human resources

What You Need to Know about HR Trends in the Digital Age – Part 2

Our exploration of how the rules of HR are changing in the digital age continues with six more trends from Deloitte’s 2017 Global Human Capital Trends report and survey.

  1. Performance management.

What’s it about?—It’s a simple truth that as the nature of work shifts, so should the way we measure and evaluate it. In recent years, companies have been experimenting more with performance management approaches that turn away from simple appraisals in favor of continuous feedback and coaching. This year, according to the Deloitte survey, companies are finishing their experiments and moving toward the deployment of new performance management models on a wide scale. So far, these changes are greatly helping to increase productivity and shift corporate culture.

business management

Where can businesses start?—Though more and more businesses are changing how they measure, evaluate, and recognize employee performance, new tools are not yet in place at every organization. Companies looking to capitalize on this trend should clearly designate a strategy and philosophy for performance management; look to their peers to see new techniques in action; and focus on providing training to managers in coaching and continuous feedback.

  1. Pushing the boundaries of leadership.

What’s it about?—Today’s rapidly transforming companies need strong leaders more than ever, and yet most organizations are having difficulty moving quickly enough to develop digital leaders with the necessary skills and expertise, let alone build completely new leadership models. As a result, the boundaries of traditional leadership hierarchies are being dramatically disrupted, and more agile, diverse, and younger leaders are emerging—sometimes from unexpected places—to take the reins at their companies.

Where can businesses start?—Challenges to the leadership model can be stressful for long-established organizations, but it’s important for companies to embrace this new direction in order to move forward. Businesses should be bold in coming up with a new vision for the organization’s leadership model. In addition, they should not be afraid of identifying prospective digital leaders within the company and promoting younger or newer workers into leadership positions quickly.

  1. Digital HR.

What’s it about?—No longer a siloed support function focused on delivering employee services, HR is, in many organizations, at the forefront of digital transformation. The push to “be digital” rather than just to “do digital” is driving the development of a new digital workforce, a more effectively designed digital workplace, and a digital HR function that not only delivers solutions, but continuously experiments and innovates. In other words, it’s not simply a question of digitizing HR platforms—rather, it’s about helping change how people work and how they interact with each other in the workplace.

Where can businesses start?—Fortunately, the path to digital HR is rapidly becoming clearer as expanded options and new platforms and tools gain a greater hold in the business world. Organizations can start down this path by upgrading core technology; developing a multi-year HR technology strategy and building a dedicated digital HR team; and prioritizing innovation as a core strategy within HR.

  1. People analytics.

What’s it about?—Data about people at work is of vital importance today, and not just to specialized technical data scientists, but as a step to achieving broad business objectives and efficiencies. When used properly, people analytics can impact everything from operations and management to financial performance. However, many businesses lack the readiness and expertise to optimize the use of this data and transform it into actionable insights.

analytics personnel

Where can businesses start?—Clear leadership and targeted investment can help businesses make a successful people analytics program part of their operations. Making a two- to three-year roadmap for analytics program investment is a good place to start, as is the establishment of a multidisciplinary group from across the organization to outline and understand the broadest possible uses of people data.

  1. Diversity and inclusion.

What’s it about?—All around the world, diversity and inclusion are now CEO-level issues. No longer a “check the box” initiative driven by HR, diversity is an essential element to the digital organization of today, which thrives on open dialogue, collaboration, and complementary working styles. To be most effective, diversity and inclusion should be a comprehensive strategy woven into the very fabric of the talent life cycle, where it can enhance employee engagement, boost the brand, and drive performance improvements.

Where can businesses start?—There is still a “reality gap” between the importance that organizations place on diversity and inclusion, and what’s happening on the ground. Businesses can shrink this gap by leveraging data to look at the facts, identify problems, and measure progress, as well as by providing education initiatives like unconscious bias training. The goal is to build an awareness of diversity into the entire workforce, including management.

  1. The augmented workforce.

What’s it about?—AI systems, robotics, and other cognitive tools and technology are reinventing almost every job, a process that is leading to something that has been dubbed the “augmented workforce.” As this trend picks up speed, organizations must consider how they will design jobs and organize work in the future with people and robots working side by side. The days of considering the workforce to be only those employees on the balance sheet are over.

