The current crisis has accelerated digital transformation, but what will it take for people and organisations to keep the momentum going?

During a recent PeopleSearch webinar, “Digital Disruption Amplified: Can you handle it?”, we discussed emerging themes in the prevailing discourse on accelerated digital transformation – the possibility of regression, building participative cultures to encourage continual transformation and the need to embrace failure in order to innovate.  

Here are the highlights of our discussion with Chief Digital Officer at Sembcorp Industries Ltd, Matthew Friedman; Managing Director, Head of SME Institutional Banking Group at DBS Bank Ltd, Koh Kar Siong and Chief Technologist (FSI) at Red Hat, Vincent Caldeira.

Covid-19 has accelerated digital transformation across the world.

MAKING IT HAPPEN IN SPITE OF A LACK OF TIME AND RESOURCES

In the past, businesses could afford to carefully map their digital strategy, taking the time to get buy-in from stakeholders, procure the necessary resources and implement transformation in stages. Covid-19 precipitated conditions that obliterated the luxury of time and resources.

A McKinsey report states that “businesses that once mapped digital strategy in one- to three-year phases must now scale their initiatives in a matter of days or weeks.”

A range of industries – banking, healthcare, retail, etc. – have had to rapidly move online.

While the process has been overwhelming for many, McKinsey describes “the falling barriers to improvisation and experimentation that have emerged among customers, markets, regulators, and organisations” as a silver lining.

However, can this be sustained? Will issues such as a lack of stakeholder buy-in and security concerns re-emerge post-crisis?

In order to answer these questions, it’s vital to take a step back and understand the reasons for the pre-crisis inertia in the first place.

“For example, in the past, the agenda of allowing employees to work remotely was never a priority. In fact, it was perceived as a potential security risk. All these challenges were always a good excuse not to make it happen,” said Vincent Caldeira, Chief Technologist (FSI) at Red Hat.

His use of the word “excuse” implies that such concerns were invalid. He explained, using investments in cyber security as an example, that even before the pandemic, the technology was sound enough. In spite of this, making a business case for such investments was difficult as organisations had the option of not forging ahead with digitalisation.

With the pandemic limiting our choices, the business case for such investments has become indisputable.

EXCUSES VERSUS SURVIVAL

Koh Kar Siong, Managing Director, Head of SME Institutional Banking Group, DBS Bank Ltd pointed out that amid this crisis, “there’s no downside risk anymore.”

For him, it’s a matter of “excuses versus survival.”

“If you don’t do anything, nothing moves, so you’ve just got to push the envelope.”

Indeed, organisational success has always depended on an openness to testing and learning. Today, testing and learning has become inextricably intertwined with survival.

REGRESSION FEARS

However, even as technology adoption rates gain pace among consumers and organisations respond in tandem, some fear that inertia could creep in once the crisis abates. Will the business case for continual transformation diminish once an organisation’s survival isn’t threatened? Will resistance to change rear its ugly head once more? Will the excuses come flooding back?

Before we allow this to happen, let’s consider the very real possibility of another such crisis.

“There certainly will be other crises, no doubt. Thinking about the most likely scenarios and planning for them is what firms should do. In the meantime, the focus should be on how to turn this situation into a competitive advantage,” said Matthew Friedman, Chief Digital Officer at Sembcorp Industries Ltd.

For instance, when it comes to working remotely, a greater effort should be put into maximising its effectiveness rather than yearning for a time when we can all return to the office.

“How do we train people to have effective meetings, to lead teams and get work done? The tech is not hard, quite honestly. It’s about people and changing their behaviour,” said Friedman.

So how can “people” and “their behaviour” be addressed? Firstly, they must realise that staying on track is an economic imperative.

“If your competitors, for example, reduce their office footprints by 50 per cent, and you maintain yours, you’re going to have a higher cost base. If you revert to manual and paper-based processes, you’re going to have a higher cost base. I think a lot of it comes down to economics. If there are real economic benefits and measurable benefits, it sticks,” said Friedman.

