Reflections from attending the California HR Conference 2018
Last week I had the opportunity to speak at, and attend, the California HR Conference 2018 in Long Beach. It was great to be able to speak, but it was also just as important to attend other sessions and hear what is on the mind of HR leaders.
What I heard in particular, and unsurprisingly, is that there are still many HR leaders who struggle to be heard by the business. They are frustrated that they are not included in important business decisions and made to focus on core HR processes.
At the same time, others have mastered that challenge and are true trusted advisers to business leadership. An inspiring example was the Cheesecake Factory’s SVP HR Dina Barmasse-Gray, who shared many of the fantastic initiatives the Cheesecake Factory take. A great example is their “Caketalk”, an innovation platform that all employees can contribute to, and vote on, AND that gets views and focus from the entire leadership team.
It is my view that Digital disruption and the need for innovation and transformation provides a very timely opportunity for HR leaders to step up and make a difference in their company’s business. In fact, the right people actions may well be the one thing that can make the biggest difference in the next few years. The time for HR leaders is now.
The Digital Transformation challenge all companies must address
Since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption. Additionally, three-quarters of today’s S&P 500 will fall off that list by 2027.
Addressing this is, and must be, a critical issue for every business leader. Yet, there is compelling research that 70% of Digital Transformation efforts are not getting the desired results.
The problem is that those who lead the transformational efforts focus their efforts on technology. And it is true that in the past, technology used to be the biggest constraint to change.
However, with exponential growth in the pace of technology innovation, there has been a shift in constraints. Technology has become relatively easy: availability of computing power, bandwidth, access and new technologies such as analytics, blockchain, virtual reality etc have made almost anything possible.
The bottleneck for organizations is now people and the organization’s ability to adopt and adapt to changes. Established companies are disrupted every day, and their ability to act on it comes down to their people and organization – not technology.
In the years that I have focused on this particular issue, most Business Leaders I have worked with cite this as their top concern. However, many don’t involve their HR leaders in addressing this challenge.
HR has two important roles in a company’s digital transformation
HR’s actually has two roles to play in a company’s Digital Transformation.
The first is the Digital Transformation of the HR function itself. This ranges from updating HR systems, better understanding and serving the employees with more adequate tools and processes, to completely shifting the mindset and role of HR and how it serves the company. An HR Digital Transformation is of course important, and absolutely needed as part of a company’s overall Digital Transformation. But it is not the most important thing HR leaders need to do, and in itself is not where the biggest difference can be made.
The most important role HR has, and should play, is in driving the people actions that will enable a company’s Digital Transformation. Doing this is what can ultimately make the difference between a company being fatally disrupted and never recovering, or getting ahead of the competition and thriving. The HR leaders who achieve this are the ones who will be the true partners to the business.
How can HR leaders make this happen?
Every company is different, and organizations are complex, but there are three things that will enable HR leaders to take charge:
- Understand the business context
- Identify gaps by asking the right questions
- Lead initiatives with business impact
Let’s look at each briefly.
1) Understand the business context
There is no way around this. HR leaders, and their teams, must understand the business and its industry really well. They must understand how it makes money and who its competitors are. HR leaders must be able to speak the language of the business and emphasize with the issues and business priorities.
2) Identify gaps by asking the right questions
HR leaders can ask the right questions to establish the most critical people actions that are required and that will make the biggest difference to the company’s return and business results from its transformational investments.
Here are some examples of the questions to ask, grouped by the six key barriers and enablers to digital transformation we have identified:
- Who is accountable for our company’s Digital Transformation?
- Does our Leadership team have access to and utilize diverse perspectives, from both inside and outside of the organization and industry?
- Are our succession planning and leadership development aligned to our digital business strategy?
Mindset and Behaviors
- Who is responsible for developing and sustaining the culture that drives the required mindset and behaviors?
- Is there a clear shared sense of purpose amongst our leaders and employees?
- Are we focused on the intrinsic motivators to effectively achieve adoption of change?
Skills and Capabilities
- Does our workforce have the minimum required Digital Literacy?
- Are we actively developing and nurturing the required ‘hard’ soft skills, including Communication, Curiosity, Collaboration and Judgement?
- Have we embedded a culture of lifelong learning?
- Are our employees change-ready and able to adopt new ways of working?
- Does our work environment reflect the organization we want to be?
- Does our performance management process effectively support our business goals?
Processes and Governance
- How are we selecting which digital initiatives to fund, and how quickly can we fund them?
- Do we have an adequate budget that is committed to digital initiatives and that can be readily applied by the digital transformation leader?
- Are our processes set up so that we are getting value from new data, technology and automation?
Organization & Eco-system
- Are we in a position to respond to emerging customer needs with innovative products quickly?
- Who is responsible for Digital in our organization?
- Are we set up to effectively deliver Digital solutions to solve business problems?
3) Lead initiatives with business impact
The purpose of the questions is to drive attention to gaps. A full assessment can identify the most important gaps to close, and the key actions that will make the biggest difference.
HR needs to lead at least one such initiative that makes the difference to accelerating business results from digital transformation. Work with the business to identify what’s most important, what the gaps are and then find one that closes that gap.
Here a few examples of people-centered initiatives that are proven to accelerate innovation and transformation, and that HR can lead:
- Challenge current succession planning and put in place a framework that is aligned to the digital leadership needs and diversity it requires
- Update the leadership development programs to focus on building digital leadership capabilities amongst current and future leaders
- Use Cheesecake Factory’s example and build your own “Caketalk” innovation platform AND drive adoption so that it is being used effectively by employees and leaders (the platform alone isn’t what makes the difference)
- Establish a team of cross-functional and business resources, closely integrated with each business leader, dedicated to culture to enable and accelerate digital innovation and transformation
- Drive a program to build a minimum digital literacy across all employees of the company
- Help your IT function develop better communication skills to work with the business and more effectively solve business issues with technology.
- Establish a Digital Reverse Mentoring program that identifies and develops junior digital-savvy mentors for senior business leaders, to solve business problems in innovative ways and break down barriers.
And so on…
You don’t have to do all of this at once, but find the one thing that will make the biggest difference, and lead it through. Let me know if you’d like to discuss any of these or other accelerators for Digital Transformation in more detail.
People are the key to drive innovation and to unlock business benefits from Digital Transformation efforts, HR has an unprecedented opportunity to not only be part of, but play the most important role in enabling their company’s success in this Digital world. Are you ready to be the Hero?
To find out how you can accelerate your organization’s Digital Transformation,
contact us for a free consultation with nepf.