Enterprises have always been faced with competition, as competition is key mechanic of success in the free market economy. But the need for adopting and reacting to the competition and creating new creative strategies has never been as high as it is today. Digital Transformation has substantially changed the game here, forcing enterprises to move faster towards a new objective, while having less room for error – than ever before. Constellation Research has shown that in digitally transformed industries, the leaders are taking more than 70% of revenue and over 77% of profit. This means the risk of being left behind is bigger than ever before Worse, when left behind it is almost impossible to catch up… as a consequence, what matters for an enterprise leader, is how much their enterprise can accelerate as a unit. As it is impossible and unrealistic for an enterprise to catch all the successful trends that become relevant in an early phase, it is even more important that CxOs look at the speed to at which their enterprise can adopt to challenges as thrown at them from existing and new markets.
Financial Indices tell the storyTo understand the increasing rate of change in the markets, look at the financial indices across the world, and the they tell the story of markets moving faster. Enterprises has been falling out of financial indices at a faster rate than ever before, many of the indices seeing a complete turnaround in members since their start, usually 30+ years ago. The main reason is that many of these enterprises have been acquired, beyond that they others have just not been able to keep up with the rate of change created by the speed of market changes. In essence, these enterprises were not able to accelerate fast enough and adopt to the rate of change they were operating in.
- The DAX has seen 100%-member turnover in the last 30 years.
- The DOW has seen over 52% of its members disappear since 2003.
- The FTSE has lost 2.6x members that its number of listed enterprises (100) in 34 years.
- The S&P 500 has seen the average age of new members joining reach 10 years.
Enterprise Acceleration FormulaSo how do we define enterprise acceleration? We look at the two key criteria, technology, manifested in software, and people. For the sake of the blog post we look at people only here. People speed is determined by the talent that people have, their ability to learn new skills, over the speed of forgetting skills and the rate of skills being obsolete.
For HR leaders, the variables are:
- Hire extraordinary talent, of course with applicability for the enterprise current and future talent needs.
- Understand people have to continuously learn and need modern tools to enable this.
- Make sure skills do not get lost, especially the relevant, just trained ones.
- Minimize the percentage of obsolete skills in the people base of the enterprise.
This requites a very different approach to people skills, their augmentation and conservation.
The three key focus areas for Enterprise Acceleration
StrategyEnterprises need to shift their strategy from satisfying executive, reporting and compliant needs, to a focus on helping the people leader, who has the task to achieve business result for the enterprise. These people leaders manage teams of one or two handful of employees and are chronically under supported from executives, tool and processes. Most requirements from the leadership of an enterprise coming down the chain of command neglect the situation, needs and challenges of these people leaders.
CxOs need to analyze, what people leaders need for their and their team's work and what they need to become more successful. This needs a change of focus from administrators and reporting needs to productivity and efficiency needs as needed by the people leaders in the current situation of the enterprise, as well as the targeted setup of the enterprise from a strategy perspective. This makes the business user focus a key success factor in the overalls strategy for implementing an enterprise acceleration strategy
SaaSCxOs need to have conversations with their software providers on 5 key topics of enterprise automation side:
1. Talent Depth Chart. The talent depth chart is crucial for enterprises to understand where its talent is. As seen in the enterprise acceleration formula, the innate talent of people is one of the key success factors for people speed. This means finding internal talent for the right job is key to identify and then to transport the talent to that next position, where the enterprise needs the people with the right skills.
2. TransBoarding. This is the ability of company to "transport and onboard" talent around in a faster and better way than ever before. Meaning that the transferees will be trained for the next position even before they take on the new position. It also means a seamless transfer between jobs can happen with significant lower cost and friction for the employee and the people leader.
3. 21st century learning. CxOs need to have a conversation about modernizing their learning systems to the needs of the 21st century workforce. This means that learning content has to be pervasive, can be self-created, and can be self-curated and consumed at the space of the modern workforce. Too much learning happens at the wrong time in the wrong place, and the speed of forgetting newly learnt information and capabilities is killing any speed an enterprise was planning to pick up from the training / learning in the first place.
4. Fixed performance management. In order for enterprise to know where the good people are, it needs to know who's performing well. Unfortunately, the state of performance management in enterprises is mostly in a sour state. Fixing whatever needs to be fixed to make performance management work is crucial for the enterprise that wants and needs to accelerate.
5. Lean recruiting. As talent of people is critical for enterprise, the need to recruit fast is crucial for the enterprise. Taking the friction from the talent acquisition process by directly enabling hiring managers to see what talent available in the market is and facilitating the conversation between manager and future candidate is a key step to accelerate on recruiting side.
So, enterprise executives need to ask their software providers, how they can help achieve these 5 capabilities. Are any of them coming, are any on the road map? Or is this the first time the vendor hears about them?
Technology PlatformThese are three topics for a conversation that people leaders need to have with their CIO / CTO colleague:
1. Machine Learning. No technology will change the work life more than machine learning. An enterprise that wants to accelerate needs to have a strategy on how to leverage machine learning for its needs. HR Leaders need to understand what their enterprise wants and can do in the near future and understand the repercussions and benefits of the technology for the people leaders and their teams in the enterprise. And Machine Learning needs to run automatically on top of the enterprise data, that is ideally stored in Big Data clusters.
2. Big Data. All planning starts with data. In a faster moving economy, enterprises no longer can afford to go on long data collection, cleanse and acquisition projects. All electronic information that it is at the disposal of the enterprise, needs to be available in Big Data clusters. This is the only way for enterprise to directly make decisions based on where data is and where it needs to move / react towards the competition in the respective markets. Establishing enterprise wide Big Data capabilities is a must have for enterprises, so they don't lose time directly at the starting blocks when starting in enterprise acceleration needs to happen.
MyPOVThere is only one thing that is certain, and that is that business will never be as slow as it is today. It's vital for enterprises to find ways to help them move faster and be able to accelerate when it matters. It is also clear that more moments will be ahead where the ability of an enterprise to accelerate are crucial. The ability to reach the speed necessary for any transformation ahead is something CxOs needs to focus on, this blog post looked specifically at the people side of enterprise acceleration, something that is near and dear to HR leaders, but ultimately really all people leaders of an enterprise.
Looking forward to hearing back from you how the conversations with the people leaders, the CIO / CTO and the vendors are going.