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Digital transformation represents the critical response needed by organisations to meet rising customer expectations, deliver scalable, individualised experiences, and respond to market forces with ever increasing levels of business agility. Digital services and disruptive technologies such as cloud computing, robotics, AI and big data combined with optimised operating models enable organisations to drive innovation and respond to internal and external events quicker and cheaper than ever before.
Interestingly, according to a leading research and advisory firm, over 60% of executives believe that they arebehind in their digital transformation programmes. Notably, the will to drive change and availability of funds are identified as the key barriers to success within many organisations. Whilst digital transformation is, of course, enabled through technology, these observations should remind us that the human dimension is as important as technology. What we stand for and how we behave represents the fundamental concepts of ethics and, if organisations want to deliver enduring success in a digital world, they will need to ensure that above all, they understand the need to act ethically.
The need for ethics
Ethics is the practice of making a principled choice between right and wrong, revolving around how people ought to act, not how they do act. And whilst the topic has in the past, struggled to gain acceptance from the business community, things are thankfully, very different now. Ethics is not just an important consideration within an organisation, it represents a key differentiator in a highly competitive market where reputation and values are now as important as products and services.
Whilst ethics is clearly something all organisations with a digital transformation agenda should actively embrace, the most difficult challenge will be at an individual level – organisations do not make decisions, individuals do. Digital professionals at all levels will need to determine what the ‘right’ thing to do actually is from an ethical perspective. Notwithstanding the level of ethical awareness or ethics training that may or may not already exist within organisations, what is considered ethical can vary across individuals, groups, religions and cultures, and in a global and fast-moving digital society, these leave considerable room for interpretation.
Even when the right course of action is clear, real-world competitive pressures can cause individuals to make decisions that could have damaging consequences for others. Being ethical will ultimately mean having the skills and moral courage to challenge existing norms and act in an ethical manner. So, in a digital society, what does being ethical actually mean and how can those involved in designing, developing and deploying digital services translate ethical principles into professional behaviours that will underpin digital transformation initiatives?
Business ethics for digital organisation
When organisations act in ways that are deemed unethical by others they are likely to attract adverse local, national and even international media attention. The events surrounding Volkswagen especially, will not be easily forgotten. Once a household name throughout the world as a pioneer in motor vehicle engineering, Volkswagen is now likely to be remembered more for its unethical behaviour than for any of its previous achievements.
If organisations are to deliver digital success, behaviours that reinforce trust and demonstrate integrity will be as important as the technical challenges that they face, such as application integration, cybersecurity and data governance. Digital initiatives have the potential to deliver sustainable benefits and increase the value of the organisation in the long-term, but these benefits must be tempered against the issues raised by declining trust, prompted by the unease at the way in which some organisations are exploiting digital technology.
Confidentiality and data security issues remain; not only do breaches of information occur at unacceptable rates, organisations have been reluctant to inform those affected when they do. Equally, concerns regarding accountability are becoming more vocal as existing mechanisms may no longer be valid, or worse, compromised by the growth of AI and machine learning algorithms to make autonomous decisions.
Top 5 ethical principles for digital transformation
What is becoming clear is that trust in the digital economy is only likely to be achieved if digital professionals are willing to make ethical decisions despite working in highly competitive environments where the desire to rapidly deploy digital services is likely to prevail over the need to consider the ethical implications of doing so. Five ethical principles for digital transformation:
1. Design for privacy, security and integrity
Whilst the opportunities to generate innovative and lucrative insights from big data are likely to be significant, so too are the risks from perceived unethical behaviour, whether actual or merely unintentional. How data is collected, managed and used is not just a legal issue, it is an ethical issue.
In the digital world, transparency and integrity must be the core values that guide professional behaviour. Organisations must use data in responsible and ethical ways; and that means not using it in ways that are considered intrusive, manipulative or disrespectful to others. Being transparent means that organisation must state their intentions regarding data usage and allow their customers to provide their consent. Organisations are often criticised for the amount of customer data that they collect and monetise. Part of the challenge here is the disconnect or lack of transparency around the value exchange between customers and service providers. Any benefit gained from collecting personal data must be shared by both parties and not exploited for monetary gain.
The concept of ‘informed consent’ is a key principle within ethics, referring to permission granted in the full knowledge of the likely consequences. This represents a significant challenge to organisation harvesting data, especially personal data for analytics as very little may be known about the intended use of the data when it is collected. In reality, obtaining informed consent may be impossible or prohibitively expensive owing to the scale of the task but, that said, the principle should still be adopted during the design and development of digital services where possible. Even then, informed consent will remain the subject of some debate as organisations will still need to consider both the validity and scope of consent provided if agreements are mandatory to access digital services.
