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Are You Still Being Fooled By The Two Lies of Digital Transformation?

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Gary Flood, Journalist, The HR Congress

WHY SHOULD YOU CARE?

Navigating digital disruptions is not a about technology. It is about the organizational changes required to harness the power of technology, many of which have become essential as companies seek to adapt to the global disruption caused by COVID-19. As companies emerge from COVID-19, many of the most significant disruptions still lie ahead

At the largest online event on HR Technology and the Future of Work for our sector, in September’s well-attended online ‘The HR Congress TechFest’ conference, a number of major HR industry commentators shared their perspectives.

Let’s dip into what a few of them had to say—being aware that this is only a taster of their rich talks, and we recommend studying the whole video

To put HR at the center of genuinely effective digital transformation, CHROs need to about being confused by the ‘two lies’ that confuse the issue: one, that it always involves implementing digital tools; and two, that digital transformation is only ever about one big change.

This is one way to understand the main message of University of Georgia Professor Gerald Kane, who set out to explore what he and his fellow researchers see as the two unhelpful myths around digital transformation.

Kane bases his analysis on a still ongoing, intense eight-year research probe into how companies are adapting to a digital world.

This is partly based on regular surveys of U.S. and international business leaders, which has resulted in a resource of over 20,000 responses buttressed by 100 interviews with executives directly leading their organizations through digital change.

That research kicked off before the pandemic but has since been extensively revised with up-to-date bulletins about how members of the study sample fared during the crisis.

This can be broken down into three phases of Respond to COVID, Recover from COVID, and—for a surprising number of those contacted—the present phase, Thrive Post COVID.

Kane called out technology as a key enabler of ‘superpowers’ that enabled companies to adapt to the disruption caused by the pandemic. Several case studies of such ‘superpower’-improved use cases were shared, including at brands like Hitachi’s tech subsidiary Vantara, Hilton Hotels, and restaurant chain Portillo’s.

‘Digital transformation that didn’t involve implementing new technology, but about creating policy so employees could get the digital knowledge they need.’

Which brings us to the Professor’s Two Lies, which he and his collaborators have detailed in two fascinating books, The Technology Fallacy (2019) and The Transformation Myth (2021).

The first, as we’ve seen, is that if it doesn’t involve tech, it’s not a transformation. Kane, after talking to real-world organizations out there who’ve actually done it, begs to differ. “We studied a major U.S. health insurer, which did implement some new technologies, but their biggest move was to completely change their tuition reimbursement programs—so if employees got a degree in 150 strategic areas that HR had identified as strategic, they got reimbursed at three times the previous rate.

“This was a digital transformation that didn’t involve implementing new technology, but about creating policy so employees could get the digital knowledge they need.”

And the second ‘Lie’? “You’re not going to be done transforming once COVID is over,” he cautioned. “And you’re not going to be done transforming when you get the new digital tools, because transformation is a new, ongoing process in a continually disruptive world–so building organizations that can adapt to disruption is now the going forward.”

This realization should be a wake-up call to the sector, he stressed. “One of the big challenges we discovered is what we call the knowing-doing gap,” he warned. “We asked, ‘What’s the biggest threat facing your company?’ And the number one answer was internal issues: ‘Our company’s not agile and doesn’t have a flexible culture,’ ‘Digital’s not a priority compared to our market environment and competitive pressure’ came out as number two and three.”

Is HR ready for the digital transformation challenge?

Based on his work on the two books and allied research, Kane, therefore, charged the HR world with adopting a growth mindset.

What he means here is a mindset that neither fools leaders they are unique and their market position unassailable, nor is so negative that they feel they can’t catch up.

“There’s never been a better time to be a great CHRO,” he said.

“But there’s also never been a worse time to be an average one, because the strategic side is something that companies really want to invest in and where HR can make a big difference.

“Ask yourself, ‘Can I step in to be a strategic leader of the organization?’ Because digital transformation isn’t about tech but instead all about talent, all about culture and for competing in a digital world, wherever an HR leader can move into more strategic roles, then you’re going to move the organization forward.”

Encouraging stuff—but he ended with posing a question we should all reflect on: will all the digital transformation progress of COVID ebb away?

“Most of the data suggests that companies exhibited about 10 years of digital change as a result of COVID,” he said.

“The real question is as things are lessening, are we going to go back to how we were–or are we going to use the lessons learned over the last few years to really become more competitive?”

One to ponder, for sure—and guard against?

See the full version of this keynote:

Written by: Katalin Toth

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