As incidents like the recent Southwest Airlines IT system meltdown—which prompted the company to cancel nearly 17,000 flights at the height of holiday travel—have demonstrated, effective digital transformation is a significant concern for organizations, expedited by a global pandemic that stressed company processes to their limits. Integrating technology that clearly improves operational efficiency can be daunting (and expensive), but the payoff can outweigh the barriers to adoption—whereas a failure to transform can leave organizations grounded, literally and figuratively. However, leaders often find themselves stuck between two different flight paths: embark on modern but strenuous improvement or keep the status quo at risk of being outpaced by competitors.
HR leaders play a significant role in enabling a successful transformation. Below are three strategies that HR departments can use to avoid common pitfalls and capitalize on the digital transformation revolution.
Fully understand, scope and communicate the business opportunity
Many organizations under-scope the extent of their transformation without establishing whether they’re aiming to digitize their processes and systems (a technology transformation) or make a core strategic shift in the culture and the business (a digital transformation). This can lead to misplaced hopes that a technology transformation will then immediately result in a strategic shift. Technology is an enabler, not a driver, of true digital transformation.
Unreasonable expectations can be extremely costly. Why? They put off the bigger vision opportunities and undersell the possibilities. It also means the organization is typically unprepared for large, strategic conversations that arise mid-transformation. For example, when companies shift software from what they’ve always used to new technology, users may feel they are taking on “a new technology system,” rather than a deeper “fundamental transformation to the way we do business.” Because of this late realization, teams across the organization aren’t ready, or even aware, of how to best leverage the new technology in their roles. Many see the new system as setting them back, rather than as a means to propel them into a new future.
True digital transformation requires a clear organization-wide vision of the opportunity that looks at the broad shifts in strategy and culture that will be enabled by technology. It entails new potential realities as well: hiring a new kind of workforce for the future, phasing out certain roles and the development of new cultures and capabilities.
Create internal and external alignment
First, be bold and align incentives—not just timelines—across internal and external stakeholders. Defining shared metrics of success across functions or silos—including for leadership—can help reinforce these shifts and drive accountability to them. When participants at any level are pulled into a transformation without having been included in its initial planning, it can be overwhelming. Yet, having too many chefs in the kitchen, all with differing hopes for a transformation, can be equally damaging to any plan’s overall success. The key lies in creating agreed-upon metrics.
Second, it’s important to go beyond change networks to build and strengthen partnerships. In this digital world, we need to support one another’s growth more than ever. Digital transformation doesn’t just integrate internal operations in new ways—it opens up the possibility to work with, learn from and grow together with other organizations.
Take advantage of what HR does best
With their close grasp on how their organizations function, HR executives can be instrumental in helping leaders strategically plan and implement a digital transformation. By closely working with those at the heart of an organization, leaders can better determine how to:
- Put the “best team” to work: Leaders often want to keep their top performers focused on delivering for today. Freeing these resources up from some current responsibilities so they can focus on the longer-term ROI of a transformation can be an important, but challenging, trade off to make.
- Adjust short- and long-term KPIs, when appropriate: Leaders across the organization should look at where short- and medium-term goals and expectations need to be reset. That goes for both departments or divisions (e.g., sales, customer services, warehouse) and individuals (e.g., performance, productivity). Taking the time to calibrate early and regularly throughout the transformation can mitigate the risk of burning out quickly in the process.
- Build out a transformation-ready workforce: Leaders will have to look at the capabilities and skills on their team. For instance, does the team have the hard skills (e.g., project management, business process mapping) and soft skills (e.g., communications, networking, influencing, systems thinking) to support the transformation? What capabilities need to be built up or brought in now to ensure future success? Ensure you have the right people and skills in the right roles at the start instead of burdening teams with infeasible expectations, high stress and suboptimal outcomes.
To return to the case of Southwest, a lack of priming for digital transformation ultimately turned its customers toward other airlines, regardless of long-standing loyalty or cost effectiveness. Airlines whose systems functioned despite holiday storms had proactively transformed operations before it was necessary. The ability to capitalize on opportunities amid crises is what stands between organizations like Southwest and their ability to outpace competitors.
Effective digital transformation means moving beyond introducing new technology to maximizing on the business opportunity at hand, getting the entire organization on the same page about impending changes, and thinking holistically about how a transformation will operate within the broader business ecosystem. With their close understanding of how the business and its people operate, HR leaders are central to this process as a bridge between employees, organizational objectives and workplace efficiency.