Real life and the markets there are much more complex than what the simplifying dichotomies almost always make us believe.

Covid-19 greatly accelerated the transition to phygital, the PHYsical enabled and extended by the diGITal orchestrated in sociAL space in [almost] real time. Whole markets, institutions of the most diverse and people in general are in a TRANSITION from PHYSICAL to PHYGITAL.

But in retail, for example, there are companies thinking that becoming a phygital is just “opening an e-commerce”, as if it were “just another store.” In education, many people think that it is just providing “online classrooms”, and the industry naively believes that the time has come for the “digitalized industry, 4.0.” It is far more complex than that, of course.

There is a need for a cultural transformation: a radical change in the fundamentals of support for the processes of creation, delivery and capture of value in the organization, with a significant part of the analogical [or digitalized analogical] bases being exchanged for digital, networked, people platforms, that redefine not only the business, but the market.

This new space-time is a big part of the new normals and this document is exactly about that. Good reading.

the social world

business and people

It is necessary to understand contexts based on networks of people, connected, participating in relationships and interactions. And in the treatment that the business has to give, in such a context, to interactions, with internal and external networks, to produce meanings and knowledge.

Adapting to networks of people means being prepared for continuous and [almost always] rapid changes. In network businesses, nothing is definitely ready, everything is set to change in response to the context.

They all invent, reinventing themselves, all the time. This creates a fluid time, where everything evolves around you even if you don’t do anything about it. Even if you don’t change, people change; transformation happens mainly in people, maybe even caused by businesses other than yours, and with time it carries with it all the businesses in a market, the entire market.

All businesses, large and consolidated or small and in formation, need to adapt, evolve and – at the end of the day – transform itselves to live, and survive, in networks of people. Because business is abstraction: what matters is people.

the physical world

business and spaces

The transition from physical to phygital has a number of challenges. One of the main ones is how to move on from an architecture that promotes layers and silos to a design that encourages the formation of networks of people, articulated and orchestrated, in a balanced way, which serve as the basis for a new business performance.

It is important to understand the relevance and urgency of physical space for the transition from analogue to digital, and engaging people and activating them as agents of innovation can be directly related to the way that we indulge environments in business.

The new physical environments will interact with the ecosystem of bits in a world where the physical space is expanded and extended by the digital.

It is a modified, expanded physique. The impact of the home office on the architecture of the houses has not yet been noticed and in offices, schools and factories the change will be of an even greater order, and the reasons why the enlarged spaces necessarily undergo a change in the business culture.

the digital world

business and data

Data is not the new petroleum, but the new uranium. Data has to be collected, enriched, processed, it has to reach critical mass to generate energy [value for the company and customer] and its storage or disposal is a danger for the business, the customer and the ecosystem.

Being data-driven is not just about data or the latest and most sophisticated big data toolkit, but about culture. Culture is the dominant aspect that defines expectations of the extent to which data is democratized, how it’s used and viewed across the organization, and the resources and training invested in the use of data as a strategic asset.

How does the decision-making process take place within the company? Do we have well-defined methods and policies? Is there a formatting in the presentation of data that supports the decisions being made? Who, where and how do you care, with what systems, so that this happens whenever it is necessary in the business?

Are data actually used to support decision-making? To the point that, in business, intuition is based on data? As long as the decision makers – who are almost the entire organization – do not come to that, they will be making decisions with high potential impact without having an idea of why and their consequences.

the phygital world

people, space and data

The phygital world is built on the balanced combination of the physical with the digital and the social. Here, in the present of the future, the physical is amplified by the digital and orchestrated by the social.

The phygital is enabled by the combination of the physical and the digital, both are connected in a hybrid world. The integration of the physical and digital worlds allows us to know and interact, through data, with spaces and objects in this ecosystem of bits and atoms.

The phygital is orchestrated by the combination of the physical and the social; it is people, above all, who control, define and build relationships, also in the phygital world. The network of people is the orchestrating orchestra of the phygital world.

Phygital is expanded by the combination of social and digital. If, on the one hand, the combination of the physical and the digital allows us to know and interact with the spaces and objects of the phygital environment, on the other hand, the combination of the social and the digital allows us to access people, regardless of their location in the physical space.

Here the boundaries are no longer geographic, but logical, fluid, and therefore programmable. When everyone encodes everything all the time, the whole world changes, all the time and the markets have no borders, and are almost in almost real time.

© 2020 – 2021 tds.company all rights reserved

This text was written by the professors Silvio Meira and André Neves.

The tds.company is the home of strategy, a theory of practice for strategic transformation, about which we have written a long, illustrated sentence, which is available in pdf at https://bit.ly/TDSCsat Our strategic enablement work is done on a digital platform that can be tested for free at https://strateegia.digital.