Within a constantly growing and changing IT industry, smaller competitors need to continuously adapt in order to maintain their market position. IT product life cycles are getting shorter, forcing companies to innovate their services, products, and organization, whilst also reducing costs and increasing profitability. When innovating, companies often focus on product and technological innovation. New organizational structures are introduced due to technological advancements however, these organizational structures and most especially management structures often lag or fail to adapt. In this sense, management innovation is crucial, especially in the context of project teams.
According to winners of the MMTC Thesis awards, Philipp Ferise and Paul von Hatzfeldt, the influence of digitalization on management innovation occurs across six areas; project teams, virtual teams, communication & collaboration, trust, technology, as well as leadership & management. Digitalization strongly influences management innovations and acts as an enabler or simplifier for throughout the innovation process.
The main dimensions of management innovation are practices, processes, and structures (Mol & Birkenshaw, 2009). Practices refers to the day-to-day practices of a company. Introducing agile working system Scrum, for example, can change the way objectives are set and how teams relate. Secondly, process takes abstract ideas and turns them into applicable tools. New ideas are evaluated and, if found to be useful, adjusted and implemented through internal projects. The third dimension of management innovation addresses organizational structures where a company changes its internal structure and introduces various tools and applications to change and improve collaboration and communication within the company.
Considering the work and management style of a single IT firm, Ferise and von Hatzfeldt noted the impact of management innovation and digitalization across six areas, these being project teams, virtual teams, communication & collaboration, trust, technology, and leadership & management. The company was restructured from traditional departments to project teams. This transformation was simplified by a multitude of tools and applications which not only help the team in their communication and collaboration but furthermore support the processes by storing and organizing data and information needed in their day-to-day business.
The dimension of trust is impacted by management innovations, but only partly affected by digitalization. As digitalization provides transparency of the processes and the working progress, it builds trust. Personal interactions, which are created by the management through different events and meetings, explicitly exclude digitalization and are another essential layer of creating trust. Digitalization shifts the basis of trust from personal interactions to virtual, objective-based interactions.
Digitalization in the form of technology or tools is not the final goal rather, it should be an enabler or simplifier for the execution of management innovation. Management must carefully evaluate digital tools and find management innovations that add value to the company, its employees, and customers.
The influence of digitalization on project teams means has managerial implications across all six areas and in the following ways.
- Clear communication of management decisions.
- An appropriate set of tools that fit the working requirements
- Guidelines and training on tools so that team members can immediately recognize which tool to use.
- Highlighting the benefits of particular tools and software will increase the uptake and use of it amongst team members.
- Evaluating new tools openly and transparently allows employees to learn about the tool’s advantages as well as disadvantages.
- Interactions between Scrum Masters and Project Owners (Pos) should be regular and enable learning within the teams.
- To foster a sense of belonging it is important that management not only focus on the main office but initiate opportunities to include team members from all office set-ups.