Where can businesses start?—To understand how new cognitive technologies could change the fabric of their workforce, companies must have a clear and comprehensive understanding of what the picture looks like now. Essential tasks for companies to complete include closely examining how core work actually gets done; identifying all human workforce segments within the company; looking at all types of nonhuman workforces currently in play; and determining what human skills will be critical for the future workforce.

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human resources

What You Need to Know about HR Trends in the Digital Age – Part 1

It won’t come as a surprise to today’s business and HR leaders that the title of Deloitte’s recently released, fifth annual Global Human Capital Trends report and survey is “Rewriting the Rules for the Digital Age.” As the report highlights, the present-day workforce is undergoing a seismic shift as a result of dramatic advances in digital technology. This shift has called into question the hows and whys of almost every organizational practice. As a result, business and HR leaders all over the world are having to look beyond old operational paradigms and embrace bold new ways of thinking about their organizations, their people, and their role in the global economy.

For HR leaders struggling with how best to adapt to this dramatically changing landscape, the Deloitte report is an instructive read. Full of insights gathered from more than 10,000 survey respondents in 140 countries, the report presents 10 of the most important trends impacting HR in the digital age, and offers helpful suggestions for leaders on how to incorporate these trends into their workplaces. Read on for a look at the top four of these trends.

  1. Building the organization of the future.

What’s it about?—The question of how to build the organization of the future has topped Deloitte’s list of trends for the past two years. This year, nearly 90% of all survey respondents rated this issue as “important” or “very important.” It’s easy to understand why this is such a priority when we consider not only that today’s high-performing organizations operate very differently than they did even just a decade earlier, but also that many organizations still operate based on industrial-age models that were developed a century or more ago. Consequently, abandoning cumbersome legacy systems and practices is a pressing concern for most businesses today, especially given the rapid pace of transformation and adaptation in the digital change.

organization chart

Where can businesses start?—There are a number of early steps that businesses can take to start down the road of building the organization of the future. These include making talent mobility a core value, which can be accomplished by moving executives from function to function so that they gain a deeper understanding of a more agile career model. Other strategies involve forming an organizational performance group to interview and study how high-performing teams and programs work, and leveraging new workplace communication tools like Slack or Basecamp to foster greater collaboration and exchange.

  1. Careers and learning.

What’s it about?—The very notion of what a “career” is has changed significantly in recent years. Today, the career of the average worker could span up to 60 years, with the average stay in a single job or role lasting between four and five years. In other words, today’s workers will be looking to continually reinvent themselves, move from role to role, and find or transform their calling over time. If businesses want to make the most of their employees’ skills, they are going to have to support them through this ongoing process by delivering continuous learning opportunities and a business culture that deeply values long-term development.

Where can businesses start?—HR leaders looking to revamp learning and development (L&D) within their organizations have a challenging task ahead, but small initial actions can help pave the way. First, it’s helpful to evaluate internal mobility to ensure that employees have frequent access to new opportunities. Hiring from within is also important, as is bringing back the idea of the “corporate university” where people can come together for cross-functional, interdisciplinary programs and learning experiences.

  1. Talent acquisition.

personnel hiring

What’s it about?—Identified as an important or very important issue by 81% of Deloitte survey respondents, talent acquisition is a challenging and contentious area in this age of talent and skill shortages. Interestingly, it has become so important for companies to find the right people for the job that attracting skilled resources is no longer the responsibility of HR alone. Instead, all managers and C-level executives are now realizing the importance of, and their role in, sourcing top talent.

Where can businesses start?—One of the most important ways that businesses can change their approach to talent acquisition is by changing the tools they use to find and connect with candidates. Recruiting today is a sophisticated digital experience, requiring businesses to explore a range of approaches, including social networks, cognitive tools, and video and gaming, in their hunt for great people.

  1. The employee experience.

What’s it about?—Just as digital-age customers have come to expect a different level of experience from the organizations they buy products and services from, employees have come to expect a different kind of workplace experience during their tenure with a company. As a result, more and more businesses are focusing on long-term employee journeys, looking at the needs of their workforce from the first pre-interview contact through retirement and beyond. These companies are finding new ways to reshape the employee experience through broad culture and engagement initiatives.

