Organizations need to change their Operating Model to perform instead of just focusing on Skills

??Organizations redesigning their Operating Model have performed better than their peers.

Leaders believed that 40% of their workforce will need to reskill due to implementing AI and automation over the next three years and 87% of executives expect job roles to be augmented, rather than replaced, by generative AI. Transforming the operating model can foster business growth, innovation and an empowered workforce. Over the past three years, organizations that view the operating model as the ultimate driver of enterprise transformation have outperformed in profitability (+55%), revenue growth/effectiveness(44%), innovation (+19%), and employee retention (+33%). These companies outperforms their competition 44% more frequently than the group focused on skills, which performs the worst. In fact, organizations that view skills as the key enabler of enterprise transformation tend to underperform in multiple areas.?Organizations that make HR central to their talent transformation can find quick wins that let them streamline work and boost business performance. Employees prioritize impactful work but executives are focused on other attributes, according to a new interesting research published by IBM IBM Institute for Business Value using data from two extensive new studies, one with 3,000 global C-suite leaders across 28 countries, another with 21,000 workers across 22 countries.

?Why a new Operating Model?

Researchers found that organizations that have revamped their operating model have outperformed their peers by putting new technologies at the core.

Rather than simply bolting innovations onto an outdated model, they’re breaking the business down to its most essential elements. But many have yet to do the hard work. They’re choosing to automate the same activities they’ve always done, rather than going back to the drawing board to find a better way forward.

?? While small changes may increase efficiency, automating bad processes won’t make them better.

Researchers found that leaders are able to adapt their operating model to support augmented work by:

?? Adopting product-focused ways of working,

?? Tapping data-driven insights, and

?? Enabling ecosystem collaboration.

Operating model leaders have made more progress in adopting product-based operating models and agile ways of working meaning teams are given goals to meet, not tasks to complete. Almost one in three (30%) of these outperformers have transitioned their entire organization to this way of working, and an additional 8% have gone beyond the walls of their enterprise to align this process with ecosystem partners. They also invest in reskilling (57%), as opposed to hiring from the outside (43%), more than all other groups.

Rather than staffing up on in-demand skills and figuring out what to do with them later, operating model outperformers are prioritizing purpose and clarity by defining how processes and job roles need to change.

?Combined Powers deliver value

The Human-Machine partnerships create more value than either can alone: Human offer Capability through empathy and creativity and Machines deliver scalability.

The human-machine partnerships that will drive advantage tomorrow are being developed today. That means workers need to be willing to experiment with new approaches to understand what works and tech-savvy enough to troubleshoot along the way.

?? As organizations develop higher-value human-machine partnerships, job role confusion becomes pervasive.??

?Impactful Work matter for Employees

Researchers found that foundational factors such as salary, benefits, and job security still top the list of employee priorities. But when asked to select the most important work attributes out of a list that doesn’t include those factors, people put impactful work above all other attributes, including autonomy, equity, flexible work arrangements, and growth opportunities.

Nearly half of employees say the work they do is far more important than who they work for or who they work with regularly.

But the executives rank impactful work lower than nine other non-compensation attributes when assessing which factors matter most to their workforce.?

?? This disconnect is poised to cause problems as executives rush to automate as many tasks as they can. If leaders don’t plan human-machine partnerships with impactful work in mind, they might miss opportunities that will help people work smarter and more strategically?

?How IBM HR use automation and AI to save time

Researchers also looked at a case study at IBM and they noted that IBM HR team is able to reduce the time it took each manager to nominate employees for promotions from 8 hours to 1 hour, a total reduction of roughly 12,000 hours per quarter.

As a result of this success, IBM has started to roll this digital assistant out to other regions, with potential time savings estimated at up to 50,000 hours per year. Automation also reduced the process from 10 weeks to six weeks, which allows the HR support team to focus more on coaching individual managers. Plus, they can now analyze the data from the nominations to provide insights to the wider enterprise.

?? This is a great example of how automation and AI can move humans up the value chain while significantly accelerating decision-making

So researchers believed that there’s a lot to gain by asking HR to help define the organization’s transformation strategy. When HR leadership and frontline workers co-create guiding principles, they can more effectively foster a culture of responsible AI focused on ethics, trust, and transparency. And defining target outcomes with both business and IT functions can help HR leaders assess how well they are aligning with the business and where they need to evolve.?

In the age of the augmented workforce, researchers observed that HR also has several opportunities to tap generative AI to improve business results.

? Shifting the role of HR from policy enforcer to value driver. Empower HR to influence tech investments that unite teams across functions and the partner ecosystem.

?Augmenting employees with generative AI to provide more purpose-driven work and enhance employee well-being.

? Making HR the go-to ecosystem advisor to help the organization access in-demand skills rapidly as needs evolve.

?? Finally researchers have outlined 4 insightful actions you can take to align your tech investments with strategy while putting people first:

1?? Prioritize with purpose.

2?? Lead with the operating model.

3?? Make work more rewarding.

4?? Invest in talent as much as technology.

And they have also identified 3 key priorities that can help them elevate employees and gain a competitive edge:

??Transform traditional processes, job roles, and organizational structures to boost productivity and enable new business and operating models.

??Build human-machine partnerships that enhance value creation and employee engagement.

??Invest in technology that lets people focus on higher value tasks and drives revenue growth.?

Thank you ??? IBM IBM Institute for Business Value ?researchers team for these insightful findings:? Jill Goldstein Bill Lobig Cathy Fillare Christopher Nowak

Dave Ulrich ?George Kemish LLM MCMI MIC MIoL

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