What is for ‘me’ in Digital Transformation?

There are many points on digital transformation that require open discussion, starting from what, why, and how to the benefits of Digital Transformation that we covered in our earlier post ‘Digital transformation – a beginner’s guide’ to let you start with the playbook. Today’s focus is to discuss the very central point, what is for ‘me’ in digital transformation, being an employee of any organization, and this also applies to you. Don’t hesitate and let’s discuss openly what is for ‘me’… if we apply the prevailing notion, what’s in it for me, we consider how will I benefit from digital transformation as an employee? How will it make me successful?

Generally, it’s been assumed that benefits for the organization from digital transformation means that it’s good or beneficial to employees. Is this an erroneous notion? We understand there are benefits for the organization; that’s why major programs are getting the go ahead; otherwise, nothing would be done. As we understand it, Digital transformation is not all about the technology. Digital transformation shifts the mindset of how organizations create value for their end-customers, and none of that would be possible without educated employees. The technology is a necessity, and companies need to ensure they are educating and empowering employees.

In digital transformation, we need to find out ‘what’s in it for me?’ for the 3 pillars of an organization:

• for the customer
• the organization
• the employee

Whereas we have already identified 3 pillars of digital transformation of an organization:

• Customer experience
• Operational processes
• Business models

and if anyone missed or ignored this information during the digital transformation, you will not get what you are looking from these projects. In digital transformation, with all the focus on technology, such as digitization and automation, it is natural for employees to wonder, what’s in it for me.

Now if someone on the top ladder of the corporate chain makes a decision, it goes back to the employees. We need to ask very basic questions about what employees want. Organizations have the best applications for the customers, and even that is being reformed, improved every other year. What’s done to help me as an employee?

I have new processes to follow that are being enriched every second month, but what’s done to help me with my goal?

While I understand, as an employee, everything is being done to make the customer journey easy and amazing, and what is being done to make things easier for the employee in front of the customer. Think through a few of the common questions below. Anticipate as many questions as possible and have answers ready for them. Here are just a few to start with:

• How is this going to impact me and my colleagues?
• How will my job change due to digital transformation?
• Do I have the right skills to succeed in a digital world, and how will the organization help me learn?
• Is my job safe? Will I be replaced by a robot?
• What will happen if I don’t “get on board”?
• How is this change going to impact the way I do my job?
• What is the organization’s strategy that directly benefit me?
• What’s in the digital transformation plan that will help me to change at work, change my day to day life at work?

Success and failure patterns are emerging from the early adapters and followers of digital transformation programs. Digital transformation is a ‘change process’ for any organization. Most people, by nature, are resistant to change. They are skeptical of it; that’s why we should follow established rules and principles of change management.

Although digital transformation is a technological challenge for an organization, it is also a human challenge to manage the change.

What we learned from the success stories of digital transformation is that, within an organization, it is essential to communicate the digital transformation initiative to every employee of your organization to get business benefits. Without this, the digital transformation project may even end up damaging your business.

Ultimately, the digital technology to transform Customer experience, Operational processes, and Business models is used by humans (employees, customers). Transformation success is directly associated with employees to meet business objectives. You can run hardware, software automatically; you can introduce RPA, IOT, Blockchain, Chatbots, etc. Every element of your digital technology plays a role in helping your humans (employees) do their jobs, even if they do not engage with it directly - all autonomously.

This leads us to infer that, for any digital technology implementation to achieve business benefits, it has to deliver the best possible return on investment. You need to ensure, as part of the digital transformation project, that your employees are using that digital solution properly and harnessing its full potential to achieve business benefits. They need to be making full use of all its functionality to provide an exceptional customer experience, innovative business models, and solving existing operational problems or inefficiencies or simplifying operations. This will become the precedent for future innovation to be ahead of your competition.

We can categorize four main areas that need to be at the top to address what is for me in digital transformation.

1.   Communicating to employees

2.   Workforce planning

3.   Empowering employees

4.   Improving the employee experience

1-Communicating to Employees:

To drive the best outcome from digital transformation projects, you need the input of your employees before embarking on a project of transformation so that you can focus on those specific areas. Bring your key stakeholders on board and give them the opportunity to voice any concerns. This step is important for senior employees and board members because they should be the ones to spearhead digital change. As leaders, you must do a better job communicating what the digital transformation is and how it will affect organizations. If you don’t engage yourself with the employees before you begin a digital transformation project or after the implementation of digital solution, there is little chance of getting the benefits to your business that you have estimated from digital transformation. Your employees will resist such initiatives in the first place, which will diminish the benefits.

Many employees will be skeptical about the benefits of certain digital technologies due to the notion that these technologies are a threat to jobs. For example, Robotics and artificial intelligence (AI) may be supposed as being replacements for employees. Such uncertainties will easily translate into a lack of engagement with these new technologies. According to 2018 research “County-level job automation risk and health: Evidence from the United States” published in Social Science & Medicine, “feelings of job insecurity related to artificial intelligence (AI) in particular are having a negative impact on employees physical and mental health.”

