These are the most critical skills for Digital Transformation

The way we live, work, and relate to one another is on the verge of a fundamental overhaul; this isn’t mere speculation anymore, but an impending eventuality. While many of these changes are well underway, there is a need for clarity amidst several important stakeholders. Do you, as an employee, feel confident that your current skill set will ensure your employability tomorrow? As an employer, do you understand the transformation that is necessary to survive? Do you comprehend the ways in which businesses are about to change? Are you prepared to balance human and machine intellect to derive the best from both? Let’s find out.

One way to define digital transformation is to undertake “the realignment of, or new investment in, technology, business models, and processes to drive new value and experiences for customers and employees and more effectively compete in an ever-changing digital economy.”

According to a Skillsoft study, only 50% of those who participated in a survey admitted to having a strategy in place, 24% admitted to no such policy, and more alarmingly, 26% said that they didn’t know, indicating confusion over what is actually needed for a sound digital transformational policy. 

Digital Transformation Strategy in Learning & Skilling

Nearly 70% of the respondents of the survey agree that their workforce needs to improve their skills to meet the digital transformation opportunities and challenges. Furthermore, 50% consider the requests to update and align skills sets to support the digital transformation is a big priority, 24% are beginning to witness such requests, 20% believe that despite the lack of requests, one needs to work in the direction nonetheless. 

Here are some of the most critical skills needed to manage a transformation:

New transformation technology skills:

  • The Basics of New Transformation Technologies

  • Designing a Design Mindset/Designing and Delivering New Digital Experiences

  • Adaptive Thinking and Agile Approaches

  • Digital Communication/Virtual Collaboration

  • Computational Thinking & Cognitive Load Management

Critical adaptive thinking and agile approaches skills needed:

  • Thinking Adaptively/Developing an Agile Mindset

  • Agile Management Technique

  • Agile Product Ownership: Role and Responsibilities

  • Lean Product Management

  • Automating Business Processes

Design mindset skills needed:

  • Design Thinking

  • Customer Journey Mapping

  • Data Modelling for Digital

  • Data Visualization

  • Exploring UI/UX Design

Merely upgrading technical skills will not be enough. To ensure that the core business values and culture sustains, communication, leadership, soft skills and operating models, all need to undergo an evolution. While the challenge is definitely complex and uniquely multifaceted, building a few foundational capabilities can ensure a smoother transition to a more robust transformation strategy. A few of such capabilities are:

  • Required understanding of new technologies (include AI, IoT, ML, etc.), existing and emerging technologies 

  • Designing new digital customer experiences

  • Developing new business models that capitalize on new technologies and experience

  • Leading and managing in the digital age

The transformation provides organizations with a unique opportunity to proactively help in bridging the skills gap in Digital Transformation. The reality and pace of change that is impacting business is no longer in a distant, unsure future. Rather, it is one which is well past its way from infancy, and one which we, as individuals, employers, industries societies, and governments, seem massively under-prepared for. The best, and most effective, way is to understand what going ‘digital’ means, find out what it means for you, list the areas you need to work at, design a strategy and get cracking! 

Building New Organisational Models to Achieve True Digital Transformation


By Gloria Lombardi

Every organisation should be developing their digital workplace. It’s not about one, single solution, but about understanding all the many and varied tools and digital experiences staff need and have when working. Leaders and managers should understand that data is an asset, and should be looking for ways to use business intelligence to inform decisions and create new opportunities. The business needs pushing in new directions, but strategy and decisions need to be supported by relevant information, and considerate of employee productivity and satisfaction.

Yet here we are, 18 years into the new century, and many companies still don’t know how to define, manage, or develop their digital workplace. Too often, internal processes are antiquated, relying on laborious manual steps. Worse still, managers fail to grasp the true meaning of ‘transformation’, and don’t fully consider the people and process changes required when new technologies are deployed.

“Management doesn’t care very much about the digital environment of employees. Strangely, they care more about the physical environment but the digital workplace has been massively neglected. Senior managers pay no or little attention to their the intranet,” says intranet maverick and worldwide experienced consultant, Gerry McGovern.

