HR strategies that help digital transformation succeed
With the adoption of technologies which typify the fourth industrial revolution, the need for workplace and workforce change creates significant challenges for Human Resources (HR). Many HR departments have focused on functional transformations, applying different technologies to solve problems of efficiency and data integrity. While functional transformation is an essential component, HR must also take a lead role in transforming organizations by ensuring employees have the capability and opportunity to make the transformation possible.
HR departments yet to embark on a broad program of transforming employees to thrive in a digital era will very soon be left behind. As HR knows, changing a policy or program takes a relatively short timeframe; changing people takes far longer, is costlier, and needs sustained commitment. If business needs employees who can operate effectively in a different way a year from now, then the time to start the change is now.
There are three HR focus areas that support the digital transformation of business and employees:
- Fostering curiosity, knowledge development and the lifelong learning mindset of employees,
- Ensuring employees can work effectively in cross-functional teams, and
- Endorsing structures that support the forming and reforming of teams and effective flow of information.
Curiosity, knowledge and lifelong learning
For the first time in modern history, lifelong learning is now a professional survival imperative. With new technologies changing work and business at a rapid rate, the need for continuous and rapid adaptation is unrelenting. For many people, the lifelong learning concept is relatively new. Many began their careers when employment was assured after university graduation through the development of deep expertise in a field. As technology in business crosses and binds multiple areas, employees now need to develop knowledge beyond their own area of expertise, along with knowledge about technology. Naturally curious people find the adjustment easier, as their focus tends to be on growth and change.
As new technologies and tools continue to emerge at an ever-increasing rate, and the changes infiltrate organizations, individuals need to learn and adapt at a faster rate to remain relevant and employable. Those yet to learn about technology, risk being irrevocably left behind. This does not mean everyone needs to be able to code, but employees must understand the basics of new technologies and how they affect the workplace and business stakeholders.
Yet we live in a paradox; in a world permeated by digital technology, human skills such as creativity, critical thinking and emotional intelligence have increased importance, and dominate the World Economic Forum’s list of skills needed for people to succeed in 2020. Employees need to be capable of balancing the possibilities and opportunities of technology, with the disadvantages they present if the human factor is not sufficiently prioritised.
Overcoming the challenges of acquiring digital skills and supporting employee development can lead to higher engagement and according to Gartner (2018) four times better retention, providing a return on the learning investment. Some organizations have made progress, providing employees with access to micro-learning platforms, organising internal hackathons and running workshops and peer-learning exchanges. Though the term has become commonplace, fostering a lifelong learning mindset remains beyond the reach of most learning and development programs. Employee transformation is a prerequisite for the successful digital transformation of a business and possessing a lifelong learning mindset is a crucial part of employee transformation.
As new technologies and tools continue to emerge at an ever-increasing rate, and the changes infiltrate organizations, individuals need to learn and adapt at a faster rate to remain relevant and employable
Team-based cross-functional work is increasingly common, reducing the insulation many people have experienced working in siloed business units. Cross-functional teams, teams composed of members from different functions and with different functional expertise, are commonly found during the implementation of technology to business.
For many experienced employees the opportunities to work in multi-functional or cross-functional teams during their career have been limited, leaving them without the benefit of experience for developing the skills needed to work effectively in cross-functional teams. In a Harvard Business Review article, Tabrizi asserts that 75 percent of cross-functional teams are dysfunctional, with barriers between silos perpetuating within teams cited as a key contributor to dysfunction. Clear governance that addresses silos and aligns rewards to recognize cross-functional team contributions can increase the effective functioning of a cross-functional team. Employees benefit from learning the vernacular of other functions, as it improves communication and understanding. The judicious application of collaboration tools also facilitates better communication and information flow.
With the increasing importance of cross-functional teamwork, there is a significant need for employees to be supported; from opportunities to develop individual capability to perform effectively in cross-functional teams to systemic reconfiguration of the organization structure.
With the increasing importance of cross-functional teamwork, there is a significant need for employees to be supported; from opportunities to develop individual capability to perform effectively in cross-functional teams to systemic reconfiguration of the organization structure
Modern organization structures
To support team-based cross-functional work, organizations have started adopting modern structures such as network and boundaryless structures. A boundaryless structure is uninhibited by the vertical and horizontal limits of departments and functions. People operate in reforming teams, depending on the current needs of the business. People also work in cross-functional teams focused on the delivery of the company’s service or product in a network. Networks recognize that information flows across the social connectedness between people. An understanding of the network can be developed through an analysis of communications and knowledge sharing practices. Organization Network Analysis (ONA) tools already exist, and future focused HR departments are using them to develop a deeper understanding of the networks within their organization.
Traditional organization structures are coexisting and slowly being replaced by modern structures, which enable organizations to better respond to the volatility, uncertainty, complexity and ambiguity of today. Modern structures require people who can work effectively in continuously reforming cross-functional teams; often as the only individual with their domain knowledge on the team. Individuals performing in such environments need to operate and behave differently from traditional ways of working and are likely to need training and support to do so effectively.
Today’s ideal employee is curious and embraces the opportunity to learn, has strong core domain knowledge and knowledge of at least one other domain, a good understanding of technology, and advanced uniquely human attributes such as creativity and critical thinking. Organizations who plan to hire the ‘right’ people instead of investing in developing their current employees towards the ideal are missing the point. It is unrealistic to assume most companies can only hire such people, because supply is insufficient. The historic needs of business did not produce such employees. The labor force changes needed today are wholesale, there won’t be anyone unaffected by the transition to the fourth industrial revolution. HR must help individuals transform, while engaging them to transform business. We cannot have one without the other.
According to McKinsey (2018) only 16 percent of digital transformations are successful. Transformation is not fast nor painless, and there is little benefit in delay. Companies that have started their transformation journey are nearer the front of the learning curve than those who have yet to begin. How a company proceeds is dependent on the company’s current situation and progress to date with new technologies, systems, structure, and ways of working; there is no single formula for transformation.
A courageous and capable HR department will step up and help lead the transformation of the people and the company, beyond its own functional boundaries.