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How HR Can Lead the Digital Transformation

Aug 08, 2016

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In human capital management, we have been enjoying the benefits and difficulties of the digital age for decades. The nature of our work changed, and the drudgery of record-keeping morphed into the challenge of data management.

Now, we are facing a shift from using digital tools to becoming digital in our thinking, working, and organizational design. For some, it’s like the feeling we had when wading in a large, deep lake for the first time and suddenly discovering we can’t touch the bottom. How deep is it? Can I make it back to shore? How big are the creatures that live here?

According to a new report in the MIT Sloan Management Review, no business is immune. Ninety percent of over 3,700 organization in Sloan’s 2016 Digital Business Global Executive Study and Research Project expect digital disruption, but only 44% say they are ready for it. That jibes with the results of Deloitte’s Global Human Capital Trends 2016 report, where 32 percent indicated they are ready for human capital analytics.[1]

As many companies have discovered, merely implementing new technology, even if you do it well, will not prepare your organization for its digital future. It requires a different approach to the way businesses think, plan, govern, and execute their strategies.

Human resources leaders have a central role in preparing for a digital future. What creates the foundation for a digital future is not technology, but developing a digital culture and the talent to drive it. According to Sloan, the main characteristics of digital cultures include an expanded appetite for risk, rapid experimentation, substantial investment in talent, and recruiting and developing leaders who excel at “soft” skills.[2]

It’s that massive investment in talent that concerns us most. Talent analytics plays a central part in the role that people strategies will play. If your organization has not yet developed an analytical approach to recruiting, developing, and retaining the talent you need to lead the cultural change, it is time now to start planning how you will help your organization conquer its digital future.

If you are just now getting started, the first thing to do is build the foundation. The basic building blocks are not technology platforms, but strategy, culture, and governance.

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Strategy

One of the most difficult actions in building strategy is creating a shared vision. Siloed thinking is an old enemy, but it is still alive and vigorous today. A shared vision can cut across organizational boundaries and help create a unified strategy. There are many tools for accomplishing that goal, and one of our favorites is the Blue Ocean Strategy Developed by  Professors W. Chan Kim and Renée Mauborgne.

Business strategy is only the beginning. Aligned digital and talent strategies come next, and both are essential components of the business plan. We think talent is first because you need talent with the vision to build the strategy and the people skills to lead the change.

Culture

Effective cultures do not evolve naturally. They are driven by intent and purpose. Culture is shaped by the values and norms of the people in the organization. Changing a culture takes time, and can be accomplished by the actions, both intentional and unintentional, of its leaders.

The MIT study correlated the cultural mindsets of respondents’ organizations with their maturity in achieving digitization. Common mindsets emerged in early-stage digital development, those organizations that are maturing, and the developing companies in between.

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Clearly, there is work to do for organizations that are struggling with meeting the challenge of the digital age. First is to define and nurture the culture. Second is to hire for cultural fit, not skills.

Governance

In our practice, good governance is foundational. The best-performing organizations are those that have the building blocks of governance in place:

  • governing policies and procedures for technology platforms, data management, and digital strategy,
  • a cross-functional governing body to manage policies and compliance,
  • supported by a digital strategy aligned with the business strategy.

Conclusion

If your organization waits, it will become more and more marginalized as the rest of the business world moves on. You don’t need to become a digital champion overnight, but a solid foundation, a clear strategy, and the willingness to change will get you there.

If you are in the early stage of development, your best move will be to team up with an analytics consulting partner. The right partner will help you grow into the kind of organization that can meet tomorrow’s challenges.

Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.  

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