MARGINALIA spoke with McGovern to explore what organisations should be doing to ensure they create an effective, 21st century digital workplace. In this interview, McGovern suggests a radical change of leadership style and organisational culture, which puts the individual to the centre of attention. He gives practical examples, and also shares some emerging trends coming to the workplace.

GL: What is holding organisations back when it comes to their ability to create a digital workplace that employees find easy to use?

GM: The core problems are lack of management, focus, and engagement. There is a historical lack of respect from management for employees. Employees are given poor systems and expected to understand how and when to use them, even when things take longer and they can’t see the benefit. 

If we compare the quality of internal versus external digital tools – enterprise software versus public consumer software – they are like night and day. There’s a vast difference in the quality of the experience they deliver. 

Management doesn’t care very much about the digital environment of its employees. Strangely, they care more about the physical environment but the digital workplace has been massively neglected. Senior managers pay no or little attention to the intranet; so employees struggle with subpar software and become disengaged, partly, because the digital tools they’re forced to use make everything so arduous and have steep, and costly, learning curves.

GL: What do employees need and want from their digital workplace?

GM: Employees expect just the basics from a digital workplace. People have been shown by Amazon, Google, and even Twitter, how easy things can be. So, they just expect things to work and to be relatively simple. They certainly don’t expect to have to deal with a torturous, horribly designed, IT system.

Most organisations are not delivering the essentials, and so employees are frustrated. It’s essential that information and processes are up-to-date and accurate. But the ability to manage and make information findable in most organisations is still terribly poor. It’s down to a lack of management; there are no quality controls, and no processes for removing out-of-date and irrelevant information from the intranet, the document management system, or the various project management ‘systems’. Metadata isn’t used in a consistent manner, to make information findable. People think that they just need to buy a search engine to solve all their problems, but content and the search engine needs good management. It’s the maintenance of standards and day-to-day management that’s missing from the digital workplace.

GL: What types of organisational models could help companies thrive in this and the next decade? Are you seeing any emerging trends?

GM: New organisational models are indeed beginning to emerge. Everybody talks about collaboration, which is more than a practice; it’s actually a journey to a new model. A collaborative approach to organisation is at the other end to hierarchy; I think traditional, strict, hierarchical organisations are not fit for purpose in the digital economy. They are too slow, too cumbersome, and they don’t create the desired results in many business situations.

More collaborative types of decision making are emerging. There’s a different model of management that is much more focused on evidence and much less on traditional hierarchy and ego. Leadership becomes more humility driven. The management structure is more data driven, more flexible, and adaptable. Those flexible organisations have an obsession with simplicity and reducing complexity. They have a constant strategic focus on simplifying the life of the employee and internal processes. 

GL: What should traditional organisations do to become more future-ready?

GM: Focus on less, and do it much better. Improve the tasks of the employee – whether it’s collaboration or product development or whatever it might be. 

Focus on the crucial task, what I call the ‘top task’ of the employee, and streamline it in a iterative model via continuous improvement based on the evidence of the worker’s ability to actually do those tasks. So, manage based on the outcomes of individual rather than the ‘opinions’ of the manager. That is a real shift. 

Understand what is critical to employees to do their job on a day-to-day basis. Then, measure it through an observation of the user experience, the employee experience: observe what people are doing and record the evidence, for example, noticing that, ‘50 percent of our sales reps cannot find an up-to-date sales presentation’. Report the metrics around the ability of the workforce to do critical tasks in their day-to-day work – show management and stakeholders what works and what doesn’t work for employees

GL: You mentioned ‘humility’ earlier. Similarly, a business professor at the University of Virginia Darden School, Edward Hess, believes that, ‘humility is the new smart’, highlighting the criticality of this skill in the technology-driven age. 

How can you actually teach humility to organisations?

GM: It can be difficult to teach humility. But if organisations constantly focus on the evidence, they can better create a sense of humility in some people. For example, saying, ‘We tested what you said would work. Actually after testing it, we found out that it didn’t work’. By relying on evidence, people can avoid ego traps and opinion-driven decision making.

