The Key to Digital Transformation Is Talent, Not Technology.

One of the most obvious repercussions of the current COVID-19 pandemic, as The Economist has remarked, will be “the flood of data-enabled services into ever more aspects of life.” We anticipate that digital transformation will become an even greater need for enterprises in the near future.

Photo by Helena Lopes on Unsplash

Contrary to popular opinion, digital transformation is more about people than technology. You can buy almost any technology, but your capacity to adapt to an even more digital future is dependent on cultivating the next generation of talents, closing the talent supply-demand gap, and future-proofing your own and others’ potential.

As it turns out, most of us wind up in professions and occupations by chance and stay for a long time, rarely pausing to contemplate our potential: Am I in the correct job? Is my career a good match for my interests and abilities?

Would I have enjoyed my life more if I had chosen a different path? Furthermore, while every job involves learning, we are prewired for familiarity, routine, and simplicity, which is why most of us end up learning less on the job as we spend more time on the job. This is beneficial in the short term because we can execute our work on autopilot, freeing up mental resources.

However, it is detrimental in the long run since what we gain in experience, we lose in fresh learning possibilities. An even greater loss is that we may spend our whole working lives without ever knowing, let alone realising, our true potential. Winston Churchill once said that we should never waste a good crisis.

Perhaps the greatest gift of the current pandemic is the opportunity to reassess our potential and ensure that we are positioning ourselves for the future. To be sure, it is too soon for most people to realise this, but in the long run, a significant number of people will likely end up in better careers and look back on their less meaningful and less engaging past careers with the same lack of regret as someone who looks back on the end of a less fulfilling personal relationship, even if it was not their choice to exit.

With this in mind, we wanted to offer a few suggestions, some based on research and others on our own experiences leading, coaching, and mentoring present and future leaders across a wide range of industries, assisting them in preparing for an even more digital future.

Our primary assumption is straightforward: While the future is more ambiguous and unclear than ever, we are certain that focusing on reskilling and upskilling individuals so that they are better equipped to adapt to change is a pretty good bet for the future. Just as our previous efforts enabled us to adjust to our more digital and virtual current reality (and a non-trivial fact is that we are writing this, and you are most likely reading this, in physical isolation), there are few indications that this tendency will abate or be reversed anytime soon. If anything, an even greater fraction of jobs, tasks, activities, and careers will invent new and inventive methods to cohabit in the digital world.

Here’s how we can all prepare for such an event:

Prioritise people: Technology is always about accomplishing more with less, but that combination is only effective if technology is combined with the correct human skills. Just as technological disruption has generally resulted in automation and the elimination of obsolete jobs, it has also always resulted in the creation of new jobs. This is why invention is often referred to as “creative destruction.” The creative side of invention, on the other hand, is wholly dependent on individuals. If we can use human adaptability to reskill and upskill our workforce, we will be able to augment both humans and technology. It’s actually fairly simple: even the most brilliant idea is meaningless if we don’t know how to utilise it, and even the most outstanding human minds will become less valuable if they don’t collaborate with technology. The major consequence is that when leaders consider investing in technology, they should first consider investing in the people who will use that technology.

Just as digital transformation is more about people than technology, the crucial technological skills are soft rather than hard. Yes, there is a high demand for cybersecurity analysts, software engineers, and data scientists. However, as we recently argued in “Does Higher Education Still Prepare People for Jobs?” there is an even greater need for people who can be taught the next generation of IT skills. Higher education, paradoxically, is always playing catch-up because where universities detect employer demand, they respond with suitable courses and learning programmes, resulting in a future glut of talent supply in those areas. In our opinion, the best way to make your business more data-centric and digital is to invest in those who are naturally adaptive, curious, and flexible. Because no one knows what the essential future hard talents will be, the best course of action is to invest in the people who are most likely to develop them.

Our own talent development philosophy combines this dual focus on potential for soft skills and knowledge for hard skills; we select people with high learnability (a hungry mind) and match their interests to in-demand skills, while understanding that those hard skills may soon become obsolete — so the key is that their curiosity remains intact. Technical expertise is fleeting, but intellectual curiosity must be sustained.

