How well is your organisation prepared for the ever-changing digital world? Laurence Smith says HR has a unique opportunity to lead the required transformation
Multiple research reports state that CEOs see digital transformation and increased competition from disruptive startups and other non-traditional competitors as their greatest challenge.
So what is HR doing to prepare the organisation to win in today’s digital world?
I sit here pondering this question, as tomorrow I must facilitate HRM Asia’s ThinkTank and this is the challenge 85 HR leaders and I have been given to think through.
What’s the most effective way for so many HR leaders from diverse industries and with different experiences to think through this challenge? How do I set the scene to make this productive and come out with some useful recommendations and actions at the end of the hour?
It seems that first I need to spend a minute or two “level setting”. Everyone will be walking in with different levels of awareness, understanding, and confidence regarding digital. Then perhaps second, I need to provide a framework to think this through and come to up with some specific recommendations…
- How do you de-mystify digital?
You cannot stop or ignore the technology advancement. You ether adapt to it faster than your neighbours and competitors, or you get left behind. Help people understand that they must become comfortable with technology, it is inevitable. Whether you win, or are left behind, is your choice (or your CEO’s!)
In many countries there were protests against the introduction of Uber – perhaps none more passionate or violent than those in France. In Paris, the taxi drivers blocked the streets and even set tyres on fire, angrily holding up signs saying “down with Uber”. Many stranded Parisians, unable to get a cab, instead tried Uber for the first time, boosting the newcomer’s business 10 times, almost overnight.
In London, the famous black cabbies took a totally different approach. First understanding what Uber offered that was so threatening, but also what they themselves offered that was a unique competitive advantage. They built their own app, Hailo, that offered a black cab as quickly as an Uber, but with the added safety, quality and navigation skills that black cabs are known for.
“In digital, denial is not a viable long term strategy”
- “Digitalisation” alone does not equal digital transformation
For many who take a shallow approach to digital, there are a lot of apparent quick wins that can show they are ticking the boxes, but won’t necessarily result in your firm being any more capable or better prepared.
The paperless office, giving everyone an iPad, or – heaven forbid – putting the whole intranet or your traditional e-learning onto a phone, does not a digital transformation make!
In fact, it’s not just about technology. It’s actually mainly about culture – which is why good HR leaders are so critical to this transformation.
Digital transformation begins to occur when a majority of the organisation and its leaders develop a “digital mindset” and can see the world from a perspective of the opportunities and threats offered by digital within the organisation’s own industry, adjacencies, and even quite different industries.
“Digital transformation is about identifying and developing new digital business models to better serve customers and stakeholders.”
I add “and stakeholders” because for this to be successful, you need to both build a culture that allows your employees to experiment and innovate, and also one that considers external stakeholders and how the purpose of your organisation aligns with values, sustainability, and other matters of importance that both society, and current and potential employees care about.
Getting hyper-aware about digital
From my own observations, supported by some research from IMD and Cisco on The Digital Vortex
, the first step is to build “hyper-awareness”, which they define as “being highly alert to stimuli… particularly to changes that spotlight opportunities or threats”.
From an HR competency perspective, this reminds me of the “core competencies” identified by Dave Ulrich’s research
which pinpoints “Strategic Positioner”, “Credible Activist”, and the new “Paradox Navigator” as the core competencies of effective HR practioners.
In addition, HR people need to first understand, and then develop in others, two critical capabilities. The first is to strengthen their own “Digital Quotient
” (or DQ as McKinsey calls it), and make sure that they have a broad understanding of the digital world and the personal, societal, and organisational implications of new technologies like artificial intelligence, robotics, and autonomous vehicles.
“HR people need to understand the digital world,
from AI to VR, and from AirBnB to Zappos.”
In addition, they need a basic understanding of design thinking and lean startup methodologies. At the very least read a book or take a course, but ideally work on a real project or go join a hackathon. You really need to know this stuff.
The most important element – and if your CEO doesn’t get it, this may be too broad a chasm to cross – is creating a culture of experimentation. And this is where HR has its greatest opportunity to play a transformative role.
You need to develop ALL of the above in your organsation, and then ensure that every single HR system, policy, and process is aligned to support it. And most importantly that you create a set of leadership values and behaviours that support it. The ways that you hire, recognise and promote, send strong signals throughout the organisation that it is, or is not, OK to take appropriate risks, try small experiments, and risk innovating.
(This is the hardest part and I will dedicate a future article to this).
Seeing the world with a “Digital Mindset”
If you’ve developed a hyper-awareness of the world around you, of how technology and innovation is re-shaping it, a competency with lean startup and design thinking, and a culture of experimentation – you truly have all the ingredients for a ‘Digital Mindset.’
That’s when magic happens.
When a critical mass of the organisation is seeing an augmented reality world around them, when they can just “see” digital opportunities and threats overlaid on every part of everyday business, they will no longer be afraid of digital, but will grasp it for the opportunity it is.
“I never knew I was only seeing the world in analogue,
until I truly understood digital”
Ultimately organisations that are successful in building a digital mindset, will see more, and move faster than traditional organisations bound up by fear, denial and ignorance. After all we all know the famous quote (by Arie de Geus and/or Peter Senge) that says that the only sustainable advantage is in learning faster than your competitors, and in this brave new digital world, this has never been truer.
Laurence Smith is the host of HRM Asia’s Digital Mindset forum, and regularly contributes articles on how technology is changing the way workforces, and HR, operate.