The digital transformation and the importance of humans

What role will we as human beings play in the digital world? A world in which robots perform monotonous physical labor faster and with fewer errors than humans. A world in which artificial intelligence masters tasks that – just a short time ago – human beings alone could perform. Algorithms can now make more accurate diagnoses than doctors. And neural networks provide more accurate information about the maintenance status of trains and wind turbines than the engineers who developed and built them. Well-trained people now find themselves outperformed by intelligent systems. And many wonder: what will be our role as human beings in the future?

The biggest challenge of the transformation: the pace of change

Much that was considered science fiction at the start of my career a good 20 years ago has long since become everyday reality. In itself, technological change is nothing new. What’s new is the speed at which the world is being transformed. Technology is now progressing at an exponential – that is, geometric – rate:

1, 2, 4, 8, 16, 32, 64, 128 and so on.

A prime example: the iPhone has been around for only a little over ten years. In 2007, many people didn’t think smartphones could change our world so radically. Steve Ballmer, Microsoft CEO at the time, said in an interview that he saw “no chance” that the iPhone would “get any significant market share.” The sales figures show just how wrong he was. Apple sold over 200 million smartphones in 2017 alone. Today, we can no longer imagine life without such digital companions.

Disruption poses a huge challenge for us as human beings

In hindsight, predictions like Ballmer’s make us grin. But they also show just how hard it is to tell what the future holds in store. Worldwide trends like the digital transformation and ever-increasing globalization are radically changing our surroundings. We see this in our private lives, but also in the world economy: day-to-day life is moving faster, our surroundings are more unstable and interconnections are harder to understand. It’s reached the point that business models are changing fundamentally, global power relationships are shifting and entire markets are disappearing. All this poses a huge challenge for us. What will my company look like, what will my job look like in the future? What competencies will be needed going forward? And do I have the skills to keep up?

Change always creates stress and uncertainty for us as human beings. In my day-to-day work at Siemens, I often notice, however, that many people are generally open to change as such. In fact, employees often want things to change. As a rule, the difficulties arise as soon as they have to try out new things and implement concrete changes themselves. Then I often hear statements like: “I don’t even know where to begin.” Or: “I have so much to do and no time for anything else.” And that’s exactly where the problem is: we have to understand that change isn’t “deferrable,” let alone a phase that ends at some point.

We can’t cut ourselves off from new developments, nor can we reduce the speed at which changes occur. To keep pace, we’ve got to adapt and move faster – as people, as a company and as a society. We’ve got to be open for new things and leverage digitalization and its opportunities in such a way that they help us increase the quality of life and benefit companies as a whole. To accomplish this goal, we have to do some things differently than we have in the past. And this shift can’t happen without a culture change.

Digitalization can’t succeed without culture change

At large companies that – like Siemens – are steeped in tradition, culture change is easier said than done. We have more than 170 years of history and employ about 380,000 people spread across more than 160 countries. When it comes to change, each individual has an important role to play because the digital transformation can only succeed if it reaches every part of the organization: at all levels, in all businesses and in every team. At Siemens, this change process is a long journey of many small steps. Here are five of its most important components:

• Breaking down silos: Thinking and acting in silos – that is, in self-contained units like single departments and locations – hinders innovation. Instead, we have to maintain a global network and exchange ideas – and not just within our own company, but also beyond it. We must aspire to learn from the best!
• Flattening hierarchies: Digitalization is fundamentally changing the role of managers. In a world in which knowledge is increasingly short-lived, no single person can be an expert in all relevant areas, nor is such comprehensive expertise necessary. Instead, supervisors have other tasks to fulfill: being networkers, motivating people and bringing them together, and organizing solution-finding processes. And this also means giving other people’s concerns priority over one’s own interests.
• Questioning old and new: The digital transformation is rapidly changing how we work, communicate and interact. However, we can’t stop questioning developments. What really makes sense? What can we simply skip? What enables us to provide the greatest customer value? After all, going digital doesn’t automatically make things better.
• Enabling agile and flexible working: In the future, we’ll no longer have conventional office workspaces with landline telephones. Even today, many of our employees around the world work in virtual teams on a diverse range of projects. Thanks to smartphones, notebook computers and video conferencing, it’s becoming increasingly irrelevant whether we work on the road, at home or at several different locations. This geographic decoupling offers a great deal of freedom and flexibility in the way we arrange our work week. The advantage also for companies: innovative ideas rarely arise in fixed, structured processes. So it’s worth blazing new trails and trying out new methods.
• Establishing continuous upskilling: New technologies and new knowledge are arising in ever shorter cycles. These rapid developments mean our workforce has to acquire new skills. To remain fit for work and ensure that we’ll have marketable skills in the future, we have to acquire new qualifications on a constant basis. This form of continuing education is a top priority at Siemens. That’s why we already invest more than €500 million a year in the training and continuing education of our people. Yet it’s also up to each of us as individuals to seek out and embrace learning opportunities. And acquiring skills in this way doesn’t always require training sessions or courses. We can learn everywhere from other people, for instance on open platforms.

Modern leadership: People in focus

Managers have a crucial role to play in the digitalization journey. They have to guide and support their teams, allay the fears of their team members and encourage them to try new things. And this also includes providing people with freedom so that we don’t block transformation processes.

In my opinion, putting employees center stage and accommodating their individual needs is vital. In practice, this means that managers have to play multiple roles. They may be colleagues, mentors or coaches – or mentees who learn from others. Frequently, they have to switch back and forth between these roles several times a day depending on the situation and on the specific colleagues they’re dealing with. Such fluidity requires a sound understanding of how people tick combined with a healthy portion of empathy and creativity.

And it’s exactly here that we, as human beings, have a major advantage. In the Digital Age, soft skills are becoming more important than ever – social skills, negotiating skills, persuasive power, empathy. Those are all human abilities, and I think they’ll always remain the exclusive domain of human beings. And that’s a good thing, because we’re the ones who can ensure that bots and algorithms are programmed in such a way that they end up making things better and not worse. By doing so, we could also eliminate, rather than replicate, our human biases – such as prejudices that influence our decisions without us noticing. If we succeed in countering these unconscious biases, many decision-making processes will become more impartial than they have been in the past.

It’s up to us to shape the digital transformation

The digital transformation is without doubt one of the greatest challenges facing organizations – and thus people – today. This change brings many opportunities. Yet it’s up to each individual to recognize and use these opportunities: the warehouse worker who no longer has to carry heavy packages; the doctor who can use intelligent algorithms to provide better treatment for a cancer patient; or the engineer who – thanks to predictive maintenance – knows exactly when to pay special attention to a particular wind turbine.

It’s up to us to shape the digital transformation in a way that enables us to benefit from it. After all, ultimately, digitalization isn’t about technology. It’s about people. Technology is only the “what,” the means to an end. People are the reason for technological innovation, the “why.” And the answer to the “why” question should be that we want to improve our lives and the lives of future generations. And we’ll only achieve this improvement if we tackle the challenges together by using our heads and following our hearts.

You can find the recording of my keynote at CEBIT d!talk 2018 here.