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The HRD, the leading player in digital transformation?

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It is not often stated that the HRD is a key player in the digital transformation of companies. However, many studies - including the eCAC 2018 analysis of the digitalization of CAC40 companies that I am conducting with Les Echos - show that cultural and human capital factors are over-determining factors in this respect. Systematically, the most advanced companies in digital transformation all share the common characteristic of paying particular attention to the issues of culture, training, internal mobility, etc. 
 
Blthough digital is everywhere, bringing about a digital transformation worthy of the name is a long-term project for companies, involving all levels. This is why the HR department must be at the forefront.
The surge of initiatives specific to accelerate business transformation sometimes leads to the appointment of a whole series of new managers: first and foremost CDOs, data scientists, AI managers, master scrums and the now famous DPOs (Digital Privacy Officers), who will have the heavy responsibility of bringing the company into compliance with the PGPD, the new European regulation on private data.
 
It is therefore rare that attention is focused on the Director of Human Resources as a factor in the digital transformation. Over the past few decades, we have become accustomed to the fact that this person is more generally read at certain low points in the company's work: management of social plans, control of salary costs, etc. However, various works ("Digital HR: Platforms, people, and work - 2017 Global Human Capital Trends", February 2017 or Dave Ulrich's book "Human Resource Champions - The Next Agenda for Adding Value and Delivering") show that human capital management - and therefore the HRD - is a determining factor when a company seeks to transform itself. The Digital Transformation Barometer - eCAC, which I carry out every year on CAC40 companies - clearly shows that the five top-performing companies since 2014 have all invested in human resources as part of their transformation. On the other hand, too many companies are investing sometimes considerable amounts in technologies without this transforming them in any way, since they pay only secondary attention to the management and strengthening of human capital.
 

Data scientist skills that are lacking

Let's not fool ourselves: right now there is a lack of skills to implement digital tools. Yves Poilane, President of the Telecom Paris Tech engineering school, observes that "for 1500 data scientists trained in French institutions, market demand is at least three times higher". This phenomenon is more or less the same in all digital professions, to the point that the salaries of graduates from the main "code" schools - Epita, 42... - have now joined those of the French "Ivy leagues", such as Polytechnique, Centrale, Les Mines...
 
As a result, many companies fail to have the minimum skills - a few developers, for example - and are apparently unable to initiate any serious transformation. VSEs and SMEs are particularly in this situation, but this is equally true of TSEs. However, this apparent inevitability is not impossible to overcome, provided that a structured overall approach is taken.
 

Consider all levels of the company

Beforehand, we will make sure that we know the skills that are already in the company, because we can see that the mapping carried out almost always reveals surprises. For example, a large administration located in eastern France discovered with surprise that it had more people who mastered Python (a code as widespread as it is powerful) outside its IT department than inside. It is also not uncommon to observe that the most sought-after skills are located at the bottom of the hierarchical pyramid rather than at the top. Not surprisingly, since these skills are more likely to be found among the younger generations, it is not unusual for them to be over-represented among the individuals who have joined the company most recently. It is among these younger generations, and more generally within very different divisions and hierarchical levels, that we will identify code experts, designers, agile project leaders... on which we will rely to create a "digital squad", a group of digital ambassadors whose mission could be to help spread skills, participate in the implementation of innovative projects and above all to spread new cultural references.
 
The company should also try to define what its digital transformation project could be in the medium term: does it want to have skills in areas that are particularly in demand (AI, Blockchain...)? Because this question of available skills leads to other questions: what is the starting point for mapping this expertise? What is the place of soft skills in this repository? How can this dynamic skills repository be maintained? This is where the talents detected within the company can play a decisive role in the digital transformation project, by collaborating with top management to define what it could be. It is therefore a question of co-constructing a medium-term project by limiting as much as possible the power games between the hierarchical strata. This exercise is salutary, both from a strictly practical point of view, to enable strategic and operational planning, and from a human point of view, by uniting the different bodies of the company within a project which, at a given moment, goes beyond it. However, one of the objectives of a digital transformation plan is to create a sense of belonging to the company, by showing employees that they will have more scope for action, and therefore for fulfilment, than they could find in their daily lives.
 

Be attentive to the employer brand

At the same time, management must be attentive to the quality of its employer brand, i.e. the image that the company reflects to the digital community. It is indeed important not to neglect the cultural characteristics, stronger than we think, common to these digital professions. Thus, coders are attached to the notion of openness, allowed by open-source, to the fact that the company has an active policy regarding the use of specialized platforms, such as Github or StackOverFlow... Many studies also point to the fact that the Millenials - those generations born with the Internet and after 2000 - are in demand for meaning and wish to invest in companies that adopt contemporary codes and working methods. One might think that in a digital world, these rules are even more exacerbated: having a strong identity as a company would obviously be seen as a strong advantage. However, within the CAC40, there is only a small majority of companies (54.8%) contributing to open source projects on Github-type platforms, a marker that is nevertheless consubstantial with the digital transformation. Similarly, only 18 of these 40 companies have an "aspirational" message on their home page, evoking a mission that goes beyond their daily activity and simple profitability objectives (working for the common good, etc.).
 
