In this edition of Author Talks, McKinsey Global Publishing’s Eleni Kostopoulos chats with Tsedal Neeley, the Naylor Fitzhugh Professor of Business Administration at the Harvard Business School, about her new book, The Digital Mindset: What It Really Takes to Thrive in the Age of Data, Algorithms, and AI (Harvard Business Review Press, May 2022), cowritten with Paul Leonardi. As robotics, artificial intelligence, and other hallmarks of the Fourth Industrial Revolution further permeate business sectors, Neeley implores people and organizations to brush up on their digital literacy and provides a framework for doing so—regardless of existing know-how. An edited version of the conversation follows.
What problem are you hoping to solve with this book?
The problem we were trying to solve, or the opportunity we were hoping to create, with this book was to try to get into the world of digital, to help readers figure out what types of digital skills they need to participate in and contribute to the digital economy.
About four or five years ago, I started to get into the work of trying to understand: What does it mean that machine learning, data, and algorithms are steadily making it into how we work, how we live, how we behave, and how we serve our customers and clients? And what does it mean for individuals, teams, and organizations to participate in this arena?
This book was trying to figure out: How do we distill all the insights that people need to begin to participate fully in a digital environment?
Was there anything that surprised you in the research, writing, or response?
A number of things surprised me as I researched and wrote this book. The first thing is how there are millions of definitions for the word digital. When you ask people, “What does digital mean?” for one individual, it’s about data. For another individual, it’s about the technology. For others, it’s about governance and structure. We had to quickly determine how we were going to frame this work so that anyone could enter the conversation with any baseline that they may have—from a data scientist to someone who’s never thought about what it means to become more digital in their professional lives.
We wanted anyone to be able to enter the conversation from wherever they are and be able to not only understand the content of the book but also find ways to increase their digital mindset. What did that mean? It meant that we didn’t just talk to people to interpolate or to learn from people’s experiences, which is what a lot of business books do—you talk to a lot of people, you collect a lot of data, you draw from experiences, you generalize, and then you gain insights.
Instead, in this book, we extrapolated from those who are at the front end of distribution—experts in data work, experts in machine learning, experts in algorithms—so that we could distill their expertise into the book, which made it very difficult to write. You’re dealing with technical content, you’re dealing with process content, and you’re trying to speak to a very broad audience and write it in a way that’s 100 percent accessible to all.
What does it mean to have a digital mindset?
When we were writing the book, we were inspired by an Albert Einstein quote. He says, “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” When we enter the digital mindset arena, we have to change how we frame everything that we do. It’s a process of changing how we think—how we think about collaboration, how we think about computation, and how we think about change. When you put all of those through the lens of the digital mindset, you’re operating differently, and we attempted to capture that.
The digital mindset is not just about technical skills, although you have to have some technical skills. It’s also a way of thinking—a way of thinking about data, devices, and technologies as well as how we operate in an organization. The other thing that we capture in this work is the minimum threshold, or the minimum digital literacy or fluency one needs to participate and contribute in a digital context. We talk about this in terms of the 30 percent rule.
The digital mindset is not just about technical skills, although you have to have some technical skills. It’s also a way of thinking—a way of thinking about data, devices, and technologies as well as how we operate in an organization.
The 30 percent rule was inspired by the many years of work that I have done looking at English as the common language in globalization, or in global work. Non-native speakers of the English language only need 30 percent of what a native speaker has in order to fully contribute and participate in a global organization. If 12,000 words means mastery, about 3,500 to 4,000 means working fluency. We applied this logic to identify exactly what people need [to understand the digital mindset]. The whole book is about the 30 percent rule of digital literacy.
Should we worry about robots taking over our jobs?
With a digital mindset, what we end up learning is that humans with digital skills will replace humans without digital skills. For far too long we’ve worried: Will machines replace us? Is automation going to be the end of many of our careers? But the reality we’re seeing years into this digital ecosystem, or digital context, is that people who have a digital mindset will be the ones who will be leading the way, compared to people without a digital mindset.
This is the reality. It’s not going to be tenure, or seniority, or rank. It's going to be: Who has a digital mindset, and who doesn't?
Digital tools for a hybrid-work world
How can organizations reconcile company culture with hybrid work?
It looks like hybrid work has won, which means many organizations are trying to figure out how to incorporate remote work along with in-person work, no matter the cadence, to create their new cultures. The difference between collaboration with humans and collaboration with machines is important to understand.
In this remote/hybrid era, collaboration with humans means we need to make sure that we are always aligned—that we don’t fall prey to the problem of being out of sight, out of sync, and out of touch. It means we work hard to make sure we’re fully aligned on our goals, we’re fully aligned on our shared norms, and we’re fully aligned on how to connect personally and professionally. This requires us to understand how to build trust virtually, how to make sure that we’re using the right digital tools for the right work objectives, and how to make sure that we are creating and maintaining an inclusive culture.
In this remote/hybrid era, collaboration with humans means we need to make sure that we are always aligned—that we don’t fall prey to the problem of being out of sight, out of sync, and out of touch.
