22nd February 2017
By Betsy Kolkea, Carolina Reynoso, Irene Giménez
Digital transformation, much has been written about it. It’s a favourite amongst consultants, analysts and researchers alike. It’s certainly a multifaceted process that promises to be challenging, beneficial and stimulating.
The objective of digital transformation in an organization must be to improve productivity and performance in order to achieve business goals. But what does digital transformation mean for organizations today, and more specifically what does it mean for HR leaders?
In their book, Leading Digital, the authors, George Westerman, Didier Bonnet and Andrew McAfee propose two major areas of investment in order to success in digital transformation. Firstly they point to investment in digital capabilities, and secondly investment in those leaders who are agents of change. Within this context HR leaders have a dual role to play. As leaders within the HR function they have opportunity to walk the talk and demonstrate what digital transformation looks like within their own team. In the wider organizational context, the acquisition and retention of digital talent, the development of digital skills across the employee population, and the fostering of digital understand at senior leadership levels will all be priorities.
A roadmap is presented here to guide HR leaders through digital transformation within their own organization. This roadmap identifies ten critical milestones along the path to successful transformation. Many HR leaders will be familiar with some of these, as they are generic to all successful change management programmes. Here they are placed specifically in the context of change and transformation in the digital age.
Audit the digital culture and talent
An audit of the “as-is” state of the organization is an important starting position. This will both help to identify the key areas for focus, and also provide a good benchmark against which to measure progress.
An audit of digital culture and talent should include technology, cultural readiness, organizational structure, skills, and leadership. Which digital technologies have already been adopted to support collaboration and communication both internally and externally? What lessons have been learned during their adoption? How ready is the organization for digital transformation? What are the key change agents and where is resistance most expected? What priority does the current organizational structure and job design give to digital? What information is available on the digital skills and capabilities within both the employee base and the wider contingent workforce? Have effective metrics been developed to understand and measure digital skills and capabilities? How savvy and ready are the leadership of the organization to lead in this digital age?
All of these are critical questions to consider in assessment the current state, and will immediately begin to shed light on some of the opportunities and challenges that the digital transformation programme is likely to encounter.
Develop a digital vision
As with any change initiative, a clear and compelling vision of the future desired state is critical. HR leaders have an important role to play in facilitating this vision, setting down the change strategy with the senior leadership team, involving others within and outside the organization as relevant stakeholders.
The vision should clearly lay out a tangible picture of what success looks like—what is deemed to be achievable and possible, plus what implications this would have. Existing norms and the status quo are likely to be challenged, external perspectives sought, blue-sky thinking encouraged—all to ensure that the vision is truly transformative and not simply minor tweaks to the current business model.
While HR will have a role in facilitation, technical and digital leaders will bring specific knowledge and experience. Additionally those in customer-facing leadership roles will contribute the key customer perspective. Many organizations will choose to invite external perspectives and speakers to come in and challenge them with the latest on trends, research initiatives, and innovations in the marketplace.
Whatever the process, the outcome should be a compelling and tangible digital vision for the future which is easy to communicate throughout the organization.
Design a roadmap for change
Having already audited the current digital landscape and established a digital vision for the future, the next step is to extract the implications of how to get from here to there. What needs to happen for the organization of today to transform into one which will deliver the vision of tomorrow?
The key areas of focus which are likely to be included in any organization’s roadmap for change are:
- Technology: what investment is needed, in what types of digital technologies?
- Skills: what skill acquisition and development is needed, for whom, at what level?
- Organization: which changes are needed in how jobs and teams are organized and managed?
- Stakeholders: who are the key stakeholders, what is their likely reaction to the vision?
- Costs: what financial investment is required, what is the estimated return on investment?
- HR framework: what changes are needed, if any, in how people are hired, trained, managed, rewarded or assessed in the light of the new digital vision?
- Leadership: who is most capable of leading this transformation, what roles should different individuals adopt?
- Metrics: how should success be measured?
Each organization will develop a very different roadmap suited to its own context.
Initiate the roadmap implementation
Many of the principles in the implementation of the roadmap are common to all change programmes. The vision should be effectively and continually communicated. Top leadership should own and sponsor the programme. A wide group of employees should be involved in the details of the implementation and invited to contribute to its content. Resistance to change should be allowed, listened to, and used to generate valuable and compelling discussions which illustrate the benefits of the change.
One of the key challenges likely to be faced is that digital transformation often involves considerable cultural change. Things will be done in different ways; roles will be defined differently; organizations are likely to be more fluid and less hierarchical; new skills will be valued; new ways of communicating and collaborating will be introduced. All of these, while potentially exciting for some, will be stressful for others, and care will need to be taken in their implementation. Generational differences are likely to emerge, as younger generations will be more familiar with the digital technologies and mindset than older colleagues. It will be important to reinforce the need for partnership–the digital skills of the young can benefit from drawing from the knowledge and experience of older colleagues.
Digital tools, such as collaborative social networks and gamification applications, can be harnessed in this implementation to facilitate global collaboration, discussion and feedback. However, support and training must be provided to those who are not at ease with these new tools to ensure that they are not excluded from this kind of global conversation.
Any radical transformation in an organization will call for radical changes in how the organization is led and reactions may be rather mixed. Some current leaders may choose not to make this change or are unable to accept the new mindset and ways of working. Many other leaders will positively welcome the digital vision and have agility and be willing to contribute to its successful implementation.
