Why people are key to successful digital transformation

Understanding the role of the ‘people element’ of technology is vital to your digital transformation strategy. Simon Winfield explains how to balance soft skills and human value with hard technical expertise. 

The ‘People Element’ of Digital Transformation: Key Insights

Our research suggests a lot of interesting things about the relationship between technology and people when it comes to digital transformation. In this episode of our Leadership Insights podcast Simon Winfield lays out the facts.

• What we mean by terms like ‘digital transformation’ ‘automation’ and ‘human value.’
• The role of workplace culture in effective transformation.
• The importance of a test-and-learn approach, with room to fail.
• Which skills are most important in a digital transformation project.
• How should the digital journey factor into the recruitment strategy.

The ‘People Element’ of Digital Transformation: The Background

Digital technology is exerting a huge influence on society and business. It is generating unprecedented change that doesn’t look like slowing down anytime soon. In the workplace, digitisation also offers ample opportunity for businesses to innovate. There is much scope to outperform your competitors – but only if you can harness all the benefits of technology and leap all the hurdles. 

People are a crucial, yet underestimated ingredient in digital transformation. The human factor can be both an asset and barrier to fully embracing the digital. Simon Winfield, Managing Director of Hays UK & Ireland, spoke to Megan on our Hays Leadership Insights podcast about how leaders can best approach this ‘people element’ of their digital transformation efforts.

Below is a transcript of the episode.

People are the engine room of your digital transformation efforts.

The topic of today’s podcast is all about digital transformation. Before we start, I thought it would be useful to clarify for our listeners what exactly we mean by digital transformation, as well as other words associated with the term, such as automation and human value?

Yes, it’s a great place to start – all the terms and buzzwords out there can be really quite confusing. I think it’s important that all of us, not just those working in IT or technology, understand what they mean. After all, technology is everywhere in the world of work and it’s generating constant change, which will impact all of us, if it hasn’t already.

Let’s start with ‘digital transformation’. Essentially, it means the acceleration of activities and processes to fully leverage the opportunities provided by digital technology. George Westerman of Massachusetts Institute of Technology defines it well. “Digital transformation marks a radical rethinking of how an organisation uses technology, people and processes to fundamentally change businesses performance.”

Automation means an alternative to manual processing – it is the use of technology to control or operate a process automatically. An example of this is the fact that sales and marketing professionals now have access to automated lead generation software. Another great example is the use of text-mining technology by lawyers to read through extensive and large documents.

Lastly, ‘human value’ is the application of people’s competencies, their skills and their experience to perform their job and individual tasks. In the digital age, the skills and competencies we have as humans will become even more important. Qualities such as adaptability and curiosity are going to play a key part in ensuring the success of digital transformation projects. So, the value we can add as humans has never been more important than in today’s world of work.

I’m sure many leaders would say that they are just at the start of their digital transformation journey. Obviously, making the right technology decisions is incredibly important – but what else should leaders be thinking about at this stage, in order to ensure their digital transformation efforts are a success?

Yes, I’d agree that most businesses are just at the start of their digital transformation journeys. In our recent survey, we surveyed over 14,500 people in the UK and found that 70% stated they are investing in automation. So, organisations are starting to make some significant investment in their technology and supporting infrastructure, which is a promising step in the right direction. But I think many would argue that the real challenge when it comes to successful digital transformation and automation isn’t just the technology. People play a massive part as well. 

Leaders should be thinking about the ‘people element’ of digital transformation. They should be thinking about how they can build a culture that is open to change, and how they can upskill and develop their people in the right way. Also, it’s important to ensure that leaders are hiring for the right skills to ensure success now and in the future.

Essentially, if you ignore the ‘people part’ of digital transformation, it’s more likely that your efforts are going to fail.

You mentioned culture. Why is this so important in driving digital change? How can the right culture help a business embrace change and facilitate innovation?

The culture of a business is going to have a huge impact on the effectiveness, speed and ultimately the success of its digital transformation efforts. Broadly speaking, our research shows that most employees believe that automation within the workplace should be embraced. But, to really drive change, your entire business and everyone in it must be mobilised to deliver the change. Every member of staff should understand why the change is happening, what it means for them and the part they will play in its rollout and the delivery.

A big part of making sure this happens is obviously clear internal communication.  Communicating to the relevant people at the right times with clear messages will help them shift their mindset and approach. In fact, McKinsey found that IT leaders who communicate with their staff across every level of the organisation are eight times more likely to run a successful transformation project than those that do not.

Ultimately, leaders need to build a culture that embraces rather than shies away from change. A big part of that is allowing your employees to try something new and potentially fail, but use the learning to drive projects forward.

It sounds as if embedding a ‘test and learn’ environment is important here – do you think leaders need to change the way they approach failure and risk-taking?

Definitely. With all of this technological change, comes a lot of unknowns. Without a ‘test and learn’ mindset, leaders are potentially setting themselves up to fail. Without testing, how are we going to know which technology is right for our businesses? And without being able to implement new changes quickly, organisations will be forever behind the curve. A test and learn environment allows you to implement change along the way, but it does need people to be agile enough to adapt.

Leaders need to shift the culture of their organisations to start seeing failure differently, so that innovation and creativity are encouraged. I think failure should be seen as an opportunity to learn and employees need to feel comfortable and supported in taking calculated risks.

Our CEO, Alistair Cox, has written on his LinkedIn Influencer blog about the importance of building a growth mindset culture. Do you think this is also important in times of change?

