Month: February 2024

Beyond Buzzwords : Elevating A Digital transformation Exercise

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In today’s fast-moving digital world, no company can afford to miss the bus of digital transformation. With rapidly moving market, existence of businesses comes into question if they fail to digitally transform themselves to compete and capture new markets. But as the world is rapidly moving towards digital transformation, with the constraints of resources are they getting the expected outcome/ROI? Are they able to make the required impact on all the stakeholders?

The above study by McKinsey’s digital practice clearly states that although 89% of the business are or have undergone business transformation and as an end result only 30% of them got the expected revenue increase, 25% of them could got the expected cost reduction, strange, right? Surely there is something in this approach that is clearly missing. What is the magic ingredient that ensures that the organization gets the anticipated outcome of the digital transformation? Well, there is no single ingredient but a collective contribution of “all” stakeholders of the organization and when we say all it is literally all; any one missing either by intent, design or capabilities can cause less than expected outcomes from the transformation. Below are few of the findings that can help organizations to ensure they are in the journey with all the right intent, plan, technology and team.

Purpose

One of the major reasons for failure is that the “Purpose” of the digital transformation is not clear, consistent or carefully governed. Top guns of the organization play a vital role as the “Why” comes from them. When we connect technology to a profound sense of purpose, we unlock its true potential and embark on a journey of meaningful progress, not just technological advancement. A well-crafted purpose shall help the organizations visualize, define and document who will they be post the transformation and align all levels of the organization. Purpose simplifies and binds the organization as often transformations tend to go directionless.

Change management

Changing and running at the same time always needs balance and thus change management cannot be avoided. A well-defined purpose clears way for top-down communication and reduces the risks of change management. The holistic approach to address the end-to-end business alignment and not the immediately impacted areas shall ensure business readiness and faster adoption. Resistance to change can be avoided if during the transformation, the front liners are involved, as they have insights into customers’ pain points and the solutions that can be levered. Going beyond traditional skills training and nurturing a culture of continuous learning is the key. Upskilling and reskilling the existing workforce shall ensure early and easy adoption. The most effective way to embrace change is by involving the top management in business process change, tech awareness etc. Before, during and after the transformation.

Approach

To optimize performance and impact, organizations must engage in rigorous self-assessment, scrutinizing their team composition, technological assets, financial constraints, and timeframes. Post-goal analysis enables informed prioritization between “Big Bang” transformations and siloed improvements, fostering learning and adaptation. The focus? Internal or frontline systems? Global or regional implementation? The answer lies in a nuanced blend driven by a holistic understanding of micro and macro factors. Ultimately, success hinges on striking a balance that maximizes value creation, elevates customer experience, and ensures business feasibility, scalability, and technological readiness. This comprehensive approach empowers organizations to navigate uncertainty and achieve impactful, sustainable progress.

Technology and talent

The digital revolution has irrevocably altered the landscape of every industry, and at the heart of this seismic shift lies technology. Far from being merely tools, cutting-edge technologies like AI, ML, IOT & Big Data are the very engines driving digital transformation, propelling organizations towards unprecedented levels of efficiency, adaptability, and customer engagement. This isn’t just about replacing analog processes with digital equivalents. It’s about reimagining workflows, disrupting outdated models, and fostering a culture of continuous innovation. Technology provides the foundation upon which organizations can build new value propositions, enhance existing products and services, and forge deeper connections with their customers. Technological innovations are individual pieces in a complex Digital Transformation puzzle, powerful but incomplete. It’s the human talent – the architects, analysts, builders, and navigators – who understand how these pieces fit together, who bridge the gap between potential and reality. Their expertise in data analysis, cloud architecture, user experience design, and agile methodologies are the brushstrokes that paint the canvas of a successful transformation. Think of tech as the enabler, talent as the artist: think of the digital platform as a blank canvas. It offers possibilities, but without the artist’s vision and brushstrokes, it remains just an expanse of white. Talent, with its skillsets and creativity, transforms that canvas into an immersive digital experience, talent breathes life into technology, making it sing. The organizations need to either upskill or reskill, attract and retain new talent or partner to ensure they have the right talent.

Most common mistake made by the organization is the assumption that digital transformations are short lived, digital transformation is not a destination; it’s a permanent state of evolution. The point isn’t to become digital; it is to generate value for the business. And that can only happen if top management act as digital guardians of their companies’ transformations and are clear on how they can best affect the change that will embed digital DNA into their organizations.

