Imperatives for Talent Strategy during Digital Transformation
September 26, 2018 | CEO & CIO Magazine
Technology has brought about dramatic changes, from daily interaction to production. In the current global trade report “digital globalization,” by McKinsey & Co., statistics show that 12% of international trade is realized through e-commerce, and start-ups are the main drivers of the transformation.
Internet-based enterprises are more flexible in terms of market competition, which also pushes traditional enterprises towards digital transformation. In order to complete the mission of digital transformation, CEOs and senior executive teams need to fully understand and promote digital transformation, engage the right people, apply the right technology, and establish a digital culture.
The following steps are necessary in the process:
- RECOGNIZE - Digital transformation is an organization-wide process; confining it to a vertical or team will only breed issues further down the line.
- DETERMINE - Every business has different needs; some will seek the analytical skills of a big data expert while others may need the social prowess of an omni-channel retailer. Determine what particular skills are most valuable to your team and, ultimately, your customers.
- IDENTIFY - Whether you look internally, externally, within your industry or beyond, finding the right talent to meet both the needs of your business and customers is a complex process. Employ the services of an experienced team of consultants to help identify ideal candidates.
- ENABLE - Start small to drive operational change across the business; align the digital transformation team with key internal stakeholders from the front and back offices. Connect them with IT and marketing. Empower them to break down silos.
Globally the telecommunications industry is a typical example. The global telecommunications industry has historically been at the vanguard of change, both in applying cutting-edge technology to its own infrastructure and operations, as well as pushing leading-edge services to its customers. Over the past 50 years, communications service providers (CSPs) have faced a constantly evolving business and technology environment.
Over the last decade, traditional revenue streams from voice, messaging (SMS), and data have persistently come up against ever stronger downward-pricing pressure. While the telecommunications industry has adapted to the internet explosion and the emergence of cellular mobile communications in the 1990s, it seems to have missed the race when it comes to solutions from over-the-top (OTT) providers and the challenges presented by the Internet of Things (IOT). Both OTT and IOT offerings exploit carrier infrastructure and cannibalize traditional revenue lines and have a cascading impact on the industry. It points to the need for transformation within the telecom ecosystem. For carriers, it is the era of "adapt or be forgotten".
International Data Corporation’s (IDC) digital transformation (DX) model recognizes five dimensions of transformation: Leadership, Omni-experience, Information Management, Operating Model, and Worksource. Although the primary goal of digital transformation for a CSP is to create a customer-driven outcome through omni-experience, results from IDC’s Carrier Transformation Survey show this can be hard to attain. There are multiple hurdles in this journey, but there are two main obstacles. First, a lack of clarity and vision in a transformation strategy; second, finding the right people and working with them to guide this voyage.
IDC predicts that by 2021, at least 50% of global GDP will be digitalized, with growth in every industry driven by digitally enhanced offerings, operations, and relationships, and that by 2020, investors will use platform/ecosystem, data value, and customer engagement metrics as valuation factors for all enterprises.
The transformed organization is driven by a customer-centric and empowered workforce that embraces risk-taking as it seeks to continuously innovate. Technology and data are its lifeblood, fueling more efficient operations, new revenue streams, and customer loyalty. Digital native enterprises leverage leadership, engagement, information, business/operating models, and worksource in an “outside in” approach to be leaders in their ecosystem and industry. They continually monitor and adapt to new information, opportunities, and threats while leveraging their ecosystem of stakeholders (customers, partners, employees, and community) to dynamically evolve products, services, and strategies.
As these overall transformational developments occur at the organizational level, other global patterns will directly affect the telecommunications industry. The world continues the move towards urbanization, with the World Bank estimating 65% of the global population to be living in urban environments by 2020. And the average levels of urbanization in higher income countries will reach 81%, compared to an urbanization rate of 31% among lower income countries. An increase in urbanization will lead to new demands in society, including a greater need for housing, healthcare facilities, and basic infrastructure. And this carries over into the telecommunications world as well, as higher density requires greater network infrastructure to handle demand for greater levels of communication and connectivity — from the ability to share social media content to the need to improve and perfect public safety communication infrastructure.
Companies must make changes to their organizations to capture the next wave of growth. IDC has identified the following key benefits arising from operations transformation:
Internal upsides: Within the organization, transformation leads to improved employee productivity, the rationalization of internal systems and processes, the breakdown of operational silos, the simplification of complex back-end systems, and most importantly, reduction in cost of delivery.
External upsides: Transformation brings about reduced time to deploy new products and services to the market while also expanding international offerings. It can help increase wallet share in existing markets and expedite offerings to new markets.
Seize and Attract Talent
Engaging and seizing talent is the key for enterprises that seek digital transformation. Executive-search companies, which help clients find top talent, need to have deep analyses of the companies and industries, to ensure that recruited senior executives would be able to push forward the digital transformation process. Mike Lim, Managing Partner of DHR International’s Asia Pacific Advanced Technology Practice, and also Managing Partner of China, describes his work as follows: “Our team is positioned to be in the HR consulting business. We offer consultancy service while charging through executive search. We seek out the right executives for clients with our understanding and analysis of their situation”.
Here is a typical example: A multinational company’s initial thought was to hire a CDO to develop its digital business in China. After in-depth analysis, DHR International suggested it appoint a CEO instead, because only the CEO can connect R&D, sales and strategies. Mike Lim considers “ambiguity tolerance” as a vital quality for qualified top executives. It is particularly important for those with industry experience as they need a reset and to embrace new things. And enterprises need to be on the search for talent with a growth mindset, which means to be open to new ways of thinking and to new things.
Several years ago, executive search services in China were mainly embraced by multinationals. There have been changes in recent years though, and today 40% of domestic enterprises have begun to engage executive search firms. The figure is also rising. Among the enterprises, internet companies that feature in the sharing economy are seizing talent for overseas market expansion. Capable top executives for these companies are required; they need to have an understanding of digital technology and know how to build models to collect consumers’ data, as well as develop business by analyzing the data. It is a big difference from product-centered companies and their overseas-expansion plans previously.
Digital culture is paramount for digital transformation. That requires the CEO to take the lead and walk the talk. For an enterprise to digitally transform, it must achieve the five digital dimensions: leadership, relationships, information, operational, and talent. Below are questions that C- Suite leadership can ask themselves as they look to achieve digital transformation:
- Is the CEO and other relevant leadership involved in the transformation roadmap? Is the CEO driving cultural change down through the organization?
- Is leadership proactive in setting the vision, determining an appropriate organization structure, and committing to an aligned amount of digital transformation resources?
- Is the organization oriented towards: “put the customer first”? What processes has the organization implemented to support the customers’ whole experience?
- Has the organization mapped out key customer-segment journeys, including looking at customer devices and delivery channels, with an eye toward creating a better experience?
- Is there a strategy to integrate data collected from all customer touch points to create actionable and relevant opportunities?
- Is there a focus to optimize customer reach, maximize relevancy, and enable reciprocity?
- Is there a focus to develop business processes that can achieve scale, expand scope, and deliver speed in operations across the organization?
- Is there a strategy for talent acquisition — finding the right skills in the right people and clearly defining job roles?
- How is an innovative work culture being fostered across the organization? Is there a focus on work optimization and talent sourcing, with the aim of aligning processes, people, and the organizational culture?
- To what extent are partners' expertise considered, particularly as it relates to skills sourcing?
- Is there a focus on rewarding, encouraging, and guiding personnel to re-skill in new IT capabilities?