Digital Economy Dispatch #100 -- Why Digital Transformation Requires Rebuilding Digital Trust

Digital Economy Dispatch #100 -- Why Digital Transformation Requires Rebuilding Digital Trust

Digital Economy Dispatch #1009th October 2022

Over the past years, I have travelled to a lot of meetings. As a result, I have spent countless hours in planes, trains, and automobiles. And far too many nights in faceless hotels. Usually conveniently placed next to major roads and airports, but inconveniently placed if you want to experience the towns and cities being visited.

On returning from these trips after many hours of mindless travel, my wife would always ask me the same question: Was it worth it? At first, I tried to offer a reasonable response by weighing up the time and trouble it had taken to attend the meetings with the outcomes for those taking part. Was there a meaningful exchange of ideas? Did my participation make an appropriate difference to the proceedings? What did I learn from being there? And, in many cases, did it result in closing a deal for the company?

But, in the end I gave up. I just didn’t have the metrics or the vocabulary to do the task justice. It was impossible to reconcile the investment I had made to allow me to participate with the direct and indirect effects of each event. Looking at these interactions individually and collectively, I began to lose sight of any objective measures that brought both sides together. In the end I just avoided the questions and pushed them aside.

We Are What We Do

Recently I have started rethinking this time vs. impact equation. Looked at from a 20th Century perspective, much of my concern had been seen as an issue of prioritizing my time on the right tasks and assuming that an hour on a train could be measured against other things I could be doing instead.

Now, in the 21st Century we undoubtedly see things rather differently. Perceptions of how we focus our efforts have shifted with the rapid move toward a digitally connected, distributed workforce. As Richard Normann neatly summarized at the start of the digital revolution, the biggest effects are being felt because of how we now view three key concepts: place, time, and distance. In a digital era, we think and act differently due to a revised understanding of where we are, who we are with, and how we view speed of action and decision-making. No longer do we see relationships and interactions simply in terms of physical presence in the traditional ways of the past. Something deeper seated and harder to deliver has taken its place: Digital trust.

Building Digital Trust

In all aspects of our lives, trust has been a critical element of what we decide to do, who we associate with, where we place our most important assets, and much more. Yet, in a digital world, such considerations become even more important. Inevitably, as the physical world dissolves into something much more liquid, there is increased concern for aspects of value, worth, ownership, identity, attribution, and provenance. We begin to question fundamental issues about the nature of the artefacts we manipulate and the actions we take.

The role of trust in digital activities has been recognized for some time and the importance of creating an understanding of digital trust has been central to many aspects of the digital transformation journey. I was reminded of this when reading two recent reports describing significant on-going research activities to identify the sources and influences of trust in digital transformation. Both are important in highlighting the opportunities and challenges we face in building digital trust. Yet, they take quite different perspectives on the focus and approaches that are required to move forward.

A technological view

In a recent analysis from Avanade, their perspective on digital trust is strongly focused on the capabilities of the technologies being adopted by organizations to manage trust. Their position is that these technologies breakdown traditional boundaries between “us” and “them” to redefine who is a customer, to revise the relationships between employees and employers, and to reshape how products and services evolve.

Their research has looked at where and how trust is managed in large established organizations. They conclude that there are 5 types of systems that dictate the digital trust position of any organization:

• Work systems. The democratization of technology is bringing new opportunities for workers to communicate with each other and to interact directly with partners, customers, and other stakeholders. Not only is this redefining the flow of information and ideas in organizations, but it is also causing workers to question what they want from a career, challenging employers to reconsider their organizational structures, and pushing entire industries toward different kinds of values and priorities. This requires alternative ways to build trust between employers, employees, partners, and ecosystems.

• Natural resource systems. Increasing awareness of excessive resource consumption is forcing a reprioritization in many aspects of business. The limitless use of digital technologies such as cloud computing and AI is being questioned. With increased concern for responsible use of resources, trust in a company is expanded to include questions about their attitude and actions with respect to energy and the environment. From this viewpoint, other aspects such as transparency and governance are also considered highly influential in who we trust with our limited natural resources.

• Infrastructure and data systems. In recent years, we have all been sensitised to the risks digital systems face due to cyber-attacks, hacking, data leaks, and process failures. Yet, today’s organizations are also realizing that they face great pressures to open access to services, connect systems together to form networked environments, and reveal more about their operating models to ensure fairness and transparency. Consequently, they face considerable challenge to balance these concerns in an appropriate trustworthy form. Much of the current focus is to ensure change management processes are sufficiently robust to build confidence in the way this complex infrastructure evolves to meet these needs.

• Physical systems. The past few years has seen major investment to produce “smart” devices that embed software-based intelligence into all kinds of physical systems. Their ability to detect their environment and report on operating conditions has revolutionized many processes in the home and the workplace. As more trust is placed on these everyday technology solutions, there is much greater reliance on their correct, accurate, and appropriate operation. Their widespread use raises many questions about their impact and influence on our behaviours and actions.

• AI systems. There are now increasing concerns about our trust in the intelligence being ascribed to much of the digital technologies we deploy. As we begin to rely on sophisticated data-driven AI algorithms across many parts of our society, it is appropriate that issues of trust become primary concerns. It is recognized that some such systems may be influenced by bias and manipulation. But more fundamentally, the role of AI-powered systems replacing human judgement forces us to face deeper questions about fairness, inclusion, and responsibility. Issues that many organizations are painfully unprepared to address.

