Why should workforce reinvention matter to the CEO?
The most crucial thing in any organisation, in the midst of today’s technology disruption, is still people.
You may have heard Covid-19 has triggered creative and disruptive new ways of working, and it is clear companies are focusing on business innovation as it is now considered an essential requirement for economic development and corporate growth. However, it is not enough. We all know of groundbreaking projects that have ended up being a failure since the team or employees were unaware of the role they were going to play in the new scenario. This specific risk is very real when discussing digital transformation processes and intelligent workflows, but how to avoid it? Or even better, how to manage and control it?
In this article, I will explain, from my experience, the crucial role of workforce reinvention in these challenging times and how to get there successfully, breaking it down in three main topics: culture of change, Cognitive HR 3.0 and a few practical examples.
There is no digital transformation without a culture of change
According to research insights carried out by Deloitte Consulting, when thinking about the future of organizations, most business leaders acknowledge digital transformation will be an essential factor to stay competitive in the decades ahead of us. Even so, many of them still express confusion about how to foster workforce innovation and reinvention. The way we work is changing rapidly, this pandemic crisis is proving to be an unexpected stress test for everyone: less interaction, rare face-to-face meetings and high demand for virtual working, lack of engagement with your employer… And while, in my opinion, the adoption of new ways of working may be lagging behind, the need for innovation culture and change management is clearly there. Long story short: employees matter, and culture drives their performance.
To do the latter, we ought to achieve maximum involvement of human capital and engage talent and commitment of managers, employees, and collaborators. We must place people at the centre of our digital reinvention strategy.
Organizations that already invested in a flexible and robust workforce reinvention and HR Technology landscape were — and still are — able to quickly respond when COVID-19 impacted worldwide. According to Capgemini’s 2017 assessment results about corporate culture, 62% of respondents highlighted cultural change as the main difficulty companies face when going digital. Therefore, a far-reaching goal such as digital transformation needs a supportive and agile environment for digital transformation to take off and succeed.
Each step of the transformation journey must address talent, skills, change adoption and culture. It ought to be a progressive, ongoing process, driven by the development of technology but placing people, experience and data at the top of the CEO’s agenda. In conclusion, today’s CHRO must leverage the power of technology to improve employee interactions and accelerate people’s impact on the business. But how…? Here starts the journey towards Cognitive HR 3.0.
What do we mean with Cognitive HR 3.0?
Historically, Human Resources have always been administrative with responsibilities and tasks such as compliance, basic jobs designs and recruitment. But today, with diminished human contact because of Covid-19, enterprises must now become inherently humanized and completely shift their Human Resources into an agile consulting organization, in order to adapt decision-making to new business and people priorities and improve performance management in the nearby future. It is clear that times have changed — but have we?
Over the past couple of years, IBM studied HR Departments in hundreds of global companies, distinguishing three different categories:
- Traditional HR 1.0 Departments: they focus on administrative tasks and procedures and concentrate everything that comes to your mind when discussing Human Resources. HR 1.0 fosters a culture of quality and compliance.
- HR 2.0 Departments: powered by the internet and as companies became more strategic, HR 2.0 shifts toward integrated centers of excellence and toward empowering and training employees, redefining the traditional service model. For them, efficiency is the main goal.
- The new Cognitive HR 3.0 Departments, which only 10% of companies have achieved, is seen as an agile and evolutionary vision of Human Resources that drive change and push innovative solutions, cognitive tools, and transparency into all business departments. It is a business imperative if we want our company to thrive when it comes to overall digital transformation and culture of change. There is a wide agreement about some of HR 3.0 characteristics:
- Extremely personalized experience-centric design
- Skills at the core of the business and data-driven decision-making powered by Artificial Intelligence
- Agile practices and consistent transparency for speed and trust preservation
As we can see, HR is now facing a major cultural shift, hence it is the time to think forward and explore the true power of Digital HR through cognitive solutions: automating the administrative load from HR 1.0 and becoming a crucial strategic asset for the company’s success. Companies need to focus on talent with a self-reinventing, AI-enabled, data-driven and agile-by-design workforce. Otherwise, any attempt at technological reinvention has little or no chance of being properly implemented.
But where to start?
Endless possibilities when putting HR 3.0 into practice
Traditional workforce tasks must be radically redefined, organizations will need to re-evaluate how they operate and what skills they need by adopting specific enablers to do so. In IBM we assure the transformation and workforce reinvention is put into practice, and the following are some of the real case examples that could be highlighted:
Measure employee performance in a continuous and transparent way (continuous feedback, shorter-term goals…):
- IBM helped one of its clients by creating a new measurement system driven by a mobile app that employees use on a regular basis to check in, discuss near- and long-term goals, and update priorities. Ongoing dialogue, trust between employees and managers, and shared accountability are key in this new 3.0 approach.
Establish transparent and trustworthy compensations for employees thanks to new technologies:
- An AI system is launched to improve compensation decisions giving salary increase recommendations during pay cycles and linking them in a much more accurate way to employees ‘skills. That is helping them retaining talent with hard-to-replace skills within the company.
Apply data-driven insights (leverage data from internal and external sources and apply insights to improve the organizational structure and performance):
- IBM turned to AI when helping an Engineering firm whose operational system was slow and quite inaccurate. They employed a cognitive solution to examine structured and unstructured data from all its archives to find the most business-appropriate decisions. After that, the company takes factors such as interests and feedback on individual employees into account and is now six times faster than before when providing a service.
These mentioned above are only examples of how technology is implemented when innovating workforce functionalities, and how companies are transforming the way they operate their day-to-day business. Above all, HR 3.0 should be a living example of organizational culture and reinvention, transforming talent to transform the organization.
At IBM, we know how to orchestrate compelling and enterprise-wide change; and are committed to guide every organization’s transformation and re-align workforce strategies to take the business to the next level.
To sum up, we can say…
The skills of the workforce and the way a company drives change will be pivotal for a company’s survival over time. Culture of change and Cognitive HR (3.0) should be the main engines for business growth and agility; and need to deliver the people skills and agile culture that will propel the organization at speed. It is about transforming Human Resources functions to lead your business and employees to thrive in this stage of uncertainty by adding value that drives results. Ultimately, it all comes down to people.
One thing is for sure, HR 3.0 is just one more stop along the way and HR 4.0 is just around the corner. The only question that arises now is, are we prepared and have the means to keep our company evolving with emergent developments over the course of time?
Thank you for your time. Please, feel free to give your opinion or contact me on Linkedin.
Bibliography
1. “Cultural change.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/cultural%20change
2. “Accelerating Digital HR during- and post COVID-19”, Deloitte Article; https://www2.deloitte.com/lu/en/pages/human-capital/articles/accelerating-digital-HR-during-and-post-covid-19.html
3. “La cultura empresarial en la era digital” , Iberdrola Compromiso Social, https://www.iberdrola.com/compromiso-social/transformacion-digital-cultura-empresarial
4. “La cultura del cambio”, Nuria Vilanova; https://www.larepublica.co/analisis/nuria-vilanova-509356/no-hay-innovacion-sin-cultura-del-cambio-2851746
5. “Accelerating the journey to HR 3.0” Research Insights” IBM & Josh Bersin Academy ; https://www.ibm.com/thought-leadership/institute-business-value/report/hr-3
