At our ReimagineHR summit in London on Thursday, CEB (now Gartner) Principal Executive Advisor Clare Moncrieff led a session on creating a common vision of digitalization for the business and HR. After examining hundreds of trends, our research councils serving chief HR officers and chief information officers have identified six deep shifts in the business environment that will result from digitalization. These shifts should act as the framework for heads of HR to:
- Ensure talent conversations with the line are grounded in business context
- Identify the current talent implications of these shifts, project future implications, and partner with the line and C-suite peers to prioritize and respond to each
- Improve their teams’ business acumen (to underscore the importance of this, 58 percent of HR business partners indicated in one of our surveys that building business acumen was their top development goal in 2017)
(The case studies we link to below are available exclusively to CEB Corporate Leadership Council members)
1) Demand Grows More Personal
As customers seek personalized products that align with their preferences and values as individuals (rather than as segments), companies will rely on digital channels and digital innovations in logistics and customer service to achieve personalization at scale. Customers will continue to expect lower-effort, nonintrusive service.
This could, for example, affect how HR functions look for new talent. Attraction of critical talent now requires differentiated, customized branding and career coaching. Candidates will demand a more effortless, personalized application experience. AT&T approached this shift by creating a more personalized “Experience Weekend” to show the innovation of its brand to campus candidates and make top talent more likely to accept job offers.
Likewise, this shift could affect career management. To address the global attrition driver of career dissatisfaction, organizations must capture and align employee career aspirations with business needs through always-on internal career marketplaces. HCL Technologies greatly improved employee career satisfaction, for example, by developing a social career navigation framework that identifies employee aspirations, connects employees with career coaching, pushes opportunities to employees, and redirects employees to emerging business needs.
2) Products Become Information-Rich Services
By 2020, 69 percent of business leaders expect that their organizations will prioritize services to enhance existing products over the creation of new products. Customers will demand comprehensive or ongoing experiences with their purchases.
In this shift, leaders’ ability to give and take across the enterprise becomes critical as product and service lines blur. GE recognized this need and has since invested in enabling leaders to shift from a hierarchical leadership mindset, to an enterprise mindset of using and contributing value throughout the organization. As with customers, employees will also be pressuring HR to deliver a cohesive and satisfying “employee experience” of HR solutions and services. American Express does this by shifting leadership development training from classrooms to guided Learning Journeys for Leaders.
3) Data Reliance Deepens
Customers rely increasingly on data, especially from peers, when making purchase decisions. Managers and employees use data for virtually every business decision. The overabundance and often uncertain quality of data make it harder to reach decisions quickly.
Take talent analytics: As talent analytics teams continue to mature their own processes, they must also create an ecosystem of partners outside of HR that have other data sources (e.g., finance, marketing) to provide more holistic and integrated guidance to the business. Philips tackles this challenge by creating cross-functional project teams that leverage expertise from other functions, allowing talent analytics teams to stay flexible and add capability without increasing substantial headcount or costs.
When it comes to total rewards, transparency and the availability of information (e.g., on workforce composition, executive compensation or median employee salary) will create new challenges for rewards executives. To increase employees’ appreciation of their plans and challenge misperceptions employees may have about their pay, Zeta Energy organizes pay communication around a few key themes. This has helped employees at the company interpret pay information the way the organization intends.
4) Work Adapts to Machines’ Broader Role
As digital technology improves, automation and machine learning move into more complex, less structured activities. Employees must demonstrate stronger judgment, creativity, flexibility, and collaboration.
Potential reductions in force will require thoughtful approaches to HR as PR, while unanticipated job creation will necessitate a more dynamic approach to recruitment sourcing and capacity. Liberty Mutual, for example, holds change workshops with employees to convert employees’ feeling of change victimization, into change ownership.
But rather than remove jobs entirely, automation will just as likely create significant changes to job profiles. This will create greater pressure on internal mobility and retraining, as machine automate tasks and recruiting costs rise. Aviva has addressed these concerns among their workforce by proactively asking all employees what could be automated in their jobs, and has since committed to retraining those employees in new skills.
5) Internal and External Boundaries Blur
Increased transparency and access to virtual communication enables companies to collaborate through open models. Functional boundaries and hierarchies within organizations give way to fast-changing matrices.
More employees will need cross-functional skills and awareness of how to give and take across horizontal workflows, both internal and external. Caterpillar solves this by inviting external partners to join their critical talent development program, helping critical talent build external networks to enable their success in future leadership roles.
When it comes to talent management, this shift will also require HR to provide transparency of available skills, opportunities, as well as flexible work approaches for employees to build “portfolio careers” that involve more frequent role switching. Telstra realized this shift and experimented with its “All Roles Flex” approach to strengthen the leadership pool and include more female leaders.
6) Everything Accelerates (Except Large Companies)
New capital-light competitors scale rapidly while customer demand changes at a faster rate. Size, complexity, and regulation slow incumbent responses. Many retail banks, for instance, face internal hurdles as they struggle to keep pace with mobile payer-to-payer systems like Venmo. 3D printing startup Carbon increases the speed at which objects can be printed.
Continual change requires HR functions to regularly assemble, deploy, and recall HR staff to provide the right mix of skills to meet shifting organizational priorities. To effectively lead the organization through constant change, Qantas’s HR function establishes a pooled staffing and project model to more effectively manage the organization through the large-scale changes required to navigate a challenging competitive environment.
But this shift also means that organizations will have to be more agile and flexible by, for example, adopting more open-source approaches to change management and goal setting. Salesforce has been able to do this through its V2MOM (vision, values, methods, obstacles, and measures) tool year-round to ensure organizational alignment and the ability to move quickly, rather than creating a static annual business plan.
For most organizations, these shifts in the business environment present the additional opportunity to upskill staff. They also encourage HR to align staff in its sub-functions on key changes affecting the business and the myriad ways their roles contribute to successfully navigating the transition to a more digital future. CEB Corporate Leadership Council embers can visit our other resources for more detail around creating a common vision of digitalization, and talent priorities for the digital enterprise.