This work offers an important summary of the technological drivers for digital trust. Unsurprisingly, its main contribution is to highlight many of the key questions that we must address in our digital journey. Good answers remain in short supply.

A human view

In contrast, Microsoft’s latest work trend research report focuses squarely on the human perspective of trust. It is based on the answers to an extensive review of questionnaires backed by data analysis from its employees and customers in their use of Microsoft products for collaboration such as Outlook and Teams. By processing these millions of data points, their primary focus is to understand more about the evolving hybrid workplace and make predictions about its future directions.

There is no doubt that moving to remote working and online meetings has helped to reduce business travel significantly. Particularly over the past 2 years, the rapid shift to online activities has been quite a boon. By working remotely, we have had the opportunity to rebalance our lives. More time at home and less on the road. For many in my position, this has been largely welcomed.

However, this notable shift in work patterns has many consequences for those in different circumstances. What is seen by some as a break from long commutes to spend more time at home, for others feels like being trapped and confined without the interaction they need to survive and thrive. The Microsoft report emphasizes this important tension and highlights how this human perspective can be viewed as increasing the tensions in digital trust between different groups and between employers and employees.

Their observations focus on 3 key areas:

Productivity Paranoia. The impact of remote working on individual worker productivity is one topic currently receiving a lot of attention. Data from Microsoft’s research reveals an important distinction between two opposing perceptions. One the one hand, those in decision making and leadership positions have concerns about the effort of their teams. The survey showed that 85% of leaders believe that hybrid work patterns makes it difficult to trust that employees are being productive.

However, in direct contrast, data from this year shows that we are working harder than ever to stay connected. The number of meetings per week has increased by 153% globally for the average Microsoft Teams user since the start of the pandemic. Even more revealing, data from recent months shows that employees have more overlapping meetings (being double-booked) than ever before. These have increased by 46% per person in the past year.

This difference between how employers and employees perceive current levels of productivity is having important consequences in eroding the trust between them. For example, the survey shows that employers main concerns are that remote employees are working enough. Meanwhile, 48% of employees and 53% of managers report that they’re already burned out at work. Unsurprisingly, employees are looking to focus their efforts to reduce stress by getting help from their employers to ensure they are working on the right things.

People Need People. A direct consequence of the lack of trust between employers and employees can be seen in the polarized approach to the return to the office. Again, the Microsoft survey and data shows important distinctions to this issue. Although 82% of business decision makers say they are concerned to get their employees back to the office, there remains significant resistance to this request.

When asked about returning to physical offices, 73% of employees and 78% of business decision makers say that it will require something more than company expectations to convince them. Connecting with co-workers and colleagues is by far the most significant reason why employees may return (at 84%).

Undoubtedly, as this hybrid working pattern evolves, employers will be left with significant issues to address. Trust within and across teams has eroded. Now 51% of employees report that in recent months the working relationships in their current groups has weakened, and 43% report that they feel that they have lost connection from their company as a whole.

Relearning How to Work and Live. With these disconnects in mind, rebuilding the workforce is now an essential focus for organizations. The past 2 years has seen significant changes in the workforce with resignations, redundancies, reassignments, and rehires. This volatility has come at a high cost. One clear issue is that current employees openly question whether they trust their employer to have their best career interests at heart. We are left with a disturbing reality: Employers don’t trust employees to stay, while employees don’t trust their employers to look after their interests.

On an operational level, now those in place require retraining and reorientation to face the new ways of working they encounter. To maintain and grow the workforce, employers are required to become trusted providers of new skills, supply exciting and meaningful opportunities for advancement, and offer flexible environments appropriate to diverse needs.

This is reflected in the Microsoft data. They have found that 80% of employees want additional skills to do their day-to-day work to be able to accomplish their current tasks and be ready for what’s ahead. Furthermore, 76% of employees highlighted learning and development support as significant in their decision to remain at the company. Organizations will find that delivering on this demand will be expensive and distracting.

In Digital We Trust

As we move into new ways of hybrid working, we face considerable challenges to re-establish working patterns optimized for a distributed, digital workforce. We are seeing increasing tension between the business’s demands for accountability with worker’s needs for flexibility. These can only be addressed when we see this as establishing a more substantial form of digital trust within and across our organizations. Now is the time to begin that journey.

Digital Economy Tidbits

How To Spot a Data Charlatan. Link.

I love this article. It gives a very straightforward view and critique of data management, data analysis, and data science. It should be required reading for anyone who is trying to gain a realistic understanding of the state-of-the-art vs the state-of-the-practices in this area. We have far too many data charlatans who are pulling the wool over the eyes of managers, policy makers, auditors, and the general public.

If you observe data charlatans in the wild, you’ll notice that they love to spin fancy stories to “explain” observed data. The more academic-sounding, the better. Nevermind that these stories only (over)fit the data in hindsight.

My concern is that I don’t believe that the answer is as easy as this article states:

To protect yourself against charlatans, all you have to do is make sure you keep some test data out of reach of their prying eyes, then treat everything else as analytics (don’t take it seriously). When you’re faced with a theory you’re in danger of buying into, use it to call the shot, and then open your secret test data to see if the theory is nonsense. It’s as easy as that!