Where can businesses start?—A holistic approach is needed when it comes to revamping the employee experience. Businesses can start by recognizing that the employee experience is as valuable and can make as much of an impact as the customer experience. Then, they can move on to specific strategies like finding ways to simplify work and improve productivity; visiting peer companies to gain inspiration and discover successful and unsuccessful techniques; and gaining critical buy-in from the C-suite.

technology

How to Get to a Next-Generation Operating Model

Companies today are faced with a tough challenge: how to build value and provide compelling and responsive customer experiences while cutting costs and inefficiencies at the same time. Leveraging new digital technologies seems to be the obvious answer, but, as a recent article from McKinsey & Company argues, technology itself is only part of the solution. What companies need to do is let go of the way they’ve always done things and commit to a next-generation operating model; that is, a way of running the business that brings together digital technologies and operations capabilities in an integrated, holistic, and well-sequenced way.

A shift in approach.

For most companies, adopting such a model requires two big shifts in their established operational approach. The first is to use customer journeys as the organizing principle for improvement efforts, rather than to run uncoordinated efforts within conventional departmental siloes. In other words, this shift involves breaking down traditional business units and instead thinking holistically about customer journeys and the internal processes that support them. For example, in the case of a customer wanting to open a bank account, rather than focusing on the individual units involved (operations, marketing, credit, and IT) it’s preferable to look at that journey as a single, end-to-end element which should be handled as a whole and not broken down by department.

online banking

The second major shift is to move away from employing individual technologies or capabilities in a piecemeal way, and instead focus on working with multiple capabilities in a strategic sequence to compound the impact and achieve maximum results. The McKinsey article calls these capabilities “levers,” and provides a breakdown of the five most important levers that organizations typically use in improving the operations and processes that support customer journeys. Read on for an overview of the five levers.

  1. Digitization

Broadly speaking, digitization refers to the process of using digital tools and technologies to improve journeys. These tools can have a powerfully transformative impact on customer-facing journeys, notably by providing options for self-service and thus giving customers independence and autonomy in their interactions with companies. Digitization can also streamline time-consuming manual and transactional tasks, thus speeding up responsiveness.

  1. Advanced analytics

An increasingly critical component of business decision-making today, advanced analytics involves using sophisticated, autonomous tools to process data and uncover patterns and insights from which actionable recommendations can be made. The intelligence that analytics provides can greatly enhance journeys that require non-linear thinking; for example, insurers with advanced analytics capabilities in place are seeing huge improvements in areas like fraud management and smart claims triage.

  1. Intelligent process automation (IPA)

This emerging set of new technologies brings together robotic process automation and machine learning to trigger fundamental process redesign. In other words, for processes that involve data aggregation from multiple systems or standardized data input, IPA can take the place of human effort.

  1. Business process outsourcing (BPO)

outsourcing

The practice of using resources outside the main business to fulfill specific tasks and functions (for example, back-office document processing) has become a popular one in recent years. Often a useful measure for improving cost efficiency, BPO is typically best when used for manual processes that are not primarily customer-facing and do not have an impact on strategic choices or value propositions.

  1. Lean process redesign

This versatile methodology helps companies streamline processes, create a culture of continuous improvement, and eliminate waste, redundancies, and inefficiencies. It applies well to almost all processes, including short- and long-cycle, transactional and judgement-based, and client-facing and internal.

How should companies implement these levers?

The McKinsey article offers three important design guidelines companies should keep in mind when thinking about how and when to use the above levers:

  1. Each lever should be used to maximum effect.

For companies to reap the rewards of the next-generation operating model, they must be willing to push the limits. Too often, companies think they are applying capabilities to the fullest, but they are actually falling short of their true potential. Leveraging a few predictive models, for example, is not the same as truly harnessing the power of analytics. Companies, and their executives in particular, must be vigilant in monitoring the use of levers, and they must be prepared to challenge teams who are complacent in the belief that they are “doing all they can.”

