Business lacking digital know-how? Problems may be in management

Managers can’t rely on business and management experience alone— knowledge of new technology is becoming crucial.
5 September 2019

Digital skills are lacking at the top. Source: Shutterstock

Whatever you make of the term, ‘digital transformation’ is a process almost every SME and large business is undergoing.  

Across the UK, France, and the US, 73 percent of companies have made ‘significant’ or better improvements to end-user experience through digital innovation, according to a study by Couchbase. 

Despite that optimism, organizations in the midst of wide-scale digital adoption are suffering failure, setbacks, delays and scaled-back expectations. Bumps in the road include a lingering reliance on legacy tech and complexity in implementation— a lack of resources or skills in the business have put the brakes on any big ideas. 

That’s just one study, but the trend is a dominant theme in countless others. Accenture estimates that a lack of workplace knowledge needed to meet the demands of a digitally-driven organization could cost the UK £141 billion (US$172 billion) in GDP growth within the next decade. 

Businesses lacking digital know-how

With cloud fast becoming the digital backbone of business operations, cloud computing skills are becoming some of those in most demand — more specifically, the ability to develop, manage and move to cloud-based infrastructure. 

The Knowledge Academy surveyed 500 senior business figures (CTOs, HR directors and managers), finding cloud computing knowledge was the ‘skill’ in most demand (33 percent), matched by cybersecurity (33 percent)— an increasingly necessary bedmate to any digital transformation project. 

At the same time, 31 percent believed their firms were struggling to integrate new technologies as they stood— lacking the necessary ‘know-how’ to take things forward. 

That means, as public cloud spend is set to double in the next five years, firms will need to address an emerging knowledge gap among their personnel to ensure they’re maximizing investments. 

What the Knowledge Academy called ‘digital naivety’ was said to be halting companies from embracing potentially valuable technologies, such as artificial intelligence (AI) and automation. But organizations said they also lacked ‘generalist digital skills’ and suffered an internal shortage of expertise required to administer and operate network systems. 

A problem with management

The real knowledge gap issue doesn’t lie among the bulk of workers on the ground. Instead, digital skills shortages are most problematic among intermediate managers (23 percent) and senior management (20 percent). Senior business leaders ranked the digital skills of director levels as higher than that of senior workers (8 percent), intermediate workers (8 percent) and junior managers (6 percent). 

The findings suggest that senior employees most likely to be in line for promotion to the upper echelons will be less likely to be digital natives, or have sufficient experience required to lead digital initiatives. As such, a digital skills deficit is becoming more apparent, as those in leadership positions lack the necessary knowledge in which to apply to digital transformation efforts. 

The effect of this deficit filters down, leading to decreased productivity (56 percent), the inability to implement time or cost-saving technology (47 percent), operations becoming less agile (43 percent), reduced competitiveness (41 percent), and lower profitability (37 percent). 

McKinsey & Co’s The Future of Work in America report, as AI and automation shifts demand for types of workplace skills, leadership and management skills will increase by 29 percent by 2030. 

During the same period, however, demand for digital and advanced IT skills will see a 48 percent increase. 

The key takeaway is that it’s no longer enough for senior management to rely on business and management experience to lead their workforces— hands-on knowledge of the technology they’re using to drive the business forward is crucial.