Digital transformation is here, and it is affecting companies in various degrees, across a number of industries. For an organization to succeed in adopting technological solutions, they must find ways to engage their workforce in this digital transformation or they will fall behind their competitors. To help determine the best practice approaches towards advancing digital transformation, we recently interviewed managers and employees at the forefront of the digital revolution. We uncovered two distinct findings. The first finding is that the digital revolution is still in its early stages and has yet to have the profound positive or negative effects that many predicted. In one way this first finding can be seen as an advantage since our second key takeaway from interviews is that the strategies and processes for managing the technological changes are not yet well developed in many organizations, so problems and risks related to the digital transformation and the corresponding engagement of the workforce remain prominent. If companies want to truly improve their productivity, improve their rate of return and produce positive work outcomes through technology, they must first adjust their management of technological innovations. A new integrated process for designing the workforce for the future The traditional management process organizations have followed for years has a very sequential pattern. The digital technology strategy design (defined by managers or vendors) flows into the implementation stage, after which the workforce is trained, and workforce adjustments are made (by HR departments). This approach is reactive and often displays a divergence between business targets and workforce strategies –the HR departments are not involved in the design of the strategy, defined by the managers, while the managers are not engaged in the detail of the workforce strategies defined by the HR departments. While this approach can work in some cases, to prepare for the digital revolution – with its fast-paced and more complex changes – we believe a more dynamic and more aligned approach is necessary. We propose a new integrated model where processes are interrelated and HR and the workforce itself has input in designing technology solutions. The objective of this process is to link the design of the digital strategy with the design of the workforce for the future, from the beginning. Rather than a sequential approach with definite steps, the whole model functions as a continuous circle, without a concrete beginning or end point. A fundamental difference for this model is that workforce and HR both have a say in the technological problem definition and solution selection as well as the related workforce adjustments. The belief behind this system is that if we want to improve the workforce of the future, we must leverage their input and shape the digital revolution around their needs. Five key elements for a successful digital transformation Companies benefit from designing and implementing technology in a thoughtful, integrated way that engages the workforce. By involving in the early stages of problem definition design workers who best understand the processes that can be improved, streamlined, or even eliminated, companies can avoid the changes and bottlenecks that later add costs, reduce continuous improvements, and inhibit user buy-in. Moreover, adhering to sequential technology design-implementation processes, the “old model,” diminishes further innovations that can put technologies to new, unanticipated uses that increase an organization’s digital capacities. Plus, leaving end users/workers out of the early stages increases the likelihood that the new digital landscape will widen the gap between winners and losers in the digital transformation process. Our interview findings indicate that a successful digital transformation incorporates the following five key elements in a new, holistic model: 1. Chief Digital Officer (CDO) as a key enabler of transformation: The CDO serves as the system integrator and change process facilitator. 2. Proactive workforce upskilling: Sufficient workforce training and investments made before the implementation process help to ensure the workforce has the skills and the cultural willingness to work effectively with digital technologies. 3. Collaborative technology design: Vendors, internal firm managers, and workers jointly define the problems/opportunities that digitization might address. 4. Augmenting human input with Artificial Intelligence (AI): Consider systemic process changes via AI (pure AI processes but also AI augmenting humans). 5. Integrating technology into workflows: Staff closest to soon-to-be-digitized work brought into the design right from the start. Not only consider automation of existing processes but also think about the process itself (and optimize it). It is imperative for companies to act swiftly so that their organization does not fall behind the best collaborative competitors in their industry. Deep-dive: The role of the Chief Digital Officer (CDO) As business operations change and adapt to the digital revolution, the need for a new executive position becomes readily apparent. Enter the Chief Digital Officer (CDO). The role of the CDO has been created by some companies to design and lead strategic digitization. Yet, some uncertainty surrounds the role’s responsibilities, given inevitable overlaps with the duties of the Chief Information Officer (CIO) and the Chief Technology Officer (CTO). While no two org charts or reporting arrangements look the same, the CDO, in general, should be understood as a more evolved role, combining elements of the CIO and CTO roles to achieve a mandate of overarching digital transformation throughout the organization. The CDO will need to be a digital integrator. Beyond extensive technical expertise, he or she must also understand operations and organizational considerations. Such a mix of skills will allow the CDO to approach technology from a design perspective and convert data into a strategic asset. In our findings, we’ve determined that CDOs must have the following three traits to be effective in their role: 1. They must have curious minds and continuously challenge the way an organization operates, plus direct solutions towards the identified challenges. 2. They must have advanced technical knowledge so they can select and implement the correct technological innovations. 3. They must understand technology and human interactions to manage the ongoing integration and change processes of the new technology. Many organizations have not yet defined the CDO position, choosing to spread the responsibilities across departments and executives. To compete in the digital revolution, however, companies should begin to consider how a dedicated CDO could impact their technical innovations and workforce engagement. Case Study THE SITUATION: A large global utilities player headquartered in Singapore faced disruptive headwinds from both within and outside of their organization. IoT-enablement of plant equipment meant an exponential increase in both the volume and velocity of big-data sets from multiple sources that they were expected to integrate and analyze. This situation was exacerbated by ambiguity around data security, connectivity, access, and ownership. The proliferation of new technologies and the acquisition of new assets (plants) resulted in a situation where the organization had multiple, incompatible platforms. Their organizational structure also raised some red flags. Their information technology (IT) department was viewed as a cost-center and reported into Finance. The IT team comprised predominantly of generalists, while the specialist services were outsourced. THE SOLUTION: Mercer was tasked with designing a new structure for the IT department, as part of a broader digital transformation strategy. Part of our recommendations included the creation of the Chief Digital Officer (CDO) role to drive alignment of their IT and operations technology (OT) objectives and teams. The CDO’s role was designed to develop a digital strategy and elevate digital transformation in C-suite conversations, both from an internal (business analytics and decision making) and external (customer facing platforms and interfaces) perspective. One of the key objectives of the CDO’s role was to ensure that senior executives not only had a holistic view of the ownership and impact of technology decisions but were also invested in driving the outcomes that would deliver returns from these decisions. 1 Engaging the Workforce in Digital Transformation https://www.mercer.com/our-thinking/career/engaging-the-workforce-in-digital-transformation.html
According to a newly-released Mercer study, Talent Trends 2018, more than half of executives believe that at least 20 percent of the roles in their organizations will cease to exist by 2022. What are you doing to ensure your organization has the talent needed to meet evolving business needs? Here’s a hint. Creating a career framework strategy and platform enables core and contingent workers to plug into an organizational structure that matches their evolving skillsets with business needs in real-time. This aligns with findings from the World Economic Forum’s The Future of Jobs report, where 39 percent of respondents said they support mobility and job rotation, and with findings from Mercer’s Thriving in the Age of Disruption report, where 71 percent of respondents said internal mobility is encouraged. Bridging this gap between intention and action can be done through the development of a thriving environment and clarification of an organization’s career framework strategy. Engage employees in a thriving organization Thriving organizations often encompass energy and authenticity, which are core drivers of employee engagement. Studies show employees who feel energized by their projects and comfortable being themselves at work, are 84 percent more likely to express job satisfaction, a desire to stay with their organization, and a willingness to recommend their workplace to others. Further, thriving organizations tend to have a societal impact, embody a culture of trust and an ethos of virtuousness. These organizations are agile and responsive to external changes and offer clear career paths for employee career growth. In these environments, employees feel engaged, empowered and energized. They feel confident about the future, enthusiastic about their job and their desire to stay at their organization. Figure 1. If a thriving organization is critical to employee engagement how do you create a thriving organization? Develop and implement responsive and effective career frameworks Future-focused leaders identify people who can drive the business forward – even if those people are not in a position of influence today or if their future roles are yet invented. This has implications for jobs, roles, and career planning and capability development. Career frameworks are an aspect of crafting a future-focused people strategy where employees understand that they have an impact on their career path. Career frameworks first became popular because of the U.S. Army. It was a way to measure soldiers’ progress and success where competencies could be defined as observable behaviors. In the late 1990s, frameworks evolved to mapping competencies to jobs. However, today, good career frameworks focus more on the employee journey than on assessment; they are at the center of people-related processes; are skills-based with a spotlight on driving greater business success; and they generate excitement among employees. Career frameworks are also becoming flexible and individualized, from both the employee and managerial perspectives. Responsive and effective frameworks allow employees the opportunity to architect their own journey and experiences. On the other hand, managers have insight into their employees’ aspirations. Conversations can go beyond performance-based topics to identify what experiences and competencies employees need to mobilize and grow. At the macro level, career frameworks also provide organizations feedback and insights. They illustrate what the workforce currently looks like and spotlight what capabilities need to be developed. Additionally, career framework platforms democratize opportunity and information. Fuel50, for example, is an intuitive, customizable and AI-driven solution that delivers career path transparency that is scalable and agile. Fuel50’s CareerDrive tool allows users or employees to invest in and manage their own careers, understand the organizational values and how they can align their careers with the business trajectory and expectations of existing and new roles. Figure 2. Career Framework Want to build a responsive and effective career framework? We recommend following these seven steps: Here are six considerations for building robust career framework for your organization: Preparing for the future On a macro level, organizations will need to create a digital infrastructure to support an internal gig economy. This is in line with how workers now contribute skills to projects and teams rather than contributing skills to the company. Individual career management will sometimes be driven by the internal ‘work market’ – where employees bid on projects and serve as internal freelancers. Companies need to provide an infrastructure to support this. It used to be that competencies enabled a robust career framework, and they defined technical job requirements. Now, the focus is on competencies as building blocks for emerging jobs of the future. According to the World Economic Forum’s Future of Jobs report, by 2020 “more than a third of the desired core skillsets of most occupations will comprise skills that are not considered crucial to the job today.”2 Given this, leaders must focus on how they can help employees build agile competencies. Broader skills will drive higher degrees of individual and company success. To be competitive in the uncertain future of work, employees will need to be curious. Another coveted trait will be seeking out new information and experiences, parsing through streams of data for relevant insights which require human judgment. Other in-demand skills will be a growth mindset and critical thinking. With an ever-growing focus on the future, employees are asking how they can equip themselves with the necessary skills to succeed. Employers can and should provide that answer as a way to engage their employees. A thriving workplace and robust career frameworks allow them to do so. 1 Global Talent Trends Study 2018 | Mercer https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html 2 The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution | World Economic Forum http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf 3 Thriving in an Age Of Disruption | Mercer https://www.mercer.com/our-thinking/thrive/thriving-in-a-disrupted-world.html 4 Career Development Opportunities | Thai Union www.thaiunion.com/en/careers/career-development-opportunities
Around the world, technology is changing the way we work. Emerging trends across diverse sectors, from financial services to retail, range from the more prosaic (digital marketing) to borderline science fiction (3D printing). How does this impact the skills needed in this fast-evolving landscape? Having a conversation about the impact of technology today is difficult without it quickly devolving into an assortment of clichés packaged into the newest management-speak. Almost every organization is “undergoing a technology transformation” or “going digital.” As pervasive as these trends seem to be, oftentimes there is a lack of understanding of these terms beyond buzzwords. In a refreshing moment of honesty, a senior business leader at one of our client organizations recently remarked that her organization wanted to “go digital — but I’m not really sure what that means.” Given the overwhelming amount of information available through multiple communication channels, hers is not the only organization struggling to zero in on the skills it really needs. Exacerbating the situation is the fact that multigenerational workforces have differing levels of exposure, understanding and comfort with technology in everyday life. In the past year, we’ve been asked to help more and more organizations define career frameworks and critical technical skills for the future. We’re finding that rather than seeking industry-specific skills, organizations are shifting toward “technology application within the industry” skills. As an example, our banking clients are starting to use social media as a marketing and distribution channel. Their digital marketing professionals must be able to not only highlight the differentiators of their products but also understand how (and whether!) a sponsored post on Facebook really translates into a purchase decision. In a different industry, a shipbuilding company is looking to develop additive manufacturing — what you and I call 3D printing — skills to their engineering function to improve their prototype-building process. With the endless examples of innovative new technology solutions come the inevitable fears of irrelevance and redundancy. According to The Wall Street Journal, business process offshoring — call centers in particular, which were a mainstay for economies like India and the Philippines in the late 1990s and early 2000s — looks set for a major disruption, with the first level of customer service now being replaced by chatbots. It only takes a call to AppleCare or United Airlines to appreciate how quickly (and well) this technology is evolving. Voice interaction is only expected to grow in the near term, not just in customer service application but also for broader web browsing and online purchasing (think Siri and Alexa). So what are the critical skills organizations and individuals should focus on given these sweeping changes to the way we work? The answer is understandably complex and depends on industry, geography and other variables. The World Economic Forum’s 2016 The Future of Jobs report cites core work-related skills, such as complex problem solving, active learning and cognitive flexibility, as increasingly important to all sectors in the near future. These skills are even more critical in emerging markets, where the evolution of technology impacts jobs faster than in more developed economies. We see this view reinforced in our work with government agencies across countries in Asia. When identifying critical skills at an industry-wide level, ongoing learning, problem solving and creativity emerge across almost all industries, whether in high-tech industries like telecommunications or more traditional sectors like manufacturing. Not surprisingly, the other skill that comes up across industries is information and communications technology or digital literacy — using digital technology, communication tools and networks to access, manage, integrate, evaluate and create information. With the “Internet of Things” (IoT) having a major impact on consumers (think sensors that monitor your heart rate) and industry (sensors that monitor and predict performance of industrial equipment), seemingly traditional businesses are thinking about data architecture and NarrowBand IoT. These technologies also highlight the need for organizations and individuals to better understand information security to prevent cyber-attacks. Recent attacks have ranged from crimes targeting individuals, such as identify theft, to wide-ranging attacks through IoT-enabled devices (like network-enabled cameras and home routers), such as those caused by the Mirai malware in late 2016 that made platforms like Twitter and Netflix inaccessible to millions of people for hours. With ever-increasing “smart” and connected appliances, these attacks are likely to get more frequent and severe. Each of us needs to understand the risks and the actions we can take to prevent becoming targets. An interesting addition to this mix of skills is transdisciplinary thinking: the ability to combine concepts and rules across different disciplines to develop a holistic approach to problem solving or product development. The automation and complexity of production-line equipment is increasing exponentially, which means that process engineers have to expand their knowledge of programming beyond generalized software to automation programming. Fields such as bioinformatics (a combination of computer science, statistics, biology and a few more areas) and the widespread application of analytics to different functional areas are also becoming increasingly commonplace. As with any major change, the impact of technology offers as many opportunities as it does risks. As large swathes of jobs become irrelevant, new skills and jobs emerge at an increasing rate. Jobs based on these emerging skills have the potential to be more fulfilling and interesting than the more routine functions they replace. After all, the industrial revolution disrupted a world dominated by manual labor — and subsequently raised skill levels and quality of life. Having said that, the ability to learn continuously has never been as important as it is today. It’s up to us, as organizations and as individuals, to keep challenging ourselves to grow in new ways and master the skills we’ll need to thrive tomorrow rather than the ones we need to survive today. 1Select Mercer engagements 2 Moss T. “Robots on Track to Bump Humans From Call-Center Jobs,” The Wall Street Journal, June 21, 2016. 3 World Economic Forum. The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution, January 2016. 4 NarrowBand IoT is a low power wide area network (LPWAN) radio technology standard developed to enable a wide range of devices and services to be connected using cellular telecommunications bands (see https://en.wikipedia.org/wiki/NarrowBand_IOT). 5 Perloth N. “Hackers Used New Weapons to Disrupt Major Websites Across U.S.,” The New York Times, October 21, 2016.