All companies and professional communities are affected by digital transformation, regardless of where they are in their journey through it. The effects ebb and flow as frequently as the tech and digital space itself, so an open and ongoing dialogue about it is crucial.
To this end, we turned to Barney Loehnis – a digital transformation expert helping companies grow and innovate with data-and-digital-driven programs – and spoke to him about the key factors in digital transformation right now and in the near future.
Part I of our interview with him covers the importance of preserving humanity in any digital innovation, and of empowering employees as well as engaging them.
What do you see as the key drivers of change at the moment in terms of digital transformation in the workplace?
The critical driver of successful digital transformation is not the technology but the underlying human need. At this juncture there’s a particular need to balance the massive use of SaaS platforms, digital tools, RPA, data and technology with an infusion of some unmistakably human touches, values and interventions.
Peter Capelli reminds us that “employees are consumers of work and, like consumers, they have a choice”. It’s a timely reminder because employers have ignored employees in favor of obsessing over customers for the last 20 years. I am not saying that our focus on customers should diminish, but I am saying we must fete employees as much as we have done customers. "Employees come first. If you take care of your employees, they will take care of the clients” counsels Richard Branson.
Employees have increasing influence. Stimulated by better education, a robust economy and a world that generally works quite well, these savvy consumers of work refuse to accept half-baked, amateurish, sloppy workplace environments. They know it's a waste of their time, inefficient, unproductive and disempowering; and they are not afraid to let employers know how they feel.
CEOs are not naive to this either, even if they have been slow to take action. By far their greatest “internal” market concerns, as stated in EY & the Conference Board research in 2018, relate to “developing next gen leaders" (64%) and the "failure to attract the best talent" (60%). To realize the promise of digital transformation companies need to shift away from fragmented intranets competing for attention, and build instead an experiential “narrative” layer for employees that sits above the multiple business systems. This will drive a personalized experience to address employee's individual needs, just as we had to do for the customer experience.
This is not rocket science, even if it is complex. All employees are looking for is stimulating work, diversity, respect, opportunities to learn, and a workplace that is designed physically and digitally to help people work collaboratively; they want access to knowledge, to engage with networks and have access to efficient collaboration and communication tools. After a lifetime of neglect employers are now aware that in order to attract talent they need to differentiate their workplace, and create compelling environments for employees.
What’s the current state of the Employee Experience in the digital workplace?
The current state in most workplaces is pretty dire, and where it is dire, the odor of poor leadership and management lingers. Yes, it's that bad. The issues start with poor recruitment processes, broil while administrating benefits and snowball out of control during amateurish performance reviews, valueless training and inefficient administration. When companies preach lofty purpose and ideals, but fail to live them, their values are simply vapid aspirations. Values should be architectural principles that drive business and management decisions and the design of the customer and employee experience.
According to a Gallup 2017 survey, only 15% of global employees say they are “engaged”. The critical point here is that the gap between aspiration and reality is vast, and the cost to the organization in lost productivity, wasted operational costs and loss of revenues is significant. Companies have to understand that the employee experience is not a cost center, but a revenue driver and productivity enabler.
The correlation between companies with high employee engagement and the impact on business performance is massive. Research from Gallup shows that for companies in the top quartile of employee experience brands increase employee productivity by 17% and are 21% more profitable than the bottom quartile. Other calculations from Co:collective show that "story-doing" companies (ie. those the craft their operating values into their customer and employee experience) rather than "storytelling" have driven annual share price growth at 12%, versus the 3% growth of companies whose culture is paper thin. So, the reward to align the company behind its values, purpose, people, experience & performance is great.
So, ironically, to animate digital experiences, we need to design heart back into them. If we come back to the human needs - of what employees and managers need from their workplace the underlying drivers of change are clear:
- Align a company's values with the people they recruit and the experience they design for the physical and digital workplace.
- Use tools to assess aptitudes and behaviors to help people understand their strengths.
- Enable managers to have visibility on workforce capabilities, and high performers to help long term resource planning.
- Democratize education, and develop continuous learning and development so people can advance their own capabilities and careers.
- Empower employees to make informed decisions on their benefits, retirement, HR admin, well-being, and career development.
- Integrate business systems so that people can access tools in the flow of their normal work.
- Build trust and transparency around data and privacy: clearly delineate to the employee which tools and data are open versus which are private.
How is digital transformation empowering companies in terms of their culture and people?
I think of the opportunity in three parts: culture design, experience design and performance design.
Culture design relates to the alignment of a company's purpose & values with what people do together and how people behave towards to each other. Culture, after all, is about the invisible bonds and the ritual interactions between a group of people. You might ask: "So what role is there for digital?". If you look at Tech companies, with their engineering mindsets, they are very good at hard coding elements of their culture into their digital workplace. Some of it comes naturally like Slack or zoom, and sometimes software is seen as the natural way to hard code behaviors that matter within a culture. Tools like cultureAmp, Glint, OfficeVibe and Perceptyx tend to be well received by employees and managers alike to drive a cadence of two-way communication and provide measurable feedback on what’s working and what’s not.
Experience design relates to the physical and digital experiences and interactions at work designed to make the employee & customer experience great. The problem for many companies is that with so many different systems, platforms, owners, and decision makers across the organization, there is rarely a grand vision for how it all works together. As a result, the overall experience is blotchy. The objective should be to design a workplace and workflow that makes it easier for employees to do their work, administrate their life, and drive employee performance. Companies like IBM and Unilever are using recruitment and assessment platforms like Plum.io and Pymetrics to match the aptitudes, values and behaviors of candidates to ensure alignment with values and aptitudes that enable future growth. A lot of professional service and BPO companies are then taking that data forward into their Learning Management:platforms to match their learning modules with their specific needs, future roles and unique learning styles.
When it comes to Performance design - understanding the drivers of performance, and designing an approach that helps drives behaviors and outcomes - most companies are stuck on annual reviews, which in evolutionary terms, leaves them stuck in the cave. We need a much more sophisticated approach to performance that doesn’t rely purely on sales, nor on subjective manager assessments. We need a theory for the individual performance that’s commensurate to the sophistication of the economic performance of the corporation - more like how premiere sports teams, astronauts and orchestras approach the certain delivery of the best outcomes. Tools like 15Five, Reflektive and Seven Geese facilitate better feedback for employees on their performance; none go as far Ray Dalio prescribes in his book “Principles", but all give a more granular approach to helping people perform better. Further down the line even Microsoft 365’s AI engine “delve” promises to unlock productivity insights via workplace analytics that will help unlock insights into the behaviors of top performing people and teams.
Part II will be published next week.
To connect with Barney
Linkedin: Barney Loehnis