How HR and business leaders can support digital transformation

How HR and business leaders can support digital transformation

Posted by Doug Palmer on August 5, 2015.

It might be tempting to think your organization’s digital adoption and level of digital sophistication is mostly outside the realm of HR. But new research by MIT Sloan Management Review and Deloitte Digital (Strategy, not technology, drives digital transformation: Becoming a digitally mature enterprise) highlights several reasons why this isn’t the case. The study indicates that how adept businesses are at leveraging digital technologies to transform processes, talent engagement, and business models isn’t as much about technology as it is about strategy, culture, leadership, learning, and talent—all areas within HR’s influence.

Clear strategy, collaborative culture are signs of maturity
The study is based on survey results from more than 4,800 business executives, managers, and analysts from 129 countries and 27 industries, augmented with interviews of business executives and technology vendors. Their responses reveal that an organization’s digital maturity—whether early, developing, or maturing—is closely tied to its having a digital strategy and the culture and leaders to support it. Digitally maturing companies are five times more likely to have a clear digital strategy than companies in the early stages. They are also more than twice as likely to have collaborative cultures that encourage risk taking and nearly three times more likely to use cross-functional teams to implement digital initiatives.

Digital skill building is high in maturing organizations
Maturing digital organizations are adept at closing skill gaps that impede digital progress. More than 75 percent of survey respondents from these companies say their organizations are able to build the necessary skills to capitalize on digital trends, compared to 19 percent in early-stage companies. Maturing companies are also more adept at conceptualizing how digital technologies can impact the business, and quicker to adapt to change. Their employees believe leaders have a strong understanding of digital trends and technologies, and the skills to lead digital strategy.

Talent favors digital maturity
Digital maturity is also a strong talent lure. Surveyed employees across all ages, from 22 to 60, want to work for businesses that are digitally enabled. More than 70 percent of respondents from companies at the early stage of digital maturity are dissatisfied or strongly dissatisfied with their companies’ reaction to digital trends. Business and HR leaders should bear this in mind in order to attract and retain the best talent.

Digital maturity is the product of strategy, culture, and leadership
To position their organization to move forward into a digitally transformed future, business and HR leaders should tackle these questions:

  • Do we have a digital strategy that goes beyond implementing technologies? As we interviewed leaders for our research, their responses pointed to three trends that will impact digital strategy and the leadership approaches and culture needed to support digital maturity: (1) melding of online and offline experiences for employees and customers, (2) increasing use of analytics and data in decision making and processes, and (3) decreasing life span for business models—industries are changing quickly, and leaders need to be bold to stay ahead of obsolescence. Maturing organizations embrace digital to improve innovation and decision making, and, ultimately, transform how the business works.
  • Does our culture foster digital initiatives? More than 70 percent of respondents from maturing companies say that their managers encourage them to innovate with digital technologies. At lower levels of maturity, only 28 percent of respondents express the same sentiment. Risk aversion hampers digital progress: business leaders should embrace failure as a prerequisite of success. They must also address the likelihood that employees may be just as risk averse as their managers and will need support to become bolder.
  • Is our organization confident in its leadership’s digital fluency? This doesn’t mean leaders have to be technology gurus. Rather, leaders should have the ability to articulate the value of digital technologies to the organization’s future. In our interviews, we found that story-telling plays a large role in gaining employee buy-in and organizational traction for digital transformation.

Addressing these questions can strengthen an organization’s ability to keep pace with digital technologies as they transform business and society. See the full report for numerous examples of companies that are leading the way.

Doug Palmer is a principal in the Digital Business and Strategy practice of Deloitte Digital, Deloitte Consulting LLP where he advises clients on matters related to digital strategy, social business, enterprise collaboration, and the adoption of emerging technologies.

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