Yes, without a doubt. According to Stanford University Psychologist, Carol Dweck, a growth mindset is all about believing you can develop your existing skills and learn new ones. However, those with a fixed mindset tend to believe that their skills are relatively established and can’t be changed or improved.

I think it’s critical to help your employees feel confident in taking on new, unfamiliar tasks, such as working with a new piece of technology. Ultimately, helping your employees to adopt a growth mindset will help them feel more comfortable tackling projects that are outside their comfort zone. As Alistair says in his blog, if your employees are fixed in their mindsets, then there’s a risk that your business will be too, and that’s a scary place to be.

Which skills do you think are most important in ensuring successful digital transformation efforts?

Skills are an absolutely vital human element of successful digital transformation.  Without the right skills in place, you’re going to struggle to make the progress you’re looking for.

However, it seems as though most employers lack access to the right skills to make the best use of automation technology. In our research, we found over half of employers in the UK expect a lack of skills from current staff to be their top barrier for automation integration. That’s worrying, and I’m sure it’s the same picture across the rest of the world. Employees echo this, saying that they do not believe they are receiving the support they need to effectively prepare for automation in their workplace. It’s really important that leaders tackle this issue head on and make every effort to understand which skills are going to be most important. Then, measures can be put in place to help existing employees to upskill in the right areas.

Automation enables employees to spend less time on the administrative side of their roles and spend more time adding human value. Soft skills such as problem-solving and communication become even more important. In fact, we found that critical thinking, communication, people management, and emotional intelligence are ranked as the top soft skills employers are looking for when hiring. When it comes to technical skills, employers said they are facing a shortage of project management, change management and data analysis in their teams and when hiring. 

It sounds like embedding a culture of learning is crucial.

The culture and mindset piece is absolutely key. To plug skills gaps and really see success within your digital transformation, a culture of learning must be embedded into the business.

The key to this is understanding that each employee will learn differently. Some will prefer structured, classroom-type learning; others will prefer more bite-size, self-directed study. There isn’t a one-size-fits all approach. However, according to a 2019 LinkedIn study, most workers prefer to learn at their own pace and at the point of need. 

What is really important is that employees feel that you are personally committed to their development. And not just because of the financial benefit to the company, but because you want to see them grow and develop. Knowing this will help them be more proactive in seeking out training opportunities internally, but also in committing to their learning outside of the workplace.

How can employers encourage their employees to really take ownership of their own learning and development?

Employers have a key part to play in ensuring their employees have the right soft and technical skills, but  I think we’d all agree that the responsibility doesn’t just lie there. In order to really future-proof their employability, it’s important that employees understand the need for their own personal commitment to learning and development. After all, due to the rate of change, skills gaps are going to occur more often. Employees must be proactive and get into the habit of learning and seeking out new learning opportunities.

In answer to your question, I think there a number of things listeners can do to help employees commit to their own lifelong learning:

• Be a role model for lifelong learning. Take time out to attend networking events, listen to a webinar or a podcast, and share what you’ve learned with your team
• Give employees the right tools. Try to provide access to micro-learning portals, tools that they can dip in and out of as and when they need to.
• Lastly, think about incentivising lifelong learning. For instance, consider introducing a yearly training allowance for each employee.

Onto hiring and recruitment. Why is finding and attracting the right talent so important to ensuring successful digital transformation efforts?

Simply put, without securing a strong pipeline of skills and talent, you may struggle to sustain your digital transformation efforts in the long-run. That said, our research suggests that few employers seem to be adapting their recruitment strategy to reflect their organisation’s investment in automation.

In our What Workers Want research, about half of workers surveyed say an investment in digital transformation would enhance the appeal of a prospective employer. Yet only a quarter of organisations say they promote their investment when recruiting. What a missed opportunity! In my view, this could lead their automation efforts to falter and possibly fail entirely. 

Should leaders focus on recruiting for technical skills or is hiring for attitude also important?

I’d say leaders should recruit new candidates based on their attitude and willingness to learn, rather than simply their qualifications, skills and experience. The idea is to find a balance between technical and soft skills when hiring. This balance will put professionals in a good position to adapt to technological change, both now and in the future. 

Hiring staff with an open mind about change is also essential. Finding these candidates may likely demand a change in the way you go about hiring. You should look into new talent pools and consider different recruitment channels to find and engage those who have the right attitude towards change.

For those employers who have made steady progress on their technology journey, would you recommend they communicate this in their employer brand strategy in order to help attract the right talent?

Employees want to work for an organisation that is investing in technology. 14% say it is absolutely vital in a prospective employer. Therefore, I’d say employers should actively promote their digital transformation initiatives and investments in automation to prospective candidates. The strategy and attitude toward transformation should be promoted at key points during the hiring process, from job ads to the interview stage.

Finally – a question we ask each of our guests – what do you think are the top three qualities that make a good leader?

That’s a good question, and it’s a tricky one because there are probably more than three that are important. I would certainly include. down good communication skills. Being able to articulate a really clear vision with the business and a roadmap for the future is essential.

Secondly, I would say leading from the front and not being afraid to get hands on and stuck in when you need to. Lastly, be brave. We’ve talked a lot about digital transformation today and its impact on the world of work. I think we’ve got to be brave in the decisions we make and the things we do. We need to take those calculated risks and not be afraid to get it wrong but go again.

The ‘People Element’ of Digital Transformation: Next Steps For Your Business?

So, as that episode of Hays Leadership Insights makes clear, getting your recruitment, management and communication right is of the utmost importance. 

To discover further insights into how automation is impacting jobs and the steps you can take to prepare, request your copy of the Hays What Workers Want Report 2022.