Bell the Cat: A different paradigm to look at Employee Ratings

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Cut the Bell

One little toy I’ve always found fascinating is the Galton Board. You may not have heard of it, but if you ever mindlessly scroll YouTube or Instagram like me sometimes – I am sure you’ve come across this small glass box with small metal balls poured on from the top. These randomly fall and hit spaces within the Galton board and yet they invariably fall to arrange themselves into a ‘bell’ shaped pattern. This mound of balls falls into what we commonly known as Gaussian or “Normal” distribution. Most random things arrange themselves (at least somewhat) into this formation. This is following the Central Limit Theorem in Math. In fact, most human experiences follow this pattern. Plot human height on a bar chart, what do you get? A bell. People’s reaction times? Bell. Plot shoe sizes, what do you get? A bell. Plot the circumference of bells on a plot, and what do you get? I have never tried plotting it – but I assume you get a bell curve!

For many years, it has also been how we visualize employee performance. In the context of talent management this feels, for the lack of a better word, fair. It makes intuitive sense that most people are average or near-average performers with both the best and the worst performers tapering off at the two ends of a bell-shaped curve. It represents people are being clustered around the mean. This idea is so ubiquitous that we see organizations with a performance calibration process where a “curve-fitting” exercise is undertaken. This is essentially to force-distribute people by rating on the bell curve. Now, a lot of the customers I’ve worked with swear by this practice and I’ve had many a healthy debate on this. Sure, this makes perfect sense in some cases too. If you have a performance linked compensation and don’t want to spread your resources too thin, you must be mindful of how people are rated. Also, I’ve seen way too many talent management processes to claim that there’s just one way of doing things. However, by assuming that normal distribution is representational of reality, we may end up under-rewarding our best people while being extremely harsh to those who need only a little help to do better.

The fact that GE, which popularized this concept in the first place, got rid of the bell curve fitting says something about the truthiness of the bell curve. Human performance isn’t a random and finite occurrence. It is deliberate, and, it doesn’t have finite variance. It is possible to have vast differences in performance. When approached with a growth mindset – this creates an upwards climb for all involved. If we curve fit, we may be essentially denying the truth its right to assert itself in our data. We’ve forced a narrow view unto the complex intricacies of reality. If we simply collect the data and don’t fit it (and ensure the data is actually representative), we are more likely to see what’s called a Power Law or Pareto Curve.

As opposed to the bell curve, this curve typically shows that there are a small number of very high performers, with a long tail of variably average performers and a low number of under-performers. It is named after the Pareto Principle which, and I am generalizing, states that 80% of the outcomes come from 20% of the inputs. Basically, a smaller number of people give organizations outsized returns. It implies that there are some super-talents in a team, and most people are below the mean. This doesn’t mean they are low performers though. But this truth only surfaces when we stop trying to force-fit people in the bell curve, and let the data speak without bias or forced comparison between nuanced and complex work outputs. Depending on your industry and culture (and all talent management is a culture setting or culture preserving exercise), this may make a lot more sense than using a bell representation.

This helps deliver a mindset shift in how we see our people. Any performance measurement system will only be successful if continuous improvement and feedback are built into it, moving everyone constantly towards a north star. Otherwise, the performance review becomes the dreaded, boring, mundane and perfunctory process we all know and hate. In terms of rewards too, it is important to shift from a forced bell curve mindset to reward people fairly and retain top talent with a disproportionate impact on your organization. That’s what happened at Microsoft. They found that their best people were leaving because of forced curve fitting. They ditched the bell.

While I understand the Bell Curve has served many organizations well for years, or at least it feels that way – I do urge organizations to reconsider their strategy for Talent Management to make it a true lever in their success. Talent can give you outsized returns if done right.

Acceptance of the Pareto Curve is just one of the many, many mind-set changes required to make Talent Management processes truly useful in building high performance teams and delivering hard-hitting results, but those are for future blog posts! For this new year, all I ask is that you relook at some of the oldest truths about talent management and consider some changes that would help your organization soar to new heights in 2024 and beyond!

We at Orbrick believe that value follows the pareto-principle too. Small investments can yield outsized returns. We love working with customers to unlock those paretos in their own organizations. Speak with me directly to discuss how we can help make Talent Management (or HCM in general) deliver more for you.