So, constantly test and observe to see if any particular idea works or not. Often, when people test their ideas in real situations, they realise that those ideas are not, after all, quite as smart as they thought they were. Theories need testing, rather than trusting blindly.

The opposite of humility is the ‘godlike’ sort of management structure, where people just make decisions based on their gut instinct, and rely on their position of authority They do not look for, or need, evidence. 

In contrast, a ‘humanity-based’ management model comes about when individuals constantly seek evidence to make the right decisions. We will never have all the information, nor all the answers – the world is too complex. But we can make better decisions when we use our experience in-sync with evidence, and alongside our colleagues – we need diversity, not group-think, when making big decisions.

We need to know how to know rather than to know the actual answer. We can know how to get the answer. We don’t necessarily know the answer straight off. Jean Piaget, the developmental psychologist, said “Intelligence is what you use when you don’t know what to do” – we need to be humble enough to know when we don’t know stuff, and intelligent enough to know how to find out more. 

GL: Can you share some examples of organisations that have embraced a culture of humility?

GM: Successful companies are emerging with newer, better models for engaging employees and empowering them.

Google, for example, does not have the classical organisational hierarchy. They are much more consensus driven and collaborative; they have flatter structures. There is less dictatorial management than in traditional companies, which are harder to change because they often have 40 or 50 years of management legacy.

Facebook is another example. A Product Manager at Facebook gave a talk once, saying that managers at Facebook have no authority. ‘They cannot tell anybody to do anything. What they are good at is influence, and they are always looking for the evidence’.

Amazon is a strange type of environment: it is ‘difficult’ in some respects, but very driven, and with a culture of evidence as well. They are constantly testing and experimenting, and making decisions based on what is actually working and not working.

Zappos is another interesting example of a culture that is quite different from a traditional, ego-based, hierarchy structure.

GL: This is a period of time when everyone talks about predictions for the New Year. And MARGINALIA is about the future of work. We certainly don’t have a crystal ball, and, using your humility argument, we should say that we don’t have all the answers. 

But do you have any expectations or views to share with MARGINALIA for what could happen in 2018 regarding the evolution of the world of work, and the digital workplace, in particular? 

GM: Generally speaking, it’s interesting to observe what has happened with Slack over the last couple of years. Slack shows how digital workplace systems do not have to suck; internal tools can be relatively easy to use, and useful in the process. Slack brought to us the possibility that we can develop and deploy enterprise systems which are actually useful and easy to use. However, the consumer-oriented user interface may have brought ease of use, but many organisations use and abuse Slack to the extent that people are swamped with notifications and banal conversations. We must remember that new ways of working are needed when we adopt new systems.

An ‘awakening’ is happening inside workplaces. The youngest generations are just much less accepting of the extremely poor quality internal systems that their older colleagues were forced to use. There is almost an internal revolt against horrible systems; they’re simply not willing to accept the low quality tools that have been delivered by the organisation in the past.

In some instances, IT strategy is just ignored and people just find their own tools – often cloud services and mobile apps. If IT and management do not rise to the challenge, they are going to find themselves redundant.

A while back, we had the bring your own device (BYOD). Now we have bring your own technology and software – bring your own everything. So, what’s the purpose of managers if employees have to find the right tools to allow them to collaborate efficiently? What is the future of the IT department if they don’t own or support cloud services?

The trend is continuing: employees are designing their own digital environment, influencing their colleagues’ ways of working, and bypassing traditional management.

A 10-Point Framework for the Digital Journey

Digitisation is here to stay so organisations should consider treating it as a long-term investment. 

In the near future, it may be difficult to imagine a company not involved in some way in digitisation. While Uber, Amazon and Netflix grab headlines for their growth in the platform economy, traditional companies are also digitising. UPS uses smart routing devices to trim millions of miles on their delivery routes. Caterpillar now equips its tractors and diggers with internet-enabled sensors that provide data to customers and itself for smarter maintenance and performance.