  1. Each lever must be implemented in the right sequence.

So many variables are involved that it’s virtually impossible to build a “universal recipe” for sequencing these levers, but companies should know that the best results can be achieved when the levers are able to build on each other. Systematic analysis, which is looking at the opportunity to apply remaining levers in turn and the resulting impact, can help companies figure out which levers depend on the successful implementation of others to be most effective.

  1. The levers should interact with each other to achieve a compound effect.

Just as levers need to be applied in the right sequence, they also need to work in tandem to be most successful; that is, it’s not simply a case of one lever picking up where another leaves off. Some companies have adopted “heat maps,” which offer an organization-wide perspective on how each lever will impact each journey, as a tool to help in looking at the levers and their effects holistically.

talent management

How to Manage Talent: 10 Things Digital Businesses Need to Know

Incumbents may think that the key to successfully transforming their established company into a digital business lies solely in their effective integration of technology, but surprisingly few realize the importance of an equally essential, yet often overlooked element of a successful digital transformation: people.

The fact is that building and sustaining a thriving digital business depends to a significant extent on people-based factors such as leadership mindset, workforce capabilities, and organizational structure—and companies who ignore the human element of a digital transformation do so at their peril. With this warning in mind, a recent article from Gartner offers 10 critical insights on talent management that every would-be digital business needs to know. The following is a comprehensive list gleaned from more than a decade of research into digital talent practices and strategy.

management

Any decision made about the organization and the people in it must be driven by a clearly defined digital strategy that springs from a compelling vision. It’s important for businesses to think holistically and long-term here; by creating a strong digital business vision, companies can better understand how going digital will impact their business, and they can then plan for how they will help and support their people in dealing with those effects.

Mindset and competencies are more important than skill when it comes to giving businesses a digital performance edge. Skills can be learned, but attitudes are usually much more difficult to shift. Businesses need to focus on the people rather than the technology, deciding on what core competencies they need on their team—like innovation, accountability, or risk-taking— and keeping those in focus all across the talent process, from initial recruitment to performance assessment.

Top-down leadership is increasingly out of place in the current digital landscape. Rather than the command-and-control style of previous eras, what’s proving more successful for digital businesses today is an enable-and-collaborate approach. The fast-paced demands of digital business often require employees to take initiative and act quickly without always seeking permission first; a new leadership style that emphasizes collaboration can help give workers the support and authority they need to be most effective.

Organizing and mobilizing people in the world of digital business is all about agility. Companies can start by identifying the role that IT will play in the company’s new digital landscape, and can move from there to organizing the elements that require optimization. It’s important not to overlook how changes like these will affect other aspects of the business.

Versatilists, or employees with a broad range of skills and competencies, are an essential ingredient for a successful digital transformation, and yet many organizations don’t have enough of these people on their team to move forward. To help address this, companies can conduct an evaluation of internal skill sets to better ascertain talent gaps and strengths, and to identify potential versatilists who can be groomed for future progress within the company. External hiring to boost the versatilist quotient can also be a helpful move.

employees

Diversity is not just a buzzword, but a vital business strategy. It’s a fact that a diverse workforce is more likely to generate a range of different ideas and come up with the most innovative solutions. As such, businesses with more homogenous workforces are likely to fall behind competitively. Organizations can increase their diversity by identifying barriers to inclusion and developing ways to overcome those obstacles, and by leveraging technologies like workplace analytics to help advance workplace parity.

Effective digital businesses use digital tools to help boost employee engagement and streamline activities. However, some of these digital tools are better at responding strategically to workplace changes than others, so businesses need to be sure they are using technologies appropriate to their workplace situation.

HR and IT must come together to give digital businesses the edge. Although these two departments have long been isolated from each other, the demands of the digital age mean that technological talent and business intelligence must learn to work together to ensure that hired talent matches with digital business needs. Workforce analytics capabilities can be a huge asset here.

Social media and other non-traditional recruitment options are the new normal when it comes to finding new talent. Candidates with the necessary digital expertise are in high demand, and so companies must cast their net wide to find the people they need. Creative recruiting strategies used by successful digital businesses include hackathons, contests, and thought leadership events.

