How Is Digital Economy Growth Driving Utility Demand?

James McClelland

Part 10 of the “Intelligent ERP-Driven Industries” series

The United Nations projects that the world’s population will reach 9.8 billion by the year 2050 and 11.2 billion by 2100. Though our world is far from a humanitarian utopia, much of the Third World is developing. The digital economy is growing in ways that were never imagined. One area that impact is being felt is in utility demand.

Countries develop and economies improve. Some experts believe utility demand will double or triple by 2050. Vehicles and mass transit add to this load as electric transportation becomes more popular. How do utilities keep up with this level of demand in a way that is sustainable for our rapidly rising population?

Digital economy growth drives utility demand

As population and income rise, the digital economy grows. When households have more money to spend, utility demand increases. These two concepts are basic to anyone who has studied developing economies. But the increase in demand doesn’t mean a return to smog and pollution.

Deregulation, carbon sequestration, and decentralized production are changing how power is produced. Clean water is finally being seen as a finite resource to be protected. A stronger global focus on sustainability is changing the utility industry. This is happening even as demand increases.

The impact of disruption

Disruption is changing how people work. According to one estimate, telecommuting increased by 79% from 2005 to 2012. New business models are contributing to that change. It’s now possible to hire a virtual assistant from Malaysia and a researcher from South Africa from the comfort of a home office. The future office building may be one that doesn’t exist. How will that impact traffic and transit patterns? What will it do to the traditional urban utility grid?

Disruption is making new companies big and traditional companies obsolete. Failing to adapt to this new reality can have a serious impact on industry leaders. The focus on sustainable development is changing whether customers use utilities at all. New wind, solar, water, and power storage technologies are driving much of this change.

How do existing utilities meet these challenges? New business models can help existing companies find new revenue sources. Smart building services, load balancing, and supply innovations can be part of this process. Combining operations and information technology allow businesses to optimize business processes.

Industry and global collaboration is key

Collaboration is another aspect of digitization that is driving new energy trends. A new utility business can be both a competitor and a partner. Previously unrelated industries are collaborating to improve energy production, delivery, and efficiency. A great example of this is the collaboration of telecoms with utility-meter manufacturers to develop smart meters.

How have these meters impacted the industry? Water meters can now detect and measure low-flow levels that were unheard of in the past. Home and business owners can monitor electricity usage in real time and adjust utilization accordingly. Sudden changes catch water leaks before they become serious problems. Utility workers can focus on improving other areas of infrastructure instead of reading meters.

Automotive newcomer Tesla made waves with its Powerwall home energy storage system. Paired with solar panels or another charging source, it provides the option of going completely off-grid. It’s gained enough attention for existing manufacturers to get into the game. Mercedes, Nissan, and BMW have now launched their own home battery systems.

Focus on the customer

Another aspect of digitization is the shift to a customer-centric approach. As demand increases, customers still want fully functional appliances, tech, and amenities in their homes and places of business. But at the same time, they want environmentally sound development of products, water, and power. How can those demands be met in a sustainable fashion?

Imagine this scenario: A family lives in a high-rise development. Natural lighting through fiberoptics and windows with coatings that reflect heat help reduce their daily energy usage. Telecommuting means they may not own a car or deal with public transportation very often.

To meet their daily needs, they may have groceries delivered or shop online for clothing. This requires strong communications and delivery structures. Their appliances and electronics use cutting-edge technology. Smart-energy design helps reduce the electrical load on the grid.

Solar window frames and parking shades generate power. Smart-energy networks offer better rates during times of peak production, lowering the impact on the grid when these production assets go offline as the sun sets. New power storage options allow vehicle owners to provide stored vehicle power to the grid overnight while charging quickly in the morning.

Focusing on changing trends in population and demand growth enables existing utilities and manufacturers to compete in the digital market. Although most executives recognize the importance of digitization, most companies don’t yet have a solid strategy to get there.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading “Accelerating Digital Transformation in Utilities.”


