“Many organizations are struggling with the digital transformation efforts they started,” says David Rogers, author of The Digital Transformation Handbook and professor at Columbia Business School, in the latest Harvard Business Review Analytic Services report sponsored by Red Hat.
The fourth annual digital transformation report, Refocused Digital Transformation: New Goals Require New Strategies surveyed 727 executives globally in January 2022. Executives were mostly in leadership positions rather than technology specialists. But the report largely reflects business imperatives.
Why are they struggling?
Talent shortage challenges digital transformation
The reasons vary, but most challenges focus on cross-organizational alignment and buy-in rather than technology. However, one reason keeps popping up at the top of the list of top digital transformation challenges: a variant of talent and skill shortages.
[ Also read 3 IT talent shortage challenges and how to solve them. ]
In the report, “finding/securing the best talent to support our digital initiatives” was the fourth digital transformation challenge, just outranked by cultural and process challenges such as “embracing digital transformation across our organization”. The report notes that “organizations are also being held back by people issues, both in finding and securing talent to support new digital initiatives and in creating a culture of continuous learning.”
It’s probably no big surprise to anyone. Whether it’s “the big quit” or another term, shortages of qualified people for all kinds of jobs have become as much a cliché as supply chain disruptions. New skills are also needed to manage technologies such as machine learning, cloud, and containers.
Certainly, this survey result is not an outlier. At RedHat Global Technology Outlook Report 2022“skills or talent gaps” took the lead High obstacle to prevent a company from succeeding in its digital transformation. (This is a slight increase from the previous year’s survey, in which integration issues took the lead.)
Given such data, you can reasonably assume that companies are prioritizing finding solutions to this challenge.
Companies don’t develop their own employees
But when companies were asked about the top business goals of their digital transformation efforts over the past 12 months, “upskilling/training employees” was low on the list. Moreover, even fewer respondents cited it as their primary goal this year than in last year’s survey.
We saw something similar with regards to security in the 2022 Global Tech Outlook report. IT security was the top IT funding priority. But when we drilled down into funding priorities within security, hiring security or compliance staff was near the bottom.
“Not enough companies focus on the transformation part of digital transformation, and the transformation part has always been about people.”
It’s hard not to conclude that while talent and skills are a challenge, many companies don’t put people first. In “Digital Transformation Refocused”, Charlene Li, director of research at London-based innovation and global transformation consultancy PA Consulting, notes: “Not enough companies are focusing on the transformation part of digital transformation. , and the transformation part has always been about people. This has been the blind spot of so many digital transformation efforts – it’s what a lot of companies are missing. »
[ Learn how CIOs are speeding toward goals while preventing employee burnout in this report from Harvard Business Review Analytic Services: Maintaining Momentum on Digital Transformation. ]
Companies even admit it, at least to some extent. While 43% chose finding/securing top talent as a top challenge, only 32% said it was an actively faced challenge right now.
What’s going on?
The Great Uncertainty
This is partly due to the uncertainties surrounding the plans.
Melissa Swift, head of transformation in the United States and Canada at Mercer, an asset management consultancy, says organizations aren’t fully addressing this problem because they haven’t yet identified the talent they need. they really need to support their new technologies and business initiatives. This view is reinforced by a finding that effectively allocating resources to the right areas of transformation was as big a challenge as finding the right people. “Do we need so many data scientists? Have we discovered gaping gaps in our database management? Swift asks.
Many companies are also still hesitant to commit firmly to telecommuting and work-from-home policies. In fact, some companies are being forced to roll back or relax back-to-work policies in the face of employee opposition. Tom Davenport, Professor of Computing and Management at Babson College, says, “I think a lot of people still don’t know how to attract talent when geography doesn’t matter so much anymore. Companies have also been slow to decide whether people can live anywhere and their policies on this. This slows down your talent recruitment process because you still don’t really know what you want to say to the potential employees you are trying to recruit.
Businesses look mostly outward
Beyond the uncertainties, what can companies do? At the MIT Sloan CIO Symposium in May 2022, a Harnessing talent and learning in today’s digital ecosystems The panel was widely critical of the extent to which companies focus on hiring new people rather than understanding the skills their employees already have and developing them. George Westerman, a senior lecturer at MIT who moderated the panel, observed that “we are digitally transforming everything in organizations except, it seems, the learning and development processes.”
This point of view is taken up in “The refocused digital transformation”. Li of PA Consulting observes: “The reality is that organizations often don’t invest in training their staff because they think they will eventually leave. Investing early in their careers and developing not only their hard skills, but also their soft skills as team members and as leaders will serve them well both now and in the future – but many organizations are just too myopic.
It’s not all gloomy: 52% of respondents say their commitment to supporting education is much higher in 2022 than it was a year ago, even if it isn’t is not an absolute priority. However, Mercer’s Swift says reassessing hiring strategies and increasing employee training opportunities should be a top priority for 2022.
“You can have the best technology in the world, but if your employees aren’t engaged or you don’t have the right people, business mysteriously slows down in ways that businesses won’t be prepared for. To maintain a competitive advantage, organizations must act quickly to address this issue,” Swift concludes.
[ Where is your team’s digital transformation work stalling? Get the eBook: What’s slowing down your Digital Transformation? 8 questions to ask. ]