Attention should be given to identifying which leadership capabilities and skills are necessary in the digitally transformed organization. Whilst some may be directly related to technology, many more capabilities are likely to be related to how people and teams and processes are managed, for example, an enabling rather than a controlling leadership style. There is considerable value in possessing an ability to deal with ambiguity and to feel comfortable when your own team members have areas of expertise that you do not share. Additionally, the ability to collaborate rather than dictate, by expressing views openly and confidently, better engages the parties involved in online dialogues. All of these and many more abilities and skills are likely to be critical in the leadership style that will be most effective in a digitally transformed organization.
HR leaders will play a critical role in identifying such leadership skills and the traits needed, as well as in providing evaluation tools and development programmes. This way HR enables the company’s leaders to work towards developing this digital skill set and qualities. However, tomorrow’s leaders will need to perform a balancing act in the way they use all their skills. Digitally enabled organizations are more likely to thrive with a ‘light-touch’ leadership that enables, encourages, fosters innovation and accepts change as constant. At the same time, these leaders must still shape and guide and direct. They will have the added task to find their own ways to achieve this balance within their teams.
Adopt suitable HR technology
It is evident that with the increasing pace of automation and change in the digital era, organizational success will depend more and more on human talent, and how efficiently it is harnessed to deliver innovation and creativity.
Only those organizations that have the most suitable HR technology will be able to manage their talent effectively, with tools to identify where talent is today and where it will be needed in future. HR teams will be able to focus on partnering with their business colleagues to best manage that talent, through relying on excellent HR technology to handle transactional processes and reporting that fell into the domain of onerous manual administrative activities in the past. Self service portals for employees and managers will form part of digital transformation, providing everyone with the tools and information they need in the time and place where needed.
HR leaders should therefore take time to consider the capabilities of their own HR technologies. How broad is the functionality? How valuable are the self-service portals? How strong are the HR analytics capabilities? How comprehensive are the mobile applications? How integrated are social technology tools?
With a myriad of HR technology tools in the marketplace today, it is advisable to look for an integrated cloud based system which provides for all HR processes. This kind of cloud solution will allow the technology to grow with your organization, delivering continual benefits.
Transform the organizational culture
It is evident that digital transformation calls for more than new technologies and processes. To successfully embed in an organization, substantive changes are likely to be necessary in the very fabric of the organization, impacting the corporate culture–how work is organized, how people relate to one another, and how value is defined.
The organizational transformation work is one of the most critical that HR leaders will be charged within a digital transformation. It will not simply be a case of tweaking job descriptions and hiring a few new people. Jobs and teams are likely to be much more fluid, agile and engaged in cross-functional collaboration. As we have already seen, leadership is likely to be more light-touch and enabling. The challenge for HR leaders will be to harness digital technology in developing new ways to recruit, manage, organize, assess, reward and retain the talent needed to drive the digitally enabled organization.
Introduce global digital technology
With the new jobs and teams defined, the digital technologies needed to make the structure work internally can be introduced. Having identified which mobile, social, analytical technologies are needed, the IT function will now be heavily involved in the implementation of these. Ensuring integration and the ease of passing data and ideas back and forth will be critical.
As with any technology implementation, the technology is only one part, and the most challenging part is often ensuring that those who need to use it have the skills, confidence and knowledge to effectively participate. Again in our digital age, new learning technologies are being introduced continually. MOOCs can make a large volume of learning curriculums and structures widely accessible to those willing to learn; something that has never happened before. User communities and access to online experts can make learning much more interactive and real. Once again HR will have a critical role to play to ensure that the learning and development experiences offered in their organization result in efficient talent development.
Develop digital talent skills
CEOs share the concerns of HR leaders globally that talent is increasingly hard to find and retain in today’s global connected economy. Those skills needed to succeed in the digital age are perhaps the most in demand.
Again the technologies available to support HR leaders in developing successful selection and retention practices are continuing to grow. Global social and professional networks provide for targeted talent searches; the big-data capabilities of HR systems allow for the analysis of high volumes of candidate data almost instantaneously; and online tools such as Glassdoor provide opportunities for employers to provide transparent employee-led insights into their working culture and style.
Having procured the talent needed, an embedded learning culture will be a prerequisite to make sure that skills and knowledge are continually updated. Online learning tools and communities empower employees to manage their own development, providing access to content, expertise and online communities of support. The digital age will see more people acquiring more digital technical expertise, but even more importantly, skills such as concise communication, analysis, facilitation, using data to innovate, and managing change will lead to success.
HR leaders will have a wide range of choice of tools available which will allow them to design the talent selection and development programmes. This way they will be able to attract the talent they need for their organization, as well as ensure that the existing talent is fully prepared to meet the demands of a truly digital work environment.
Measure success and look to the future
Having already started with an audit of the current organization and its digital capabilities, it will be possible to consistently compare and measure the progress that has been made at regular intervals.
To what extent has the digital vision outlined been achieved? How fully have the business outcomes outlined been achieved? What is the return on investment over the period? Addressing such questions through this type of rigorous discipline will indicate the extent to which the digital transformation has succeeded. Similarly it will also point to those areas which need continued effort, focus and improvement
Formal and detailed assessments of areas that support digital transformation are also necessary. This includes various other KPI analyzes to discover what is still needed: competencies and skills by department to see if training efforts were successful, adjustments to positions to find out whether new ones must be opened and others dropped or changed. Similarly the state of digitalization of the organization’s technology must be evaluated, without the right kind of technology in place, digital transformation will be harder to achieve. Last but not least, the identifiable digital footprint of the transformed organization must also be mirrored in the digital employer branding. Lessons learned along the way can be helpfully captured to improve future activities and to avoid pitfalls.
As the pace of change is guaranteed to continue to increase, it is essential to realize that a digital transformation is a step in the right direction, and one that will need to be regularly repeated as the digital technological environment in which we live and work continues to evolve. Likewise the organization will have to continually readjust the strategy and plan new milestones accordingly.