How to future-proof your organization in the digital age

In business, the name of today’s game is transformation. No longer just a buzz phrase, business transformation now has the power to make or break a company. Keep in mind that 50% of the companies on the 2006 Fortune 500 list have already ceased to exist. This pace of change will only accelerate, and companies now must proactively meet new imperatives just to survive. Growing pains are inevitable as leaders face questions that will transform many parts of their organizations, one of which is the talent agenda.

Consider today’s overall workforce. For the first time, it’s composed of four generations — traditionalists, baby boomers, Gen Xers and millennials. In just seven years, millennials are expected to make up 75% of the workforce, and companies will need to adjust to accommodate this change in demographics.

The definition of “employee” has evolved, with four iterations: full-time, contingent, remote and robot. While estimates about the impact of robotics and artificial intelligence on the workforce vary, one futurist predicted that 2 billion jobs by 2030 will be affected.

Work-life integration has replaced work-life balance, as technology has assumed a growing presence in day-to-day life. The days when professionals would stop working once 5 p.m. hit are rapidly disappearing. Today’s devices make it possible to do business anytime, anywhere. In 2010, a person was connected via an average of 1.84 devices; just 10 years later, in 2020, that number is expected to reach 6.58. 

And workers and customers alike want a consistent, efficient digital experience.

Leaders must be digitally savvy

This transformative period has raised a lot of questions for leaders seeking to future-proof their businesses: What part of the talent agenda should see investments? Does the organization have a culture that’s ready to embrace transformation, and if not, how must it evolve to address employees’ changing needs? When should outsourcing or alternative staffing be considered? And with 10,000 baby boomers retiring each day, who (or what) will do their work in the future? But most importantly, leaders should assess what they are doing to ensure sustainable success and make adjustments as needed.

The future of a business depends in part on whether it has digital-savvy leaders with a well-rounded set of competencies. While traditional capabilities such as business acumen, delegation and decision-making remain key to effective leadership, the leaders of today and tomorrow must also excel at building relationships and ecosystems, managing change and solving problems, among other digital-era fundamentals.

According to the Global Leadership Forecast 2018 — a study jointly produced by the global EY organization, Development Dimensions International and The Conference Board — a company’s financial performance correlates with the level of its leadership’s digital savvy. Digital pioneers’ businesses outperform other companies by 50%, while digital laggards’ organizations underperform by 28%.

But updating traditional practices to better fit with digital-era imperatives might challenge some organizations. Sixty-four percent of the C-suite executives in the study cited development of next-generation leaders as their top challenge. In addition, only 22% of respondents considered themselves effective at all the types of digital-era leadership capabilities. Areas of weakness included digital literacy and leadership of virtual teams.

“Doing” digital isn’t enough

To respond to these and other issues, company leaders must take a “be digital” approach. This involves making sure that your people are ready to embrace rapid transformation and that your company culture is strong enough to withstand that transformation. When it comes to talent, focus on new and emerging leaders, and if necessary, replace current leaders with more digitally savvy ones.

To build a future-ready culture, make sure that continuous learning, experiential development, teaming, organization-wide transparency and trust, and the organization’s purpose are in sync from the top down. Examples of culture building include developing innovative development opportunities; offering regular recognition and rewards; and relaying feedback more frequently. Another way of strengthening your culture is to promote flexibility and overall employee well-being. Your workforce should play a role in all of these activities.

Regular assessment of your culture and use of technology and analytics to further develop the culture are also critical. To make sure that your culture-related initiatives succeed, every operational lever of your organization must support them. Say you want your company to promote teaming. The organizational design can no longer be silo- or hierarchy-driven, your company needs to invest in collaboration technology, and you may even need to think beyond the walled cubicle when it comes to the physical environment. The success of a major change at a company hinges on whether these and other operational levers align with the goal.

In addition, your organization needs to revamp its HR function’s structure to accommodate an increased use of data and technology in order to be nimbler and more responsive to ever-changing needs. HR leaders themselves must have opportunities to develop their digital and analytic skills.

With change being one of the only constants nowadays — and with digital continuing to disrupt the talent agenda — it’s time for leaders to transform themselves and their organizations. Doing anything less puts their future in jeopardy.

Considerations for future-proofing your organization

Keeping all of these issues in mind, ask yourself the following questions:

·How are you developing future leaders and talent to align with the growth prospects of your organization?

·How is your organizational purpose leading your workforce culture?

·How is your organization becoming more agile to meet the demands of a constantly shifting business environment?

·How are you changing the way you source talent with the rise of the gig economy?

·How are you enabling your workforce differently given the changing world of work?

This article was co-written with my colleague Herb Jackson, EY Principal, People Advisory Services.