or remote leadership. But “leadership versatility” is rather needed, a paradigm shift that assumes emotionally mature leaders: “Compassionate managers are leaders with a high degree of versatility, who can adapt to requirements and people individually and situationally, and who are able to treat themselves and the employees entrusted with dignity and respect”, says the personnel consultant Dr.-Ing. Peter Becker.[2]

Digitized processes with a competence and training matrix

The development of a database of requirements and competence with the extension to a competence and training matrix is an exemplary pilot application of the successful cooperation between the Steinbeis Consulting Groups Digital Business Transformation and Personnel. Preparing such kind of a competence and training matrix is one way to analyse and document in-house training needs of a company. This means that qualification needs must be collected, training dates must be organized, to be in constant contact with participants and speakers, and to organize necessary resources. Based on internal offers and external training certificates, the courses carried out are recorded in a staff development database or in a three-dimensional training matrix in the next step. All training participations are stored in this system in order to get an overview of the training each employee received as well as the skills acquired. The profiles can also be used for the process of recruitment. Embedded in a digitized recruiting process, suitable candidates are identified or put down in the company’s own talent pool.

Development and application of the qualification matrix can basically be divided into three steps. In the first step, the requirements for a given position in the company are defined as well as the qualifications and skills that a person should have for this requirement profile. Based on this initial target profile, that is put about by requirements, qualification and competency, the employee is then asked about the “current actual characteristics”. For an objective assessment of the actual profile, both external and self-assessment from the point of view of superiors and the employee are necessary. Qualifications can be assessed objectively, as they are usually certified. When assessing a person’s level of competence, it is often easier to evaluate professional and methodical competences through work performance than social and personal competences.

After having defined requirement and competence characteristics, the scaling for requirement/competence comparison will follow. If an expert is needed while someone with knowledge is filling the position, the comparison of current and target skills shows the difference and thus the employee’s qualification needs. The further expansion to a three-dimensional competence-qualification matrix includes an adequate assignment of the determined qualification needs to the offered staff training program. A competence and qualification matrix can be used to ensure comparability and objectivity, since all employees are viewed internally based on the same requirements. Once implemented, a competence and qualification matrix should be freely accessible to everyone.

This ensures that particularly a company’s requirements towards their managers are disclosed. Prospective managers and those who already are managers should be able to take individual responsibility for meeting the requirements. Each necessary competence must be linked to a training offer that takes place at regular intervals. It is important to make the presentation of the matrix as simple as possible. The matrix must be clear and easy to understand, otherwise there is no guarantee that the three-dimensional database will be used.

New Work and the role of IT

When it comes to IT in connection with New Work, the focus is usually on the new challenges of working outside the company’s network, as well as bring-your-own-device approaches with regard to IT security, data security, software and hardware equipment. Secure environments on employee laptops, single sign-on solutions, and VPN integration into the corporate network, reliable and data protection-compliant collaboration platforms – all of this is of course part of it, as is raising employee awareness of new risks and challenges. However, if New Work is to become a fixed element of corporate strategy, then IT must be included in the design of this strategy in the sense of a lived IT-business alignment. It must not remain a cost center for the necessary infrastructure but must become a profit center in the sense of a holistic understanding of New Work described above: Experiencing autonomy, competence, social inclusion, self-determination, and influence are essential drivers of human performance and motivation – New Work strives for working conditions that make this possible. Therefore, IT must ask: What (technical) means can we use to create such working conditions?

The SCG Digital Business Transformation pursues complementary approaches here: Standard software is always selected independently of the manufacturer, so that a precise fit to the company processes is guaranteed without prior specifications. This in turn enables employees to work purposefully and efficiently, relieving them of tedious routine tasks, which lead to a feeling of competence and recognition of special personal skills. In the selection process, we make sure that future users can influence the selection. However, standard software does not always bring the desired result. Many negative experiences with the digital transformation are based on the fact that suddenly “everything is different with the new software”, which leads to a feeling of loss of competence and demotivates staff. In almost every case, it is justified by tailor-made software not being available on the market and customization being too expensive. In these cases, the Steinbeis experts follow the approach of human-centered development of individual software: Employees are direct part of the decision-making process what the digital version of their previous working methods will look like here, and they will be more motivated to use it accordingly. The special technological approach (model-driven development) ensures that this is also possible in a cost-efficient manner. Another focus is on the support of specific engineering processes, an area where Steinbeis experts contribute their many years of experience to find effective solutions.

For the areas of personnel development and recruitment, the two consulting groups develop and implement tailor-made digitized business processes in cooperation. The latest project here is an integrated solution for the areas of recruiting, qualification management and continuous training based on the competence and qualification matrix approach described above.