facebook linkedin2 twitter

2021 Digital Convergence and
Organizational Creativity

12 trends that dominated the enterprise landscape in 2021

This is the 11th year of digital transformation and the Fourth Industrial Revolution (4IR). Yet even eleven years on, the 4IR is still embryonic. Its impact on the five foundational sectors of information, energy, transport, food, and materials remains largely superficial. Despite this apparent inertia, every one of these sectors is exhibiting a phase change today as organizations continue to seek exponential improvements in cost and capabilities.

Business leaders are also recognizing that there is no going back to normal in the post-pandemic world. Technology convergence is opening a window to a whole new paradigm as we are forced to rethink, to enable and to reimagine what it means to be a human worker in an era of unprecedented disruption.

This year we saw COP 26 address climate change targets in the midst of social upheaval, ideological polarization, rampant debt, currency debasement, and increasing inequality – all of which constrict our ability to adapt to the extraordinary changes in mindsets necessary to move from an age of extraction to an age of creativity.

Despite these enormous obstacles, we are continuing to evolve from a centralized, hierarchical and extractive production system to one based on collaboration, information technology and algorithms, and innovative human creativity.

Our Year in Review explores the challenges and opportunities of this movement from extraction to creation. Read on for what we collectively learned this year and to find out how these insights inform new priorities for digital leadership. 


The employee experience goes beyond digital first

With the transforming operating model of digital age business as the line of sight, this year saw organizations envision employee experiences and platforms that encouraged adoption of new work practices and invoked engagement in new purpose and culture models.

What moved?

Disruption driven by the extraordinary events of the past year spurred 4IR companies to escalate the implementation of smart, adaptive technological platforms that connected the diverse assets of the enterprise into a personalized, seamless, and insightful experience for individual workers, thereby realizing a holistic, top-down experience that helped employees adopt practices and build capabilities that anticipated and pre-empted the future state.

What didn't move?

Not all business leaders recognized that a modern, digital first employee experience isn’t inherently of strategic value unless it is connected to the shifting mindsets and behaviors needed in transformative business models. Companies slow to evolve from organizational siloes and fragmented technology stacks were stymied in their efforts to realize an employee experience directly correlated to overall mission and purpose, growth and performance, as well as culture and human-centricity.

For our perspective, see LDS On: Employee Experience Strategy.


Businesses move from capacity to capability

Human adaptability increasingly became the focus of corporate operating models even as digitalization, globalization, and the climate agenda took center stage. Workers were challenged with continually developing exclusively human skills while algorithms and machines continued to usurp routine tasks.

What moved?

Disruptive economic, political, and social forces challenged business leaders driven by an intrinsic need to create new market spaces through relationships with ecosystem partners to find a renewed sense of corporate purpose and convey a clear and inspirational vision for the future to workforces already tasked with adapting to new operating models and transformative growth strategies.

What didn't move?

Many organizations are still reticent in addressing the critical societal and environmental issues that, together with digitalization, are creating the “dynamic stability” that is being defined as the new normal. Yet velocity in both human and machine decision-making is not possible in the absence of high-quality data that produces well-curated and highly contextual insights and learnings that are a precursor to marketplace agility and adaptability.

For our perspective, see LDS On: Moving from Capacity to Capability in the 4IR.


ESG rises to new heights

Investor demand for Environmental, Social and Corporate Governance (ESG) reporting rose exponentially in 2021 as demand for sustainable investments overtook traditional products.

What moved?

Companies recognized that better ESG data was required to meet reporting demands, especially as social issues moved to the forefront of public discussion during the pandemic. Evidence of carbon offsetting and the measurement of biodiversity impacts were increasingly under scrutiny in the lead up to COP 26. Both hype and skepticism gave way to a more nuanced understanding of when and how ESG is showing pecuniary benefits.

What didn't move?

Some businesses failed to proactively anticipate the growing avalanche of ESG disclosure requirements from investors, regulators, and activists. As a result, they now find themselves scrambling to catch up with higher ranked organizations. New regulations and voluntary reporting standards will continue to expand and put more pressure on investors over the coming years. This in turn will highlight companies who have lagged behind in implementing meaningful and verifiable environmental, social and governance metrics.

For our perspective, see LDS On: Making the Business Case for ESG.


Build Back Better gains momentum

As business leaders sought to navigate a range of pandemic challenges, the Build Back Better concept gained significant traction in emerging ideas around the restoration of infrastructure, the revitalization of livelihood and industry, and the rehabilitation of local culture and environment.