Billion-Dollar Business: Driving Profits From Purpose

Shannon Lester

Why does your business exist?

In the past, the answer was to generate financial returns for shareholders.

Today, it’s about so much more. It’s about finding purpose. It’s about making the world a better place by supporting noble causes. It’s about inspiring customers, employees, and the world at large by committing your company to important social issues that affect us all.

In Billion Dollar Business: Driving Profit from Purpose, the latest episode of Game-Changing Conversations, presented by SAP, our panel of experts discussed how your enterprise can become purpose-driven – and how embracing purpose can drive profits.

Framed by several inspiring quotes, these thought leaders offered listeners three key pieces of advice for getting started:

1. Adopt a can-do attitude: Everything seems impossible until it’s done

Addressing complex societal issues through business can feel overwhelming.

In fact, you’re probably asking yourself how your company can prioritize things like sustainability, human rights, and climate change while driving profits and keeping consumers, employees, shareholders, and stakeholders happy.

The first step is to shift your perspective. Stop viewing purpose as a box to check off your to-do list. Instead, see it as an opportunity to improve the world, inspire consumer loyalty, and drive profits.

As panelist Freya Williams, CEO of Futerra North America, explained, the purpose-led organization is the “business model of the future,” and what seems to be impossible today will be “business as usual tomorrow.”

“[There is a] huge opportunity to monetize this big pivot to sustainable and purpose-led business in society,” she said. “There are many companies out there that have a billion dollars or more in annual revenue from products and services that align with sustainability or have social good at their core.”

Today, building a billion-dollar business doesn’t require compromising on your beliefs. You can drive profitable growth while proudly standing up for and supporting meaningful issues.

2. Take a long-term view: Intend to live forever

A major challenge of investing in purpose is longevity. Judging your business by next week’s or next quarter’s projected performance doesn’t capture everything. You need to take a long-term view of purpose – and that will lead to business results.

Panelist Jim Sullivan, vice president of Sustainability Management & Strategy at SAP, cited a 2017 McKinsey study that proved this point.

McKinsey found that firms with more long-term views exhibited stronger financial performance. These organizations increased their market capitalization by an average of $7 billion more than companies with short-term approaches to purpose.

On top of that, long-term firms added 12,000 more jobs, on average, than their short-term peers. If all 615 companies McKinsey studied had a more long-term view of purpose, the U.S. economy would have benefited from the addition of over 5 million jobs between 2001 and 2015.

Rome wasn’t built in a day. Building a billion-dollar business takes time. So, practice patience. Take a long-term view and assume you’ll live forever so you can better weather changes and stay the course in your pursuit of building a purpose-driven, billion-dollar business.

3. Focus on conservation, not consumption: The world owes you nothing

“As we take from the world,” said panelist Padmini Ranganathan, global vice president of SAP Ariba, “we have to give back to it.”

Purpose-driven companies are increasingly putting nature at the core of their decision-making processes. Issues like preservation and sustainability are growing in importance to businesses, consumers, and employees alike.

In the past, organizations were driven by bottom lines. They aimed to reduce production costs to increase profitability. Today, purpose drives profitability, and companies take great care to ensure their products are ethically sourced and produced.

Consumers naturally respond to this. Buyers are proud to support brands that avoid chopping down rainforests or give back to communities where they operate.

This devotion to purpose also attracts staff. Prospective employees are more likely to join your company and current workers are more likely to be passionate about their jobs when they identify with your organization’s values.

While millennial consumers and employees may have fueled this interest in purpose-led organizations, they’re not the only generation that recognizes the importance of purpose.

Baby boomers and Generation X grew up in different worlds. But they understand the value of supporting noble causes – and they’ve embraced this shift toward a better, more sustainable future.

Unilever, Tesla, Chipotle, and Everlane are just a few examples of purpose-driven businesses. Some are “born good,” as Freya Williams explains, meaning they were founded with a purpose built into their philosophy. Others are “born again,” meaning they reinvented themselves by introducing sustainability into their businesses.