But more than that, it is the management model that makes the company adhere (or not) to the principles of the digital culture: do employees have a project mode operating model, with a strong autonomy, allowing them for example to have direct relations with customers? Do they have the ability to change the specifications of the product they are working on by themselves, to modify the price for the consumer and the economic model? Beyond that, is the company's management ready to work within a project mode that will see a member of the executive committee confront a young 22-year-old coder, with arguments that may be more relevant from the latter? Preparing employees and especially managers for these reverse mentoring challenges is therefore a wise precaution, which can be induced once again by human resources. In recent years, criticism has often focused on the behaviour of employees from schools and their equivalents. Described as arrogant and not very compatible with the culture of traditional companies, some of these coders have been dismissed. While it cannot be ruled out that some of them may have indulged in arrogant postures, it is more likely that the denial of the cultural rupture between this world that is coming, its rules and the one that precedes it, explains the failure to integrate these newcomers. It is therefore necessary, beyond recruiting digital skills, to use their tools, their methods, to raise the awareness of the whole company, or at least of the individuals who will be directly involved in working with these newcomers. In the same vein, a factor symptomatic of misunderstanding concerns the attribution of a hierarchical manager to the "product owner", a pivotal function of the so-called "agile" working groups, whose autonomy is considered a key factor of success, to the point where it is unanimously accepted that only the end customer can be his boss. However, traditional organizations abhor a vacuum and cannot imagine that individuals would not have a manager who would come and closely supervise the level of progress of the work to be done.
 

Circulate knowledge quickly

Generally speaking, it is worth remembering that agile project modes should be systematized because, beyond their efficiency and ease in dealing with highly complex contexts, they have an advantage that is rarely highlighted: their ability to circulate knowledge in an accelerated manner and to train company employees almost continuously in innovation. However, in the world to come, where innovation cycles are significantly accelerated, one of the characteristics of winning organizations is their ability to embrace innovation at an increased pace, and thus to train their employees effectively, so that they no longer undergo innovation but rather initiate it. In this respect, it is naïve to think that we can rely on professional training tools as they exist. Firms that want to be compatible with this accelerating world must no longer ensure that their employees are able to blend into the organization but rather to be positive contesting forces capable of disseminating new innovations and facilitating their adoption; the agile model is virtually impassable in this respect.
 
Of course, training systems must complement these principles. While the largest companies will be able to set up sophisticated online training platforms, others may just as well use the many resources that exist on the web to adapt them to the company's needs: Kaggle offers the possibility of launching competitions in artificial intelligence, CodeCademy makes it possible to train in all types of code, Arduino to learn the functioning of electronic systems, etc. These platforms are widely used, even by those who are already seasoned experts. They have the merit of being open, regularly updated with the latest innovations, and of being easily confronted with the real world, i.e. allowing for back and forth movement between theory and practice. They are useful corollaries to a project mode that would be widely practiced in the company.
 

Integrating the HRD into the Executive Committee

All these elements clearly show the importance of cultural codes and that, contrary to what is almost systematically asserted, it is not exclusively the high salaries in the digital sphere that prevent traditional companies from recruiting: many start-ups or associative projects gain access to cutting-edge skills without offering either stratospheric salaries or generous stock option plans. By simply embracing the codes of the world to come, they create the conditions for virtuous collaboration both from an organizational and employee point of view. This cultural diffusion is complex and does not take place smoothly. Insofar as it introduces a set of new reference frameworks, it leads to overall coordination, which it would be advisable to involve the Director of Human Resources. More generally, while it is often the Chief Digital Officer who has been given the privilege of sitting on the Executive Committee in recent years, consideration should be given to adding the Director of Human Resources, whose mandate is closely linked to the digital transformation. Being able to measure the number of projects carried out in agile mode, the number of new talents joining the company, the number of projects involving reverse mentoring initiatives or involving open source, the attractiveness of the employer brand in the digital community are all factors in the analysis of the level of progress of the digital transformation; and these are far more relevant than having a high-performance mobile application from a lake of data. Similarly, it has been customary to say that it is desirable for the CDO to have the best possible relationship with the Director of Information Systems. At least the same should apply to the HRD.
 
These four notions - (i) mapping digital skills and creating a "digital squad", (ii) defining a specific transformation project, (iii) branding one's employer for the Millennials and (iv) adapting one's management model to digital culture - are difficult to address because they imply a profound questioning of the cultural values on which the vast majority of organizations are based: individual expertise, hierarchy, command, control... The main pitfall consists in letting the top and especially the middle management think that they can live with a minimal adaptation of these principles. As organisational sociologist François Dupuy points out: "It is not people who make mistakes, but those who fail to understand what surprises them".
 
 
The original of this article was published on Harvard Business Review

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