01 Mar. 2017 | Comments (4)

In the field of managing human capital, the corporate track record in navigating change, whether in introducing a new business strategy, a change in leadership, a different operating model, the integration of an acquisition or now, the transformation of the business into all things “digital”, is more likely to be categorized in terms of partial success or even as an overall failure. Failure metrics include: lower employee engagement, less innovation, decreased customer satisfaction, and failure to achieve synergy targets.    

Whether the insufficient change management response is the result of not really learning lessons learned, not realizing as Roger Enrico said “the soft stuff is always harder than the hard stuff” or because of the continued hyper focus on the financials rather than on the people (and not realizing that both are connected); it continues.  However, now it is more important than ever to get change transformation and change sustainability right.

If you cannot respond quickly and effectively to what are your own internal business and organizational changes; your own markets, customers, competitors and workforce, how will you be able to prepare and respond to the current and emerging external forces that are not only accelerating but, in fact, redefining what is necessary for sustainable success.

Here are two of the tectonic plate shifting forces that companies are already or soon must be responding to:

Moving to All Things Digital

This starts with a realization that a digital mindset is even more important than a digital infrastructure.  It’s much more than having mobile apps and the availability of “big data”. Many of us do not like to use the term, however it is a mindset shift! Executives and employees must make fundamental leadership, organization design structure, “what is valued” and “how the work gets done” changes.  Without these new ways of doing, you can’t develop and provide digital products and services and then a digital customer buying experience. The balance of company versus consumer power has forever changed. There already is an established shift in who purchasers turn to for trusted information (including pricing) about brands and products.  To each other and not the company! Yes, it’s “power to the people”! (The Digitisation of Everything: How Organisations Must Adapt to Changing Consumer Behavior, Ernst & Young, July, 2011).

To successfully navigate into and then sustain a digital business and culture, companies cannot simply rely on the selective hiring of “born digital” talent. (“Rebuilt to Last: Part 1: The Journey to Digital Sustainability”, Korn Ferry 2017).  This is not a prudent change management strategy and will likely cause “organ rejection” within both the company and among the digital new hires.  What determines whether a company is successful in this reinvention is more about having strong overall change management competencies and rewarded resilience, being effective in changing legacy systems, the focused commitment and ability of managing across functional silos and a willingness to overcome embedded aversion to risk. Big budgets, the best new technology investments or the best talent will not lead to the road to digital success. (“Accelerating the Pace and Impact of Digital Transformation”, A Harvard Business Review Analytic Services Report, Harvard Business Review, 2016).

Impact of Artificial Intelligence

Almost 50% of jobs in the global economy have the potential to be automated (“A Future That Works: Automation, Employment, and Productivity”, McKinsey Global Institute, January 2017). AI and intelligent machines will impact vast areas of both work and personal lives by 2025, however there is no agreement whether these advances will eliminate more jobs than they will create.  (“Digital Life in 2025: AI, Robotics, and the Future of Jobs”, Pew Research Center, August 2014).

The challenges associated with this evolving “blended” workforce and workplace has already created significant challenges regarding how companies are organized, how work gets managed, assigned and completed.  Just because an intelligent machine can perform the work, should it?  If one of your core competencies is maintaining deep collaborative customer relationships along critical segments of the value chain, how does the deployment of AI and intelligent machines impact this? This will add a new dimension to “diversity” in the workplace!

There will likely be significant issues to overcome including job loss or skills relocation, whether the income gap grows, whether workforce education and preparation keeps up and whether deriving meaning from work remains as a value.  Important questions to ask and answer. Watershed change is here. What is important in moving forward and adapting is first, realizing this you are not immune to this new present and then, that your past success is insufficient for future growth and maybe even for survival. 

 

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  • About the Author: Steve Steckler

    Steve Steckler

    Steve Steckler is currently Head of Transformation Management and Corporate HR M&A Integration at Merck, KGaA, the world’s oldest chemicals and pharmaceuticals company, headquartered in Germ…

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  1. David Ulrich 0 people like this 01 Mar. 2017 03:57 PM

    Great insights on disruptions that will change HR field. Digital HR will shift how HR work is done and how HR not only shares information, but builds connections. Artificial intelligence has also arrived. Nice job

  2. Alice Benson 0 people like this 04 Mar. 2017 11:51 AM

    This is spot on, Steve. This is an opportunity for HR to really drive these fundamental and seismic shifts. If we use our grit and be bold HR can be fundamental to making these changes.

  3. Alice Savic 0 people like this 05 Mar. 2017 12:20 PM

    This is exactly the central question - just because an intelligent machine can perform the work, should it? Attributes like creativity, communicating by connecting, building trust through intimacy, and other human traits which can (currently!) not be outsourced to an algorithm become even more important. Also does the understanding that human beings on the receiving end may wish to interact with other human beings.

  4. Miles Overholt 0 people like this 07 Mar. 2017 01:01 PM

    Two huge trends that remind us that much more change lies ahead. The continual reminder that we need to develop a change readiness muscle should not be considered background noise. It is real and unavoidable.