What moved?

4IR organizations demonstrated resilience by transforming and even thriving throughout revitalization and innovation, including adaptations to areas like production, human resources, and communications, while the Biden administration announced initiatives in areas like the provisioning of affordable health care, efforts to combat climate change, investment in children’s education and caregiving, and cost reductions for the middle class.

What didn't move?

Significant global supply chain issues triggered by the pandemic continued to challenge businesses, even while concerns about the economic inequality, the living wage and the digital divide gained momentum. Efforts to regain public trust in the private sector as one of the pillars of society stalled even as the World Economic Forum announced "The Great Reset."  


Companies look beyond hybrid

Unexpected and dramatic business accelerations continued in 2021 as institutional and employment policies, strategies, and practices sought to keep pace with worker flexibility and well-being, technological adaptation, and new social contracts with the workforce.

What Moved?

Over the past twelve months, business leaders were tasked with guiding the shift from managing the employee experience to supporting the overall life experience of employees. This entailed engaging in a new social contract with workers while also enhancing and augmenting human capabilities through new technologies. Progressive companies rewrote worker contracts to provide flexibility in how, when, and where work is performed.

What Didn't Move?

Many organizations struggled to maintain parity with the workforce by ensuring that those working remotely felt as included as those in the centralized environment. For some, protection of intellectual property became paramount even while digitally augmented experiences for remote workers fell short of expectations.

For our perspective, see LDS On: The Future of Work is Beyond Hybrid.


Digital strategies embrace sustainability

Digital strategies that promoted inclusivity, trustworthiness and sustainable business practices rose to prominence over the past year, seeking to promote confidence in new technologies, renewing efforts to bridge the digital divide, and reinforcing worker well-being.

What moved?

Following the International Business Council (IBC) initiative to identify a core set of sustainable value creation metrics centered around the principles of governance, planet, people, and prosperity, many organizations were encouraged to adopt these as a framework for future dialog and collaboration on shaping the digital economy and society.

What didn't move?

Several key areas remain largely untapped, including high-quality internet access and adoption for all; the development of new, outcome-based, and participatory governance mechanisms to complement traditional policy and regulation; and the development of innovations that allow everyone to benefit from data while protecting the legitimate interests of all stakeholders.

For our perspective, see LDS On: Building an Inclusive, Trustworthy & Sustainable Digital Future.


Convergence fuels digital transformation

Organizations are adopting digital and innovating at an unprecedented speed since the onset of the global pandemic. A holistic and simultaneously converged and coordinated approach to transformation was adopted by many companies in lieu of incubated or piecemeal approaches common in past years.

What moved?

The majority of successful digital transformation efforts over the past year were marked by the appointment of a centralized digital transformation team and were implemented across several departments or functions simultaneously. This approach was often coupled with increased technology convergence, or the combination of two or more different technologies to create a more disruptive and powerful end product. For example, IoT, artificial intelligence, and blockchain working seamlessly together.

What didn't move?

Transformation efforts limited to one department or function at a time, with the ultimate goal of extending this approach to other departments sequentially, resulted in short circuiting the breakneck speed of business transformation required during this second wave of the 4IR. This approach limited convergence on a broad scale.


Scalable learning usurps scalable efficiency

Constantly reskilling the workforce as 4IR digital technology and automation gathers momentum meant that organizations sought to inspire human potential rather than relying purely on the old model of driving productivity.

What moved?

Unprecedented advances in automation over the past year meant that progressive companies sought to move beyond the 3rd Industrial Revolution’s focus on scalable human efficiency to a model that embraced the pursuit of new value for all levels of the workforce through a learning mindset driven by curiosity and exploration. This meant tapping into information flows and capturing emerging knowledge from both within and outside the company.

What didn't move?

Many organizations remain mired in a model that demands ever increasing levels of worker efficiency rather than one which acknowledges a new paradigm by putting the human in the center of every value proposition that requires creative collaboration with ever more powerful machine counterparts.

For our perspective, see LDS On: Learning on Multiple Timescales.


Essential technologies become human-centric

What moved?

In particular, the combination of certain technologies influenced organizational approaches to business. These included software algorithms that automated complex decision-making tasks to mimic human thought processes; applications that used contextualized digital information to augment the user’s real-world view; the use of machines with enhanced sensing, control and intelligence; and digital ledgers that use algorithms to record and confirm transactions with reliability and anonymity.

What didn't move?