Transformation is much more likely to occur if it is driven from the top down. The idea of bottom-up or grassroots change is both romantic and intuitive, but in reality, change is much more likely to occur if it is driven from the top down. This does not necessitate an autocratic or hierarchical structure, nor does it necessitate a fear-based society.

In truth, whether transactional or transformational leadership is used, it is a basic question of leadership. In the context of digital transformations, the major conclusion is that you cannot expect significant changes or upgrades to your organisation unless you begin by recruiting and developing top executives in that direction. It has never been clearer that leadership — both good and terrible — has an impact on every part of the organisation, with the individual leader accounting for up to 50% of the variability in group or unit performance.

As a result, when asked about the single most critical aspect in determining the efficiency of an organization’s transformation, we invariably provide the same answer: the CEO or head of the firm. Yes, industry, context, culture, people, legacy, and actual technology all matter, as do resources. However, most of these characteristics are rather comparable across direct competitors, whereas the mindset, values, integrity, and, most importantly, competency of the most senior executives will stand out and be the primary differentiator.

Everything in business, except talent, can be replicated. Therefore, if you want to have an effect, invest in elite talent, which is where you will gain the most value. The distinguishing element in the competition for talent is always leadership. We talk about in-demand talents like software engineering, but the trick is to find the people who can manage the software engineers and encourage them to work as a team to outperform other software engineers.

Check to see if you’re acting on data insights: So much of today’s data debate is centred on AI (artificial intelligence), or certain types of computer intelligence such as machine learning, deep learning, or natural language processing. These significant breakthroughs in artificial intelligence are fascinating, but we don’t see them as the primary differentiator for future-proofing your firm. A far more significant competitive advantage is the ability to collect useful data, transform that data into meaningful insights, and, most importantly, act on those insights. In our opinion, data without insights is meaningless, and insights without action are meaningless.

This point cannot be overstated because far too many corporate leaders believe that by hiring brilliant data scientists or purchasing fancy AI tools, their problems will be solved or they will become more high-tech. The big difference between Google and the rest, between Amazon and the rest, between Facebook and the rest, is not the brain strength of their data scientists or the actual functionality of their technology (though we may see them as best-in-class), but their radical data-driven cultures.

They have incredible data assets and outstanding algorithms to analyse (and monetize) that data, but their major strategic edge and most valuable asset is that they live, breathe, and act in accordance with the data. Data is their air, and you can’t buy it; you have to foster, nourish, and harness it over time — and, most importantly, with leadership.

If you can’t fail quickly, try to succeed slowly: The phrases “speed is king,” “activity is vital,” “perfect is the enemy of excellent,” and “you should be willing and eager to fail fast” have all become management cliches. However, the only way to adapt to a constantly changing and swiftly disturbed present is to accelerate and function at breakneck speed. Of course, there is always a trade-off between speed and quality, so if you can’t fail fast enough — that is, if you don’t have a culture in place that tolerates quick experiments with the expectation that the lessons learned from those failed experiences will make you stronger and smarter — then you need to be certain that your long-term bets are paying off. In other words, if you can’t fail quickly, it’s better to succeed slowly. At the end of the day, failure is just a method for achieving long-term success, so if you choose another plan, that’s fine — just make sure you can actually get there. However, keep in mind that nothing breeds stagnation and a false sense of security like a fixation on success. Indeed, we frequently hear leaders justify their failures with the self-congratulatory phrase “we have learned from our mistakes,” but learning from your triumphs is far more difficult.

As the last several weeks have shown, the global community is adaptable. This agility has been driven by people and facilitated by technology. Humans are the common denominator in the concept of future proofing, whether as a supplement to the technology being unleashed for remote working, or because we have the soft skills and leadership required to navigate a historic crisis, or because we have the insights required to drive slow success or fast failure for a cure. It all begins with each of us and those we are responsible for developing. The objective is to cultivate curiosity so that we have options even when there is no crisis.