Throughout the years, we have been curious and, in some cases, an enthusiast regarding what technology can do, upgrade and … disrupt. I have watched closely an unprecedented time in the history of mankind in which the confluence of several technologies (information and communication, but much more than that) are transforming life as we know it, as we learn, work, live, or travel. We see this happening in the business world, how we design new business models, changing work processes, product or service design and interaction with customers, partners, or suppliers. In my executive search, cultural transformation, and leadership shaping consultancy missions, I have also helped companies to acquire human and organizational capital to bring these roadmaps to a successful conclusion.
“Digital transformation,” as we globally call it, has become a mandatory concept for any organization. I have noticed, however, that it has become a buzzword, too general and intangible , when not managed in a proper manner. Management is not rocket science. Yes, it is increasingly less deterministic and predictable. More complex and, as such, more difficult. My perspectives, described below, are personal, subjective, and based on empiricism, after experiencing several projects of change, in which digital was / is the main driver or accelerator.
First, digital transformation must, of course, go far beyond the massification of communication platforms (e.g., Skype, Zoom, Teams), investment in the latest generation CRM or ERP, the implementation of document management software to paperless objectives, the e-commerce store, or the insertion of friendly chatbots on the website. It should be deployed and rendered profitable as a global investment, that “touches” the key aspects of an organization’s value-chain.
Let’s go back to the basics. We must understand that the digital transformation is based on three components, which have performed fast-paced improvement levels in the last decades: the processing, transmission, and storage of information. This allowed the emergence, sequentially, of personal computers, networks, mobile phones and the internet. Later, we saw the emergence of smartphones and cloud computing. And, in a new generation of innovation, a whole new array[WB3] of technologies, ranging from AI and Machine Learning to Blockchain, from 5G to the internet of things (IOT), from Augmented Reality (AR) to Robotic Process Automation (RBA) or 3D printing – which intersect and increase the disruption. As such, it is important to ascertain the optimal way we can leverage this disruption to transmit, process and store information. And how we transform this disruption into useful knowledge, needs to be in the fastest and most reliable way possible, throughout the key processes of an organization.
In each company’s unique status assessment, the conclusions should make it possible to establish a strategic vision of the transformation, by areas, specifically addressing two macro-objectives: operational excellence (efficiency) and the maximization of the customer experience (effectiveness). This should be done top-down (vision and strategies from the CEO / top management) balanced with bottom-up improvement projects, properly aligned. Example: if we want to set up a new business unit that provides certain products / services to a segment of customers, a digital transformation must optimize the supply of resources, the marketing model, the degree of standardization / tailor-made of the offer, and the simplification of company – customer interactions. For example, it is because they are effective in these dimensions that Airbnb competes successfully with hotel chains, Uber or Lyft are overcoming taxis, or Netflix ending Blockbuster’s business. Or the reason why Android (Google) or iOS (Apple) systems are today practically a duopoly worldwide (yes, they are extreme cases, of notoriety and success, but they show the essence of digital transformation).
It is necessary that the new business architecture unfolds in the Processes, Technologies, and People aspects. The latter is the most important variable. Questions for organizations (and namely, the CHRO’s) to assess:
- Do we have qualified people to deal with data in a dynamic manner?
- Do we have qualified people to manage projects in an agile way?
- Do we have qualified people to interact effectively with an “ecosystem”, in an open innovation environment, on collaborative platforms?
- Do we have leaders trained to manage teams, which collaborate digitally, in a work-anytime-anywhere model?
- Do we have top management teams capable of identifying technology opportunities and, with a strategic vision, reformulating (or disrupting) current business models?
It will be mandatory for HR leaders to develop basic technology knowledge and competencies to face this incoming future. They should learn about the utility, present maturity, and potential of the above-mentioned technologies. How it can interact and generate “augmented human talent” – in a symbiotic relationship between humans and machines.
These are, in practice, the most important, complex, and impacting challenges of the ongoing revolution. The Chief Human Resources Officers (CHRO’s) have the responsibility of leading the way, helping Boards to redesign organizational structures, acquiring the right competencies (through upskilling and reskilling), and reshaping the business culture. At the end of the day, the success of digital transformation is not a question of technology (by its very nature, transmissible and scalable) … it is all about People!
Managing Partner of Darefy – Leadership & Change Builders