Tech, transformation and talent
Posted on: 21/01/2020
In 2000, during his penultimate year as the CEO of General Electric, a role he would hold for 20 years, Jack Welch said “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” There are many organisations in this same situation today.
Indeed, speak to most if not all business leaders and it soon becomes clear that unless significant inroads are made into the digital transformation of their organisations within the next two years, they run the real risk of falling behind the curve and seeing the bottom line detrimentally impacted as a result. Blocking the path, however, are two key challenges that need to be met: definition and impact.
Clarity and differentiation
By definition, we refer to why the organisation wants to transform and – armed with that understanding – the ‘type’ of transformation that it needs to undertake. It could be in response to shifting customer expectations and the delivery of products and services in new ways; to modernise legacy processes and identifying new ones that will drive future growth. Or perhaps the focus is on the use of technology to solve customer problems in different ways.
Whichever approach is required, the premise is the same: any digital transformation project needs to align the organisation with how the world has changed and the ways in which stakeholders demand more value, quality and efficiencies. It must start and end with providing an improved personable experience for the organisation’s key stakeholders – its customers, employees, partners and communities being served.
Evolution not revolution
Many would be forgiven for thinking that ‘digital transformation’ is a relatively recent concept, but this is a false assumption to make. While quickly finding its way to the top of the organisational agenda over the last few years, digital transformation is anything but new. Neither is the concept of a ‘digital revolution’ itself, this has already happened – we’re simply catching up, as the following demonstrates.
At time of writing, there are seven billion connected IoT devices and 52,000 data points per person collected by a single social media behemoth. Add the collective sum of the world’s data to the equation which is set to grow from 33 zettabytes today to 175ZB by 2025 (a growth rate of 61 per cent) and it soon becomes clear that the possibilities afforded by digitalisation are only just beginning to be realised.
This has, by default, created an opportunity for innovative technologies to see how the data which is available can be better used such as enabling people to self-monitor their health, and shifting the focus to prevention rather than cure. In other words, how are we going to get from where we are now and the place we need to be, and what does this mean from a talent acquisition perspective?
Emerging trend: talent and location management
Another key area in which digital transformation is set to unlock organisational potential is the value it will be able to add to the workforce. Talent investment, especially when it comes to technical roles, is increasingly moving towards a hybrid model – one which is a rich mix of permanent employees and contingent or consultant talent.
We are already starting to see the first of the truly digital native generation enter the workforce and it will be they who lead it tomorrow. Businesses are already engaging customers, partners, suppliers and other stakeholders on a local and global basis and employees will soon expect the same for their careers. This will lead to a transformation in the way employers both communicate and manage their teams.
Again, we’re talking about data driving change. Over the next few years we will expect to see a transformation in almost every aspect of the workplace, from digital collaboration tools that enhance communication between employer and employee wherever they are located, to the use of data in monitoring and measuring the performance, health and wellbeing of individuals both in and outside of the workplace.
As competition between organisations rises, so does the need to streamline operations where feasible. One way of doing this is by moving the shared services operations elsewhere, but such an approach demands caution, as we have seen in the case of Lisbon.
The Portuguese capital has experienced exponential growth of its tech ecosystem, with venture capital flooding into the city from investors eager to take advantage of its rebounding economy. In fact, investments have tripled to over €7 billion since 2016 with the tech sector credited for the Lisbon unemployment rate dropping from 18 per cent in 2013 to six per cent today.
However, the downside for organisations who move their shared services operations to locations that experience such a dramatic economic transformation is that a spike in competing players will do likewise. The result of this is not only a saturation of the local market but also an escalation in the war for talent – one which the organisation could easily lose unless it is agile and adapts to the threat of this new competition.
We have seen time and again a number of such cases whereby an organisation enters a relatively untapped talent marketplace and pays its people towards the lower end of the pay scale. This may suffice for a while, but when new competitors enter the same space and offer more attractive salaries, those existing businesses may struggle to retain the talent they already have if they don’t revise their offering to compete on a level playing field.
It is simple finance: if the earning potential is not competitive, top talent won’t be attracted to that organisation and they take two forms. The first are the high-value innovators with the knowledge, experience and proven expertise in delivering successful transformation projects. Then there are the true digital natives – the generation whose natural instinct is to consider a technological solution to any challenge. As the artist John Ruskin rightly said: “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.”
He was right. If the organisation pays too little, the ability to deliver a successful transformation project outcome will be jeopardised if the talent being used has little or no prior experience; it may overrun, and the associated costs could easily run into the hundreds of thousands or even millions.
Fundamentally, there needs to be an understanding of how digital transformation sits within the overall business strategy. Key to this is getting everyone at every level of the onboard with the process and understanding how it will positively impact their role within the organisation.
Progress is already being made. According to one report, 85 per cent of business leaders are on board with digitally transforming their organisations and McKinsey estimates that the US is currently operating at 18 per cent of its digital potential, with the UK just a percentage point behind.
Furthermore, 89 per cent of IT decision makers state that their digital investments have been ‘moderately’ or ‘very successful’ in terms of business growth and increased market share, according to the 2019 Insight Intelligent Technology Index.
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