HR must get over its struggle with digital transformation for brands to thrive

HR is at the centre of changes to leadership, training and the application of data so digital transformation of internal processes is just as critical.

hr employee

For many companies, digital transformation is a product of competitive pressure to improve the customer experience.

The technology and processes involved in this effort are now evident across every department of a typical business. Digital isn’t just disrupting business models but the process of work, too.

The race is to avoid being left behind as new and nimble competitors begin life with simpler and more powerful tech architecture, in a trend that fits the classic ‘S curves’ scenario, as shown below.

Chart: Chris Sandstrom, Chalmers University of Technology

In order to stay ahead of (or at least on) these curves, businesses need to properly understand new digital technology. Worryingly, an Econsultancy survey from late 2015 showed that although 71% of respondents thought it was important for leaders to be technically literate, when asked whether their leader was, 41% said ‘quite’ and 29% said ‘not very’.

HR is in the thick of it

HR is right in the middle of all these changes – changes to the concept of leadership, working processes, employee skills, the application of data, interdepartmental collaboration and tech infrastructure.

In Econsultancy’s best practice guide, ‘The Future of HR in the Digital Age’, and at its annual Digital Transformation conference, consultant Neil Perkin has highlighted some of the changes necessary within HR departments. The first is the growing role of data.

READ MORE: Why marketing and HR should join forces to drive advocacy among employees

HR departments are no longer the preserve of paperwork and face-to-face meetings. Analytics has its part to play.

Laszlo Bock, former senior vice-president of people operations at Google, has written about the company’s ‘three thirds’ hiring model. That means an HR department that breaks down as one third from HR backgrounds, one third from consultancy backgrounds and, crucially, one third from academic fields such as science and mathematics (people who are inculcated with the need for analytical proof).

This approach, often called ‘people analytics’, is designed to look for patterns in recruitment and retention, employee wellbeing, performance and tenure, and ultimately to define job roles with more than just words. That means comparing the performance of similar teams to derive insights, as well as analysing different candidates’ performance in order to influence what characteristics and credentials HR looks for.

Bock told The Wharton School in an interview that the only way to truly measure the effect of a manager’s performance on his or her team is to make people switch teams.

He advised HR practitioners to “hire somebody with a quant background and a semester or two of MBA-level statistics. That’s all you need … someone to be able to tell random variation from actual, cause-driven variation”.

Then it’s a case of taking two groups – whether five or 500 people – and treating the two differently to see what happens. Such an experimental approach could prove a competitive advantage in a jobs market where digital skills come at a premium.

Digital transformation is about people

Take one of the most famous cautionary tales where a business model failed – Kodak – and you’ll see that the company had the technical expertise required (it invented digital imaging) but management simply could not get rid of their preconceptions quickly enough.

Change management expert John Kotter, in his book XLR8, discusses how articulating a big business opportunity in the right way can create urgency in an organisation. The opportunity begets a change vision, which begets strategic initiatives:

  • The big opportunity – a big window into a winning future that is realistic, emotionally compelling, memorable.
  • The change vision – what you need to look like to be able to capitalise on the big opportunity.
  • Strategic initiatives – activities that, if designed and executed fast enough and well enough, will make your vision a reality.

Urgency is an organisational trait prioritised, too, by Amazon founder Jeff Bezos. Bezos talks of ‘high-velocity decisions’, reasoning that it’s better to make decisions with 70% of the information you need rather than wait until you have 90%. This is encapsulated in the Amazon leadership principle ‘disagree and commit’.

A topic related to organisational urgency is that of ‘agile’ project management. Agile, a methodology adopted from software development, permits data-led, small-scale and iterative projects – anathema for some large companies whose ‘waterfall’ thinking has created imposing Death Star-style tech infrastructure.

HR can play a fundamental role in fostering agile thinking by enabling small multidisciplinary teams. These teams can be an effective way of tackling smaller projects in companies where large hierarchies have reduced the network side of the business where new ideas can flourish.

Transparency for the win?

A final thought for the value of transparency, a trait often associated with digital-born businesses and their cultures.

Google publishes each employee’s personal OKRs (objectives and key results), which in turn come from readily available team OKRs and company OKRs.

With surveys from Gallup showing that only 13% of people worldwide are engaged with what they do in the workplace, this transparency may be one way in which clarity of purpose can be achieved.

Ultimately, digital transformation calls for change in ways of working across the business, and HR is no exception.

Ben Davis is senior writer at Marketing Week’s sister title Econsultancy

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