However your purpose originates, it’s crucial to have one.

The final word

No commentary on purpose-driven businesses would be complete without an outlook of the future. As the Game-Changing Conversations show wound down, host Bonnie D. Graham asked her panelists for predictions on what lies ahead with purpose in the business world.

Freya Williams hopes that by 2030 all companies will have met their sustainable development goals, and purpose-driven businesses will be viewed as the new normal.

Jim Sullivan believes new companies that fail to embrace a purpose won’t last long – and they’ll never stand a chance of becoming billion-dollar businesses.

Padmini Ranganathan expects companies to focus on eradicating human rights violations or cutting ties with suppliers that are guilty of them. She also predicts that businesses will begin emphasizing data and technology to increase supply chain transparency.

Whatever the future holds, one thing is clear: Purpose deserves a place in your business. In fact, it should be one of the core reasons your company exists in the first place.

Game-Changing Conversations, presented by SAP, is an online radio series focused on co-innovation, purpose, partnership, and collaboration. To learn more, listen to the episode.


Shannon Lester

About Shannon Lester

Shannon Lester is the Global Marketing Leader for SAP’s Strategic Customer Program. She has over 20 years of marketing experience in technology and professional services, with a strong background in executive stakeholder management and demand generation. Shannon lives in Canada with her husband and two children.

The Future Of Feeding The World

Dan Wellers and Michael Rander

The UN projects that the world population will hit 8.5 billion in 2030, an increase of 16% in just 15 years — and some 795 million people are already going hungry each day. Making sure we can produce and distribute enough food to sustain everyone is one of the greatest challenges humanity faces. That’s why it’s urgent that we rethink how the world’s population feeds itself.

A menu of challenges

A child handicapped by the effects of a poor diet isn’t likely to complete an advanced degree. A community surviving on subsistence farming can’t spare its brightest minds for innovation. A country relying on dirty energy for inefficient farming isn’t fighting climate change or becoming a regional or global economic powerhouse. However, while the challenges of food production affect some individuals, social groups, or countries more than others, they touch everyone. Indeed, they’re so intertwined with health, energy consumption, the environment, and education levels that we can’t address challenges in those areas without considering the global food system as well. Consider these facts:

  • Malnutrition is the largest contributor to disease in the world.
  • Nearly one in four children worldwide are malnourished, contributing to reduced school performance and impaired brain development.
  • Food systems account for 70% of freshwater use and consume 30% of the world’s available energy, much of it in fossil fuels.
  • Food systems account for 20-30% of global greenhouse emissions, even as climate change threatens to reduce crop yields by 25% or more.
  • Agriculture is the most significant driver of deforestation, which rose 51% from 2015 to 2016.

Tomorrow’s blue plate specials

Addressing these challenges won’t be easy, but investment in new technologies that will help is beginning to ramp up, with $14 billion invested in 1,000 startups related to food systems between 2010 and 2017. (By comparison, investors poured $145 billion into 18,000 healthcare startups in the same timeframe.) If the trend continues, a recent report from the World Economic Forum suggests that the planet’s food systems could look very different by 2030. By applying technology innovations, we could shrink the environmental burden of farming, improve crop diversity so diets are more nutritious and agriculture is more sustainable, help farmers produce more food while increasing their profits, and make food distribution more safe and efficient. Here are a few examples:

  • Using IoT and machine learning technologies, precision agriculture methods will optimize land and water use for different crops and farming conditions, lowering costs and increasing production while reducing freshwater use.
  • Applying big data analytics to insurance statistics about farming conditions and yields will lower the risks for farmers to try new crops and methods.
  • Sensor-enabled food transportation will reduce wasted food by letting companies in the food supply chain adjust temperature, humidity, and other transportation conditions in real time.
  • Sensors and blockchain technology will improve supply chain transparency, further reducing food waste and loss while preventing tampering, counterfeiting, and mislabeling.
  • Advanced batteries and other off-grid ways to generate and store renewable energy will make farming equipment both more environmentally friendly and less expensive to operate while letting farmers sell excess electricity back to the grid as an additional “crop.”

