Digital Transformation is a Workforce Transformation

Digital transformation is top of a lot of boardroom discussions today for obvious reasons such as higher quality products and services, employee productivity enhancements, operational efficiencies and the inevitable cost savings.  In these strategic talks, little mention is given to the need for workplace transformation but one without the other is a recipe for failure.

The risks of employee disengagement, decreased productivity and turnover can be daunting in a digital transformation, and that means that there is a clear need for focused attention on the impact upon the workforce through these changes. This is especially the case at organizations with disjointed IT applications, systems and processes, all of which result in a highly complex integration process.

Digital Transformation

Steps toward success

For digital transformation to succeed, internal processes need to follow the customer experience, not the other way around. This often results in radical changes such as the dismantling of processes and functional roles, as well as the demand for new skills and capabilities to meet evolving customer demands.  When these are not handled well, these changes can irretrievably damage employee morale, particularly if senior leaders have not articulated a compelling and inspiring reason for the change throughout the enterprise.  In conjunction with this every employee needs to see and feel the “what’s in it for me” – it is crucial to their commitment and involvement to making the changes work.

If there is already a culture of fear or mistrust in the organization, people will be resistant to changes they perceive as employment risks, making it difficult for the business to achieve the far-reaching goals of the transformation.  Many change programs fail because the senior team and board of directors lack the necessary transformational management experience to steer the workforce through the process. There is a profound difference between operational and transformational management. This is especially the case when it comes to making needed changes to the executive team in the early stages of the effort.

Consequently, the people who end up guiding the transformation often have a very different skillset than what is needed to manage the impact of change in the workforce. The emotional side to change is often underestimated in terms of how deeply it can affect employees.  In this void, HR must step forward and take a leadership role, understanding the reasons for the digital transformation to guide the process forward without adversely affecting workforce morale, engagement and productivity.  If this is done well, employees will embrace the change effort, knowing the organization will emerge smarter, stronger and more competitive.

HR Transformation

In leading the change program, HR itself will need to change. Processes and systems that impede workforce innovation, flexibility and agility must be abandoned. Building the right workforce is an art form, not a matter of creating rigid processes to assess people.  When HR professionals fail to articulate the ‘why’ and the ‘what’ of the transformation objectives to employees, and don’t regularly take the pulse of the organization as the changes occur, it may contribute to a negative outcome.

There are numerous ways to mitigate these risks. For one thing, HR should encourage senior leaders to run a talent capability diagnostic before embarking on the digital transformation.  It is all very well having a brilliant transformation plan in place, but the organization must honestly assess its existing ecosystem to perceive possible skills gaps.

It is also important to hire the right talent at the right stages of the initiative. The talent capable of implementing the design stage may not be able to deploy the program regionally or globally or even sustain the benefits in the long term. Having the right talent in place at critical periods of the transformation can make the difference between success and failure.

Secondly, digital transformation cannot be thrust upon an unwilling audience. HR leaders must ensure organizational-wide buy-in of the change effort as it commences, if not before, leading frank discussions on the reasons for the change program and the workforce modifications that are likely to result.   If these issues aren’t addressed until the transformation is underway, negative employee attitudes and resistance may already be embedded.

In summation

HR should see its role as that of an internal consultant to senior management and the board on the workforce implications of the digital transformation. In this capacity, HR can assist the hiring of people to manage the digital change effort.  HR can also ensure the design and implementation of a governance structure that permits accelerated decision-making capabilities. It can provide valuable advice on the consistent application of practices, tools and metrics in areas like benefits management and it can manage those stakeholders who resist technology adoption.

Add it up and the need for HR to assume a leadership role is clear and compelling. Human capital is an organization’s most important form of capital and managing people to achieve their greatest potential is what HR does.  As digital transformation continues to be a key strategy of more and more organizations, HR practitioners that have already undertaken this type of experience will be in high demand. Count on it.

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