The new evolving ecosystem of mobile computing, interactivity and data gathering presents an opportunity to craft new value propositions. This is just as well since the era of “easy” global growth becomes less likely to continue. While population increase and mass consumer markets gave traditional businesses opportunities to grow in the 20th century, the wave of the future is more likely to centre on creative recombinations of technology and people, something digitisation encapsulates.

Management waves and new technologies have come and gone before, from cassette tapes and fax machines to business process reengineering and Six Sigma, which makes it easy to dismiss digitisation as a fad. But executives we recently interviewed for a research article share a belief that despite the growing access to computers and data over previous decades, digitisation is just starting. The managers and leaders we interviewed were actively involved in shaping the digital future of media companies (books, music and television). We also spoke to managers in banking, ship building, retail and consulting to understand more from companies where the product is less likely to be digitised.

While this work is ongoing, below is the first of several instalments explaining the framework we see emerging: 10 checkpoints on the digital journey that companies face. In later articles, we will expand on these points, which include skills and roles, structures and processes, and cultural aspects. We will start and end with cultural aspects, specifically checkpoint one, the mindset shift.

image: https://knowledge.insead.edu/sites/www.insead.edu/files/images/digital-journey-wheel-1.jpg

Mindset shift

While companies need to respond to this new reality seriously, there is no recipe for transformation. “Going digital” or “digitisation” is often characterised as a transformation, suggesting that organisations embark on a caterpillar-to-butterfly metamorphosis with a clear start and finish and emerge ready to take flight as digital leaders.

The lessons from companies well down the road of digitisation show that framing it as a journey is a better starting point. Our study revealed the issue of mindset as the first of 10 dimensions companies would do well to consider throughout this journey. Interviewees for our study were willing to experiment and start early, iterate and grow in capabilities and know-how, which are important ingredients for any organisation looking to adapt to a fast-moving environment.

According to a theory of organisational behaviour called “absorptive capacity”, companies who amass foundational knowledge, skills and ideas build the capacity to absorb new ideas faster. Absorptive capacity is defined as a company’s ability to recognise the value of new information, assimilate it and apply it to commercial ends. Absorptive capacity depends on prior knowledge, because knowledge is cumulative. In the same way a student doesn’t go from learning simple algebra to doing advanced calculus overnight, organisations can’t run before they can walk. In short, they don’t just become digital by buying or creating a new technology; they build ongoing capabilities and knowledge over time.

It’s not too late, or too early

An interviewee from the book industry told us that “we’ve been producing e-books since 2000, although we didn’t sell many of them. But it was a mini example of the whole value chain which we looked at in more depth later. Getting the rights from authors and agents, technically producing the e-books from today’s perspective through many aggregators and vendors…was like a preparation phase for the business which kicked off in about 2009.”

The good news from this example is that it’s not too late, or indeed too early, to get involved. For the company above, its earliest foray into e-books was not a commercial success, but it was an invaluable learning process and set it up for the e-book wave.

It’s not about technology

It’s also important to frame digitisation as being less about computing-based efficiencies than about organisational effectiveness. Companies are fairly confident that the software infrastructure will exist for them to create platforms and gather data. What is most important is understanding the potential of technological developments to shape consumer experiences.

One participant told us that, “you have to digital define the way we interact, probably the way we live in many areas. So it’s much further reaching than it was in the past. Now it’s starting to change…business models. It might change the overall user experience…I’m thinking a lot about how will people interact, or how will they consume information.”

The processes organisations should adopt to become digital are not necessarily themselves “digital”. Technology is important but it’s not the essential component.

Our interviewees gave us the sense that they were overwhelmed with data, not least because data have become so fine-grained and instant. Acting on constant feedback and insights, but without jumping at every data point, will be crucial to leveraging data effectively. In my next article, I will expand on how organisations can leverage these bigger analytics to derive larger meaning and what skillsets organisations will need to use such tools effectively. As we learnt from those who see digitisation as a journey, the focus today is less on data and storage than on analysis and ideas.