These digital transformations of the global food ecosystem are either already here or well on their way. Looking a bit farther into the future, we may see even more disruptive changes.

For one thing, some experts are suggesting it’s time we seriously rethink our entire diet — limiting or even eliminating some familiar foods, creating more sustainable versions of others, and starting to eat things that not everyone currently considers edible. For example, there’s a growing body of evidence that human population won’t be able to sustain the environmental footprint of large-scale cattle production, which requires enormous amounts of land, water, and crops for feed while emitting significant levels of greenhouse gases. We could find ourselves eating far less beef, or none at all — or we could start eating burgers from beef that was never on the hoof at all, but cultured in a lab. The milk we put in our morning coffee might come not from cows, but from genetically modified yeast. And to get more protein in our diets, we might start our mornings with muffins made from cricket flour.

Don’t cringe. New technologies will make sure that tomorrow’s plant-derived, cultured, and engineered foods are every bit as nutritious — and tasty — as the ones we already enjoy, while reducing the environmental damage caused by animal agriculture. Indeed, influential investors like Richard Branson and Bill Gates are betting millions on it.

We’re also likely to see new farming methods designed to increase yield and grow food in places unfriendly to traditional agriculture. “Plantscrapers” might tuck vertical farms into urban residential and business buildings in a symbiosis where the plants provide food and cleaner air in exchange for human-created heat and fertilizer. AI-optimized bacteria selected by machine learning algorithms for their ability to make the greatest impact on food crops could make plants hardier and more productive. We could pollinate crops with bees that have been genetically engineered to resist disease — or tiny autonomous “RoboBees,” if we can’t bring bees back from Colony Collapse Disorder.

This meal won’t make itself

Technology alone, of course, isn’t enough to ensure a well-fed future for everyone. Changing a global system will take time, and every change has implications, from the question of who controls which data to the issue of what other jobs might be available for people who no longer need to spend their time farming.

Rethinking the global food system requires us to envision, plan for, and execute on multiple possible futures without knowing for sure which will come to pass or how unexpected events might redirect us. What’s more, the challenges of food insecurity are so complex and interrelated that solving them will be difficult if all we do is work forward from what’s happening today.

It makes more sense to come up with alternative versions of the future, then work backward to determine what might create each of these different possible outcomes. What are the variables involved, such as weather patterns, political considerations, demands for different types of food, availability of loans, and access to markets? What possible futures could those variables enable? If we change nothing, which of these futures is the most likely? And finally, which future is the most desirable, and what steps must we take to make sure it comes to pass?

In the end, feeding 8.5 billion people by 2030 is as much a matter of mindset as it is of technology. To get there, we need to shift our ingrained assumptions about how the global food system works, how we make sure everyone has enough to eat, and most of all, why it matters. That demands that we expand our options beyond what we already understand and start thinking about what we haven’t tried yet.

More food for thought

None of the world’s challenges exist in isolation, but the need to feed the hungry impacts more other challenges than most. Consider these statistics:

  • Agriculture is the world’s largest employer. In less developed countries, it employs around 60% of workers, many of whom might otherwise enter other industries and increase economic development.
  • Women make up 43% of agricultural labor but have disproportionately low access to resources like land, technology, and markets, which traps them in poverty and prevents them from participating fully in the global economy.
  • Seven out of ten people in the world live in a country where inequality has risen over the last 30 years. As inequality rises, so does food insecurity, which in turn creates and exacerbates conflicts from food riots to mass migration of refugees.

The better we get at tackling the problem of global hunger and food insecurity, the better our chances of addressing other pressing issues, too.

Read the executive brief Why We Must Rethink the Global Food System.


About Dan Wellers and Michael Rander

Dan Wellers is the Global Lead of Digital Futures at SAP. Michael Rander is the Global Research Director of Future of Work at SAP.