Individuals must also be able to see how transformation benefits their careers.

“You have to create a common understanding. People have to understand that there is a win-win value proposition to it. People are afraid that these technologies could replace them, or that they may expose suboptimal performance, but they have to have an understanding of the benefit for the individual. I think for 80 per cent of people, if there’s a value proposition, a benefit for them, it’s only logical they will not resist,” he added.

DIGITAL TRANSFORMATION DOESN’T HAVE TO RESULT IN JOB LOSSES

In spite of the benefits, the fear of losing one’s job as a result of automation is very real.

But job losses should not be seen as par for the course. Instead, organisations need to help employees transition to higher-order jobs.

At DBS, this began long before the pandemic and continues today. Regular job rotations help staff transition into new roles as their existing job functions are automated.

“There’s a lot of training given as well – both internal and external training programmes.  We have a triple “E” principle – Educate, Experience and Expose. At any one point, we have 1,000 people going through some form of training, some form of education, enhancement or reskilling. Year to date, we have about 900 to 1,000 people who have successfully transitioned into a new role,” said Koh of DBS.

In one case, an employee transitioned into a vastly different role.

“He was a customer service officer. In his leisure time, he is a gamer and he loves coding. So he signed up for our coding course, got himself certified and joined our tech team to be a programmer to code for our digital transformation projects.”

In a market where skills gaps remain concerning, leaders need to see investments in talent development as being aligned with organisational goals and success.

BUILDING A PARTICIPATIVE CULTURE

Aside from being willing to transform individually, people need to contribute ideas, according to Caldeira of Red Hat.

“When leadership says transformation is going to stay at the top of the agenda, they really mean it, but as with any transformation that is orchestrated top-down, there’s usually a huge gap between management’s perception of how the organisation is transforming, and what actually happens day-to-day.”

Caldeira feels organisations that build a participative community have a greater chance of long-term success.

“Do people get the chance to start addressing some of the problems they have without necessarily having to wait for the support of top management? Allow everyone to comment and provide their opinions,” he said.

But how feasible is it to take every employee’s views into account? Caldeira conceded it could be messy.

“You have to find the right way of balancing what the management does and what the people contribute, but it’s fair game for everyone to contribute their ideas.”

Ultimately, management may not implement every idea and people have to be prepared for that.

“I think the difference is in how it actually starts. Right? It starts with a discussion,” he said.

EMBRACING FAILURE

One way of keeping the momentum going is by encouraging a culture of continual innovation which in turn, requires risk-taking and the ability to accept and embrace failure.

According to Koh Kar Siong, DBS has moulded a “start-up culture” to encourage this.

“As a start-up, you dare to try things. We encourage failure right from the start, so when Covid-19 hit, everybody came to a point to decide what is good, what should move faster, why we should try.”

In the post-crisis era, they have concrete plans to keep this spirit going.

“Going into the post-Covid period, it won’t take a lot of effort for us to group people together and form task forces. For example, we’ll look at whether our office space needs to be trimmed because actually, a lot more people prefer to work from home There are processes and workflows that we have streamlined because of Covid. Thereafter, we’re going to decommission them because they might not work anymore. We’ll need to move forward. So instead of restarting post-Covid, we are going to reset our operating model to face the new norm. That’s the direction we have set,” added Koh.

To make innovation and transformation part of an organisation’s corporate culture, initiatives also need to be presented in a less intimidating manner. Matthew Friedman of Sembcorp Industries Ltd said they must be seen as a series of incremental improvements.

“I think we have to be careful with words like innovation and transformation because they can also sound like jargon. It should be viewed as a step-function change. It’s a continuous improvement of operations and performance, and when you look back on it, you’ll say, “Wow! That was innovation!”

In the second part of this series, we’ll take a look at the keys to talent acquisition and development, and the role of HR leaders in the new normal.  

Click here to watch the webinar in full.