The Era of "Digital Transformation"

Many of the B2B and B2C companies wonder where they should start with a digital transformation programme. The most obvious place, since we are discussing “Digital Transformation”, is technology. Starting a transformation with technology may include doing things like revamping the website, developing mobile applications, or even purchasing a marketing cloud to show that your company is, indeed, on its way to becoming digitally transformed.

Doing Digital can be a big success for a brand, or in the worst case, it can be a failure as well for companies.

At a recent Econsultancy “Digital Intelligence Briefing” held in Singapore, Damien Cummings, CEO at Peoplewave and Econsultancy’s Entrepreneur-in-residence, discussed that the first step may, instead, be to reach out Human Resources (HR) and get them on board.

The reasons why are listed below;

Why is HR critical to digital transformation?

The major components enabling Digital Transformation:

When industries start the digital transformation process they may come up with an idea or strategy which typically includes buying some technology and building a team to implement it.

While these steps are indeed important, companies who do that, and that only, may be missing out on certain things which can be an essential part in building successful digital transformation.

At the event, Cummings argued that digital transformation actually requires five components all working together be successful:

Strategy- Everyone should agree where the transformation is headed.

Engagement- To ensure that everyone, not just the initiators, is on board.

Innovation- Because the north star of transformation must be in progress.

Technology- To bring in advances from the organization into the company.

Data & Analytics- Feedback which you receive from data and data-driven action plans ensures that digital transformation can continue on an ongoing basis.

If any of the tactics are missing, organizations risk encountering one of the many insurmountable obstacles to transformation. So, before starting the digital transformation, it is essential to determine who can hold these pieces altogether.

The trouble with driving it from any of the C-Suites is that they either constrained with fixed budgets (CIO, CTO), are not resourced for such an undertaking (CEO, CFO) or do not typically have the clout in the organization to ensure that all departments are engaged (CMO, Chief Data Officer or CDO).

The department which takes the initiatives to lead the change, therefore, should be one which has:

·        Flexible Budgets

·        Existing relationships throughout the organization, and

·        A well-resourced team.

According to Cummings, the one department which fulfills all these criteria is human resources (HR).

HR and the start of Digital Transformation

One useful model to help the digital transformation process comes from Harvard Business School professor John Kotter. Kotter, in his book, discussed the leading change, and he described 8 steps organizations must follow in order to bring change, and how to stick to it. Eventually companies, simply getting started is perhaps the most difficult hurdle to get over. Kotter recommends that leading digital transformation starts by creating a “climate for change” in the organization.

The best suitable way while creating this climate is to write and communicate an emotionally compelling vision of the future which Kotter calls “The Big Opportunity.” The big opportunity should highlight an exciting new direction for the company which, if everyone pulls together, will place the organization in a better, stronger position in the future.

This straight-forward vision could be initiated by the CEO, CMO, or another senior executive, but without early and total buy-in from HR, it will be difficult to communicate it company-wide and ensure it is well-understood throughout the organization.

Ongoing Digital transformation with HR

To sustain the Big Opportunity and remain in the competition, real change needs to start happening throughout the company quickly. Kotter’s model lists several changes that matter, including:

·        Building a new, powerful coalition around the vision.

·        Empowering departments to act decisively.

·        Keep a track of changes occurring, stick to basics and becomes part of the culture.

Out of any one department in the organization, HR has the reach and influence to ensure that each of these come to fruition. In addition to that, there is another, a more significant change which Kotter coined is necessary. In his recent book, Accelerate, Kotter describes how the typical, management hierarchies are ideal for delivering reliability and reducing risk.

But, he adds, that revolutionary change within an organization ( digital transformation), cannot happen if an organization is focused on reducing risk.

The answer? Companies should deploy a “dual operating system” where the hierarchical management structure remains to run the business and a new, parallel network of employees who work outside of the normal reporting structure are responsible for innovation.

Perhaps surprisingly, this idea is not new. Xerox, the office automation supply company, has had 2 company culture for decades. This hierarchical one is responsible for selling copiers and other machines and its Palo Alto Research Centre (Xerox PARC) is responsible for innovation.

As a testament to the success of the model, Xerox PARC invented and developed many of the components of the modern PC (mouse, GUI, and Ethernet among them) in the 1970's, before Apple and IBM adopted it.

It is needless to say, for a digital transformation team to even consider a dual organization company structure, HR must be a part of the planning from the very beginning. Attempt to such a radical change would be impossible if it’s done virtually without the support of those who are tasked with hiring, on-boarding, and, to some extent, managing employees throughout the company.

Conclusion…

Human Resources plays a crucial role in getting the digital transformation process started (The Big Opportunity) and will also help keep it going, especially if it requires a change as fundamental to the organization as implementing a “dual operating system”.

Apart from getting started and keeping the momentum up, though, HR can also help ensure that all of the entities required for digital transformation becomes part of the culture and are well-represented by leaders and understood by rest of the company.

So that intent on starting or being a part of digital transformation should introduce themselves to their HR partners and do what they can to get them on board with the programme early and enthusiastically.

I hope you find this article informative and helpful for your Business need. Connect with us at www.techpind.com

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