Read more at https://knowledge.insead.edu/leadership-organisations/a-10-point-framework-for-the-digital-journey-6801#Am23AeCvyAwXCEVD.99

Investing in HR Tech Is Not the Same as Digital Transformation

“If you put 20 executives in a room and ask them to define ‘digital’, you are guaranteed to get 20 different answers,” says Anand Eswaran, Corporate Vice President of Microsoft Services and Microsoft Digital. That’s the reality: most companies’ leaders feel overwhelmed by technology, and they’re not sure where to begin or how much money and time spend on Digital Transformation.

On the issues of how to integrate technology across the business, what Digital Transformation requires, and why digital goes beyond technology, we spoke with Soumyasanto Sen, a millennial leader, an advisor, evangelist, and investor in HR technologies, currently focusing on AI-driven people analytics, digital strategies, blockchain, and digital HR transformation.

Passionate about entrepreneurship, Soumya is also the co-founder and advisory board member for HRTech Conscience and Delité Advisory & Partners.


Soumyasanto Sen

“Those, that don’t adapt Digital Transformation, will fail”

– Digitalization becomes an essential part of a corporate strategy, but to be honest, for a significant part of business owners and HR professionals, digitalization is just a buzzword. After all, what does a Digital Transformation of a workplace mean for a company?

Digitalization can extend the reach of organizations, improve management decisions, and speed the development of new products and services. At the same time, the excessively rapid adoption of technologies can disrupt traditional business models. Business owners are equally responsible for successful Digital Transformation.

The challenge of digitalization is not acquiring a proficiency in digital technologies; instead, management must create the conditions and culture needed to enable a transformation to a digitally mature organization. Leaders and HR professionals must also help people (customers, suppliers, employees) take on the right mindset for adopting all these changes. The real value of Digital Transformation for HR is that it enables the whole organization to think creatively.

So, for me, digitalization is more than a buzzword, and it is an essential part of corporate strategies, for sure. There is no alternative to Digital Transformation. Visionary companies will carve out new strategic options for themselves—those that don’t adapt, will fail.

The digital workplace is also considered a company asset. the digital workplace encompasses all the technologies people use to get work done in today’s workplace. It ranges from HR and core business applications to e-mail, instant messaging, enterprise social media tools, and virtual meeting tools.

As per Deloitte, the digital workplace framework consists of four layers, covering the following components, shown in the diagram below:

digital workplace interview

According to Deloitte, the digital workplace is all about the employees’ ability to do their job by collaborating, communicating, and connecting with others.

Technology enables the digital workplace. Each organization already has a digital workplace toolbox with different tools. Depending on your industry and business needs, the tools needed to support your digital workplace vary. The key is to adopt the right tools for your employees to do their jobs.

An effective use of technology in the digital workplace is underpinned by appropriate controls. This means one must support the digital workplace with appropriate governance structures and management processes.

As with any core initiative, it is essential for business needs to drive the digital workplace. To deliver the necessary benefits, the direction of your organization should guide the direction of your digital workplace.

Digital Workplace Banner GIF

About HR digital strategies and a deep change in mind

– What stages does the digital transformation consist of? What steps are the most important and require particularly close attention?

To be very clear, investing in technology is not the same as Digital Transformation. Most companies are now investing into new tools, applications, platforms, and services. These make them tech-enabled, but it doesn’t mean companies are actually transforming in a digital economy. With Digital Transformation, technology is driven by purpose, and that purpose is meant to reshape business.

Based on the research of companies like Cognizant and Altimeter, there are six key stages many organizations go through in their Digital Transformation. But this doesn’t mean everyone has to follow this sequence.

Six Stages Digital Transformation

Digital Transformation enables people to think and to transform. Digital Transformation is about the ability of the organization, and therefore people’s minds not only to adapt to change, but to drive change and innovation, enabling the organization to deep dive into its need, values, purpose and mission.

Digital Transformation is not just bright new technology—it’s a new way of organizing, engaging with customers and employees, and building networks of expertise and trust—through cooperation and collaboration—and working faster, better, smarter than ever before.

Embracing the digital world and implementing technological transformations don’t necessarily begin with technology. They actually begin with a profound change in mindset, an evolution in the way we see the world. Digital strategy plays an important role here.

