How global digitisation will impact how we live, work and play

This is not about applying technology to old organisational models and processes to smarten them up, but fundamentally transforming businesses with the customer typically at the heart of this process.

Where and how companies work in developing their digital workplaces to enable their digital transformation is a critical success factor as it is essential the transformation starts inside out.

In parallel it can work from the outside in but if you do not fundamentally challenge how things are done within the organisation, all the transformation drive will get held up in the treacle of the non-digital organisation.

In recognition of this, many organisations set up separate digital transformation businesses, often operating from a co-working location, to drive the outside in change, but ultimately the new and old world need to come together, and so the role of Workplace and Real Estate is to help facilitate the inside out approach, working with other parts of the business like Operations, Marketing and Human Resources to answer two key fundamental questions:

A) What are the behaviours and culture of a digital organisation?

How things are done have an enormous impact on the success of transformation projects. Agile development techniques enable platforms to be created in short sprints with deployment, testing and learning in chunks 'as you go' that are widely deployed in many organisations.

This process needs to be supported by the workplace, creating environments that provide settings that support the process. Scrum spaces are widely deployed, enabling the teams to come together for short review meetings periodically during the day, typically in an open stand-up format.

But really successful businesses are applying far more science in trying to understand the psychology of the wider process. As a generalisation, developers tend to be more introverted yet we provide them with a ‘one-size fits nobody’ workplace solution.

Introverts typically need some quiet space to recharge and refresh and providing this space can energise the development process.

B) How are we going to attract digital talent?

Everybody recognises the importance of attracting tech talent, but it is also important to attract the best in your market sector.

Over the next five years, large companies will invest, on average, hundreds of millions of dollars—and some more than a billion dollars—to transform their business digitally.

And given that top engineering talent can, for example, be anywhere from three to ten times more productive than average engineers, acquiring top talent can yield double-digit investment savings by accelerating the transformation process by even 20 to 30%.

(McKInsey The New Tech Talent You Need to Attract 2016)

I worked with a client on Digital Workplace Transformation and the number one project objective was to attract the top six graduates from a specific Cambridge course.

The CEO saw the workplace as a key enabler and simply a marketing cost, to achieve this objective. The transformation involved a relocation and migration to an activity based working (ABS) ethos, supporting an agile development process that involved bringing clients into the workplace to co-create the next product development.

At every stage of this process the same question was asked – would this location, building, workstyle, building design, culture, workplace experience, management style and development approach attract a top graduate from Cambridge?

Everybody recognises the importance of attracting tech talent, but it is also important to attract the best in your market sector.

The business did successfully attract top Cambridge talent, but also grew its revenue by 30% in the following 12 months - 5 times more than its competitors.

In the future demand for such talent, particularly in areas like big data, will significantly outstrip projected supply and so businesses will have to work harder and harder.

Transformation in the manufacturing sector

Some of the biggest opportunities for transformation exist in the manufacturing sector and everybody is talking about 'Industry 4.0' to highlight this.

Most manufacturers have deployed lean manufacturing techniques within their production processes, but digital transformation provides them with very significant opportunities to take this to the next level both within the factory and beyond.

Within the factory we are seeing focus on the following:

• Interoperability:

The ability of machines, devices, sensors and people to connect and communicate with each other via the Internet of Things (IoT)

• Information transparency:

The ability of information systems to create a virtual copy of the physical world by enriching digital plant models with sensor data.

• Technical assistance:

First, the ability of assistance systems to support humans by aggregating and visualizing information comprehensibly for making informed decisions and solving urgent problems quickly.

Second, the ability of cyber physical systems to physically support humans by conducting a range of tasks that are unpleasant, too exhausting, or unsafe.

• Decentralized decisions:

The ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomously as possible. Only in the case of exceptions, interferences or conflicting goals, are tasks delegated to a higher level.

Beyond the factory we are seeing digitisation transform the industry from being purely manufacturing to be more serviced focus.

GE and Rolls Royce for example do not just supply airline engines but are monitoring their performance 24 hours a day, and using data analytics to drive predictive maintenance.

We are seeing the same initiatives being applied to others sectors like automotive, wind turbines (energy), boilers etc.GE aims to become the world’s best infrastructure and technology group in the world and has moved its HQ to Boston to be closer to MIT.

Society 5.0 - digital transformation to tackle societal challenges

While digital transformation is predominantly used in a business context, it also impacts other organizations such as governments and public sector agencies as they tackle societal challenges such as obesity, aging populations and the environmental sustainability.

Japan has taken this to another level; digital transformation aims to impact all aspects of life with the country’s 'Society 5.0' initiative, which goes far beyond the limited Industry 4.0 vision in other countries.

Japan has the ‘oldest’ population in the world with 26.3% being over 65 years old and it is investing heavily in digital infrastructure and systems to address the needs of this age group.

In addition, it is addressing issues such as natural disasters, and the provision of government services, education, law and order and societal cohesion.

Japan has the ‘oldest’ population in the world with 26.3% being over 65 years old and it is investing heavily in digital infrastructure and systems to address the needs of this age group.

Intelligent Cities which shape society

Real estate has a fundamental role in place-making which shapes society, and the transformation of localities must think through how the digital infrastructure can help people work, live, play and learn in the future.

Cisco have just announced a $1b fund to invest in Intelligent Cities, and we are already seeing many examples of innovative solutions around the world – digital signage, local information on transport or weather, event promotion and management, car parking/re-charging places, connecting people in places, understanding how places are being used to support proactive maintenance and cleaning as well as to enhance and refine the 'city living experience'.

I will elaborate on all of these areas in more detail in future blogs and appreciate contribution and/or comments  - you can email me here. 

Just looking at this list highlights the complexity of strategic workforce planning and location strategy in the current world, and the importance of rigorous analysis and data-driven decision making.

Neil McLocklin heads up Knight Frank's EMEA Strategic Consulting line with over 20 years’ experience leading strategic consultancy practices across Europe and working for a multitude of corporates as well as the public sector clients. 

Knight Frank's EMEA Strategic Consulting team works with large and small business helping them to align property to business goals and objectives and, in turn, making them more competitive and fast moving.