How Do You Know if You Need a Chief Digital Officer?

How Do You Know if You Need a Chief Digital Officer?

At a recent meeting, a select few heads of HR at global companies were having a high-level discussion on digital business models when one participant from a big consumer products firm brought the conversation back down to earth: “On a practical level,” he asked, “what is the value of having a chief digital officer?” He went on to explain that he was the only executive in his C-suite who had experience in a digital company and was trying to figure out how to drive digital business transformation at his organization.

This is a question that many experts and pundits have weighed in on over the past several years, with some predicting the demise of the role, while others believe it can have tremendous value. Our own data at CEB, now Gartner, suggests that about 1 in 5 companies has a dedicated leadership position for digital business transformation. Just slightly more (1 in 4) have an overarching digital strategy for their entire enterprise. (CEB CIO Leadership Council members can read more about what we expect the digital enterprise to look like by 2020 and how organizations are getting there.)

Many organizations are asking this question: Do we need a chief data officer? The broader question, however, is what governance structure best enhances the focus, speed, and scale of your digital transformation initiative—and there’s no one right answer. This was an important takeaway from the discussion at our meeting: All participants seemed to agree that organizations need some sort of dedicated digital governance structure, but having a single leader (other than the CEO) in charge of it isn’t necessarily the right solution for all organizations.

The HR leaders whose organizations had decided against appointing chief digital officers said they had done so because they tended to be more centralized in both structure and leadership philosophy. They were more confident in being able to set a consistent tone throughout the organization that digital business transformation was every leader’s responsibility. That said, these chief HR officers were careful to note that they did have some governance structure in place to ensure that the right people were making the right digital strategy decisions at the right time. These structures ranged from having leaders who were digital champions across the organization, to a small committee reporting to the CEO on digital matters, to standalone digital business operations where there was a team incubating new digital business ideas.

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Talent Daily Debates: Are Everlane’s ‘Passion Days’ Effective Cultural Onboarding?

Talent Daily Debates: Are Everlane’s ‘Passion Days’ Effective Cultural Onboarding?

Smart executives know that an organization’s culture drives top-line growth, but it can be difficult and time-consuming for new hires to learn the ins and outs of the culture as they get up to speed. Companies are constantly searching for more innovative and effective ways for their new employees to learn the culture. For example, l’Oreal released its Fit Culture App for new hires last year, which uses “texts, videos, employee testimonials, … quizzes, games and real-life missions” to “give each and every employee, from the moment they arrive, the keys to succeed in full alignment with company values such as multiculturalism, diversity and inclusion.”

More recently, Quartz’s Leah Fessler profiled the onboarding program at the ethical clothing company Everlane, which sets the cultural tone from day one by making every new employee’s first day a “Passion Day”:

“It’s called a passion day,” says Michael Preysman, CEO of the direct-to-consumer clothing startup, which hit $100 million in revenue in 2016. Every Everlane employee starts their new job with a passion day, on which they’re given $100 to spend doing something they love. … There are no limits on what the cash can be spent on, so long as it’s outside of the office and legal. And while they’re not warned ahead of time, every employee has to share how they spent their cash upon being introduced to the entire company the following week. …

Passion days are an extension of an already hyper-individualized hiring process. Everyone who applies to Everlane has to complete a project, regardless of their seniority, to evaluate their skills. “One of our core values is to hire people who are entrepreneurial thinkers—people who are creative and passionate,” Preysman says.

Some of our expert researchers at CEB, now Gartner, had different points of view on whether Everlane’s Passion Day program is an idea worth emulating. Here’s what they had to say:

Andrea Kropp, Research Director: It’s great to see companies putting action and money behind their culture initiatives, especially when the culture they are striving for is very different from the norm. The vast majority of new hires have worked somewhere else before, even if just part-time or in a family business, so they’ve already been exposed to someone else’s culture. If you know your culture is dramatically different, you need something attention-grabbing to show new hires that you are serious and not just paying lip service to the idea of being different.

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Less Talk, More Action: How to Solve the Problem of Communication Overload

Less Talk, More Action: How to Solve the Problem of Communication Overload

It’s impossible to hide from your coworkers. Whether you work in the office, from home, or at a coffee shop, any of your colleagues can instantly interrupt (and perhaps ruin) your day with a “tap on the shoulder” thanks to a plethora of communication technologies. At Bloomberg BNA Last week, Genevieve Douglas highlighted some new data illustrating the negative impact this constant onslaught of communication is having on a growing number of employees. Many are either missing critical information they need, or are considering changing employers to get away from the deluge of chatter and information.

Douglas points to a survey published in March by the communications software provider Dynamic Signal, in which half of respondents said they felt overwhelmed by the proliferation of these tools and pressured to use multiple platforms. A third of the employees surveyed said they were so stressed out by the state of communication in their workplace that they were ready to quit because of it.

Having personally tracked the reasons why employees quit with my colleague Brian Kropp for over a decade, I’m skeptical that employees will really quit because of poor communication alone. However, our latest research does substantiate the claim that providing employees with “on demand access” to information and HR solutions through more channels and new technology platforms really does hinder their performance.

Business leaders are aware of this problem of communication overload and looking to address it proactively, Natalie McCullough, general manager of MyAnalytics and Workplace Analytics at Microsoft, told Douglas. When it comes to enabling employee collaboration through technology, our new research points to a useful rule of thumb: If you want to improve employees’ performance and experience at the same time, focus less on providing new ways for them to communicate and more on enabling them to act.

Adding a communication channel should not lead to more communications, but rather better communications that are ‘effortless’ to process and use. This, paradoxically, requires employers to restrict the sharing of information and communicate in ways that nudge employees to act. We call this “guided action.”

