COVID-19 has been a catalyst for digital transformation, helping organizations accelerate their adoption of new ways of working. KPMG-commissioned research by Forrester Consulting revealed that the most successful organizations invest in eight capabilities, including an aligned and empowered workforce.
To position itself for the new reality, a digitally transformed enterprise requires a new kind of HR function — one that is connected, drives a culture of innovation and enables new ways of collaboration. HR should apply what is referred to as a digital mind-set. This balances four principles:
- Connecting end to end: Understand the impact of change on the enterprise value chain and its required outcomes and customer experience. This means adopting a horizontal outlook that connects customers with the front, middle and back office and looks to the business outcomes rather than just activities that connect vertically organized structures and functions.
- Growth mind-set: This includes a belief that everyone can improve and that capabilities are not ‘fixed in stone’. It’s important to commit to development through learning and fostering a culture that encourages curiosity, flexibility and experimentation.
- Everyone an innovator: Recognize that innovation occurs through connecting ideas at the boundaries of teams, functions and processes. Make sure everyone feels they have a role to play in contributing ideas, especially as they look across the enterprise and not just within their own silos.
- Courage to act and challenge: Everyone is encouraged to act and challenge the status quo, possesses autonomy and the freedom to act and is accountable for meeting business objectives.
It is my belief that if the HR function is to achieve a true competitive advantage through people, then it needs to build something unique to the enterprise and stop looking for generic best practices. The HR playbooks of 2019 and before are no longer relevant.
To succeed in these times of extraordinary technological advances, there’s consensus among those who participated in KPMG’s recent report, The future of HR: Lessons from the Pathfinders, that an experimental approach is important. How can these principles be applied?
1. Connecting end to end
A connected organization adapts to the impact of digital disruption on the changing enterprise value chain, business outcomes and customer experience. Connecting end to end is about collaborating across different parts of the organization. A truly connected organization has a high level of trust that encourages the open exchange of information and ideas across different work areas. People collaborate across internal organization boundaries to get things done.
This emergence of ‘boundaryless’ functions and, in time, functionless enterprises may create the need to reshape work at the task level — reconfiguring organizations and radically transforming their job functions and processes rather than simply applying artificial intelligence to existing functions and tasks.
In addition, through KPMG’s research into the defining characteristics of a Connected Enterprise, it was found that great customer experience stems from all employees having a clear focus on how the whole enterprise delivers superior outcomes. This requires all parts of the organization, be it the front, middle or back office, to see their role in relation to the whole value-creation process. It’s about being able to see horizontally across the enterprise and not just vertically in functional silos. This is a mind-set shift and it’s not always easy to come by as traditional hierarchies emphasize the vertical over the horizontal.
2. Growth mind-set
A growth mind-set is about being open to change, encouraging experimentation, being adaptable and building a learning culture. As roles evolve and people collaborate across role boundaries, a strong, continuously evolving and forward-looking learning culture can be critical to success.
Learning in the flow of work should be a priority, reinforcing the concept that learning needs to be designed, curated and available to employees on demand.
HR’s learning and development functions can provide the workforce with the opportunity to more effectively manage their work and anticipate changes to their ways of working. In addition, effective and considered organization design can increase individual autonomy and opportunities, and strategic leadership support can encourage individual development and growth at all levels of the workforce.
3. Everyone an innovator
Everyone in the organization should be encouraged to innovate and experiment with how tasks, roles and delivery are conducted between humans and machines. For example, the HR function can use automation to improve the speed and accuracy of administrative tasks, such as answering employee benefits questions and running weekly reports. This could free up employees to spend more time on activities that help meet the organization’s core purpose.
It's important that HR teams and policies support a culture of vulnerability, where all employees and leaders are willing to openly share their failures and their lessons learned. It’s about openness and a lack of fear to try something new — and possibly fail. “Waiting to find the perfect solution before you move ahead would have put us at a competitive disadvantage,” says Tamara Hassan, HR director for Mars Asia. Instead, HR Pathfinders embrace an agile mind-set that Hassan refers to as “making practice the new perfect.” That agility gave them the freedom to test new ideas, even if risky.
Some organizations like Spectrum Health are gathering employees’ ideas in innovative ways. “We piloted an ideation platform called Spigot. We asked participants to submit ideas that could improve the Spectrum Health experience,” said Spectrum Health CHRO Pamela Ries. After the ideas were submitted, participants (employees) voted on their favorites through crowd sourcing. Resources were then channeled into building a business plan around the top two. This platform is now used for various use cases to help create new solutions. “The role we play in creating a positive team member experience is getting a lot more attention, because CEOs and other leaders care more about culture and the employee experience now.”
4. Courage to act and challenge
In an organization with a digital mind-set, everyone should be a leader and encouraged to act and challenge ideas. When this is in place, it’s expected that employees seek and possess the autonomy and freedom to act while being accountable for meeting business objectives.
“The organization is very much about empowering people to challenge,” says Lainie Tayler, Carman’s Kitchen’s General Manager – People. “To question each time they are in the meeting and if they need to be there and also challenge if more than one team member needs to be present.”
“The biggest learning for us was that we needed to approach things with courage and a mind-set of resilience,” says Sharon Choe, Dropbox’s Global Head of Workforce Planning, People Technology & Operations. She also talked about the notion of a learning mind-set: when making a bold choice, always be transparent, flexible and willing to iterate.
An HR function demonstrating a mature digital mind-set helps the organization operate interdependently and experiments with new work structures. Micromanagement, siloed ways of operating and information guarding are experiences of the past, as HR supports the organization’s plan to embed health and well-being, accountability, transparency in priorities and rapid decision making in support of improving the customer experience.
What kind of future do you want to build?
To navigate the world of digital transformation, a mind-set that reflects these four principles should be cultivated and encouraged among employees. This is true at an enterprise level as well as for functional transformation (including HR and people functions). While no one can predict what will happen as the new reality sets in, or when organizations will get there, they can plan for various scenarios and prepare for the future. Organizations positioning themselves for success should reinvent work from the ground up, driving productivity in a way that maintains a sharp focus on people and values.
The future of HR: Lessons from the Pathfinders
How are some of the world’s foremost HR organizations driving value in the face of double disruption?
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Board Member, Management Consulting & Governance, Risk and Compliance Services
KPMG in Cyprus