HR’s Critical Role in Digital Transformation

By 2022, worldwide investments in the digital transformation of business practices, products, and services are expected to reach nearly $2 trillion (Source: International Data Corporation (IDC)). However, research by Forrester indicates only 27% of businesses have a coherent digital transformation strategy in place for creating customer value. Furthermore, in a recent survey conducted by Wipro Digital, out of 400 US companies with an articulated digital transformation strategy, 50% of their executives felt their company was not successfully implementing those strategies.

Companies everywhere seem eager and ready to invest in digital transformation strategies, but do they know how to effectively execute them? The numbers so far seem to indicate that the answer may be a resounding “no.” Studies continue to show that up to 80% of transformation efforts fail to achieve their intended goals.

Though unfortunate, this lack of execution effectiveness is not entirely surprising. To understand the challenges inherent within digital transformation, one need only to look at the sheer depth of the organizational change needed for a successful transformation. The IDC recently stated: “…a new era is upon us where technologies and processes that businesses deploy are so tightly linked to their customers and markets that the boundary between the internal operations of the enterprise and its external ecosystem is rapidly disappearing. Business leaders are challenged to move their enterprises to the next level employing digital technologies to create new ways of operating and growing.” To achieve this new way of operating, many organizations can no longer ignore the role of culture.

The Role of Culture

Executives routinely identify culture change as being at the heart of complex transformation. We define culture as patterns of behavior that have been either reinforced or discouraged by people, systems, or processes over time. With that definition in mind, identifying current and desired patterns of behavior, and closing any gaps should all be easy, right?

As it turns out, it is not easy. What we see is that companies are not as good at planning for and executing the behavioral transformations as they are at defining the current and desired states.

Let’s look at a recent poll we conducted with senior HR leaders, for example. We learned that there often is a clear business case for digital transformation, and there is some alignment among senior leaders that transformation is needed. However, there often isn’t a clear strategy in place for long-term execution. There is little clarity about the business-critical behaviors needed to drive the transformation at all levels of the organization. Perhaps most importantly, leaders are not truly prepared to lead through the digital transformation.

What is a Digital Culture?

If we look at what constitutes a well-designed digital culture, it can be best defined by those within it. Members of a digital culture routinely demonstrate foundational qualities around innovation, collaboration, and agility. In addition, they leverage accelerators around customer-centricity, courage, and data acumen for maximum cultural and digital impact. Each of these qualities contain best practices around the types of business-critical behavior patterns that are needed, at every level of the organization, to make success more likely.

HR’s Critical Role

Earlier we said that HR leaders often feel the business-critical behaviors for successful transformation and culture change are not clearly defined in their organization, and leaders do not know how to lead through the transformation and shape new patterns of behavior for the new culture.

Despite this, there is good news. Given the needs and complexities of developing a truly digital culture, HR is uniquely positioned to connect business-critical behaviors and skills across all key stakeholders, including customers, leaders, employees and management. To get started, focus on the following practices when dealing with digital transformation, or DX:

5 Things HR leaders Can Do Now

1. Educate yourself
   1. Understand the difference between DX and traditional IT implementations
   2. Learn about the leadership qualities and organizational factors driving DX
2. Get involved
   1. Help emphasize the importance of leadership, behavior change, and culture as part of the DX strategy execution
   2. Position the HR function as a critical partner
3. Leverage resources
   1. Partner with colleagues and key stakeholder groups to align the leadership team and discuss the behavior change needed at all levels
   2. Identify external resources to supplement and complement what your team can do
4. Coach leaders
   1. Help leaders implement, shape, and reinforce business-critical behaviors and overcome barriers
   2. Counsel them on their own behavior and what they need to do differently
5. Lead the change
   1. Share and assess the qualities of a digital culture; identify strengths, gaps, and barriers
   2. Develop the talent strategy to assess current talent and identify critical skills that don’t exist in the organization
   3. Don’t wait to be asked, your leaders and organizations need your help

Take our complimentary, 10-question Digital Transformation Readiness Assessment to learn in 5 minutes how prepared your organization is for digital transformation. Click below to get started now.