Already, concerns have been raised over the ability of mobile phone software to track individuals’ movements even when the location services feature on the phone is inactive and reports that facial recognition applications are being used in certain countries have a darker objective - to collect personal data for reasons that are likely to be less than sincere.
2. Promote trust
Data consumers, whether they are individuals, groups or organisations must be able to trust the digital services and the data they are using. Those who collect and manage data must uphold the principle that its integrity must be assured if it is to be of value to consumers. Assuring data integrity must mean that organisations have a duty to ensure that the data they hold is subject to robust governance and audit procedures. Simply put, organisations must know that what was put there hasn't changed.
Digital infrastructures provide the capability to not just hold data, but to enable it to be made available to others for a multitude of uses, including validation, replication and analysis. If digital consumers are to trust the underlying data driving the services they use, it must have clear provenance, end-to-end traceability from source to the user interface, and be of sufficient quality, fit for its intended purpose. If the provenance and veracity of the data cannot be verified it creates a significant level of risk for those consuming it – once the data has been processed, any actions undertaken as a consequence can’t be undone.
A 2014 survey by the Pew Research Center in the US found that only 11% of individuals were at least ‘somewhat confident’ that online video and social media sites would keep their personal data private. Part of the challenge is the difficulty of segmentation of consumers by their attitudes to privacy, which are context-specific and defy generalisation. But it’s a challenge that businesses need to address: nine out of ten internet users in the UK and the United States would avoid doing business with companies that do not protect their privacy.
Organisations who are racing to deliver ‘the art of the possible’ without acknowledging the core principles of privacy, security and integrity are likely to leave themselves exposed to high levels of ethical risk.
3. Beware of bias
Unintentional ethical behaviour can be caused by many things, but one of the more likely reasons will be due to the sub-conscious biases that can influence human behaviour. Confirmation bias is probably the most well-known example, where individuals seek or interpret information in a way that that confirms their beliefs, hypotheses or expectations and dismiss opinions and information that are contrary to these. For example, ‘cherry-picking’ data that will be used to support digital transformation business cases or to drive the testing of digital services is likely to raise ethical concerns with those expecting such activities to be performed with a high level of integrity and impartiality.
When there is bias in data there is a real risk that systems that consume this data will inherit that bias. Of particular concern must be the machine learning algorithms that are used to make millions of decisions every day. Warnings have already been aired regarding algorithmic bias, with experts suggesting that such bias is now pervasive in many industries, with little action being taken to identify or correct it. A worrying thought considering machine learning is now moving into many industry sectors including medicine, finance and law.
The answer to the question of bias is, of course, ‘transparency’. Digital professionals will need to challenge status quo behaviour and actively identify hidden biases that may be present as they develop, assure and deploy digital service. Again, consumer trust must also be established and maintained, by ensuring customers buying systems using AI and machine learning algorithms know how the inference models have been built and the data used to drive them.
4. Ensure there is accountability
Inference models and algorithms are fundamental components within the burgeoning range of ‘smart’ digital services that provide an artificial intelligence and machine learning capability. Owing to their ability to combine social data with decision-making engines, concerns have grown about the extent to which clear accountability structures can be maintained. For example, if algorithms are used by financial services organisations to make decisions that would normally be made by qualified and regulated professionals, questions must be raised around where accountability lies. Organisations seeking to develop digital services must, therefore, ensure that these services are not used to avoid or reduce corporate accountability.
5. Promote an ethical culture
Organisational culture can be described as the set of shared values, beliefs and norms that influences the way individuals within it think, feel and behave. Values especially, are important as they articulate what the organisation stands for, such as ‘providing an excellent digital experience’ or ‘excellence through innovation and teamwork’. Whilst corporate values can be readily found on corporate websites, publishing a list of values is not the same as adopting values. Value-driven organisations are those that actively demonstrate their values and use them to guide their behaviour, even doing so means making some difficult decisions.
Whilst digital transformation has the potential to create opportunity, value and success at all levels within the organisation, these must be achieved through fairness, honesty and integrity. Digital organisations, therefore, have a moral responsibility to safeguard their employees from taking unnecessary risks that could ultimately prove to be damaging to both the individual and the organisation. Let’s not forget that professional reputation is as important to individuals as it is to organisations.
Ethics for digital success
In the digital economy, the successful organisation will be the one that is not only aware of ethical values such as trust, honesty, fairness, confidentiality and accountability, but actively adopts them to do the right thing and make decisions that are above reproach.
Ethics must no longer be thought of as just a marketing tool that has no real influence on the culture of digital organisations, but instead, represent a fundamental set of behaviours that should be exhibited by all those who have a vested interest in digital transformation. If there was ever a need for ethical principles for digital transformation, it must surely be now.
An article by Dave Yardley, author of the book ‘Practical Consultancy Ethics’.