Even as technology made significant gains in the business arena, and despite organizational efforts to harness human creativity in lieu of repetitive tasks usurped by machines, 2021 saw droves of workers leaving their jobs to focus on a healthier and more fulfilling work-life balance.


Worker fulfillment rises to prominence

The "Great Resignation" suggests that we are at a tipping point in workplace history. Legacy work practices with their origins in the 1st Industrial Revolution are no longer acceptable to employees who desire a greater sense of purpose at work.

What moved?

As the quest for personal fulfillment and a healthy work-life balance gathered momentum, progressive business leaders recognized that contemporary workers expected the organization to help them improve not just their satisfaction in the workplace but also their overall life experience. This “holistic life” mindset demands the elimination of mundane work routines and practices that fail to contribute to a unified sense of organizational purpose and a culture that fosters shared values and an inspired workplace ethic.

What didn't move?

Organizations are persisting with long-established routines and work practices that hybrid-enabled employees see as time wasting exercises, including mandatory attendance at centralized locations even as pandemic limitations are rescinded. Managers who are not empowered to embrace change see the energy and culture of the workplace stagnate as organizations continue to demand the fulfillment of what are perceived as nonessential activities.


Culture and AI: Perfect Together

Thoughtful implementation of artificially enhanced tools can help to bolster the quality of decision-making and increase efficiency, which in turn can build confidence and trust in the technology, resulting in more effective human-machine collaboration, collective learning and discovery, and team morale.

What moved?

Companies that deployed AI effectively scaled its use across the entire organization and structured human-machine interactions to maximize mutual learning possibilities. This approach was perceived to have a profound effect on company culture through improvements in how teams learn and how people work in concert. As trust in AI as an integral, strategic component of the business increased, so too did overall worker confidence in its ability to create or add value to everyday macro or micro interactions.

What didn't move?

In a quest for rapid digital transformation and technological gain, some organizations failed to demonstrate a clear understanding of how work should be ideally distributed based on the optimal symbiosis of human and machine.


Data reinforces its status as cyber oil

As analytical tools mature, more 4IR companies are using state-of-the-art data capabilities to generate rapid insights about customers, employees, and other stakeholders while also using this information to revamp processes and revolutionize decision-making.

What moved?

Increased government regulations concerning the collection and handling of data, along with concerns about reputational damage from potential data breaches, led to significant improvements in corporate data governance. Business leaders demonstrated greater understanding of the role of data in the creation of competitive advantage and market differentiation, as well as its part in rethinking business processes, making smarter decisions, and modifying products and services.

What didn't move?

Many companies continued to set ambitious and often unrealistic targets for developing data capabilities. This left them at a significant disadvantage, especially given the pervasive existence of data coupled with the accelerating pace of technological development.

These twelve trends are indicative of the ways in which the 4IR is escalating digital convergence while also promoting a new wave of organizational creativity that has profound implications for the future of work. As we consider the ongoing paradigm shift from extraction to creation, and the movement from capacity to capability, we consider several key takeaways:

  • Business leaders must promote a forward-looking agenda that acknowledges human worker adaptation, as scalable learning will supersede scalable efficiency even while new technologies make far-reaching changes in the five foundational sectors of food, information, materials, energy, and transport.
  • Building organizational resilience ahead of future crises begins with the recognition that digitalization, globalization, and the climate agenda will take precedence as top-of-mind economic, political, and social concerns for the foreseeable future. Making bold moves to prioritize and shape business strategy synonymously with these game-changers is essential.
  • As enhanced data and analytics and increasingly sophisticated algorithms transform industries at an ever-quicker pace, the strategies and organizational cultures of leading companies must seek to garner ever greater power, accuracy, and trustworthiness by facilitating the automation of complex decision-making tasks.
  • Leaders must recognize the many signals of accelerating disruption and increasing convergence where people, technology, and business intersect. This will continue to accelerate exponentially, creating disruptive and powerful end products and services at lower costs while new networks, enhanced security, and intelligent software development challenge 4IR organizations to remain competitive in an increasingly complex business arena.

With 2021 behind us and future-leaning perspectives top of mind, we have a vision of what's to come in 2022.

  1. Rethinking Competitive Advantage – New Rules for the Digital Age. Ram Charan & Geri Willigan. 2021.
  2. The Adaptation Advantage: Let Go, Learn Fast, and Thrive in the Future of Work. Heather McGowan & Chris Shipley. 2020.
  3. The Adaptable Organization. Deloitte. 2021.
  4. The Hidden Cultural Benefits of AI. BCG. 2021.
  5. Rethinking Humanity, ReThinkX. 2021.