Digitalization drives businesses built on culture of trust

Digitalization is not a question of technology but people, culture and new business models topped up with courage, and some tech.

Risto Kinnunen

The discussion on digitalization is quite often focused on technology when actually the real change comes from working with people, and from the way of making new things, or old things in a new way. Transferring the existing business to online is not digitalization and in many cases doing this can even be bad for business as it might just add costs without any benefits.

One needs to rethink the whole value chain and the culture how things are done, with a little help from technology. Creating an app or bringing in virtual classes to office is not digitalization if everything else stays the same. Real digitalization has three prerequisites 1: changes in ways of working , 2: new or modified business model, and in many cases 3: some new technology.

Digitalization: the body...

One of the cornerstones in digital technology is that it makes it possible to combine several different data sources in a creative way to create value. The examples are easy to find, take for example combining existing user data for marketing purposes. Or maybe the case of Cambridge Analytica in recent US presidential elections. Also in insurance business and fintech there are new models rising and it will be interesting to follow what comes out from that area. Maybe it could become acceptable to lower car insurance fees by allowing the insurer to collect data on your driving habits. How to collect the data in a non-intrusive but reliable way is an interesting question.

Here is one example I came across some time ago:

Internet of Things brings opportunities into play to gather data from physical objects. One example is the Finnish start-up Emergence who won an innovation competition organized by Elisa. Their winning case was a way to follow the location of buoys. The sea in Finnish coast is pretty difficult to navigate as it is shallow and there are a huge number of islands, islets and rocks. To help navigation, there are about 17 000 buoys and all of them are needed as there are two kinds of sailors in Finland: those who have been on the rocks and those who lie. The elements are pretty hard for the buoys taken that the sea gets an ice cover every winter. Location of the buoys needs to be checked every year which currently means driving boats for over 4 300 nautical miles, or 8000 km. Crossing the North Atlantic is about 3 000 nautical miles. So when you equip the buoys with a small solar panel, a location beacon and a radio transmitter, you can create a way to locate the buoys automatically. Then you don’t need to drive boats to check the locations but only go and replace the missing ones. If we look at this example through the three prerequisites, they are all here: A start-up is creating a solution for government unit, the value of the solution is pretty evident and there is some new technology utilized.

… and soul

Recent development in technologies makes creation of new services easier and quicker. For a new service to really make it in the market, great user experience and outstanding design play an increasingly important role. To me, almost nothing is as repelling as high tech that does not work in an intuitive way. In many cases, the key to great UX is to actually leave things out, not to add more options. I tend to try different services when I see them and one of the more delightful ones is Glympse, an easy way to show where your are to e.g. a friend or colleague if you are running late. The service is free for consumers, extremely easy to use and does what it promises so that makes me an advocate of it.

 

To really push digitalization through, you need to have a working culture where you trust your peers, you have the courage to challenge existing business models, and you utilize stunning technology to make it all work.

 

Digitalization also brings up a question of trust. It is often discussed if one can trust that your data is safe and not used in other purposes than what was agreed. The side that is not that often discussed about is trust between people. There might be several parties working on the same topic without direct reporting and you need to trust that others are doing what was agreed. Also in digital era, the location of work has partially lost its meaning and the old way of managing people needs to be put to sleep. Here the agreed way of working is essential. Also, with the quicker pace in business, planning ahead is even more difficult now than it was before. This calls for faster ways to react to changes in business environment. The only way to be responsive is to have freedom to improvise within the agreed frames and the only way to get this working is through a culture of trust. Trusting that colleagues and partners to do their work with best intentions.

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