HR digital strategies or HR technology strategies should actually support the overall strategic objectives of the organization, and HR must take ownership of the digital strategy and ensure that it aligns with the HR strategy, which in turn should align with the business strategy. Moreover, it should emphasize more than just efficiency and effectiveness as a driver for the adoption of technology, and choose solutions that allow for future growth and flexibility, while focusing on deploying solutions that meet the current and future needs of the organization.

Drivers that can lead digital strategies for HR are (check out Digital Strategy in HR World):Four Stages Digital Transformation01

What benefits are companies looking for from new HR technology?

– It is a common practice to identify the benefits of new HR technologybefore the implementation process begins. But which benefits should be included in the list?

By selecting the right technology, HR departments and professionals can deliver simpler, faster and smarter user interfaces, as part of a HCM system. This allows organizations to put productivity and engagement at the heart of the process, which in turn should encourage employee loyalty.

The major investments in HR technology solutions are time, money, and energy. One must include the following benefits when considering HR technology transformation:

Easy administration and sharing of information

Good HR technology allows information, whether written or broadcast, to be shared more quickly and with fewer resources. It should also provide easy administration that eliminates the need for double or triple entry systems and reduces the need to file large amounts of paperwork.

Greater productivity

A better HR system can produce real productivity benefits as the adoption of innovative tools leads to workforce optimization, competitive advantage, and greater customer satisfaction. Productivity is essential to the employees, employers, the organization, and the economy, who will all benefit from this.

Reduced cost

Aside from the less tangible costs such as efficiency or productivity, good HR technology will save real money; especially in the era of cloud computing, cost reduction is considered one of the main benefits of any HR technology.

Soumyasanto Sen 01

Soumyasanto Sen

Improved communication

HR technologies must provide employees the opportunity to do their job by collaborating, communicating, and connecting with others, increasing employee engagement and improving performance in turn.

Focusing analytics

Analytics is no longer about finding interesting information and identify it for managers. Now, data are being used to understand every part of a business operation, and analytical tools are being embedded into the day-to-day decision-making of business operations. HR analytics play a vital role here.
There are many other benefits, and aside from the convenience of a HR system that is accessible online by employees and managers, these include:

  • Going mobile for continuous accessibility
  • Helping with consistency
  • Ensuring compliance and privacy
  • Improving user experience

The reasons why so many HR technology implementations fail

– How long does the implementation process last for companies of different types? Is it fair to say that the digitalization of workflows is a never-ending process?

Digital transformation isn’t an outcome; its complex but developing journey. I don’t think that anyone today can claim they have reached the end of the Digital Transformation process. Most are just beginning; in fact, some of them haven’t even started yet.

Blockchain banner

According to MIT/Sloan research, 63% of executives revealed that the pace of technology change in their organization was too slow. In the same report, the most frequently cited obstacle to Digital Transformation was “a lack of urgency.”

If I had asked people what they wanted, they would have said ‘faster horses.” – Henry Ford

So, in this digital era, one cannot give a fixed timeline, as it’s a continuous improvement process. Digital Transformation is big and also costly. It covers everything from effectively engaging customers, vendors, and employees, forming new teams to collaborate, forcing process improvements and innovation, optimizing business models, and inspiring new infrastructures, etc.

It’s actually an agile process, which is of course never ending if we think so. The process involves measuring, learning, and building continuously throughout the journey.


digital transformation

– Why do you think so many implementations of new HR technology, which costs tens of thousands, fail?

Organizations are using hundreds, sometimes thousands of applications. New applications are constantly being deployed, whether the new version are upgrades or replacements for old legacy applications. This all brings risk, and if this is not taken into account, they fail. The most important issues as of today are:

Adoption is the key to the success of products and services.

The most important point is to accept the change and adapt to the transformation. If the users don’t like to use the application or start diminishing, all your efforts will come to an unfortunate end.

User experience matters the most today.

Today, users’ expectations are very high. In their personal lives, they’re used to having easy-to-learn and -use technologies at their fingertips. A top-notch user experience is a great way to keep users involved and engaged with a product in this digital age.

