New forms of Digital Organizational Capital in the Isolation Economy – the New Normal?

Stefan Seidel (University of Liechtenstein) & Richard T. Watson (University of Georgia)

During the Covid-19 Crisis organizations are facing reduced economic capital (revenue) as well as disrupted human capital (employees) and organizational capital (work practices), at least temporarily. At the same time, they are building new infrastructures in terms of new work practices and technologies—they are building new digital organizational capital.

We conjecture there will be two key effects.

  • This new digital organizational capital helps compensating for the discontinuance of certain work practices that require physical presence in the workplace and thus to continue business.
  • Some of these changes are likely to persist because they have benefits that were not previously appreciated.

At universities, we see a number of different situations. Some disciplines—think of biologists or engineers—need laboratories to conduct much of their research. It is thus not surprising that some universities have decided to extend the “tenure clock” for assistant professors, meaning that they are given more time to meet the expectations for being promoted. Others—including business scholars—can continue their research, but with an increasing use of digital technologies including for video conferencing, file sharing, collaborative data analysis, and collaborative writing. While the initial reaction was to postpone academic conferences, many of them are now held virtually. Effectively, researchers are accommodating new digital work practices—they are building digital organizational capital at the level of the research community. Specific academic practices that may change or be augmented using digital technologies include data collection (increased use of data sets available online), data analysis (if different scholars are involved they will have to find ways to collaboratively analyze data sets), and of course writing. Notably, much of this work has already been done in distributed teams in the past—but now the digital component will be more prevalent across disciplines.

With regards to teaching, the vast majority of universities has virtualized their teaching at unprecedented speed and scale. New digital organizational capital—in terms of engagement practices and technical infrastructures—has been created within weeks. Even professors who were rather digitally-averse are now offering their courses online—a situation that was hard to imagine only a few weeks ago. As a community of teachers and scholars, we are rapidly learning how to curate content that allows for effective distance learning. We are building dynamic teaching capabilities.

Similar developments can be observed across industries. Established work practices are replaced by new digital work practices. Of course, this isn’t possible for all organizations, some processes require more time to be digitized, and some processes have physical and location requirements that seem impossible to digitize at this point.

Clearly, one of the key questions is which of these changes will persist when the quarantine is lifted—and how they will enable organizations to be more effective and more efficient after the crisis. Practitioners are challenged to reflect on the changes they are observing, unpack how these are related to performance measures, and decide what will remain and becomes the “new normal.”  This is the chance the Covid-19 crisis offers.