Digital transformation requires more than just new technology

Digital transformation has been a priority for businesses for many years, primarily to benefit from the opportunities presented by a mix of digital technologies and their impact across all aspects of society. Customer-facing functions such as sales, marketing and procurement, in their quest for new revenue sources and information-powered ecosystems of value, have led the way on digital transformation, while HR has historically taken a back seat. But in order for the entire organisation undergoing transformation to work together holistically, HR needs to take the lead and embed a digital DNA within the organisation.

This will result in profoundly transforming not only technology platforms and systems, but, more importantly, the corporate culture and mindset as a whole, along with organisational activities, processes, competencies and operating models.  Whilst technology makes innovation possible, it’s an organisation’s capacity to embrace that innovation that will make all the difference.

 

Corporate culture must support digital transformation

 Digital transformation is not just about technology, it’s about people, processes, competencies and culture since these keep businesses running. To implement a successful digital transformation strategy, businesses must ensure that their people (and in turn their culture – ‘the way we do things round here’ ) support it and let them see it as providing a platform to innovate. Last year, Gartner analyst Aashish Gupta said, “The culture aspect and the technology demand equal attention from the application leader, because culture will form the backbone of all change initiatives for their digital business transformation. Staff trapped in a “fixed” mindset may slow down or, worse, derail the digital business transformation initiatives of the company.”

Often, senior management struggle to understand the benefits and implications of new tools and processes, primarily because they are used to the old ways of working. If senior managers have been working in the same way for the past so many years, it’s understandable why they might struggle to alter the way they work. In fact, findings from a 2018 Cornerstone and IDC study – Future Culture: Building a Culture of Innovation in the Age of Digital Transformation,” have shown that cultural resistance to change is the biggest digital transformation barrier for UK companies. If senior management in the organisation is reluctant to appreciate the benefits of digital transformation, then confusion and frustration will spread throughout the business. Therefore, it’s imperative to prioritise moulding the corporate culture towards a digital future – and that starts with the HR function.

 

Make the case for change

To ensure all functions of the business integrate and work together towards a digital future, companies must develop new skill sets and promote a different culture among their people. It’s essential that the HR function leads the way in in creating this awareness and building a strong case for change, so it can show others the benefits of new ways of working. HR should be the change they wish to see by redesigning talent practices, from recruiting to learning to performance management, by building a compelling employee experience across their customer journey map and creating value where it matters most – business outcomes.

HR should create an immersive experience for senior management, gradually exposing them to new technologies and the resulting new ways of working, to ensure that they align with the digital agenda and lead by example. With senior management’s active support, creating a digital culture will be easier and more effective.

The digital journey is a never-ending transformation given the rapid evolution of technology and its wider use. The challenge for HR is to sustain this change in a practical way across the organisation.

 

Clear communication and incremental steps

It’s essential that your organisation communicates the scope and the desired outcome from the digital transformation journey including the inevitable disruptions that will follow. Make clear the incentives of alternative ways of working that will be possible because of the changes: a secure, fully responsive, device independent, digital infrastructure, for instance, will make remote working more viable making the attraction and retention of talent easier and boosting productivity.

As senior management is often quite set in their ways of working, consider how you can get them on board. Share digital transformation success stories like Domino’s: with Domino’s ‘Anywhere’, you can now order your piping hot pizza directly to outdoor areas like the park or beach, without needing a specific street address, or JetBlue’s inflight Wi-Fi, Fly-Fi, which has boosted the crew’s productivity in attending to customer needs proactively. Cabin crew now use iPads to access individual customer information, such as their type of loyalty membership, birthday, or next connecting flight. Perhaps then you can introduce platforms like Docusign or Slack, to show senior managers the benefits of going digital in parts of the business without throwing them too far in the deep end.

 

Choose your HR technology wisely

If your organisation’s digital transformation journey will require employees to upskill or change how they work, then HR must lead with this initiative and ensure it can support these changes. This often starts with an engaging human capital management platform or an employee experience platform. But don’t rush into it. Take your time when choosing the right HR technology to partner with. Remember, this journey is not just about automating existing processes. The point of a digital transformation is to ‘transform’ the organisation, and this includes its people, so review your options with an outcome based, people-first approach and consider what will best support employee learning and development outcomes. Re-use what works, perhaps with a digital uplift; reinvent what does not. Often the temptation is to rip and replace what you have got, and sometimes that can lead to unexpected bumps along the road which will distract from the overall digital agenda.

 

Measure the value

If you want to create a digital culture that employees and shareholders are happy to embrace, then the organisation needs to clearly demonstrate that digital transformation is impacting employees and the business in a positive way. HR should take a baseline measurement of engagement levels and productivity triggers when beginning the journey and refer back to it, periodically, to track progress and determine whether business outcomes are aligning with the new digital strategy.

For digital innovation to make an impact, there needs to be a fundamental shift in the way people work. Instead of continuing to do things the same way, organisations must challenge the status quo to tackle new problems. Focus less on the technology and more on people and culture. To create new opportunities, organisations should encouraging a cultural shift and work towards building a corporate culture that encourages people to innovate.

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 Arnab Banerjee, is Principal Thought Leadership & Advisory Services at Cornerstone OnDemand

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