Achieving digital transformation success through talent and technology

Building a successful digital organization is a formidable task, requiring meticulous decision-making regarding talent and technology. The triumph of the transformation is often contingent upon the quality of these choices.

Undertaking a digital transformation, be it a complete digitalization of an enterprise or the establishment of a digital and advanced analytics (DnA) startup within an organization, poses a significant challenge. Regrettably, we have observed numerous instances where such transformations have encountered hurdles, and their leaders have struggled to sustain any improvements over time.

Throughout the transformation process, the selection and utilization of talent and technology represent crucial elements for achieving success. This pertains to all aspects of the transformation journey, including planning, recruitment, management, and development. In this regard, McKinsey has imparted invaluable insights that shed light on the crucial decisions companies must make regarding talent to achieve a fruitful digital transformation. According to it experts, there are some best practices for hiring with digital transformation in mind:

Prioritizing senior digital leadership for talent attraction and better value proposition

To effectively execute a digital transformation, an organization's talent and technology strategies must be aligned with the capabilities of its senior leadership. This includes lead data scientists, who are critical in transforming and shaping the future organization regarding candidate selection, technical standards, and working methods. It has been found that individual leaders influence up to 50 percent of group or unit performance. Hence, selecting the right individuals for these roles is crucial for the success of digital transformation.

Investing time in conducting a broad search to identify senior digital leaders with the right expertise and experience to drive the transformation and ensure a successful search is essential. Furthermore, the appointment of a chief digital officer (CDO) sets the tone for subsequent hires and contributes to the company's employee value proposition to attract top talent. Allowing the CDO to hire from the top down, starting with senior roles, will enable the organization to find the right lead data scientist, data engineers, software engineers, and technical architects.

The quality of reports to the CDO will be crucial in achieving the initial wins needed to gain traction, such as successfully developing digital products or setting up technical infrastructure. Organizations must not take shortcuts with early hiring as it can delay transformations by six months to a year or more, risking the overall reputation and viability of the program. Therefore, organizations should proactively set up the digital leader for success by ensuring that the CDO has influence and a seat at the table and that the program is significant enough to require commitment and conviction from the C-suite.

Rethinking value proposition for digital talent

CDOs play crucial roles in shaping value propositions about talent. However, it is essential to recognize that a leader cannot achieve this goal alone. Several factors, including the local hiring market, talent pool, and industry sector-specific issues, impact an organization's ability to attract and retain digital talent. Therefore, organizations should strive to improve their work environment and value proposition within the local context.

While companies may feel compelled to compete with big tech companies like Google and Amazon for digital talent, the competition for technical roles primarily occurs within the local business community. For instance, a mining company located in a remote area may compete primarily with other mining companies and oil and gas firms for digital talent. However, companies must understand that digital skills are not industry-specific, and local players from other sectors may also compete for the same digital talent.

Meeting minimum requirements such as salary and respected tech leadership is insufficient to attract top digital talent. Employers must also consider individual candidates' specific needs and motivations to stand out. Modern technology stacks, development opportunities, training programs, and access to educational conferences can be attractive to candidates. Furthermore, employers should consider the unique factors that appeal to specific categories of candidates and adjust their pitch and work environment accordingly. For example, the automotive, manufacturing, and energy sectors may offer opportunities to work on cutting-edge technology and address challenging problems like transitioning to a net-zero economy.

Developing an accurate picture of the company's tech culture is crucial. A mix of skills, mindsets, and work preferences is necessary, and employers should hire for specific profiles as part of the overall organizational mix. A clear definition of expectations aligned with different profiles can minimize confusion.

Culture has historically been a barrier to delivering impact from digital initiatives. Organizations must set a vision across both strategy and culture and hire employees based on gaps and culture fit. Employers should also pay close attention to team dynamics within the cultural landscape, considering the importance that some employees attach to working with groups outside their specialties.

In conclusion, attracting and retaining digital talent is crucial for organizations looking to succeed in the digital age. Employers must recognize the local hiring market and talent pool, industry sector-specific issues, and develop an accurate picture of their tech culture to build a successful organization. Ultimately, appealing to individual candidates' specific needs and motivations is crucial to stand out in a highly competitive market.

