An interview with Professor Dr. Arnd Gottschalk, director of the Kassel-based Steinbeis Transfer Center for Human Resources Management & Organizational Development
What role do HR and organizational development have to play in times of digital transformation? What skills do people need to prepare themselves for the future? TRANSFER spoke to Professor Dr. Arnd Gottschalk about these issues, as well as the tasks that will face managers in the working environments of the future.
Hello Professor Gottschalk, the areas you work in include work organization and organizational development. How will these change as a result of digital transformation and what will this mean for business development?
Digital solutions affect companies differently depending on the area of industry they work in and the products they make. My recommendation is to use a principle I call “first what, then how”: It makes more sense to start by asking what changes will come about as a result of digital transformation and then ask how companies will develop in the future, or how they’ll have to develop. But what actually is digital transformation? Companies should answer this question with a holistic approach, on several fronts. If they don’t, there’s a danger that the topic will get shoved into the IT department – and if you ask me, that’s the last function it should go! For me, in essence digital solutions are about producing and processing digital information. They’re not just about automation, hardware development, or robots. You have to stand back more and take the wider view. The picture we got of this at the beginning was a bit fuzzy, but gradually the demands this area will place on the work environments of the future have become clear to people: Work will become even more broad-based than it has been, more networked, more intense, and more transparent, because data will be available in almost infinite volumes in real time. This is where HR and organizational development is needed! A couple of years ago people were asking what direction organizational development (OD) is headed in and whether it will actually be needed anymore. It’s currently needed more than ever and the fundamental principles of classic OD are still needed, including things like the principle of turning people who are affected by things into people who are involved in those things. The current developments are too complex and too fast for individual business leaders or consultants to make the right decisions or prepare themselves. I believe there’s an urgent need in the field of organizational development to see ourselves as learning companions for the future and become established as such within companies. The term I use for this is “future designer,” so it’s about being an expert who provides methodical and systematic companionship on the journey ahead – for the organization, managers, staff, and teams.
Digital solutions are everywhere now and are fundamentally reshaping the world of work. The central question here is what will it be like working in Business 4.0 – smart companies – and what challenges will these changes bring, not just for employees, but also for employers.
There’s a famous saying that “prediction is very difficult, especially if it’s about the future.” The working environments of Business 4.0 will depend on the type of company – there’s no one-size-fits-all answer to this one. It’s also clear that some sectors of industry and companies will be affected more by digital transformation than others. So the big challenge will be to ensure that managers and other employees feel similarly empowered – much more empowered – to do something about the changes that are coming, which are getting faster and faster. The two terms I use are learning aptitude and future-readiness. Lots of people have fallen into the trap Seligmann calls “learned helplessness,” so they assume their company will take care of things. Wrong! Also, not everyone is in a position to set their own development objectives or to motivate themselves to learn so they can translate their newly acquired skills into practice. So managers have to take the lead in this area, much more than they have in the past. HR development isn’t the task of the HR department, it’s the managers’ job!
The OECD currently points to three skills that will be required in the future: the ability to create new things and think creatively, the ability to deal with conflicting needs and think within the context of complex connections, and the ability to assume responsibility, take on tasks independently, make decisions (and learn to fail), and to do something (and not remain passive). So employees need to be equipped with skills that will make them future-ready. A tremendous amount of staff training is needed in this area – for managers and other employees. I think methods skills will be needed more by managers in the future. Companies have little awareness of the methods skills they need to prepare for the future in their markets, or this awareness is limited to certain departments. Innovation and future-readiness are not just something you delegate to the strategy department, they’re important to everyone and you need an organizational framework that allows for failure and learning.
To shape the new world of digital and virtual work, companies also need to realign their HR strategies. What will that entail specifically for HR managers and other people in management positions?
Well, first of all you need an HR strategy that is also seen as part of the business strategy and is derived from the business strategy, a bit like an innovation strategy or market strategy. Lots of small and medium-sized businesses don’t have a specific HR strategy or any strategic direction in their HR (cf. Gottschalk/Vögele: Steinbeis Engineering Study, 2012). I make a distinction in two areas within HR strategies. There’s the strategy for the human resources department and there’s a human resources strategy for the business enterprise. With digital transformation, what this means specifically is you need to know what the digitalization strategy implies for the HR department. What approach does HR have toward digital technology? The second aspect is about looking at the digital technology strategy for the company. What changes will processes and tasks undergo, and in what way will the network of customers and suppliers change? Digital technology strategies are not some kind of stand-alone strategy. They should always be seen within the context of internal and external business environment. The key questions with a bearing on the HR strategy, especially for companies strongly influenced by digital transformation, are: How quickly can we move things forward? How strong are the forces that move us forward or pull us back? Will we be able to manage digital transformation with our current workforce, and what will we do with the people who can no longer join us on the journey? Flexible, temporary contracts are one way to deal with this issue, but it takes a whole generation of workers to go through the change this way. HR departments should therefore ask how much training is needed for people to adapt – and specialist skills are needed just as much as methods skills – and which new people will be needed. What can we do to develop the skills we need or buy them in? What shifts will there be in current vocations? What new vocations will arise? The problem is, we can’t say for sure what will happen in the future – and I use the word “future” deliberately – so management has to be 100% on the ball and involved in planning the strategy. This is where HR has something to gain in the future by ensuring the right models are available for shaping the future and that they’re proactively implemented.
Just like any change, digital transformation gets people worried in a company, and it can also meet with resistance. What can or should HR managers and other people in management do about this?
Resistance can be on an emotional, rational, or political level. Emotional resistance usually arises when people are scared of uncertainty. What’s going to happen to me? What am I still worth with the qualifications I have? Can I keep pace in a world of digital technology? HR departments and managers need to be prepared for these questions, even if they sometimes don’t have an answer to them. Rational resistance typically arises when people misunderstand things or misinterpret numbers, facts, and figures. Why do we actually need digital transformation? What benefit is it to us? So this is about “why?”. Then there’s political resistance when it’s about the balance of power. Who’s responsible for digital transformation? Who gets the budgets? Who’s trying to use the topic to raise their profile? This is where HR managers can assume the role of a moderator. Resistance is generally seen as something negative or a delaying tactic, but whatever the reason for it, it has to be taken seriously! If you ask me what the antidote is for resistance, I’d say any medicine has to contain the following ingredients: explanation, communication, information, participation, qualifications, and integration.
There’s one further point: Employers, managers, and other members of staff have to learn how digital transformation works, and this is where organizational development has a role to play in moving things in the right direction. Employers and managers have to take seriously the demands placed on workers – that they should be “in good shape” – especially when it comes to flexibility, adaptability, and willingness to learn! It’s not right to just make demands; people have to lead by example and show what digital transformation means for the individual company and worker. But be careful of people forming factions: I think digital transformation currently has the tendency to split people into factions, and people really put up the barriers. These have to be dealt with by the processes of digital transformation. Organizational development and change management offer a number of effective models and interventions when this happens, such as planning workshops, force field analysis, stakeholder maps, but also design thinking models based on change processes, and we can use these to initiate and steer digital change processes. The principle of participation – i.e., getting people affected by processes involved in those processes, introducing them to changes step by step, accompanying them, and allowing them to shape processes – is something people should take to heart.
Professor Dr. Arnd Gottschalk is director of the Steinbeis Transfer Center for Human Resources Management & Organizational Development. The services provided by the Steinbeis Enterprise include strategic Human Resources Management, Organizational Development, Change Management, Innovation Management and Leadership.