The pace of change is accelerating in all walks of life and business – and digital transformation is contributing to it all. Rarely a day goes by where we don’t see something impacted and altered forever by digital technology.
A recent SAP Center for Business Insight study, supported by research and analysis from Oxford Economics, echoed this reality as businesses leading in digital transformation indicated significant investments in their digital initiatives. They are pouring substantial time, money, and effort into training and recruitment, working diligently to tear down impediments and roadblocks, and leveraging digital technology to increase employee engagement and better prepare their workforce. In fact, more than one-half (56%) of leaders cite that organizational change is mostly attributed to digital transformation efforts – a rate five times greater than others surveyed.
Meanwhile, a perfect storm in the future of work is brewing as digitalization, shifting demographics, and globalization converge and drive rapid change. For example, the SAP Center for Business Insight study revealed that millennials currently make up one-fourth of the workforce today and will grow to three-quarters by 2025. The way businesses manage work is also evolving as nearly one-half (45%) of the workforce is expected to be comprised of contingent workers.
To help us sort through this tidal wave of change, I recently interviewed a long-time colleague and established thought leader in this area: Kerry Brown, vice president of user adoption at SAP. Kerry has spoken externally for years at conferences and academic programs in this area and currently works with many customers to help guide them on this journey.
Q: Kerry, a recent study by the SAP Center for Business Insight showed that leaders in digital transformation are focusing on becoming talent-driven. What is the definition of this new goal, and how is the trend playing out in the organizations with whom you speak and work?
A: Talent-driven organizations are those that focus on people and talent as an asset, rather than an outcome. Not only awareness, but action and investment are characteristics that define a talent-driven organization. The leaders in this space are spending more on retraining the existing general workforce and existing management than their peers. We see leaders, at a rate of 5x more than digital transformation laggards (35% versus seven percent), reporting that digitalization has already changed their talent management efforts.
Q: We see many people talk about how we are at or around the “knee in the curve” with digital transformation, and with it disruption and much more. In your opinion, where along that curve are we in terms of timing and pace of change? And what fundamental implications should we expect next?
A: Certainly, this is an ever-evolving experience for every organization. The inflection, or tipping point, that acts as a catalyst rests on the continuum from a manual enterprise to a self-driving and self-learning enterprise. Notably, disruption presented by new business models and competitors will accelerate the impetus to engage and adjust current work patterns and roles. The timing and pace are a reflection of this disruption, and having an agile and enabled workforce will keep leaders ahead of the curve.
Q: How can we best prepare and enable organizations and their employees to grasp and adapt to the brave new world of digitalization? What defines leadership in this case, and what are the benefits they have now or will accrue later?
A: Working with a forward view and eyes wide open will avoid the element of surprise. We have had the luxury of a constant and predictable workforce for the last 20 years. For example, 83% of leaders expect talent management in their organization to be changed by digitalization within the next two years, versus 37% for all others. Leaders are also significantly more likely to create new roles – such as chief robotics officer – to keep up with their digital transformation efforts. Knowing the demographics of your people and anticipating shifts due to retirement and recruitment, for instance, will provide transparency and insights for action. Leaders find the increasing quality of talent recruitment and retention a key trend for driving future revenue.
Q: Kerry, there’s a lot of chatter about the digital workforce. What does this trend mean in the context of the future of work? What are some of the significant implications, and what technologies should be considered?
A: The future of work, as we know it, will leverage contributions that are uniquely human. Increasingly, people will act and make choices by leveraging comprehensive analytics and real-time recommendations, where a system needs intervention, guidance, and control. The pace at which technologies – such as machine learning, artificial intelligence, robotics, and natural language processing – are adopted will influence the timing and impacts on every industry and organization. While technology will become increasingly viable and feasible for business, making technology desirable to the employee is essential.
Q: Kerry, you are a very accomplished athlete outside of work, including rowing on championship teams. What advice and lessons learned can business draw from your athleticism to leap from transformation to digitalization and talent-driven?
A: In sports, as in business, your competitors challenge you to improve and learn. Complacency is not a strategy for winning. Winning depends on knowing and growing your talent, as well as anticipating and leading change.
Thanks, Kerry, for your tremendous insights! We encourage everyone to read Kerry’s latest blog, “Digital: When Ignorance Isn’t Bliss,” and stay tuned for other entries in the Digital Workforce series in 2018.