Upskilling internal talent to fill digital talent gaps

Companies should not overlook their internal talent pool. Many companies have untapped pockets of digital talent that can be developed through upskilling programs. To begin, companies should assess technical competencies rather than just résumé reviews and leadership skills during the hiring process for technical roles. Companies should also recognize that not all digital products require highly sophisticated skill sets and can be covered by upskilling some current employees. Identifying these employees can be achieved through skill surveys. However, a decision to train an existing employee versus hiring externally needs to be based on measurable criteria, such as the time required for the candidate to become fully independent in the new role.

It is important to be realistic about the number of employees who can be upskilled and the time required for training and development. The first employees to upskill should be those with high data, technical readiness, and strong business sponsorship. Companies should also place internal hires in positions where they can learn and grow alongside experienced engineers, whether hired externally or staffed via a third party. Internal hires can also strengthen the link between development or product teams and operations, which is sometimes overlooked. However, executives overestimate how quickly their existing talent can be converted. Retraining people within IT is not always easy, and some roles are too specialized for reskilling. In such cases, hiring specifically for that role from the marketplace is better. It is important to consider the speed with which you are trying to deliver on use cases and the time required for employees to complete the required training. For instance, it can take years to become a high-quality data scientist or technical architect, and attempting to convert someone into these roles with minimal training can negatively impact the program. Unless highly proficient people are hired initially, it is unlikely to obtain early wins the program needs to gain traction.

Companies should avoid taking shortcuts with early hiring, which can risk the overall reputation and viability of the program. In conclusion, upskilling internal talent is a viable option for companies seeking to fill digital talent gaps, but it should be approached realistically and strategically.

Learning and development program for digital talent

It is important to recognize that skills development needs to go beyond formal training programs to develop and embed data and analytics (DnA) skills within an organization. The rapid pace of technological change can make it difficult to set up such programs, and a combination of on-the-job training and structured learning programs is often the best approach. An apprenticeship model can be particularly effective, so hiring senior leaders first is important. These leaders can provide powerful on-the-job learning experiences when matched with more junior employees. This approach to ongoing learning should also apply to senior employees, including executives and senior technical leadership, who should spend at least half of their time actively working on day-to-day tasks. This involvement in the final product helps improve both upskilling and retention.

Many successful organizations focus on creating an environment where workers can teach themselves. For example, for most of its tracked training, Google uses an employee-to-employee network called "g2g" (Googler-to-Googler). Members of the network, which includes over 6,000 people, offer their time to help peers develop. Leading companies are more likely than laggards to reward higher skill levels with better compensation, greater benefits, and more responsibility. Employees understand that they must continually upgrade their skills, and online courses are a particularly effective way. These courses are often free or affordable, and certification in high-demand technical skills such as machine learning, Python, or R can be obtained at work or during personal time. For individuals with potential, opportunities and incentives can be provided to encourage self-directed learning.

It is important to have cohort- and role-specific learning journeys across the entire enterprise from the top down. These learning journeys should include a mix of self-paced and group learning, such as online courses and in-person case studies, for different cohorts, such as the chief experience officer's team, data engineers, translators, and those operating the products being developed.

Finally, it is important to be realistic about the time required for skills development. Best-in-class data scientists spend many years in school and more years in an active role before being hired by leading firms. Recreating this level of expertise with an internal six-month training program is impossible. Therefore, it is important to recognize the need for ongoing learning and skills development and to support employees throughout their career development journey.

Conclusion

Organizations must hire capable senior leaders to stimulate growth. Creating value propositions, establishing key performance indicators, and designing career pathways are necessary to attract, motivate, develop, and retain talent. As a scale-up business, it is important to periodically review key trade-offs, including determining the appropriate balance between employee training and talent sourcing to ensure a good blend of culture, pace, and quality. By consistently reflecting on and refining these principles, organizations can enable their DnA teams to reach their maximum potential.