DIGITAL (HR & TRANSFORMATION)
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.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
PEOPLE, HR & WORKFORCE ANALYTICS
5 L+D Questions You Can’t Answer Without Analytics
Learning is a key part of work, and science says it will continue to be vital in the workplace of the future.
Without strong Learning and Development (L&D) programs, employees may have a harder time being productive, moving up in the organization, and contributing to financial performance. Additionally, it can also lead to lower employee engagement and increased turnover.
Despite the clear positive effects of learning, I’ve repeatedly heard from L&D leaders that they lack insights into whether what they do impacts overall business goals.
Without this capability, L&D is seen as an overhead rather than a competitive advantage. As Dan Lovely, Chief Learning Officer at AIG, put it: “We are in the skill building business. That need is greater than it has ever been before. For a long time many companies have talked about ‘people as our greatest asset’, but it is becoming a reality more than ever before. How could people not see the value of learning and development?”
So what is holding people back from seeing L&D’s value? L&D teams are struggling to measure the effectiveness of training outcomes.
Analytics is critical to the measurement process, yet according to a survey of L&D organization from Bersin by Deloitte, only 10 percent of survey participants say they are “very effectively able” to use data and analytics to respond to shifting or time-sensitive business needs – and the research shows that L&D’s reliance on Learning Management Systems (LMS) is to blame.
Learning Management Systems Can’t Do Learning Analytics
The LMS is a foundational system for most L&D organizations, and 64% of them consider custom LMS reports or dashboards “the most useful tool” for tracking, measuring, and evaluating learning.
Unfortunately, while an LMS is fairly good “at providing metrics such as learner satisfaction, enrollments, cost of training, and learner demographics, few are able to capture data that is useful outside of the L&D function.” Additionally, “L&D providers rate their L&D applications as useful in tracking and monitoring learning and delivering content, but less useful at reporting and analyzing.”
The lack of analytics support in current L&D tools prevents learning organizations from being more efficient, developing stronger relationships with clients and business leaders, and proactively providing the business with better data for decision-making.
Recommended Read: 4 Best Practices for Choosing the Right HR Analytics Technology
And this will only become more difficult to achieve as L&D functions modernize and incorporate new learning methods and devices into their technology stack, further complicating the process of tracking since most LMS’s can’t combine data from other systems in reporting outputs.
Without a complete picture, the L&D organization is hard pressed to answer the most important questions to their success, such as:
1. Does L&D make our employees stay?
With voluntary resignations at an all-time high and unemployment rates historically low, employee retention is a key objective for most organizations. L&D can address this problem because “when employees perceive that their organizations encourage career development, they feel more confident about their long-term career path.” In fact, a Culture Amp study found that people who stay with an organization are 24% more likely to say that they have had access to the learning and development they needed.
Use learning analytics to:
Surface insights on how L&D is impacting employee retention, such as what training programs produce the cohorts with the longest tenure and whether the savings from reduced turnover justify the costs of key programs.
With this information, you can determine which levers to pull to further increase employee retention based on the programs the data has revealed as most successful.
2. Does L&D help our employees perform better?
Simply put, strong performers can make the difference between hitting business objectives and missing them. In fact, 37% of High-Performing Organizations (HPOs) report above average revenue growth for 2016 compared to 20% of Low-Performing Organizations.
Performance is strongly tied to L&D, but without analytics, it’s difficult to tell how exactly learning affects employee performance. This is because human performance is varied and assessment needs to take place over time. Therefore, in assessing L&D impact, you need access to data from the entire employee lifecycle.
Use learning analytics to:
Get a complete picture of learning throughout an employee’s tenure at your organization. This is only possible if you have a learning analytics solution that can connect all your HR and business systems together – whether it’s your performance management, HRMS, or financial performance tool. AND look at the relationships in this data over time frames ranging from months to multiple years.
This single source of data truth enables you to track what the ratio of high-performers are to non-high performers who do training, how long it takes performance to improve after training, whether training and certification programs have an impact on improved financial performance, and more.
3. How does L&D contribute to employee engagement?
On its own, employee engagement is a traditionally difficult metric to measure. However, studies show that L&D plays a role in engagement scores: one study in particular suggests that 41% of the variance in engagement is driven by activities that learning and development professionals have the opportunity to influence. In turn, 70% of the variance in performance ultimately can be explained by the degree of engagement.
Use learning analytics to:
Examine employee engagement within locations, departments, and teams to discover if those who are highly engaged are the same individuals that have recently completed a professional development program. Likewise, learning data can reveal which groups have the lowest engagement, what factors may be contributing to this low score, and whether more training could improve the situation.
4. Who would benefit most from L&D?
Roles are becoming increasingly specialized, which means a “one size fits all” approach will not work. In fact, 68% of L&D providers indicate role-centric approaches (i.e., role-specific, individualized approaches to learning design and delivery) are “Very Valuable” or “Extremely Valuable.
By focusing efforts on those employees that are more likely to make a positive impact on the bottom line, L&D teams can create more specific career development programs that will hopefully increase profits and productivity.
Use learning analytics to:
Identify the individuals who have benefited the most from training over the past few years – these are your high performers who have been promoted within the shortest amount of time. You can focus some of your programming on this group. Likewise, look for the employees who have re-certification deadlines to meet as they should have priority.
You could also use cohort analysis to determine which other employees have the potential to be high performers based on common attributes with your current stars. These employees could benefit the most from a targeted career development strategy. Furthermore, you examine the common attributes of employees who have never done training to see what effect this has on performance and whether a new L&D program for this group is warranted.
Recommended Read: It’s Time to Move Up the Workforce Intelligence Maturity Curve
5. Would we be better off without a specific L&D program?
Knowing what’s not working is just as important as knowing what is. Just as great HR strategy shouldn’t be about making HR better but rather the business, the L&D organization must focus on business outcomes in order to prove that it is a competitive advantage.
When L&D professionals can tie learning outcomes directly to business results, it becomes much easier to determine what programs should be cut or reworked.
Use learning analytics to:
Compare learning metrics directly to business metrics so you can analyze whether, for example, a specific training program had an impact on this quarter’s financial results or if changes to manager training hours is linked to changes in revenue per employee on their team.
Modernizing Learning Measurement
Connecting learning analytics to business data has traditionally been contingent on time-consuming, expensive data warehouse projects or hundreds of person hours going through spreadsheets and generating reports from various HR systems. Both methods involve long and tedious processes, which prevent L&D teams from quickly acting on data so they can proactively make decisions that could impact the bottomline.
Another option is to look into cloud-based learning analytics technology, which connect HR and business systems together, and offer the end-to-end view needed to quickly answer L&D’s critical questions and measure their total contribution to business goals.
Access to those kinds of insights will not only help L&D run more efficiently, but business leaders will also have the facts needed to properly invest in their employees career development.