Pivoting toward human connections for increased value creation

Value has eluded digital transformation efforts for many years. New CGI research shows that top performers are maximizing value by focusing on the human side of the organization.

Large enterprises can transform successfully into agile organizations and create value. Among these large enterprises, we found that top performers are attributing five times more revenue and profit growth to their transformation initiatives than average performers (Figure 1).1 Our study reveals that the top performers pivoted on six key areas that focus on the human side of the enterprise. They still struggle with effective measurement and need to do better.

The pivots and actions of top performers provide significant insights for executives in maximizing the return from their own transformation initiatives. In this paper, we present the key pivots taken by the top performers in their digital transformation journey, which yielded significantly more value for them. These common pivots across the top performers are described below.

Number of times of favorable action (averaged against their scores)

Maximizing the self-sufficiency of customer-facing units For large enterprises, pace is the common enemy. The speed of change in the external environment is accelerating while the speed of reaction within organizations is far too slow. Top performers reported having twice more autonomous business units than average performers. This means moving decision-making closer to the customer and increasing the agility of the organization in responding to customer needs. In addition, top performers also reported having 2.8 times more staffing in the business units, ensuring that the autonomous business units are self sufficient.

Developing a strong internal and external ecosystem Social cohesion and having strong formal and informal networks increase the chances of success in the new order of things. Top performers reported being 2.6 times more advanced in developing an internal ecosystem. They recognize the importance of collaboration. Breaking down functional silos enables more holistic value creation, innovation and operating models. In addition, the drive to develop more autonomous business units has increased the need to communicate and collaborate.

Top performers also are leveraging their ecosystem more strategically than before. They are 3.1 times more advanced in developing an external ecosystem. They recognize that they do not need to do it all themselves; there is potentially greater value in the ecosystem.

Taking an iterative approach to transformation While some organizations require disruptive change, the majority of top performers (66%) have adopted an incremental strategy to transformation. Rather than react to the current change driver with another transformation, they realize they need to transform their organization to become more agile and capable of reacting to change drivers continuously. They see a more dynamic market and therefore the need for continuous innovation and agile change as key to their future success.

Maintaining focus and being realistic In a transformation program, it is easy for executives to run many initiatives in parallel. This increases the risk of losing focus and alignment across the organization. Top performers are extremely value-oriented and focused. They reported executing 10 or less initiatives at any one time. Top performers reported a success rate (i.e., meeting or exceeding anticipated returns on investment) that is six times higher than average performers. Additionally, top performers report spending more time in commercializing a product or service than average performers. Focusing on 10 or less initiatives is key to ensuring management attention is maintained, customers are involved in co-design and the organization is focused and aligned. And by allowing more time, top performers are more realistic and prefer to ensure that the interventions are well resourced and executed.

Allowing front-line employees time for value-add activities There’s no recipe for innovation, but it often happens in response to a challenge or a problem. In our study, 75% of top performers reported spending more than 4 hours per month on valueadd activities. They recognize the importance of allowing frontline and operational employees to spend time on value-add activities such as improvements, innovation and collaboration. This is key to identifying real customer driven innovation from the “shop floor”, unlocking pace and increasing buy-in and adoption. Seventy percent of top performers rated their satisfaction with their value from innovation at 8 out of 10.

Measuring what matters—the human side Although we have more data and information than ever before, most organizations are not clear on what critical information they need to drive value within the organization. Top performers realize the importance of innovation and collaboration to remain competitive, efficient, effective and agile. The move towards new business, operating and organization models and the adoption of more digital, real-time and data-driven products and services has resulted in the need for different critical information, delivered in real time.

Top performers realize that they do not have the right information in real-time, especially around the human elements (e.g., customer needs and satisfaction, amount and quality of innovation, quality of collaboration, ecosystem performance, mindset and behavior, organizational agility and amount of learning). This pivot of realization means that top performers are now starting to define key performance indicators around these human elements and visualize the informal value-creating structure.

These six pivots towards the people side of the organization, clearly differentiate the top performers from the average performers and have enabled superior financial performance.

Other in-depth conversations with transformation leaders from top performers validated these pivots but also highlighted additional insights including the importance of CEO sponsorship in ensuring stability and organizational alignment, selecting the right leaders and validating assumptions with customers. These insights further accentuate the need for understanding and visualizing human connections (for a copy of CGI’s Human Connections book, which summarizes these findings against our eight design principles for agile organizations, please email [email protected]).).2,3

A final takeaway is that all the pivots are connected and each has an impact on another. Therefore, for organizations to leapfrog the performance gap and create maximum value, they need to look at their human connections and their pivots holistically.

Craig Wallace is a Vice-President and Global Digital Transformation Lead at CGI based in London,

Anne Rajkumari is a Director in CGI’s Amsterdam office. [email protected]

1 In 2019, for the third year in a row, CGI conducted an organization design study with more than 200 business leaders (online    and telephonic) in research partnership with IDC to gain deeper insights into the design and measurements of success of   leading digital organizations. The study covered large enterprises with more than US$1 billion in annual revenue.

2 Design Principles of an Agile Organization, https://www.cgi.com/en/media/brochure/design-principles-of-an-agile-organization

3 Between March and August 2019, we held in-depth conversations with 12 digital thought leaders of top performing    organizations to learn about their experiences of leading transformations in their organizations. We summarize the findings in the book called Human Connections.