This situation can only be addressed to each and every employee, no matter in which grade he is. Your role is to communicate clearly and vividly that this digital transformation will improve their roles. You have to make sure to let them know that their roles are secure and digital transformation will only strengthen and improve roles; there is no threat to them.

There is nothing worse than being "in the dark." Whether you have 10 or 100,000 employees, you must communicate. This is the only magic pill available in the corporate world to achieve your ultimate objective of transformation. As observed from experience, a closed-office environment creates rumors, gossip, and anger. This leads to employees pushing back, questioning, and creating an un-motivated culture. 

Therefore, the only golden principal is to communicate your plan and vision for the digital transformation clearly. It is just as important as coming up with the idea of transformation.

Without your humans (employees) on board for this journey, you won't make it successful.

2-Workforce Planning

New technologies are reshaping the world; therefore, as part of a digital transformation program, we should have a clear understanding of these new technologies’ impact on the organization and how they are going to shake the workforce in the next three to five years. Once you know the effect, you can plan accordingly.

While calculating the benefits of digital transformation, consider the true value of a transformation on the workforce, freeing up your internal talent from mundane tasks so they can focus on high-value, high-impact work that helps organization growth. 

This will excite the employees as they have to learn new processes, quicker decision-making, and an evolutionary model of how it will work. Therefore, as part of digital transformation, you must consider the digital technologies that require the skills employees have to thrive in a new reality. As part of this exercise, you may want to consider what programs you can build internally to equip employees with the necessary skills or if you need to contact external resources.

Remember, to achieve ultimate results from digital transformation, it starts with happy, educated, inspired, and engaged employees. Their happiness translates to happy customers, which makes happy business owners. Digital is the means to get you to your business benefits. “85% of financial success is due to an individual’s personality and ability to communicate, negotiate, and lead. Only 15% is due to technical knowledge according to research from the Carnegie Institute of Technology.”

Employees:

“Only 15% of the worldwide workforce is motivated and engaged in regards to their work published in the State of the Global Workplace (Gallup 2017).” Digital Transformation requires new competences, disruptive ways of working, new talent, and innovative approaches for working environments.

We can see a new approach to the working environment, as Richard Branson announces that Virgin will allow staff to take as much holiday as they like; no checking with managers, no tracking days off.  

Let’s take another example of Netflix, which Richard Branson also mentioned in his book The Virgin Way. Netflix’s “Freedom & Responsibility” policy since 2010 includes unmetered vacation; employees take as much holiday as they want, whenever they want.

Valve Software—the company behind the Half-Life, Counter-Strike, and Portal video game series had a collaborative and adaptive structure with no bosses, published in Bloomberg ‘Why There Are No Bosses at Valve’.

We are also seeing this type of culture in startups. Are you ready to take such a brave decision?

These ways of working are proven, and organizations are getting results; however, challenges are unprecedented, and Gartner Identifies Six Barriers to Becoming a Digital Business, and in this report, “Digital innovation can be successful only in a culture of collaboration. People have to be able to work across boundaries and explore new ideas. In reality, most organizations are stuck in a culture of change-resistant silos and hierarchies.”

"Culture is organizational 'dark matter' — you can't see it, but its effects are obvious," said Mr. Blosch, research vice president at Gartner. "The challenge is that many organizations have developed a culture of hierarchy and clear boundaries between areas of responsibilities. Digital innovation requires the opposite: collaborative cross-functional and self-directed teams that are not afraid of uncertain outcomes."

We also need to think to decimate old practices… a good comparison of industrial age working practices vs Digital age working practices are published by “Why employees are the key to your digital transformation”

Talent for Organization

The report published by Capgemini and LinkedIn ‘The Digital Talent Gap’ mentioned, “Every second organization they surveyed acknowledged that the digital gap is widening. Over half (54%) of the organizations agreed that the digital talent gap is hampering their digital transformation programs and that their organization has lost competitive advantage because of a shortage of digital talent. More employers (59%) say that their organization lacks employees who possess soft digital skills than hard digital skills (51%). The two soft digital skills in most demand are customer-centricity and passion for learning and the two hard digital skills in most demand are cybersecurity and cloud computing.”

And if we will further reconnoiter into the situation of Talent, according to Gartner 2018 Shifting Skills Survey, they have asked over 7,000 employees to self-assess their level of proficiency in in-demand skills.

• 70% said they haven’t mastered the skills they need for their jobs today.
• 80% said they lack the skills they need for their current role and their future career.