The Human Angle

By Jenny Dearborn, David Judge, Tom Raftery, and Neal Ungerleider

In a future teeming with robots and artificial intelligence, humans seem to be on the verge of being crowded out. But in reality the opposite is true.

To be successful, organizations need to become more human than ever.

Organizations that focus only on automation will automate away their competitive edge. The most successful will focus instead on skills that set them apart and that can’t be duplicated by AI or machine learning. Those skills can be summed up in one word: humanness.

You can see it in the numbers. According to David J. Deming of the Harvard Kennedy School, demand for jobs that require social skills has risen nearly 12 percentage points since 1980, while less-social jobs, such as computer coding, have declined by a little over 3 percentage points.

AI is in its infancy, which means that it cannot yet come close to duplicating our most human skills. Stefan van Duin and Naser Bakhshi, consultants at professional services company Deloitte, break down artificial intelligence into two types: narrow and general. Narrow AI is good at specific tasks, such as playing chess or identifying facial expressions. General AI, which can learn and solve complex, multifaceted problems the way a human being does, exists today only in the minds of futurists.

The only thing narrow artificial intelligence can do is automate. It can’t empathize. It can’t collaborate. It can’t innovate. Those abilities, if they ever come, are still a long way off. In the meantime, AI’s biggest value is in augmentation. When human beings work with AI tools, the process results in a sort of augmented intelligence. This augmented intelligence outperforms the work of either human beings or AI software tools on their own.

AI-powered tools will be the partners that free employees and management to tackle higher-level challenges.

Those challenges will, by default, be more human and social in nature because many rote, repetitive tasks will be automated away. Companies will find that developing fundamental human skills, such as critical thinking and problem solving, within the organization will take on a new importance. These skills can’t be automated and they won’t become process steps for algorithms anytime soon.

In a world where technology change is constant and unpredictable, those organizations that make the fullest use of uniquely human skills will win. These skills will be used in collaboration with both other humans and AI-fueled software and hardware tools. The degree of humanness an organization possesses will become a competitive advantage.

This means that today’s companies must think about hiring, training, and leading differently. Most of today’s corporate training programs focus on imparting specific knowledge that will likely become obsolete over time.

Instead of hiring for portfolios of specific subject knowledge, organizations should instead hire—and train—for more foundational skills, whose value can’t erode away as easily.

Recently, educational consulting firm Hanover Research looked at high-growth occupations identified by the U.S. Bureau of Labor Statistics and determined the core skills required in each of them based on a database that it had developed. The most valuable skills were active listening, speaking, and critical thinking—giving lie to the dismissive term soft skills. They’re not soft; they’re human.


This doesn’t mean that STEM skills won’t be important in the future. But organizations will find that their most valuable employees are those with both math and social skills.

That’s because technical skills will become more perishable as AI shifts the pace of technology change from linear to exponential. Employees will require constant retraining over time. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is already outdated by the time students graduate, according to The Future of Jobs, a report from the World Economic Forum (WEF).

The WEF’s report further notes that “65% of children entering primary school today will ultimately end up working in jobs that don’t yet exist.” By contrast, human skills such as interpersonal communication and project management will remain consistent over the years.

For example, organizations already report that they are having difficulty finding people equipped for the Big Data era’s hot job: data scientist. That’s because data scientists need a combination of hard and soft skills. Data scientists can’t just be good programmers and statisticians; they also need to be intuitive and inquisitive and have good communication skills. We don’t expect all these qualities from our engineering graduates, nor from most of our employees.

But we need to start.

From Self-Help to Self-Skills

Even if most schools and employers have yet to see it, employees are starting to understand that their future viability depends on improving their innately human qualities. One of the most popular courses on Coursera, an online learning platform, is called Learning How to Learn. Created by the University of California, San Diego, the course is essentially a master class in human skills: students learn everything from memory techniques to dealing with procrastination and communicating complicated ideas, according to an article in The New York Times.

Attempting to teach employees how to make behavioral changes has always seemed off-limits to organizations—the province of private therapists, not corporate trainers. But that outlook is changing.

