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Sunday, January 22, 2017

Unexpected Benefits of Digital Transformation 01-22

Digital tools can be used in many different “right” — and surprising — ways to add value to an organization.

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                                                                                                                                                           Many different fields of study — such as psychology, human-computer interaction, and ecology —
have employed the concept of “affordances.” The term refers to the different possible actions that someone can take with an object in a particular environment. For example, someone can interact with a beach ball by batting it in the air, letting it float in water, sitting on it, or popping it. The importance of affordances is the shift in focus from the characteristics of the object to what one can do with an object in a particular situation.

The concept of affordances can be particularly useful when applied to digital technologies in organizations. It overcomes many of the key mistakes companies make when trying to update their organizations to compete in an increasingly digital environment.

Having the Technology Is Not Enough

Perhaps the most fundamental implication introduced by the concept of affordances is the shift from the characteristics of the technology itself to what your company can actually do with it. Digital technologies only enable possible actions for people and organizations to engage in; they do not make those actions happen on their own. Simply owning or implementing digital technologies is not enough to derive business value from it.

This insight may sound obvious, but it is stunning how often managers forget this simple fact in practice. They either believe that the mere adoption of the latest technology will improve their business prospects, or they focus all of their efforts on implementation without applying the time or resources to make the types of organizational changes needed to benefit from the possibilities the technologies offer.

For example, one company adopted Twitter in order to be more responsive to customers, but it kept existing processes in place — processes that required multiple approvals before publicly responding on behalf of the company. This negated the benefit of Twitter because it limited the way the technology could be used to respond quickly to customers. This example may be egregious, but it is common for companies to adopt digital technologies without considering how work needs to change to take advantage of the benefits they enable.

There Are Many Different ‘Right’ Ways to Use Digital Technologies

Just as a beach ball can be used in a number of different ways, so can digital technologies enable a number of different possible actions within organizations. One of Twitter’s greatest strengths (and a reason many people and companies find it confusing) is the multiple possible actions it can enable. Some companies — many of the major media outlets, for example — use Twitter as a means of broadening the reach of their content. Others, such as Delta, JetBlue, and KLM, use Twitter as an effective customer service tool, enabling them to support customers in a very fluid service environment. Still others use Twitter as a business intelligence tool. Companies such as Kaiser Permanente used data generated by companies on Twitter to identify areas of improvement in business operations, and T-Mobile used it to identify competitors’ weaknesses to inform their business strategy. The concept of affordances brings the question of how a particular technology will be used within an organization to the forefront.

The Most Valuable Applications Aren’t Always Known in Advance

The affordance literature also introduces the concept of “hidden” affordances, which describes possible actions enabled that are not necessarily known in advance, which is also true of digital technologies in organizations. For example, one company adopted an expertise identification tool to help determine who in the organization needed knowledge. The tool analyzed digital content generated by employees and automatically generated knowledge profiles for them. Although the intention of the technology was to make others in the organization aware of what knowledge employees possessed, the greater impact was in helping employees understand what knowledge they possessed that was most valuable to others. This often differed considerably from their formal roles or how the employees thought they were most valuable. In another organization, the same technology had a very different unanticipated impact, helping improve the performance of women, lower-rank, and newer employees. The technology democratized access to knowledge in the company, access that had previously been controlled through the social networks of senior male employees. Recognition of hidden affordances helps keep managers aware of unexpected or unanticipated benefits of digital technologies that may not have been considered in advance.

A Digital Organization-Affordance Cycle

The final benefit of an affordance view of digital technologies in organizations is the recognition of a mutually dependent relationship between the organization and its digital technologies. Digital technologies can change the organizational environment of which they are a part, creating the

possibility of a new set of affordances. Organizations can also implement or emphasize new features in the digital technologies, as the most valuable affordances they enable become more apparent. An affordance perspective suggests that digital transformation, rather than a linear progression, is a recursive process in which technologies and the organizational environment mutually influence one another over time. Digital technology creates new opportunities to work differently, and working differently creates new opportunities to infuse technology into the work process.

Shifting toward an affordance view requires managers to shift from thinking about digital tools themselves to a focus on what the tools help companies do differently. As managers think about whether these changes in how work happens will add value to an organization, they will be able to more easily consider what legacy technologies fulfill similar tasks, and whether these different systems will complement or compete with one another. 

Reproduced from MIT Sloan Management Review


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