Looking beyond Digitalization: The Human Factor

March 6, 2018

by Carla Cico, Member of the Board, Allegion

“Digitalization is changing the way we do things”, or alternatively, “IoT is changing our daily life”: these are the most common statements that we read and/or hear on a daily basis.

At the World Economic Forum 2018 in Davos, Alibaba founder and Executive Chairman Jack Ma spoke at length about some of the key challenges he considered were facing the world, among them being the impact on society of new technologies. “Artificial intelligence (AI), big data is a threat to human beings”, he said. “I think AI should support human beings. Technology should always do something that enables people, not disables people. The AI and robots are going to kill a lot of jobs, because in the future it’ll be done by machines. Service industries offer hope – but they must be done uniquely.” Given these challenges to human autonomy and way of life, what then are the ways we can ensure that humans remain in control of the process of transformation?

We often speak about digitalization, IoT and AI as if they have come down to us from a different planet and have landed on Earth to conquer humans, who then need to react to this invasion and do something to protect themselves.

Rather than find this attitude frightening, I myself nd it rather puzzling, and if the stakes were not so high, I would nd it also rather amusing. Why? Because we created this so-called “monster” and now we do not seem to know how to protect ourselves from it.

Maybe it is time to put digitalization, IoT and AI in perspective and to think how we can make the best use of these technologies and not become their slaves, either in our corporate or in our personal lives.

Firstly, behind all these technologies lies the most powerful “engine” – the human brain. This gives me comfort because if the human brain has been able to develop these technologies, it should also be able to control them too and use them appropriately in order to make our life easier and more comfortable, while minimizing the negative impacts.

Secondly, we think about digitalization as mainly a “technology” thing, but it is not just this: digitalization is an enabler. It allows us to do and to look at things in a different way, while taking advantage of the many features of the technology, therefore it is not just an end in itself. Having said that, digital transformation will not be successful if it is not driven and supported by the people involved, be they in top management or the workers on the production line.

The reason why many companies fail in the digital transformation process is not because they do not have the proper technology. They fail because they do not have the right people in place and the right organizational culture to deliver it. If we look back in our history, we can see that every time there was a major transformation in industry, some companies were successful while others failed. The reason then, as now, was due to the people involved and their lack of vision.

Digitalization brings a change of culture to any organization: this is why it takes time and why it needs daily attention. Merely introducing a new technology will not work. You can change the technology, and change the process, but without appropriate attention to the human resources involved, you will be doomed to failure. Each person involved brings a unique set of skills and competencies, against which a mere technology and/or a machine cannot compete in a process of continuous disruption.

Therefore, if companies are seen to be failing in the digitalization process, is this because the CEOs and C level executives have suddenly all lost their grip? I do not think so. I think that the failure we see in these companies is more due to a lack of planning and foresight, and a lack of understanding of where these companies are at, that is what technological tools you already have, and what type of human resources you have, as well as what you need.

Once you have identified both of these things, before you look outside the company for help, make sure that you have made the best use of what you already have available: this is already the rst step in the digitalization process. only then should you look at what you need to add: digitalization is expensive and it takes time, so you need make sure you do not waste resources.

My advice for senior managers embarking on the digitalization process is to make a plan and stick to it, making sure that it is not just seen as “your” plan, but that it is adopted by each and every employee as their own plan. If you can bring all of the company on board, the chances are much better that you will succeed.

Technology should be used to enable people to work and to perform their tasks better, it should not be seen as a substitute. no matter how much technology or robotic process automation is used, it is the knowledge and the emotional intelligence that makes humans different from both animals and robots, and these will be the ultimate differentiator between success and failure.

Today it is fashionable when we talk about human resources, to speak about “talents” – how to attract talents, how to keep them and so on. The underlying definition of talent, in most of these cases, is “a person who understands technology”. In other words, most companies when they do their admission tests look for people who understand algorithms, technical platforms and so on. Very seldom is there a requirement to show how good the person is in communicating, in problem solving not related to mathematical skills and in interpersonal relationships, among other things.

Maybe it is time to focus more on attracting people to technology with more “human” skills, who are able to interact with others, and able to think independently, able to write a coherent essay and able to extract value from all the data available. Because so-called big data are not useful if you do not know how to interpret them and to use them properly: for this you need to evaluate the human factor.

Education will play a fundamental role from an early age in this process. Instead of just giving kids tablets and smartphones, we should also give them Lego and/or any other toys that will help them to develop the characteristics that are part of the human DnA: sensitivity, emotion and reasoning. Kids should learn to play together in a group to develop their social skills, and not just play alone with their smartphones.

I am a technologist and I support the use of technology, but it needs to be properly used so that it can make our lives better. As leaders in our industry, it is our duty to use technology appropriately, both in the corporate world as well as in the private domain. If we succeed in doing so, we will leave a much better world to the next generation.

Carla Cico is an award-winning CEO with global experience delivering outstanding shareholder value within publicly listed companies, PE houses and VC’s. Ranked by both Forbes and Fortune Magazines as “One of the Most Powerful Women in International business” and elected the “Best International CEO in Latin Americas Telecommunications sector” by Reuters. Her expertise and skills driving and transforming businesses across multi-sectors including: Telecoms – Brazil Telecom and Telecom Italia; Infrastructure, Property and Consultancy is internationally recognised. Carla currently holds a number of non-executive positions internationally.