Although there is a longstanding assumption that social skills are innate, nothing is further from the truth. As the popularity of Learning How to Learn attests, human skills—everything from learning skills to communication skills to empathy—can, and indeed must, be taught.

These human skills are integral for training workers for a workplace where artificial intelligence and automation are part of the daily routine. According to the WEF’s New Vision for Education report, the skills that employees will need in the future fall into three primary categories:

  • Foundational literacies: These core skills needed for the coming age of robotics and AI include understanding the basics of math, science, computing, finance, civics, and culture. While mastery of every topic isn’t required, workers who have a basic comprehension of many different areas will be richly rewarded in the coming economy.
  • Competencies: Developing competencies requires mastering very human skills, such as active listening, critical thinking, problem solving, creativity, communication, and collaboration.
  • Character qualities: Over the next decade, employees will need to master the skills that will help them grasp changing job duties and responsibilities. This means learning the skills that help employees acquire curiosity, initiative, persistence, grit, adaptability, leadership, and social and cultural awareness.


The good news is that learning human skills is not completely divorced from how work is structured today. Yonatan Zunger, a Google engineer with a background working with AI, argues that there is a considerable need for human skills in the workplace already—especially in the tech world. Many employees are simply unaware that when they are working on complicated software or hardware projects, they are using empathy, strategic problem solving, intuition, and interpersonal communication.

The unconscious deployment of human skills takes place even more frequently when employees climb the corporate ladder into management. “This is closely tied to the deeper difference between junior and senior roles: a junior person’s job is to find answers to questions; a senior person’s job is to find the right questions to ask,” says Zunger.

Human skills will be crucial to navigating the AI-infused workplace. There will be no shortage of need for the right questions to ask.

One of the biggest changes narrow AI tools will bring to the workplace is an evolution in how work is performed. AI-based tools will automate repetitive tasks across a wide swath of industries, which means that the day-to-day work for many white-collar workers will become far more focused on tasks requiring problem solving and critical thinking. These tasks will present challenges centered on interpersonal collaboration, clear communication, and autonomous decision-making—all human skills.

Being More Human Is Hard

However, the human skills that are essential for tomorrow’s AI-ified workplace, such as interpersonal communication, project planning, and conflict management, require a different approach from traditional learning. Often, these skills don’t just require people to learn new facts and techniques; they also call for basic changes in the ways individuals behave on—and off—the job.

Attempting to teach employees how to make behavioral changes has always seemed off-limits to organizations—the province of private therapists, not corporate trainers. But that outlook is changing. As science gains a better understanding of how the human brain works, many behaviors that affect employees on the job are understood to be universal and natural rather than individual (see “Human Skills 101”).

Human Skills 101

As neuroscience has improved our understanding of the brain, human skills have become increasingly quantifiable—and teachable.

Though the term soft skills has managed to hang on in the popular lexicon, our understanding of these human skills has increased to the point where they aren’t soft at all: they are a clearly definable set of skills that are crucial for organizations in the AI era.

Active listening: Paying close attention when receiving information and drawing out more information than received in normal discourse

Critical thinking: Gathering, analyzing, and evaluating issues and information to come to an unbiased conclusion

Problem solving: Finding solutions to problems and understanding the steps used to solve the problem

Decision-making: Weighing the evidence and options at hand to determine a specific course of action

Monitoring: Paying close attention to an issue, topic, or interaction in order to retain information for the future

Coordination: Working with individuals and other groups to achieve common goals

Social perceptiveness: Inferring what others are thinking by observing them

Time management: Budgeting and allocating time for projects and goals and structuring schedules to minimize conflicts and maximize productivity

Creativity: Generating ideas, concepts, or inferences that can be used to create new things

Curiosity: Desiring to learn and understand new or unfamiliar concepts

Imagination: Conceiving and thinking about new ideas, concepts, or images

Storytelling: Building narratives and concepts out of both new and existing ideas

Experimentation: Trying out new ideas, theories, and activities

Ethics: Practicing rules and standards that guide conduct and guarantee rights and fairness

Empathy: Identifying and understanding the emotional states of others

Collaboration: Working with others, coordinating efforts, and sharing resources to accomplish a common project

Resiliency: Withstanding setbacks, avoiding discouragement, and persisting toward a larger goal

Resistance to change, for example, is now known to result from an involuntary chemical reaction in the brain known as the fight-or-flight response, not from a weakness of character. Scientists and psychologists have developed objective ways of identifying these kinds of behaviors and have come up with universally applicable ways for employees to learn how to deal with them.

