The 5 Generations - of digital maturity
The 5 Generations are based on Pernille Kræmmergaard research over the past more than 20 years and our practical experiences from companies and organizations. The framework has evolved from originally containing 2 Generations. With the digital and technological development, Generation 3 was developed in the late 2000s, the 4th Generation in 2016 and Generation 5 in 2019. And there will be more generations, and the contours of Generation 6 have gradually begun to draw, but the technology that is seriously expected to draw the 6th Generation is not mature enough yet that we find it relevant to build it - cf. that we only deal with technologies that are so mature to be seriously used in practice.
The figure below shows The 5 Generations. At the bottom step, which is Generation 1, it is mostly about switch on workflows and processes. At the preliminary top step, Generation 5, the organization, and the company can, with the greatest obviousness, use the digital opportunities to become better at providing services and products to customers and citizens, and preferably before they even know what they are missing and as a motive for sustainable growth and development.
The generations in the figure above are depicted as a staircase because it is partly difficult to skip steps, and an organization will typically be on several steps, if not all, at the same time. An organization that has taken the trip all the way to Generation 5 and has the organizational skills that this preliminary top step requires - very few have - will still need the skills and part of the thinking and leadership practices that lie in Generation 1, 2, 3, and 4. But the digital mindset will be different.
In the following, each of the generations will be briefly outlined, so you get an understanding of the characteristics and differences of the five generations, and how the use of digital technologies, IT, and data play together with strategy, organization, and leadership and cannot be seen independently.
In Generation 1, the question is asked; How do we support our existing practice of digital solutions and automated simple manual tasks? It is about savings, especially about letting customers and citizens serve themselves. Forms and information move online. It is often the individual department, or silo, that makes local decisions about which systems and technologies its employees and customers should use, just as simple, manual processes are now automated. In Generation 1, we become aware of digital channels: Websites, self-service, apps, and which channels we should be on and especially why. We also become good at seeing opportunities to save resources when it makes sense, for example, to automate simple workflows. And we learn to make precise requests to solutions when we know exactly what we want, for example, a simple automation robot, or a new website.
In Generation 2, the question is asked; How do we do, what we already do, better - how do we implement new standardized processes and systems? It is no longer enough to power customer-facing activities. Now the focus must be on the internal processes and on the connections between the customer- and citizen-oriented digital solutions (front-end) and the internal systems (back-end). Internal processes must be standardized and integrated and more efficient. The IT systems must be able to talk to each other, and the tailor-made local systems from Generation 1 will be replaced by standardized systems. The increasing demands for standardization mean that processes and workflows must be adapted to a greater extent to the systems rather than the other way around. Therefore, in Generations 2, we become aware of ensuring the organizational implementation of new technologies. The internal governance and management of both individual projects and the entire portfolio also comes into focus, as a way we can ensure standardization and realization of financial gains.
In the first generations, technology and strategy are about automating and streamlining internally and externally and with savings as a significant part of the motive. The digital is not seen as something that goes beyond the purely technological, and the strategy in relation to the technologies is first and foremost to reap the resource benefits of powering existing practices. It is not a question of using the technologies as a motive for the company's development of new products and services.
In Generation 3, the question is asked; How do we ensure that what we offer our customers is right - how do we improve our services and products or deliver them in new ways? Technology is now integrated into products and services, so the customers’ satisfaction can be improved, and market shares maintained. The focus on the internal processes in Generation 2 is being replaced by a focus on customers and citizens, and how we can use digital opportunities and technology to solve the problems they experience. It requires closer collaboration with both customers and technology suppliers and new development methods where experimentation and innovation take place. At the same time, the technologies continue to be used to purposefully optimize and exploit opportunities for savings. In Generation 3, we become aware that digital opportunities and technology become the motive for development and not just something that is invited in when decisions have been made. We will be good at using open innovation in recognition that not all smart minds are employed in the organization. And we become preoccupied with agility, learning, and user experiences.
In Generation 4, the question is asked; How can we, together with others, offer the end customer coherent services and products and develop new business models? Here we do not just ask how the technology can be used to provide customers with new services and products or deliver them in new ways, we are also starting to see that newer technologies offer opportunities to change the business model. The starting point will be to strive to meet the customer's basic needs in coherent ways to ensure a competitive advantage. Often a prerequisite will be, new forms of organization with external partners in ecosystems. In Generation 4, we will be good at focusing on what we need to be particularly good at, to offer customers services and products that meet their basic needs and challenge ourselves on whether old assumptions and business models still hold. But more importantly, we get an insight into the importance of data, and of working systematically with metadata, data principles, data access, etc. And we become aware that the collaboration in ecosystems, places demand to the company's digital architecture and the possibilities for external integration and data sharing.
In Generation 5 the question is asked; How can we offer the customer personalized services, create attractive work environments, and contribute to “a better world"? The work with data in Generation 4 is now being expanded, so we can use advanced prescriptive and predictive analyzes and artificial intelligence to target services to the individual customer. It is a crucial break with standard products and services, and in relation to Generation 4, the relevant services can now also be offered proactively before the customer himself demands them. It places great demands on transparency. Data ethics must be taken seriously, and customers must have insight into what their data is used for in an easy-to-understand way. For employees, Generation 5 means new ways of working, learning, prioritizing, and making decisions and ensuring an attractive work environment, where they have a better opportunity to use their core professionalism, which is also challenged and changed. At the same time, the company needs to navigate a number of new bottom lines. The economic is no longer the only one. All organizations and companies are expected to make a positive difference to the society in a broader sense. The UN's global goal of sustainability moves into the strategy and is something the company is measured by and for which use digital technologies is seen as a significant, if not necessary, contributor.
One can say that the first two steps show a digitization. Only from Generation 3 we begin to see the first steps towards a real digital transformation - a transformation of the company and its value creation - which becomes even more pronounced in Generation 4 and 5. It is also here that the complexity seriously increases. Now the technologies are increasingly used to drive the company's strategy and development. The use of technologies is becoming a question of how to improve and change for the benefit of customers and citizens. It affects the organization of the company and the relationship with others.
Overall, it is our experience that the leap from Generation 2 to Generation 3 is the most difficult. And this may be because many managers find it difficult to see what the leap means strategically, technologically, organizationally and to performance of the leadership in the company. It is also relevant in Generation 1 and 2, but from Generation 3 and up, it is necessary to integrate the digital opportunities and technology into the company's strategic work, and see them as motives for new, rather than an automation of the existing. It makes other demands, and requires transformation and new strategies, new forms of organization, new platforms, new bottom lines, new use of data, etc.
As mentioned earlier, each of the generations represents an independent management practice and digital mindset, and each of them places different demands to the management task. At the same time, each generation differ in opinion in many areas, including in particular:
1. Strategic purpose of technologies
2. Digital ambition and organizational change
3. Value realization with technology
4. Data and Analytics
5. Technology organization and collaboration
6. Digital Architecture and Governance
And there are certainly more, but these are the central ones. It is these 6 areas that our self-evaluation test asks about - where are you today and where do you want to be in 5 years - see more here:
In each of the generations, top managers, managers, and employees naturally also have different points of attention and each generation makes demands on the mindset, competencies, and skills.
If you want to build a deeper knowledge of the generations, we recommend that you read the book: "Digital Maturity - Strategy, Organization, and Leadership in The 5 Generations". You can learn more about the book here: