HR's challenge - develop the right conditions for Digital Leaders
- Summary:
- Digitization has not only changed the way organizations, private and public sector, operate, but it is also changing the kind of leaders we need, argues Josh Bersin in Deloitte’s 2017 Global Human Capital Trends report.
The level of organizational changes caused by digitization, the speed of change and the need for constant innovation demand a different kind of leadership, according to Josh Bersin, principal and founder, Bersin by Deloitte:
The leaders in digital organizations have to know what digital products and services are and they have to be able to experiment and innovate, to try new things and fail and learn and not just operate businesses any more. We still need operators, but far fewer of them.
They have to be connected in the organization and to have a ‘followership’, not just positional leadership. You are no longer a leader because you’re a vice president, you’re a leader because people follow you and people respect you.
Bersin adds:
Most of the [organisations] we talk to have dozens and dozens of competitors doing very innovative things, so digital leaders have to be aware of what’s going on on the outside: they understand the pace of change, the changes in technology. So they are very externally focused and they understand how to build a culture of innovation and change as opposed to a culture of direction and accountability.
One of the things that’s hard about that for companies is that most leaders in the company got to their position by working their way up the pyramid and they never really had to prove that they were good at innovating. Now we’re saying almost every role has need for this, so a lot of competency models and behavioral models that companies have had for leadership are being questioned.
Creating a digital leadership program is one of the key tasks for HR, yet only 5% of respondents in Deloitte’s 2017 Global Human Capital Trends survey said they had a program in place. In particular, Bersin notes that not enough is being done to develop the leadership potential of millennials many of whom are now in their early 30s:
I think about 70% of millennials in our research said they’d had no leadership development or leadership opportunities whatsoever. People at that stage of their life thrive on growth and if companies don’t give them opportunities quickly, they’ll leave. Bigger and older companies have really struggled to tip their rewards system upside down so they can reward their people faster.
Of course, HR itself is not immune to the need for change, including becoming not just digitally aware but experimenting too, notes Bersin:
You need to be as digital as the rest of the organization. You need to build the same kind of skills as line managers, you need to build experiments, prototypes, and you need to stop assuming that the core ERP system is going to give you everything that you need, because it’s not.
Everybody created cloud-based software and everyone thought okay, if I replace all this old stuff with cloud vendors the world’s going to be better. Well it turns out it’s not – it’s not that easy to use or much better than it was before, it’s just in the cloud.
So organizations are starting to build little development teams within the HR or IT department to build things like a new system for onboarding or wellness or performance management. Bersin adds:
Unfortunately the vendor market is behind so you can’t buy it, you’ve got to build it. So there’s a kind of a new architecture emerging where you have a core ERP that might be in the cloud, then you buy or build mobile apps on top of that for your employees.
Core systems are not going to be enough alone and although big vendors are striving to add features, as ever the innovation is coming from smaller vendors. The beauty of these smaller mobile apps is that they don’t cost the earth or take long to implement. Bersin notes:
One client says they don’t even look at the functionality of the app any more they just let people use it and they tell them if they like it or not. If they don’t like it, they don’t care if it has a lot of functionality. If it’s not useful they won’t use it.
Falling behind
People analytics has been become an established HR tool, but it still snags a top 10 spot in the list of business and HR concerns. The report reveals, however, that the benefits have often fallen short of expectations.
The report found that only 8% of respondents have usable data and only 9% believe they have a solid understand of what elements of talent drives performance. Only 15% have widely implemented HR and talent scorecards for line managers. So what’s gone wrong? Bersin explains:
We got all excited about modelling and predictions. Companies like Google predicted that if you did this or that you’d be likely to leave the company. So companies got people with PhDs into these jobs and built these little academic groups that would take a bunch of HR data and try and find, say retention models. They are helpful but not that useful in terms of making more money for your company.
What followed were a few years of experimentation and the scrabble for HR to employ data scientists, but continues Bersin:
What we found in the last couple of years is that the companies that built these teams are very frustrated and they are saying they’re not doing anything useful. They are coming up with interesting projects, but they are not helping us run the business.
Instead, according to Bersin, analytics needs to be less the preserve of an elite group of data scientists and become much more pragmatic, following closely what the business needs and responding quickly:
I think it’s becoming much more pragmatic. Maybe this is the normal progression of any business function: people experiment and then people industrialize. So I think we are starting to industrialize people analytics.
While business and HR leaders may be daunted by the level of change required to fit these new rules of business, what is clear, notes Bersin, is that the time for talk is over:
We’re past talking about it and we’re doing it. People aren’t just experimenting now, they are doing things.
Trending
So what are the Top Ten Human Capital Trends for 2017 as defined by Bersin?
(1) The organization of the future – Arriving now
The old hierarchical model of business is being replaced by the power of networks. The traditional question “For whom do you work?” has been replaced by “With whom do you work?”
(2) Careers and Learning: Real time, all the time
Employees facing 60 or even 70 years of working need to continually reinvent themselves as skills quickly become obsolete as the pace of change quickens. That means Learning and Development teams need to create solutions that inspire and enable people to reinvent themselves, develop skills and contribute to the learning of others.
(3) Talent acquisition: Enter the cognitive recruiter
The biggest disruptor in talent acquisition today is experimentation with technology and services, particularly cognitive technologies such as artificial intelligence (AI), machine-to-machine learning, robotic process automation, natural language processing, predictive algorithms, and self-learning. Recruiters are now relationship builders and managers.
(4) The employee experience: Culture, engagement, and beyond
No longer just looking narrowly at employee engagement, the focus is on the employee experience. Pulse feedback tools, wellness and fitness apps all help create an improved employee experience.
(5) Performance management: Play a winning hand
Agile goal management, check-ins and continuous feedback are well understood and becoming more common, while new models of evaluation and rewards are beginning to be adopted.
(6) Leadership disrupted: Pushing the boundaries
High-performing leaders need to be more digitally focused and team-centric. They are concerned with culture, context, knowledge-sharing and expected to innovate.
(7) Digital HR: Platforms, people, and work
How can HR drive the culture of innovation and sharing, network-based organizations and design a digital workplace that enables productivity? At the same time, how must the HR function itself change to operate in a digital way and use digital tools and apps?
(8) People analytics: Recalculating the route
Looking forward people analytics will be completely integrated into systems and always in the background rather than a separate source of information and will offer increasingly personalized recommendations.
(9) Diversity and inclusion: The reality gap
The era of diversity as a check-in-the-box activity owned by HR is over and it has become a top-level-management issue. Diversity is no longer defined by ideas of gender, race and demographics, but includes things such as ‘diversity of thought’ and people with cognitive differences such as autism.
(10) The future of work: The augmented workforce
AI, robotics and cognitive tools are helping reinvent every job and create ‘the augmented workforce’. This is likely to be the fastest area to accelerate over the next five years.
[Source: Deloitte’s 2017 Global Human Capital Trends report: Rewriting the rules for the digital age]
My take
The message from this comprehensive report is that it really is time to stop talking and start making changes.
While it is not just digitization alone that is changing the way we do business, it plays a massive role – it provides both the means to help us work more effectively in teams and communicate more easily, and because of that it is making us change the way we need to structure our organizations. Change on a huge scale is required that extends way beyond the remit of HR alone.