Now the question comes back to organizations to build the right skills of employees. Even though digital natives and millennials are entering the workforce, there is still a sizeable gap to be filled in the skillsets of organizations. We are seeing large organizations have corporate learning and development initiatives, but they are facing issues of scalability and standardization across global level. Another issue is that digital skills requirement is not only for one department; the holistic approach is required across the organization to build digital skills.

Organizations can start offering formal accreditation or certifications to employees through third party institutions, agencies, or even internal certification programs with the clear business objective for employees to build the right digital skills for digital transformation. These certifications will add and inspire employees for future careers, and you can make them part of your hiring process to attract new talent. Other approaches can be to arrange workshops, in-classroom trainings, or online learning media. Different employees are comfortable with different ways of learning, so give them all the options to choose and there will be no excuse not to learn.

With the advancement of digital technologies, a number of employees prefer online learning, on-demand learnings. This gives an option to employees to have their own pace and have access to the content, and they can use it whenever they want or when they have requirements to fulfill. Accenture’s study revealed that “40-60% less employee time requires learning the same material online vs traditional classroom setting.” Due to this reason, this method is becoming the preferred method of learning. 

The most important aspect is to let employees be skilled. According to a joint report by the World Economic Forum and The Boston Consulting Group, "managing skills in the digital age requires organizations to harness technology that enables them to leverage a data-driven approach to lifelong learning and smart upskilling".

Employees with the right talent are essential to the digital transformation process, and organizations have to create & nurture a culture of digital mindset, which will drive an organization's digital maturity and elevate it to the ranks of a digital leader.

3-Empowerment of Employees

A famous quote, “Knowledge is power,” describes the best marvels to ensure that employees have the knowledge, information, and empowerment they require to execute their job successfully. Employees with full autonomy and tools they need to perform their jobs are happier and motivated. You can visualize when someone is empowered and stirred. He will outperform in each and every job function, which will result in overall business benefits. Therefore, digital transformation is being welcomed by the employees, which will give them more capabilities from digital tools.

In digital transformation programs, it is important that each employee know where they fit-in or their role. The senior stakeholder may know it, but this information must go to each and every employee. Let employees see how their involvement can help progress the transformation and enable them to see how it impacts the success of the business.

A survey ‘Employee Distrust is Pervasive in U.S. Workforce’ found that “workers who feel valued by their employer are more likely to be engaged in their work. Employees who feel valued were significantly more likely to report having high levels of energy, being strongly involved in their work and feeling happily engrossed in what they do.”

It’s a right time for organizations to make work irresistible by following ‘a refreshed model of engagement’ from Deloitte Insight.

4-Improving the employee experience

Harvard Business Review contributor Jacob Morgan described “the employee experience into three main components: cultural, technological, and physical. Whichever organization addressed all of three together, they get real results. “Most initiatives amount to an adrenaline shot,” Morgan says. “A perk is introduced to boost scores, but over time the effect wears off and scores go back down. Another perk is introduced, and scores go back up and then they fall again. The more this cycle repeats itself, the more it feels like manipulation. People begin to recognize the short-term fixes for what they are.”

Stories around the world are telling us that most organizations focus all of their energies on just one of these areas (cultural, technological, physical) rather than making the whole employee experience. It’s not a surprise that “despite the $720 million spent on engagements initiatives by organizations, only 13% of employees working for an organization are engaged Worldwide and 32% of employees in the U.S. are engaged - meaning they are involved in, enthusiastic about and committed to their work and workplace” according to Gallup Daily tracking report ‘The Worldwide Employee Engagement Crisis’.

Employee experience is not another catchword. It has a vital role in business success, serving as both a driver and enabler of digital transformation. For example, if you are taking a transformation project to improve customer experience, it is not going to be possible without employee experience and engagement level.

Customer experience is driving business growth without any doubt, and on a similar line, employee engagement will be more operative to drive business growth.

Organizations that invest in employee experience got astonishing results, as per Jacob Morgan’s article on HBR ‘Why the Millions We Spend on Employee Engagement Buy Us So Little’, “Compared with other companies, the experiential organizations had more than four times the average profit and more than two times the average revenue. They were also almost 25% smaller, which suggests higher levels of productivity and innovation.”

In other words, if you think investing in employee experience doesn’t work, it’s because you’re doing it wrong.

Conclusion:

Embarking on your digital transformation journey with ambition for a bright future, you need to develop digital leaders, rewire the organization, and engage & enable your employees (humans). You may be in a stage where you are battling with how to implement ERP, Supply-chain, customer experience, emerging technologies (AI/ML, IOT, Blockchain), etc., and the most important aspect, culture, people, and process, are even harder than technologies.

Studies shows “since 1970s, organizational transformation projects are failing at the rate of 60-70%, a statistic that has stayed constant to the present.”

We are missing the ‘human’ element from the equation in these projects. It is very important not to ignore the fact that people (humans) remain at the heart of any business.

The views expressed on this article are my own and do not necessarily reflect the views of Oracle.