The future of HR is built on a digital mind-set

Posted by Arthur Mazor and Michael Stephan on December 21, 2018.

We’ve been having many discussions in recent years about various disruptions affecting all businesses—but what does this all mean for HR? Now more than ever, HR is being asked to take the lead on behalf of the enterprise in making shifts and changes to thrive amid constant disruption. One of four major shifts HR must make to prepare for the future is to help the enterprise build a digital mind-set—from doing digital to being digital. Why? Because it’s critical to addressing three very different futures affecting all of us: the future of enterprise, the future of the workforce, and the future of how work gets done. Nobody is better positioned than CHROs and HR leaders to take the lead in preparing themselves—and their enterprises—to thrive in this new world of work.

So, what does a digital mind-set mean and why is it so important for HR to adopt?
Digital DNA is how an enterprise is organized, operates, and behaves in digital ways. Through in-depth research, Deloitte identified 23 traits that characterize digital organizations. Our research shows that in order to be digital, an enterprise must make notable shifts toward these traits. However, when leaders or functions try to make these independently, success is limited. This is where HR comes in.

In order to drive meaningful change, digital needs to shift from a goal to a movement. When organizations want to drive significant changes in behaviors, mind-set, capabilities, and collaboration, HR is best poised to take the lead, not just for HR, but also for the enterprise. HR has an opportunity—a mandate, really—to help the enterprise develop a digital mind-set, helping leaders and the whole workforce prepare for each of these futures. A subset of these traits, pictured below, make up what we believe to be the most critical digital mind-set shifts needed for HR to transition toward the future and thrive in the digital age.

Figure 1.

Source: Deloitte Consulting LLP

Are enterprises moving toward a digital mind-set?
We recently conducted a Twitter poll to get a sense for how many enterprises are actively working to adopt digital traits and behaviors. The results from more than 10,500 respondents reinforce what we’re seeing in the field—which is both good and bad news.

First the good news: 41 percent of the respondents indicated their enterprise is either building a digital mind-set or working on getting there. The flip side, of course, is that 59 percent of respondents say their enterprises aren’t cultivating digital traits or they don’t know if they are. The fact that so many respondents (25+ percent) don’t know if their enterprise is making an effort to cultivate a digital mind-set isn’t surprising. It’s not uncommon for people to be unclear during times of disruption because change strategies are often deployed top-down rather than built bottom-up through a workforce lens. Our experience also indicates that many organizations are starting with the implementation of new digital technologies. While these are improving efficiency and extending capabilities, the absence of declared shifts in how one organizes, operates, or behaves often leaves the workforce unclear about expectations.

Future of HR twitter poll response card

What can we learn from the results?
The nearly 60 percent of respondents who say their enterprises aren’t adopting digital traits or they don’t know face real risks by not advancing digitally. We’ve all seen companies that are no longer around because they didn’t adapt to where the future was going. Tenure on the S&P 500 keeps getting shorter, now averaging about 15 years. It’s a disrupt-or-be-disrupted world, so if your organization is not cultivating its Digital DNA, its survival is at risk.

Even more important than mitigating risk are the inherent benefits to adopting a digital mind-set. HR should be driving this shift. How?

  • Size up: HR can lead the enterprise’s efforts to prioritize its focus, thoughtfully selecting a targeted number of the 23 Digital DNA traits to advance behavior and culture change, increase the probability of success, align with business imperatives, and avoid overwhelming the enterprise.
  • Achieve: HR can lead the enterprise in developing a clear set of business outcomes to achieve by being digital—stronger customer relationships, a more engaged workforce, robust product and services development, or whatever the business agrees are priorities for winning in this ever-increasingly dynamic world.
  • Strengthen: HR can help drive adoption of digital ways of working by cultivating a deeper understanding and awareness of the gaps among the enterprise’s leaders and workforce and develop specific actions to further develop the capabilities required to succeed in the future.
  • Shift: HR must be a role model by guiding the enterprise in accomplishing measurable changes in culture and behavior, fully embracing the actions for shifting into the future. HR’s credibility as a leader of the enterprise’s move to be digital rises when the function also leads with making the moves for itself.

The future is here
We’ve seen many enterprises (as reflected in the 41 percent in our Twitter poll) that are shifting, recognizing the importance of operating with agility and fluidity, breaking down silos, and fostering intentional collaboration (see Figure 1). These are excellent starts, laying the groundwork for being digital across a broader range of the Digital DNA traits. Yet to truly unlock the inherent benefits of a shift in mind-set, you must expand your focus to the changing nature and typology of work, dynamic skills requirements, and the need to fail fast and learn faster. As we say often, there is no “mature” digital enterprise; there are levels of maturity and all organizations are still maturing. What is your next step to the future?

We appreciate the feedback from everyone who responded to our Twitter poll (there will be more, so keep bringing your feedback). Your input adds valuable perspective to what our work with organizations reveals every day: The future of the enterprise, the workforce, and how work gets done does not—and will not—look at all like the past, compelling HR to step up and embrace its pivotal role in leading people and organizations forward.

Let us know of your experiences as we all navigate to the future of HR.

Arthur MazorArthur Mazor, is a principal with Deloitte Consulting LLP, Deloitte’s Human Capital practice digital leader, and the global practice leader for HR Strategy & Employee Experience. Art collaborates with complex, global clients to drive business value through transforming human capital strategies, programs, and services.
Michael StephanMichael Stephan, is a principal with Deloitte Consulting LLP and the US and Global HR Transformation Leader. He develops and integrates HR service delivery models across the operations and technology spectrum, with a targeted focus on optimizing the delivery of HR services around the world.

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