When we work with machines, it’s a different proposition. Machines like AI bots or actual robots are steadily entering workplaces. We need to understand that we can’t treat machines like humans. They’re very different. We need to participate in the learning process of machines without getting frustrated, losing trust, or abandoning them. We need to figure out how to use machines for human augmentation.
For example, at one company, within the course of five days, people are trained to use robotic process-automation tools. It removes repetitive work so that people can do the types of things that are innovative and require actual problem solving, as opposed to spending so much time doing repetitive work. That’s what working with machines means, and this is going to be an increasing modality at workplaces.
What does this shift to hybrid mean for privacy?
After the remote-work revolution that we’ve all lived through and will live through for a long time to come, what’s happened is that every organization has had to grapple with the acceleration of virtuality. With that comes the introduction and use of many more digital tools. People say to me all the time, “I barely knew what Zoom meant and what Slack and Microsoft Teams were. Now they are my lifeline.”
When you introduce new digital tools, you begin to make your organization more vulnerable. When you’re dealing with a lot of data—your own, your employees’, and that of customers and other stakeholders—you make yourself vulnerable. Boardrooms are now regularly talking about cybersecurity because the impact of one major breach could be felt for years and years and years. Cybersecurity is included in the book because the way it plays out in an organization relies on how every individual needs to understand through training how vulnerable they are. They need to recognize that they should not click on that foreign email. They need to understand that certain things require encryption. When they’re working from home, using personal devices—particularly in some industries—is dangerous business.
When you’re dealing with a lot of data—your own, your employees’, and that of customers and other stakeholders—you make yourself vulnerable. Boardrooms are now regularly talking about cybersecurity because the impact of one major breach could be felt for years and years and years.
It’s so important for individuals to ensure that they’re participating in keeping their organization safe and for leaders of organizations to build systems and work with fantastic cybersecurity vendors to protect the perimeters of their organization, whether people are physically present or working from home. Cybersecurity has to be one of the important factors that every single person needs to be worried about.
Executing a digital transformation
How can organizations make the most of their data?
People think that you just have data, when actually, they’re produced. What we have and what we don’t have is constructed by the decisions that are made on what data to collect, and what data not to collect. To have a data-informed environment is incredibly important, but that requires us to make decisions about what we’re collecting, what we’re interpreting, and how we’re interpreting it.
The other aspect of data-related work is to make sure that we have the knowledge or the know-how to ask the right questions in order to make informed decisions. To ask the right questions, we need to have a sense of statistical reasoning. We need to understand how data work. We need to understand a bit around technology: Where do we find our data? Where is our data housed? Do we have standard data all across our business units and organizations so we can create algorithms to benefit our stakeholders internally or externally? Do we have great material there?
It’s also really important to understand that when we talk about data, we need all to worry about data privacy—data security, data structure, data governance—and it’s a shared responsibility in an organization. It’s not something where you say, “Those people there worry about data.” We all need to worry about data, so we need to understand what they are, how they work, and how to use them.
What is digital exhaust and why is it useful?
In organizations, when we do our daily work—whether we’re on email or we’re looking at a particular dashboard—everything that we do creates data [or digital] exhaust that can be useful, particularly if the company is collecting the data exhaust systematically, analyzing it, comparing it internally, and combining the data, the behaviors that are standard, and what we learned to figure out how to maximize work.
In our work, we have found that through data exhaust, people in organizations can discern who knows what, who knows whom, and how to match the right people with the right set of knowledge in order to advance the organizational goals. We’ve also found that you can identify where people are duplicating work within a system. With everything that we do today, it’s so important to understand we’re leaving a footprint that could be useful for the organization, and more and more companies are starting to pay attention.
In our work, we have found that through data exhaust, people in organizations can discern who knows what, who knows whom, and how to match the right people with the right set of knowledge in order to advance the organizational goals.
How can organizations prepare their culture for a digital transformation?
Change can definitely be hard. When we talk about digital transformation, there’s no doubt that we’re talking about people having to develop new insights and skills, and cultures having to change so that they’re using data and technology in ways that serve stakeholders better. We’re also talking about the use of digital tools that may be foreign to us.
To prepare people, organizations need to adopt a continued-learning approach, where people are learning something new on a very regular basis. When you talk to companies that are at the front edge of digital work and digital transformation, they say, “We should learn something new every single day.” Build a curiosity. Attend a seminar. Attend an entire course, whatever it may be. Many organizations are building learning portals so that people can pick and choose what they need to learn. The reality here is that when we move into a digital realm, we need to have a wholesale renewed way of thinking.
We need a digital mindset. It’s a combination of seeing the possibilities for the future by changing our attitudes, by changing our behaviors, by putting on the right lens, by understanding what’s essential and what is not, and by developing our skills around the 30 percent that we’ve identified.
Those things require time and effort, but they’re not as difficult as we think. In order to be digital savvy, if someone invests nine months to a year to really immerse themselves in certain key areas, they will be ready to truly contribute to a digital environment.