Organizations that emphasize such individual behavioral traits as active listening, social perceptiveness, and experimentation will have both an easier transition to a workplace that uses AI tools and more success operating in it.

Framing behavioral training in ways that emphasize its practical application at work and in advancing career goals helps employees feel more comfortable confronting behavioral roadblocks without feeling bad about themselves or stigmatized by others. It also helps organizations see the potential ROI of investing in what has traditionally been dismissed as touchy-feely stuff.

In fact, offering objective means for examining inner behaviors and tools for modifying them is more beneficial than just leaving the job to employees. For example, according to research by psychologist Tasha Eurich, introspection, which is how most of us try to understand our behaviors, can actually be counterproductive.

Human beings are complex creatures. There is generally way too much going on inside our minds to be able to pinpoint the conscious and unconscious behaviors that drive us to act the way we do. We wind up inventing explanations—usually negative—for our behaviors, which can lead to anxiety and depression, according to Eurich’s research.

Structured, objective training can help employees improve their human skills without the negative side effects. At SAP, for example, we offer employees a course on conflict resolution that uses objective research techniques for determining what happens when people get into conflicts. Employees learn about the different conflict styles that researchers have identified and take an assessment to determine their own style of dealing with conflict. Then employees work in teams to discuss their different styles and work together to resolve a specific conflict that one of the group members is currently experiencing.

How Knowing One’s Self Helps the Organization

Courses like this are helpful not just for reducing conflicts between individuals and among teams (and improving organizational productivity); they also contribute to greater self-awareness, which is the basis for enabling people to take fullest advantage of their human skills.

Self-awareness is a powerful tool for improving performance at both the individual and organizational levels. Self-aware people are more confident and creative, make better decisions, build stronger relationships, and communicate more effectively. They are also less likely to lie, cheat, and steal, according to Eurich.

It naturally follows that such people make better employees and are more likely to be promoted. They also make more effective leaders with happier employees, which makes the organization more profitable, according to research by Atuma Okpara and Agwu M. Edwin.

There are two types of self-awareness, writes Eurich. One is having a clear view inside of one’s self: one’s own thoughts, feelings, behaviors, strengths, and weaknesses. The second type is understanding how others view us in terms of these same categories.

Interestingly, while we often assume that those who possess one type of awareness also possess the other, there is no direct correlation between the two. In fact, just 10% to 15% of people have both, according to a survey by Eurich. That means that the vast majority of us must learn one or the other—or both.

Gaining self-awareness is a process that can take many years. But training that gives employees the opportunity to examine their own behaviors against objective standards and gain feedback from expert instructors and peers can help speed up the journey. Just like the conflict management course, there are many ways to do this in a practical context that benefits employees and the organization alike.

For example, SAP also offers courses on building self-confidence, increasing trust with peers, creating connections with others, solving complex problems, and increasing resiliency in the face of difficult situations—all of which increase self-awareness in constructive ways. These human-skills courses are as popular with our employees as the hard-skill courses in new technologies or new programming techniques.

Depending on an organization’s size, budget, and goals, learning programs like these can include small group training, large lectures, online courses, licensing of third-party online content, reimbursement for students to attain certification, and many other models.

Human Skills Are the Constant

Automation and artificial intelligence will change the workplace in unpredictable ways. One thing we can predict, however, is that human skills will be needed more than ever.

