What Digital Transformation Leadership Looks Like For HR

Here’s why digital transformation will succeed only with HR

A decade ago, I was working for a large, global manufacturer. In HR, we were excited about the notion of having a digital solution — an HRIS system — to automate what was then a lot of manual processes that were a heavy lift for both HR and managers, particularly around performance management. Our paper-based processes required us to chase people around and coerce managers to engage in what felt like a forced activity from HR, rather than something they believed was valuable.

Digital Transformation Has Two Parts

While we were thrilled with the idea of automation, it bears pointing out that the term “digital transformation” has two equally important words. You can make a process much more efficient by digitalizing it. But, if you’re not taking the time to first look at the underlying processes and rules to determine what to keep and what to discard from the perspective of the employee experience, you’re just making existing processes faster. These won’t necessarily be people-friendly, valued, or adopted.
 

Transformation takes time and courage to look at what’s working and what’s not, to make hard decisions about what to fold into your digital transformation and what to toss. This applies to more than HR processes. Digital transformation — whether it’s a new finance process, a new manufacturing process, or a new sales process — is ultimately about people and improving organizational efficiency.

All these transformations involve HR because they impact culture, change management, and employee experience. HR’s role is to understand the pain points of switching, training, adoption, and usage for employees so that the company redesigns processes to be as frictionless and streamlined as possible and to properly communicate the changes to the organization. HR leaders also serve as the voice of the stakeholders. We are the guides who help employees through the process, as well as hold them accountable, and ensure the processes are sustainable for all.

For these reasons, business transformation is tied to HR transformation, and HR must have the courage to take on the mantle of innovation. Before we cover what makes digital transformation successful, we first need to tackle what undermines it.

Humpty Dumpty Digital Transformations

Digital transformations can become expensive boondoggles for a number of reasons, but let me focus on the top ones.

Treating Technology as the Outcome

It’s common for organizations to zero-in on the technology itself as the solution, instead of first thinking about desired outcomes, which include peoples’ experiences. Technology is only an enabler of these, and so, must accommodate what the business is trying to achieve strategically and for its employees.

One-Size-Fits-All Approach

Closely related to this is the misguided allure of the all-in-one HRIS/HCM solution. Deploying one may enable you to check-off multiple boxes in the short-term, but sometimes at the expense of an optimal long-term outcome. These behemoths have value, but they have been built primarily as repositories of employee data for compliance and reporting purposes. They haven’t been designed around the concepts of promoting positive, consumer-grade employee experiences in the flow of work, meaning, in the applications employees use every day. In fact, our own recent performance management research revealed that having the wrong technology tools is worse than having no tools at all when it comes to performance, engagement, and alignment with strategic business objectives.

A case in point for how to do things right is the University of Phoenix. The university decided to replace its HRIS performance management module with Betterworks performance management. But first, it designed the performance management processes it wanted – doing away with the universally dreaded annual performance review and replacing it with more flexible and frequent performance conversations. Then the organization found the technology that best met its employees’ needs. You can read more about this in the University of Phoenix case study from 3Sixty Insights.

Failing to See What’s Broken

We all understand the analogy of building a house on a poor foundation. In much the same way, if you layer technology on top of broken processes, the cracks will show up a few months to a year out, leaving you with a costly investment and perhaps a costlier and time-consuming fix.

We often see this in performance management processes, for example. HR has known for years that traditional performance reviews, which were developed more than 70 years ago, are disliked by everyone, including HR. And, they don’t yield better performance. Yet, many companies retain these processes and have designed additional ones, such as calibration, around it, only compounding the problem. HR and business leaders need to understand what’s broken and be willing to discard it.

Design It and They Will Come

A fourth key failing in digital transformation comes from the belief that a solution can be designed and rolled out by HR, Finance, IT, or any department without listening to all stakeholders that will be impacted by the transformation. They need to be part of the design process. If we build in isolation according to our own standards but without listening to employees to understand the use cases and potential pitfalls, we may well end up with a failed initiative that further frustrates and breaks their trust.

What Digital Transformation Leadership Looks Like for HR

As HR leaders, we touch all parts of the business. One of my colleagues in leadership at Betterworks believes the next generation of CEOs will come from the ranks of HR — from individuals who have led with an operational focus and the empathy needed to lead companies today. We must have a seat at the leadership table. If any of you don’t have this, stake your claim. Now is the time. As we help lead the business, we must demonstrate courage and resolve in these areas.

1. Lead Mindset Change

Take a hard look at processes and behaviors, and be willing to question why your company is doing things a certain way. Is it because that’s the way it’s always been done? Does it make sense to continue or rethink processes? What could your company be doing differently that would yield a better result in retention, engagement, or strategic alignment, for example?

2. Focus on Business Outcomes

HR should be able to explain why retaining or disposing of approaches makes both “sense” and “cents” to the business – to borrow a phrase from Leapgen co-founder Jason Averbook. Rather than focusing on a new technology or process that will make life easier for HR, explain how the business benefits. HR competes with other functions for investment dollars and must be able to articulate a compelling business case.

3. Use Data

Data storytelling is critical to proving the value of a proposed reset and investment. While it can be challenging to extract and assemble relevant data from the pockets where it resides, the analysis can yield surprising and powerful insights. Be curious about the data, how you can apply it, and what discoveries you might make.

4. Be Technology Competent and Current

Understanding technology is table stakes for HR, especially in the hybrid and remote work environment. Beyond that, digital transformation is never done; it’s an ongoing and iterative process. What worked five years ago may not work today. HR leaders must be up to the task of continually consuming and understanding technology innovation to help their companies stay current, remain employee-focused, and deliver consumer-grade experiences.

5. Collaborate Cross-Functionally

Strategic oversight and collaboration with IT and the CIO are essential for digital transformation. When designing new processes and systems, it’s also critical to work with all stakeholders who will be affected by the change. We can’t design in a bubble based on what we or a small group of decision-makers think..

6. Be a Change Management Upstander

When inviting multiple stakeholders into any process, it takes courage to hear and act upon their comments. We may discover processes are more broken than we think. Listening and striving to make work better for employees will build trust and show that we care about building an employee-first environment. By being open to what employees are telling us about what is and isn’t working with technology, we can help drive responsiveness and better outcomes.

7. Listen and Act Through Feedback Loops

How will you know if your initiative is working? What will you do if it’s not working or meeting resistance? Here again, employee listening can yield important findings for the organization, while positioning HR as essential to facilitating employee-first solutions.

HR is at the Apex of “Big”

HR has been called on to do a lot in the past few years. Many, understandably, feel burned out. But if you’re in HR, take a moment to reflect on what you’ve accomplished and to think about the expansive landscape ahead.

There is no better time to be in HR than now. You know what needs to be done. You see the possibilities ahead, both for the people you serve and your own development. You have the opportunity to help organizations transform, to make work better for everyone, within your grasp.

Author Bio

Jamie Aitken is Vice President of HR transformation at Betterworks, a role in which she supports Betterworks customers with innovative strategies to improve talent management practices, employee engagement, and culture. Connect Jamie Aitken