Just as the nature of performance is changing for today’s digital businesses, so too is the nature of performance reviews. New dynamic teams that are working together in a different way and are contributing new value to the digital business can’t be assessed using old methods; instead, tools that support new approaches like frequent performance feedback, tailored personalized development, and visibility of accomplishments are best.

leadership

How to Think Like a Disruptive Digital Leader

CEOs and other top executives today know that a major shift is needed to adapt to the dramatic changes that the digital revolution has brought to the business landscape. But all too often, they overlook one of the most important factors in achieving such a shift successfully: their own mindset.

leadership meetingAs the business world becomes increasingly driven by digital developments, two distinct categories of CEO mindsets are emerging. One is the traditionalist: these executives are strongly on the side of the incumbent marketplace, of letting solid business cases determine investment strategies, and of prioritizing predictability over speed and innovation. The other is the digital market disruptor: the type of leader who believes that innovation can lead to big wins, that embracing failure is an inevitable part of risk management, and that innovation and speed should be prioritized over predictability.

These mindsets are important because, inevitably, a leader’s mindset is their frame of reference for interpreting and acting on information, and this process is in turn directly connected to how the company itself operates. Thus, a traditional CEO may struggle to lead a company’s digital transformation successfully, not necessarily due to lack of knowledge or willingness, but simply because they have difficulty altering long-established thought and decision-making patterns that are increasingly less relevant to the real world of business today. Transforming their mindset is therefore one of the first things that leaders who become successful digital drivers must do in order to transform their company.

To find out if you’re thinking like a disruptive digital leader, check yourself against these five key mindset traits of digital disruptors, as outlined in a recent article from Gartner.

Thrive on uncertainty.

Uncertainty can be paralyzing, particularly to incumbent business leaders who are accustomed to having plenty of time to make decisions and strong business cases arguing for or against those decisions. In the digital era, however, technology and innovations are evolving so rapidly and unpredictably that uncertainty is inevitable. Disruptive digital leaders not only understand, but embrace this idea. They don’t waste time or energy trying to make the uncertain more certain. Instead, they explore what is technologically possible, what impending changes might mean to the markets, and what are the risk-reward tradeoffs, doing the best they can to establish plans that allow for change and evolution.

Focus on “leapfrogging” ideas.

lightbulb

Traditional incremental thinking simply can’t keep up with the pace of change in the digital era. Disruptive digital leaders are therefore always on the lookout for breakthrough ideas—ideas that that have the potential to leapfrog ahead into a visionary new frontier and to bring dramatic, rather than step-by-step, changes to a company. Naturally, this requires a mindset that tolerates risk, given the volatility of future technologies. A true digital leader will be driven by this challenge and the possibility of creating net-new business value while still keeping a close eye on the end goal.

Master the digital-era levers.

The digital revolution has unfolded over a relatively short time frame, but it’s been long enough to demonstrate that not all new digital technologies are ready for the long haul. There are plenty of shiny innovations that look good if you’re interested in technology for technology’s sake, but won’t ever become true drivers of transformation. Digital leaders know to look beyond these distractions, seeking to master not isolated pieces of technology, but the real competitive levers of the digital era. Making long-term, strategic investments in areas like platform-based business models or customer data analytics can help companies become pioneering digital business leaders, rather than just another flash in the pan.

Start, experiment, learn, iterate.

If traditionally-minded leaders would rather wait until technology-enabled breakthroughs have been tried, tested, and proven, disruptive digital leaders know that waiting for certainty just means that another company will get in the door first. That’s why the mindset of digital leaders is focused on a start-experiment-learn-iterate approach: beginning from well-grounded strategic bets, these leaders explore and experiment with different pathways to breakthrough solutions, learning as they go rather than waiting for a sure thing before they start. The result is often a leaner approach that yields new value while still mitigating downside risk.

Innovate faster than the competition.

Speed is everything in the digital era. The current landscape is so rich in disruption and innovation that, often, the only way for companies to differentiate themselves is simply to launch their new product or service first. To achieve this goal of innovation at maximum speed, digital leaders work to establish a true culture of creativity. This means incentivizing speed, but not punishing failure—indeed, sometimes mistakes are even rewarded. This type of culture also involves breaking free of traditional industry rules, and championing and modeling risk-taking and discovery at every level of the company, from new recruits to established directors.