Consulting GIF

One should also not ignore the reasons for an unsuccessful transformation below:

Unengaged stakeholders or owners

Any successful HR technology project requires the active engagement of the right stakeholders—the decision-makers and owners of the business processes involved in the problem being addressed, who can make the right decisions and lead the project to success. If they are missing or unengaged, the chances of failure become very high.

Lack of relevance to the business

A very common reason for failure is a lack of relevance to the business. It is not unusual for any HR technology project to focus on a topic or area that doesn’t actually add value to the business. Value addition is very important for any business, especially when you are considering transformation.

No measures or agility

No enterprise business can manage or improve until it can measure. So measure and benchmark the business’ existing user experience and instantly compare any variations when a change is made. There is always scope for improvement, and the process must be agile.

Others reasons also include:

  • Lack of highly skilled teams
  • Lack of integration of new and existing technologies and data
  • Slow and poor processes
  • Outdated technologies
  • Lack of collaboration between IT and businessThe reasons may vary for each company, but the most significant reasons are commonly lie behind transformation failures.

About HR departments and tech skills

– There is an opinion that only HR personal should work in HR. Does a company need to bring technical people into its HR department before starting a Digital Transformation?

The team is the ultimate productivity structure within any organization and HR needs to be right in the middle of this, ensuring the right personalities and skills are represented, and driving new methodologies to ensure the best possible consequences. Increasing team engagement and diversity, using psychometric assessments, encouraging continuous performance feedback, and ensuring trust and collaboration are the major challenges for any team development.

HR Processes GIF

According to Bersin, if HR isn’t supporting the building, optimization, performance, reward and recognition, and methodological support elements, the entire project could be at risk of failing miserably.

So in respect to the strategy, to compete successfully in the new digital economy, HR should:

  • Use technology effectively to execute business imperatives and extend collaboration with other departments, incorporating mobile technology, analytics, social media, and the cloud to ease the transition to a strategic role.
  • Consider the competitive risk of not leveraging technology to contribute to business strategy. Organizations in developed economies are not adopting technology as quickly as their peers in fast-growing economies and may risk being left behind in the global competition for talent.
  • Embrace the transition to strategic thinking and driving business results.

Digital Transformation could not prosper without the integration of IT and business. Most of the successful Digital Transformation projects involve HR and technology people together within one team. Lack of collaboration between them leads to failure for sure.

The Rise of the People Strategy Platform

“Now, more than ever, the corporate strategy for large companies hinges on the people strategy.”

This was a key takeaway from a summit of HR leaders and Boston Consulting Group (BCG) experts, who met to discuss the future of HR and the trends shaping it. It goes without saying that great HR functions are strategic: they play a vocal role in critical business decisions and control a significant portion of a company’s expenses. 

Management consultant Ram Charan, McKinsey & Co global managing director Dominic Barton, and Korn Ferry vice chairman Dennis Carey have gone so far as to recommend (in their HBR article, People Before Strategy) that “the CEO should create a triumvirate at the top of the corporation that includes both the CFO and the CHRO” that “makes the connection between the organization and business results.”

Why? Today’s business environment is more complex than ever before, creating an unmatched opportunity for HR to create value for the business. PwC’s 18th Annual Global CEO survey, which included a report on People strategy for the digital age: A new take on talent, identified six key priorities for CEOs and HR:

HR’s role is not simply to translate business strategy — but to drive it.

As BCG captures well in their paper, When people strategy drives business strategy:

“Developing a people strategy was once a straightforward matter of figuring out how to create the best possible workforce to execute an already defined business strategy. But… people strategy today involves much tougher choices and tradeoffs. It may actually drive the business strategy as much as business strategy drives it.”

