PwC leaders recently sat down to discuss three ways to pivot your organization and digital transformation toward a post-pandemic future. For the full discussion, watch the webinar on-demand: A&D Future of Industry: The Digital Pivot.
Q: Given the current situation – a pandemic, economic upheaval, overall disruption – will the pace of digital transformation continue or will we see a slowdown?
Jose Rocha: Before the pandemic, companies were focused on growth, serving the customer with new products and services – as much as you can, as fast as you can. It was an environment where it was easier to defend broad technology investments to reimagine the development process, deploy advanced analytics, implement factory automation and modernize service. Technology investments were abundant across functions from supply chain to human capital management.
Now, as we begin a new year with the disruption of the pandemic still hanging over us, many have to ask – do we shut down these digital transformation projects, delay them, or stay the course? We’ve found that, in fact, the digital transformation is unstoppable. The customer expects you to deliver, you must be ready for the next part of this cycle for your business to survive, and as for the workforce , they have experienced an environment where the digital tools of analytics, automation, seamless data and collaboration support their productivity and innovation. They demand that their organizations continue to progress to be digitally fit.
Q: So, what is next in this shift toward digital fitness?
Rosco Newsom: We have to ignite the workforce for productivity in solving problems, figuring out how to take costs out, developing products and services that move the organization forward now. This requires that we focus digital transformation projects more narrowly. Right now, there are too many digital projects, all of which are great, but it is too much. We recommend focusing on two to three digital capabilities that will differentiate and provide market value.
This requires a thorough examination: strategy, what your customer demands, people talent, digital capabilities that exist, and what you most need for right now. Take for instance the U.S. Defense Department’s digital strategy – spell out exactly what this means for your business. The Defense Department wants agility, flexibility, cost transparency. Do you have the digital environment and talent that meets those requirements?
This review allows you to define the critical capabilities to point your people, your funding, your technology in the most impactful way.
Finally, you have to ignite your employee base with this digital culture and upskilling that generates creativity and productivity along the way.
Narrowing the scope creates the rationale for continuing digital transformation that is needed, despite the economic pressures. The narrowed list – the three areas – should be those that deliver margin, reduce cost, and do so quickly.
Q: So, you have identified your top three transformation requirements, you have buy in from your board or investors – now what?
John Karren: It’s all about people at this point, understanding with great specificity how people work and learn, how they solve problems and where you can create more capacity. It sounds machine-like, but this really is about increasing how everyone contributes to the business and investing in how you inspire and ignite your people.
The first step is that leaders own the message – what the strategy is, what the enterprise-wide capabilities need to be, where you are going and why. Each leader has a role – from identifying technologies, understanding and mapping talent and requirements, making the case for the future. No one functional group or person works in isolation but shares the mission.
The second step is that the transformation applies immediately to the business. If what you are doing doesn’t demonstrate a return quickly, it will not pull anyone along with you – leaders, employees, customers or suppliers.
This immediacy of results is the basis for leading and incentivizing people in a much different way. Making this immediacy a way of working requires that employee engagement be viewed in new and different ways. In current jargon, this is gamification, which basically means designing a monetary and non-monetary rewards system (e.g. leader boards, spotlight digital champions, performance reviews) that highlights progress toward demonstrated skills contributing to your three defined strategic capabilities to meet real business requirements. It can’t be just a game–it needs to be real. It needs to be measurable.
That gamification stage leads to what we call crowd-sourced innovation and assets – contributors and consumers of these assets see the result of how their ideas and abilities feed the business in terms of innovation, ideas, gap identification, cost-savings ideas.
You can optimize technology and processes, but if people aren’t prepared and ready, you can’t accelerate at the pace that is needed. The two functions – enterprise strategy and people—must move in parallel.