What does digital disruption really mean? It is a buzzword these days and all companies whether retail or manufacturing or healthcare are panicking about a business model disruption, a technology disruption, a competitor – somebody that’s stepping on their space they do not know what they are going to do.
According to a report by Deloitte in collaboration with MIT shows that 75 to 80 percent of the CEOs are worried that something in the digital domain will change their business models or there operations. So it is not really about efficiency or technology to make things faster anymore, but this is about the entire business.
The other disruption that is happening is the disruption in the workforce. There is a change of ethos in the way people are thinking about their jobs and what their jobs men to them and what their relationship to their employers is. But organizations are not set up for that – we are not set up for people coming and going and coming back, we are not set up for contract plough based work, and the relationship between us and the employers is different from what it was. Thus it becomes imperative for the employers to have a good relationship with candidate and even the people they don’t hire. Because this has a huge impact.
If you look at the most disruptive companies like Airbnb, FB etc., it isn’t that they are good at technology, it is the way they run their businesses. It’s the people and how they organize themselves. Being a disruptive organization or managing a disruption is all about how you manage the people in your company and it’s not just about managing technology. Uber for e.g. is a decentralized company. Decisions are made in cities independent of San Francisco. Airbnb is the same way. There is no central structure to this company. It’s run by the actual partners themselves. There are lessons to be learnt by these digital disruptors.
According to the Deloitte Human capital trends, 2015 report, the most shocking finding is that 92 percent of the businesses surveyed are not organized to succeed. Only 14 percent thought they knew how to reorganize. So there’s an issue on how we actually get work done in a digital organization. How do they work together and share information?
It is about culture, shared values, communication systems and people moving between the teams. The problem with this from the HR standpoint is that none of the HR practices are designed for a traditional top-down hierarchical organization – and digital disruption is figuring out how to operate in such a world.
One of the things that is critical to such organizations is the idea of employee engagement. Employee engagements is looked at by NPS (Net Promoter Score) – would you recommend the company to others – but it is seen that it is not super high. But some companies do manage to create this environment of high levels of performance and engagement. How do they do this? The only thing is that they have leadership and leaders who value and think about their people. So you can be a high performing digital organization by taking care of your people.
Impact of technology
According to a research in the US, employees look at their phones 8 billion times. The question is whether we are getting anything out of that? The answer is no. If you look at economic data, economic productivity has been the lowest since the 4th industrial revolution started. Since the beginning of the Internet and technological revolution, productivity has not gone up significantly. And the reason for this is that we have not figured out how to adapt to technology.
We can’t predict what the technology will do. We can’t assume if technology will make our lives better. Our job in HR is to curate and make sense of the technology and use it productively to make the employee experience better at work. This is the most important new mandate we have.
The present disruptions that are clearly taking place in the market are:
Probably the biggest transformational impact on HR is the shift from designing processes to design thinking. Design thinking is the future of HR. It is about studying the working activities and work day lives of the employees and developing interactions, systems and tools to make their work better. The HRs job is going to be designing and building an engaging employee experience for high performance that is useful to management.
(This article is based on Josh Bersin session on 'The Digital World of Work - How It Has Changed HR' at TechHR 2016)