Zero One: Digital Transformation Begins with Employees
Giving “customer experience” lip service can cost business executives their jobs – or at least hit them in their wallets. Just ask senior executives at United Airlines who learned last Friday about changes to their incentive compensation program.
In a proxy filing, United Continental Holdings said executive bonuses will be “directly and meaningfully tied to progress in improving the customer experience.” This comes on the heels of the United Airlines debacle, whereby a customer was forcibly removed from an airplane after refusing to give up his seat to an airline employee on standby.
Too many companies falsely claim to have a customer-centric culture that prioritizes the customer experience. Delivering a great customer experience is especially important in today’s digital world where the customer is in charge, but it’s easier said than done. Traditional processes, organizational structures and employee habits need to be upended.
Deloitte Consulting and MIT surveyed organizations and found that 87 percent believe digital will totally disrupt their industry. But only 11 percent say their current talent pool can compete in that new world. Worse, 92 percent admit they’re not even correctly structured.
We sat down with Michael Gretczko, Deloitte’s HR transformation principal and general manager of ConnectMe, to understand how the workforce plays into digital transformation and the customer experience.
Digital transformation is mostly felt in marketing and sales. I haven’t come across a lot of talk about transforming the workforce. Why is this?
Gretczko: That’s been our observation as well, and we think the market is missing something. Lots of companies are spending lots of money on digital transformation and frankly ignoring the fact that they have a workforce that fundamentally needs to work differently. In our minds, there are really only two components: disruption affecting business models and, on the other side, a workforce that’s also being impacted just as much if not more. In order to activate and achieve the outcomes of digital transformation, you’ve got to focus on both.
We’ve built an integrated practice that works on digital supply chain, digital customer, and all the digital pieces required to activate the business side. But we also focus on the digital organization and the digital worker, so you can align how your employees behave, operate, and collaborate to support that new business model.
For many years, we’ve done customer-experience work and employee-experience work. We’ve always thought of those as inextricably linked, because your employees are your face to the customers. If you aren’t creating a great experience for your employees, they tend to be less engaged and less able to meet your customers wherever they are.
What does a digital organization look like?
Gretczko: A traditional organization is hierarchical and organized by function. In today’s world, people are in networks of teams working on multi-disciplinary projects that form and re-form. One of our clients recognized it had over 30,000 teams operating within their environment.
This is the way work happens in the future. You got to have the right management systems, right technologies, right processes and organizational structure. Business leaders are beginning to recognize how important this is.
What hard returns can companies expect from workforce transformation?
Gretczko: Business outcomes are so hard to tie to a single cause. The way I think about it is, if you look at organizations that move to this model or start out in this model, they share similarities. They tend to be very agile, highly innovative, highly creative in the way they put together different skill sets, laser focused on customers, and use data to inform their decisions.
You’re asking companies, line-of-business executives and other employees to upend the way they work. This sounds like an enormous challenge.
Gretczko: You’re spot on. It’s difficult if you try to go after it with just one solution. Some organizations will change who reports to who, thinking it’ll fix the issue. Some go get Slack or Workplace by Facebook or give everybody a mobile device. Some get rid of performance management and instead measure people on team outcomes. The reality is that you have to combine all of those strategies, because none is a silver bullet.
Do you run into a lot of employees who can’t make this transition?
Gretczko: That’s a great question. The short answer is yes. We’ve developed something called Digital DNA for measuring 23 traits of an organization. One of those is about the readiness of your talent to adapt to this kind of digital change. Some people will not make the transformation, and so companies need to be prepared to re-skill those folks and change their behavior – that is, they have to act, think and react differently.
There’s an assumption in the market that only millennials can operate in this way, but this hasn’t been our experience. There are digital natives at all levels of the organization and in all age brackets.
Should companies expect to lay off employees?
Gretczko: As consultants, we’re good at spotting disruption and trends in the market and connecting the dots to business issues and problems that are coming. We have a strategy of working with our clients before the [problems] arrive. We say, “Guys, this is coming. Let’s make sure you are getting ready to react to it.” With your question about laying off people, how do we help these companies recognize the problem and solve their workforce ahead of the disruption so that they don’t need to do things like that and instead shift their workforce.
Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how the new workforce is impacting your business. You can reach him at email@example.com.