The digital transformation is actually the level of a networked, decentralized IT that used to be characterized by client-server architectures and that is nowadays on the way towards an open, fully globalized networked IT landscape. Industry 4.0 is accompanied by the next generation of digitization – more automation of production and business processes and, above all, artificial decision-making in all areas. However, application only works, if companies adapt to it. At the time of digitization 1.0, people talked about CIM, the fractal factory and Lean Management. Today, it is forgotten that the answers to some current questions were already described at that time – end-to-end processes, customer centricity, vital structures and, above all, the increased involvement of affected people. The fractal has already provided the aspects that are still crucial for an agile team.
The look at the fractal lives from forgetting earlier ideas of remits (see: The Fractal Company: A Revolution in Corporate Culture). The new units, the PODs, holons and platforms, behave like an enterprise within the enterprise and follow the same criteria on each level of detail.
The focus on a unit is made with a certain scaling. The self-similarity expresses the fact that the basic pattern remains the same on the different levels. For example, units, no matter whether divisions, departments or teams, process inputs into outputs based on described processes.
The fractal itself takes care of its structure and the distribution of tasks. The processes depend on the working style of each employee and can vary from one unit to another. Decision paths follow natural conditions and not general guidelines. Influence from outside is taboo, if not forbidden.
Each fractal must be viable in itself, i.e. it can produce the desired result, whether it is a product or a service. The Minimal Viable Products (MVP) are made possible by the complete coverage of related features. The purpose of the fractal is not growth, but survival – viability. This results in an over time changing purpose of a fractal due to new requirements.
The interaction with the environment, suppliers and customers, requires the continuous amelioration of the fractal. This further development is an important task of the agile team. Since the fractal is not reduced to a single purpose in the long run, the revision of existing processes creates the freedom to find and establish new activities.
- Target consistency
Decisive for the fractal organization is the consistency of the individual targets across the different levels. The ultimate goal is the fit overall fractal. Inconsistent targets would burden the overall amelioration. This means that a fractal cannot be simply detached from the overall context, but that, in addition to its own survival, it also takes into account the survival of the whole. Nonetheless, should a split-off occur, then it is a matter of creating a new whole – remember 3M, who have created a previously non-existent offer and a new business area – Post-It.
One should not be irritated by the angular structure of the fractals although today’s agile teams tend to be portrayed in a more rounded way. This does not alter the aforementioned characteristics. It’s about understanding the units that are nested within themselves.
Bottom line: While in the nineties of the last century the emphasis was on the use of new technical possibilities, today the need for action arises from the unimaginable acceleration of the business and the dissolution of geographical distances by the Internet. Standard processes are performed by computers at the speed of light. Everything else people have to do as timely as possible. This requires agile teams that are similar to each other, organize themselves, and are viable, continuously ameliorate and follow common goals. In addition, cross-sectional fractals are needed to provide standard services such as IT, accounting, human resources, etc. This allows the value-adding fractals to concentrate on their business. It makes work easier to remember and reuse the insights of the past, such as the idea of the fractal – the archetype of agile teams.
In business, decision-makers feel free of the small influencing factors. And yet the flapping of tiny undertakings can create a huge storm. More and more computer power enables increasingly complex calculations of these micro influences, which are used as the basis for decisions. Especially indecisive top managers, who have a hard time making decisions, like to hide behind such calculations. The basis for a decision is for them not the convincing forecast or the feeling for a good business, but the result of a calculation that is based on assumptions, which results in the resulting variables. What the technocratic decision-makers oversee is the fact that this kind of decision in the context of the digital transformation will be taken over by the computers and thus announces the end of the technocrats.
The following reasons result from their world view, which, far from vision and gut feeling, lose sight of the decisive part of success.
- Factual constraints as basic conditions
The compelling necessities are reasons for a decision, which cannot be influenced by decision-makers. This forces them to make decisions that they do not actually want to make, but have to. The basis for this is the reporting system that uses key figures to make weak points visible. This form of externalization is typical for someone, who does not feel responsible for his actions.
- Technical progress as a goal
The effects of the reign of experts have so far been particularly evident in totalitarian states. The planned economy relied on strict guidelines and the allocation of resources by experts, who develop and decide the solutions on a drawing board without consulting the people concerned or to use their abilities. The selective perception and the Semmelweis reflex prevent these nerds from making a holistically justifiable selection.
- Fairness as a blind spot
The logic of the measurable facts overlays the view at the interaction of quantitative AND qualitative variables, which influence each other with a time delay in complex effect networks. Above all, subjective aspects, such as righteousness, are difficult to grasp and are ignored by experts, because they can hardly be incorporated into a formula. Digital transformation makes it possible to calculate more, but then the machine no longer needs technocratic decision-makers, because the algorithm can do that by itself – better, faster and more reliable.
- Rationalization as a Reason
Since the digital transformation began in the seventies, the image of a company has changed. While Henry Ford has done everything he could to vertically integrate the whole aspects of the value creation, today’s activities are not only distributed among different companies, but even worldwide, with the aim of achieving the lowest possible depth of production. People as actors are successively replaced by machines. The remaining tasks will be outsourced to third parties as cheap as possible. Technocrats act like sport addicts, who cannot stop becoming more powerful and fitter at the same time until breakdown. And that in spite of the fact that they are sawing off the branch, on which they are sitting
- The human being as a statistical-technical function
Even though the perceptions of the employees and leaders are hard to transfer into numbers, statistics provide a remedy – for example, to describe personal motivation at work: In Switzerland, in 2016 three aspects were most important to employees: a good relationship with their colleagues , an exciting job and cheap working hours. It is more convenient to deduce the measures from such calculated results than to talk to the own staff, what they think is right. Decision makers who use formulas to calculate their decisions are as anachronistic as the horse-drawn coachman more than a hundred years ago.
Bottom line: Today’s deciders are stuck in a corset of compliance, general data availability and unmanageable VUCA. They forget thereby the decisive part of success – the people. Everything happens so quickly everywhere that the well thought-out reaction is no longer possible. The comprehensive breakdown and investigation of a fact into its components cannot be accomplished with an extra effort. Digital transformation automates most routine activities – and caution! Also the technocratic decision-makers will soon no longer be needed, because in the future the employees are making the decisions, since they are closer to the customer and on site. What remains is the overall management of the company, which can no longer be delegated to a formula that makes a prepared decision. The intuitive entrepreneur, who relies on his gut feeling and is committed to ethical values, replaces that way the technocrats, who become incapable of making decisions because of their corset. The digital transformation, which is seen as the last resort for avoiding personnel costs, replaces its promoters with corresponding software and initiates the end of the technocrats.