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Hiring for Culture Fit Won’t Improve Your Culture

Hiring for Culture Fit Won’t Improve Your Culture

Organizational culture is critical to business outcomes and more than 80 percent of organizations hire specifically for culture fit. Seeing an opportunity here, tech startup Bunch wants to help companies bring more analytic rigor into how hiring managers assess job candidates for culture fit. Steve O’Hear recently profiled the startup at TechCrunch:

Specifically, by mapping company culture data against that provided by a job applicant, the idea, Bunch founder and CEO Darja Gutnick tells me, is to be able to highlight any potential cultural fit issues that can be teased out during a subsequent interview…

The way Bunch works is as follows: A company signs to the Saas and its teams take a 5-minute culture assessment, based on the O’Reilly model. Then, using the data provided, Bunch creates a culture profile for the company and each of its teams, mapped onto 6 key dimensions: Results-orientation, Adaptability, Collaborative, Detail-orientation, Principles and Customer-orientation. Every new applicant is tasked with taking an automated culture quiz that Bunch checks against the team and company profile.

Bunch’s push to put a quantitative lens on hiring for culture fit is well-intentioned. Taking a more “gut feel” approach to culture fit, as many managers currently do, can open up the organization to unconscious biases that threaten workforce diversity. There’s just one problem: Hiring for cultural fit is both more difficult and less effective than Bunch’s platform makes it look. Beyond the significant issue of bias, our research at CEB (now Gartner) shows that common strategies to change or strengthen culture by bringing in certain types of people don’t usually work.

Here are three main reasons why tools like Bunch’s are unlikely to produce the results organizations are looking for:

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Google’s People-Oriented Approach to People Analytics

In this half-hour talk posted last week at re:Work, Google’s VP of People Operations Prasad Setty discusses his experience leading the development of the search giant’s talent analytics program, and about the key difference he discovered between having data make decisions for people, and using data to improve the way people make decisions:

When Prasad Setty joined Google ten years ago to build its People Analytics team, he envisioned a workplace where all people-related decisions would be made by data and analytics. If algorithms were spitting out search terms, why couldn’t we use them to make decisions for and about our people?

Setty soon discovered that this was the wrong approach. Despite the ability of analytics to objectively predict outcomes with high accuracy, people were reluctant to rely solely on formulas when it came to making important decisions — especially decisions that involved people, such as a promotion. And so, Setty shifted his vision for the People Analytics team. Rather than using data and analytics to make all decisions at Google, the team’s mission would be to educate Googlers on how they were making decisions and to help them make better decisions over time.

What really stands out about Google’s approach here is that they chose not to use a quantitative focus, even though they had the analytic sophistication necessary to do so. At one point, Setty mentions how HR was able to create a logistic predictive model that was able to accurately predict promotion decisions with an error rate of only 10 percent based on a few easily measurable attributes. Despite this, the engineers involved in the hiring process made it very clear that they did not want to outsource such an important task away to an algorithm.

This is an important lesson in how organizations can effectively use data in managing talent issues, particularly culture change.

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Principles Eat Rules for Breakfast

Principles Eat Rules for Breakfast

Part of the old, negative stereotype of HR is that it is a function driven entirely by rules and procedures, concerned mainly with compliance and ensuring that employees do not engage in behaviors that could harm the organization. As the role of HR and talent management has evolved into something more strategic, however, the rules-based mentality has become more of a liability for organizations that want to develop high-performance cultures and unleash their people’s potential.

At the Harvard Business Review last week, HPWP Consulting founder Sue Bingham made the case against overly prescriptive HR policies, arguing that policies focused on preventing bad behavior by a minority of employees only cause the majority of employees who do have the organization’s best interests in mind to feel distrusted and belittled. This in turn makes it harder to attract and retain high performers. In the alternative, she advocates for policies that focus on setting positive expectations rather than proscribing specific infractions, and that treat employees as intelligent adults capable of using good judgment.

In other words, organizations need principles, not rules, Eric J. McNulty argued at Strategy+Business last week, as principles “give people something unshakable to hold onto yet also the freedom to take independent decisions and actions to move toward a shared objective”:

In some rule-based enterprises, it is the enduring, mythical power of a four-inch-thick procedure manual that lays out exactly what workers can and cannot do. In others, it is accumulated organizational ossification. Of course, there are regulations, union rules, and other legitimate constraints. Too often, however, rules were designed to fix the problems of yesterday and remain in place long after the problem itself has changed. …

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Oregon’s Possible Scheduling Regulation Is a Sign of Shifting Employer-Employee Contract

Oregon’s Possible Scheduling Regulation Is a Sign of Shifting Employer-Employee Contract

The campaign to crack down on variable or on-call scheduling is emerging as a central issue for labor activists in the US today, second only to the minimum wage. Oregon is currently on track to become the first state to introduce regulations obligating most employers to provide predictable schedules to their hourly employees. A bill mandating advance notice of scheduling passed the state Senate last year and is returning to the House for a final vote, the Statesman Journal reported this week:

The bill’s provisions would apply to retail, food service and hospitality employers with at least 500 workers worldwide. That’s up from 100 statewide in the original bill. Individually owned franchises would not be covered. If the bill passes, beginning July 1, 2018, those employers would have to provide workers with an estimated schedule seven days before the first day of that week’s work. That’s down from 14 days in the original bill. The advance notice requirement would increase to 14 days on July 1, 2020. Enforcement would begin Jan. 1, 2019.

The bill also requires employers to provide extra pay to workers who have fewer than 10 hours off between shifts, allows workers to turn down extra shifts, and allows employers to maintain standby list of employees who are willing to be called into work on short notice. And it prohibits cities and counties from setting their own scheduling regulations.

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