Impact of Technology on the Strategic Management

Do we still need humans? aka Rise of the Robots

Consider the balance between the human mind and the machine. An accountant with a spreadsheet and an engineer with a computer-aided design system are examples of how we have thought about the essentially supporting role of computing power. As machine learning becomes a major force, however, the balance is beginning to change — to the extent that the question is starting to shift from “What can computers do?” to “What do we still need humans for?” Anyone who thinks their personal contribution is special or un-computable should have significant doubts. (Machine, Platform, Crowd, McAfee & Brynjolfsson, 2017)

Paradox: Talent shortage vs Unemployment

  • Unemployment 2017: EU 7,4% equals to 18M persons, Youth unemployment as high as 16%, Finland 8,7%, Spain +17%
  • Need for talent: for the past nine years, software engineers have been at the top of the hardest to fill jobs in the United States. I don’t think anyone is surprised to learn that 2018 will be no different.
  • Then again: 56,000 layoffs and counting: India’s IT bloodbath this year may just be the start (Quartz India Dec 2017)

Research Method & Case Organization (a very short intro)

We conducted a three-year action design research project participating in the design, development, and evaluation of a particular organizational management system implementation. Siili Solutions PLC conducted an R&D initiative aimed to improve competence management in order to meet current and future customer demand from January 2013 to October 2016. The heaviest development efforts were between 2014 and 2015 and Siili Solutions PLC has invested over €2 million in the program. During the research period Siili’s headcount increased from 100 to over 500 and it moved onto the Nasdaq main list. Currently the market cap is close to €100M.

Future of Work — 5 trends

The combination of digitalization and globalization will have a dramatic impact on organizations and the way people work. Demographic upheavals and societal changes, as well as the inevitable focus on environmental issues, will amplify the effect of these trends.

  • Digitalization
  • Globalization
  • Demographic upheavals
  • Societal changes
  • Environmental issues

Dynamic business models — no more 5-year-plans

Modern theories emphasize the dynamic nature of evolving business environments and the active development of company resources with, for example, knowledge and competence management. These are called with many names like lean startup, sense & respond, or only the paranoid survive.

Distinctive way of management — Adaptability, Creativity, Respect

Since the 1960s organization theory and sociology researchers have been interested in professional organizations employing a large number of professionals (von Nordenflycht 2010, Malhotra et al. 2006).

Flexible Organization Forms — Self-Organizing Networks of Teams

Scientists and practitioners are constantly looking for the optimal organization structure (Mattila 2012). The perception of the ideal structure has evolved from a bureaucratic, rigid form into a more adaptive and reactive way of organizing, which is thought to be especially suitable for KIFs, with less routine and more innovative work (Deloitte 2016). In fact, present literature claims that PSFs are the firms pioneering today the optimal organization of the future (Greenwood et al. 2009).

Technology

The most valuable strategic assets of the modern organization are its knowledge workers and data resources. In HR, this means the utilization of especially competence data about the current work force and data about the future skill needs. The former is available within the HR systems and the latter needs analytics that combine business intelligence from competition, knowledge of our offering portfolio and business trends.

  • The need for specific true competence management systems
  • The need for useful information to be stored in order to activate employees to use a system that they see as beneficial
  • The need to look forward and enable individual development
  • The need for transparency, ease of use, and dynamic visualization

Data Assets & Competence Analytics

Companies can no longer rely on technology alone as a source of competitive advantage (Carr 2003). They need an enterprise-wide information strategy and information governance in the current information-intensive, knowledge- based economy (Davenport 2007, Castells 2010). In 1998 Redman (1998) already argued that many enterprises have not achieved the needed awareness of poor data quality, which has adverse effects on the operational, tactical, and strategic levels of business. Nowadays, the leading organizations have learned the lesson that information quality problems are business problems rather than technical IT problems (Lee et al. 2014)

What is the central message?

The “future of work” is already affecting strategic management, HR organizations, and technology in practice. The most valuable strategic assets of the modern organization are its knowledge workers and data resources. Therefore, new, innovative thinking and digital skills are needed in order to be able to facilitate reinvention on both individual and organizational levels.

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Erkka Niemi, PhD

Erkka Niemi, PhD

Technology enthusiast CTO with a lifelong addiction to skateboarding in Helsinki & Palo Alto @Unikieinc @AaltoUniversity #SelfDrivingCars #DeepTech