The connection between conflict resolution skills, critical thinking courses, and the rise of AI-aided technology might not be immediately obvious. But these new AI tools are leading us down the path to a much more human workplace.

Employees will interact with their computers through voice conversations and image recognition. Machine learning will find unexpected correlations in massive amounts of data but empathy and creativity will be required for data scientists to figure out the right questions to ask. Interpersonal communication will become even more important as teams coordinate between offices, remote workplaces, and AI aides.

While the future might be filled with artificial intelligence, deep learning, and untold amounts of data, uniquely human capabilities will be the ones that matter. Machines can’t write a symphony, design a building, teach a college course, or manage a department. The future belongs to humans working with machines, and for that, you need human skills. D!


About the Authors

Jenny Dearborn is Chief Learning Officer at SAP.

David Judge is Vice President, SAP Leonardo, at SAP.

Tom Raftery is Global Vice President and Internet of Things Evangelist at SAP.

Neal Ungerleider is a Los Angeles-based technology journalist and consultant.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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HR In The Age Of Digital Transformation

Neha Makkar Patnaik

HR has come a long way from the days of being called Personnel Management. It’s now known as People & Culture, Employee Experience, or simply People, and the changes in the last few years have been especially far-reaching, to say the least; seismic even.

While focused until recently on topics like efficiency and direct access to HR data and services for individual employees, a new and expanded HR transformation is underway, led by employee experience, cloud capabilities including mobile and continuous upgrades, a renewed focus on talent, as well as the availability of new digital technologies like machine learning and artificial intelligence. These capabilities are enabling HR re-imagine new ways of delivering HR services and strategies throughout the organization. For example:

  • Use advanced prediction and optimization technologies to shift focus from time-consuming candidate-screening processes to innovative HR strategies and business models that support growth
  • Help employees with tailored career paths, push personalized learning recommendations, suggest mentors and mentees based on skills and competencies
  • Predict flight risk of employees and prescribe mitigation strategies for at-risk talent
  • Leverage intelligent management of high-volume, rules-based events with predictions and recommendations

Whereas the traditional view of HR transformation was all about doing existing things better, the next generation of HR transformation is focused on doing completely new things.

These new digital aspects of HR transformation do not replace the existing focus on automation and efficiency. They work hand in hand and, in many cases, digital technologies can further augment automation. Digital approaches are becoming increasingly important, and a digital HR strategy must be a key component of HR’s overall strategy and, therefore, the business strategy.

For years, HR had been working behind a wall, finally got a seat at the table, and now it’s imperative for CHROs to be a strategic partner in the organization’s digital journey. This is what McKinsey calls “Leading with the G-3” in An Agenda for the Talent-First CEO, in which the CEO, CFO, and CHRO (i.e., the “G-3”) ensure HR and finance work in tandem, with the CEO being the linchpin and the person who ensures the talent agenda is threaded into business decisions and not a passive response or afterthought.

However, technology and executive alignment aren’t enough to drive a company’s digital transformation. At the heart of every organization are its people – its most expensive and valuable asset. Keeping them engaged and motivated fosters an innovation culture that is essential for success. This Gallup study reveals that a whopping 85% of employees worldwide are performing below their potential due to engagement issues.

HR experiences that are based on consumer-grade digital experiences along with a focus on the employee’s personal and professional well-being will help engage every worker, inspiring them to do their best and helping them turn every organization’s purpose into performance. Because, we believe, purpose drives people and people drive business results.

Embark on your HR transformation journey

Has your HR organization created a roadmap to support the transformation agenda? Start a discussion with your team about the current and desired state of HR processes using the framework with this white paper.

Also, read SAP’s HR transformation story within the broader context of SAP’s own transformation.


About Neha Makkar Patnaik

Neha Makkar Patnaik is a principal consultant at SAP Labs India. As part of the Digital Transformation Office, Neha is responsible for articulating the value proposition for digitizing the office of the CHRO in alignment with the overall strategic priorities of the organization. She also focuses on thought leadership and value-based selling programs for retail and consumer products industries.