HR's Role in Renewing Digital Transformation
A meme made the rounds last year that the increasing pace of digital transformation could be attributed more to COVID-19 than the efforts of CEOs, CTOs or CIOs. While there's an element of truth to this, implementing a digital workplace isn’t all digital transformation is about.
While the digital workplace may have ushered in a new era of work, most of the digital future we had previously imagined still lies ahead of us. And since any deep organizational transformation typically rests on people and culture, then the chief HR officer (CHRO) must play a key role in driving that transformation.
So, let's take a look at HR's role in raising the importance of digital transformation for their organizations and ensuring it is given a higher level of priority than before the pandemic.
The CHRO's Role in Digital Transformation
Before discussing the CHRO's role in digital transformation, it may be equally important to clarify what it's not: implementing digital technologies. While the CHRO may drive the strategic discussion on how to optimize the HR function with digital technologies, the success of the overall transformation requires more than thinking through the technology itself.
From an HR perspective, digital transformation works at four interconnected levels:
1. The Customer-Facing Business
In the words of author and HR management guru Dave Ulrich, HR is about the business. So, HR’s main focus in digital transformation needs to be the digital transformation of the business, rather than of the function (although that, too, is important). Leading organizations are tapping into new business models, often based on digital platforms and product ecosystems, that help them get closer to their customers, with the support of data and analytics as feedback loop. HR must play a central role in helping support the organization in achieving those goals, influencing customer experience processes and ensuring they are informed by insights.
Many companies embarked on their digital transformation journey before Covid-19 and, despite the progress made over the past two years, much work remains. Digital transformation is likely to continue well beyond the pandemic because of the changes brought on by the pandemic. McKinsey’s The Future of Work After Covid report highlights the trends expected as a result of Covid-19, many of which will have much more impact on HR's strategy for the business as a whole than on the function digitalizing its own activities.
2. The Internal Organization and Organizational Leadership
Digital transformation impacts organizations in many ways, with work automation and augmentation. At the HR level, the sourcing of employees is extended to new workforce categories, such as contingent workers, and new organizational networks and ecosystems.
Organizations that succeed in this new era are learning how to get closer to their employees and using data and analytics to improve on processes and overall experience. To achieve this, HR leaders may want to consider redesigning jobs to offer greater opportunities for higher productivity and more compelling work, and developing new staffing models informed by digital technologies.
There's also an opportunity for HR to rethink the organization's leadership model. For instance, CHROs may evaluate the benefits of shifting toward servant, distributed and collective leadership styles, as well as greater use of self-management. These are all methods that have been shown to positively influence teams and their professional development.
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3. HR Processes
While CHROs should consider the organization as a whole when thinking through digital transformation, the function's processes should nevertheless be considered by ensuring they support the new ways of working and leading. Examples include using AI to enable both managers and employees to use processes more effectively, and the use of HR apps to provide better manager and employee experiences.
4. The HR Function
Once transformation is underway across all key levels of the organization, it is then possible to look at how HR can better support and enable future transformations and improve the company's agility. This can include greater use of internal networks to improve HR’s impact on the rest of the organization and the use of digital technologies such as Robotic Process Automation (RPA) and analytics within HR (often relabelled as People Operations). EY's take on HR’s new operating model illustrates the extent of change that may be involved.
HR at the Heart of Organizational Transformation
The most precious asset of a corporation is its employees. And at the heart of a healthy employee culture is HR. HR has an increasingly prominent role in moving their organizations forward, despite the terminology seemingly more apt to the IT function.
HR leaders must drive and support digital transformation at each level and do so in a very agile way, responding to and building on the transformation as it progresses. At each level, HR must ensure effective use of digital technologies to enable what is needed for every member of the organization — and the organization as a whole — to succeed.
While the specifics of this plan vary by industry, there are five actions HR leaders can take to help their organization down the transformation journey:
- Establish a close, two-way relationship with IT to ensure everyone is working together to understand how their processes and initiatives impact the rest of the organization.
- Apply a strategic perspective to digital transformation, linking HR’s activities and organization to the needs of the business.
- Organize through networks, participating in or orchestrating ecosystems that support growth and progress.
- Experiment with digital technologies before discarding them. Not all technologies make sense for every business, but being too quick to judge the use of one can cost an organization the opportunity to uncover unexpected potential.
- Improve the digital workplace to ensure the chosen model (remote, hybrid or in-office) is effective and enables the organization to succeed in its mission.
Implementing these actions will enable HR leaders to take advantage of the opportunities provided by digital technologies and make an important contribution to the business as a whole.
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About the Author
Jon Ingham is a people and organization strategist who provides training and consulting through his Strategic HR Academy. Jon has also written several articles, book chapters and books on the future of work and of HR, including "Building Better HR Departments" (with Dave Ulrich, 2016) and "The Social Organization" (2017).