The Influence of Digital Transformation on Change Management – A Critical Analysis of Recent Concepts within the Consulting Industry 1/2
Welcome to our series of articles about current theses of our students!
The alumna Melissa Adejolu has written an outstanding master’s thesis on “The Influence of Digital Transformation on Change Management – A Critical Analysis of Current Concepts in the Consulting Industry” as part of her Digital Management studies at the Fresenius University of Applied Sciences in Cologne. The summary is presented below. Read the first part now and look forward to the continuation on November 13, 2020!
“The only constant in life is change”
This well-known quotation of the Greek philosopher Heraclitus (600 B.C.) about change is more relevant today than it was then. The quote emphasizes that change is inevitable and that people must accept a constantly changing status quo. One of the most important success factors for companies has always been to adapt to changing circumstances in order to remain competitive and survive.
Toyota’s recipe for success: just-in-time
“Just-in-time” is the measure frequently used in classic change management to make the change of offer more efficient. It originated with the Japanese car manufacturer Toyota, which was able to gain considerable competitive advantages by introducing a just-in-time concept. Today, traditional change management is followed by a collection of change models such as Kotter’s 8 steps or McKinsey 7-S Framework.
The new VUCA environment
Due to digitalization, the world is changing at an unprecedented speed. Neither size, brand, tradition nor experience can protect companies from today’s disruptive influences of globalization and especially digitization. This unpredictable, fast-moving and disruptive environment is often referred to as the VUCA environment. VUCA stands for a volatile, uncertain, complex and ambiguous environment.
Companies need to rethink their livelihoods
New basic conditions and rules decide on success and failure. According to MIT, 40% of the current Fortune 500 companies will disappear within the next five years. Companies must therefore take an interdisciplinary approach to rethink their livelihoods and adapt to technological change. They must digitally transform themselves, i.e. redesign business processes, products and procedures with the help of digital technologies, in order to survive in this competitive environment.
Classical change management models are outdated
Change itself is a complex phenomenon that should be simplified by the use of change management. There are many models that illustrate how change can be managed. However, the six models selected for this thesis (including Kotter’s 8 steps or McKinsey 7-S Framework) come from a time when technological breaks were not as strong as they are today. Therefore, the models do not consider the VUCA environment of the present.
The world is changing from analog to digital
Change management today can no longer be seen as a momentary action because everything changes faster. The world is just beginning to discover and experience the possible technological possibilities. In addition, the world is changing from an analog to a digital environment. The new technologies offer a variety of digital means to avoid typical change management problems such as communication problems in the future.
Flexibility is the be-all and end-all
The further development is a shift from a rigid to a flexible environment. Due to the VUCA environment the world is uncertain and unpredictable. Customer expectations are constantly growing. They are “amazonized” and expect the same digital maturity from every company as innovation companies offer. Accordingly, companies must be flexible and able to constantly adapt to keep pace with this demand. The time of strategic, long-term planning is over.
Summarized and edited by Louisa Roszinski