For example, HR leaders at a professional services corporation used insights gained from their people analytics solution to drive the business to change the composition of project teams for multi-year, multi-million-dollar contracts— the result was an improvement in margins by $1-$3 M per contract. Given that people strategy may actually drive the business strategy as much as business strategy drives it, what has held HR back from achieving this? There are 2 reasons:

1. HR systems are built to enable operational excellence, not strategic excellence

HR has long focused on achieving operational excellence. This has included many multi- (multi!) million dollar investments in systems that manage and automate HR tasks, act as systems of record, and help HR execute on administrative activities faster, with fewer errors. HR management systems, applicant tracking systems, performance management systems, learning management systems, payroll systems. The list of systems that were built to enable operational excellence in HR goes on and on.Graphic showing popular HRMS or HR management systemsBut these systems — while they generate lots of data — are capable of not much more than operational reporting. These transactional systems cannot effectively answer strategic workforce questions, connect workforce decisions to business outcomes, or support future modeling and projections. Their underlying technology simply does not allow it in any meaningful way.

Take Workday as an example, where the underlying transactional technology cannot support analytics:

Workday has had three “at bats” in its attempt to provide more than basic operational reporting to its customers. In all three attempts, Workday had to look to third-party technology, as the Workday transactional technology is not capable of supporting analytics.

Attempt 1 was Workday Big Data Analytics — announced in 2012, Workday hoped to leverage a third-party analytics technology (called Datameer) to “provide pre-packaged analytics that enable customers to combine Workday data with third-party data sources of any type, including big data, all delivered in the cloud.” 

This attempt failed, and was replaced with Workday’s next attempt: in 2014 Workday acquired Identified, an analytics technology company, and announced its plans to use Identified’s technology to “create a new suite of applications that will harness the power of advanced data science and machine learning algorithms to equip customers to make smarter financial and workforce decisions.” This attempt also failed. 

In 2016, after a lack of pick up by customers and inability to deliver on its analytics promises, Workday acquired Platfora, a data discovery tool that Workday hopes will help customers “bring more data into Workday.” In its attempt number 3, Workday is trying to solve the problem of bringing more third-party system data into Workday. But it is unclear what will happen when it eventually gets there — if it does — and, once there, how that data will be analyzed.

The short story — even the great transactional HR system vendors are struggling to figure out analytics. Success requires deep expertise, the right technology, knowledge around what questions to ask and how best to answer them, and the ability to bring data together from many disparate sources (including business data) with ease.

2. HR has been underserved by IT

Many HR teams have striven to put the data being generated by their HR systems to good use. They’ve done this in two ways. One common approach is to call on IT, who typically responds with “you need a data warehouse first” — often a multi-million dollar, multi-year project that focuses on cleaning and integrating data

Once the data is ready, IT professionals, using business intelligence and data discovery tools, then create dashboards and scorecards — only to find that the questions HR and the business care most about are not being answered, the delivery of the insights is insecure, and the data is out of date. 

Not surprisingly, these projects have high failure rates. Another approach is to tackle the problem within HR — through reporting staff and, if fortunate,  data analysts. But these individuals are equally hamstrung by the capabilities of the systems and tools they use. Often after an initial success with dashboards for leaders, the function hits the wall and is unable to scale to support the needs of the business.

Fortunately, a new platform has emerged to enable strategic HR: the people strategy platform

The people strategy platform complements investments in HR transactional systems by bringing together the data from those systems — and from business systems — to answer important questions that connect people to business results.

Focused on providing strategic insights to make better people decisions and plans, and connecting those decisions directly to business outcomes, the people strategy platform enables strategic excellence within HR.Graphic showing the difference between a people strategy platform and HR management systemsHere are a few examples comparing the role of a people strategy platform to the role of your transactional HR systems:

Comparison of HR Management Systems which enable operational excellence and People Strategy Platform which enables strategic excellence

To achieve the strategic insights listed above, a people strategy platform — at a high level — must include these critical capabilities:

Graphic showing 5 critical capabilities of a people strategy platform

Now is a great time to be in HR. With the CHRO as a key power player in the C-suite, and the rise of the People Strategy Platform to enable strategic excellence, HR organizations have more ability than ever before to create value for the business.

The Digital Journey

A series of articles based on a research study of organisations embarking on digital change. 

Managers and leaders actively involved in shaping the digital future of a variety of companies across different sectors were interviewed for this series. It will consist of six parts.

Read more at https://knowledge.insead.edu/leadership-organisations/the-digital-journey-6921#cV2DxBj3Fc6sxkuh.99