The entire banking sector is involved in digital transformation.
While the means and speed of execution vary from one institution to the next, the issues addressed are largely the same:
- Transforming the business model: achieving economies of scale on agency costs, specializing networks in new services, etc.
- Optimizing the customer experience: ensuring continuity in the relationship across channels, developing personalized, high value services for clients who are increasingly well informed and demanding, etc.
- Overhauling processes: rationalizing back-office operations, speeding up processing, etc.
- Updating ways of working: boosting the organization’s agility and ease of access to different channels, harnessing the benefits of robotic process automation, etc.
At the same time, change has become a constant and a modus operandi in itself. According to an IPSOS survey, the estimated average number of simultaneous changes managed by employees already reached 2.5 already in 2012.
This “structural need” for transformation has a major impact on both “hard” organizational aspects (structure, business model, performance indicators, etc.) and “soft” aspects (human assets, culture, management, etc.)
It has taken a few years for organizations to move on from the idea of digital transformation focusing on technology above all. Now, they need to go further and acknowledge that a successful transformation depends on the ability to (correctly) tackle the human challenges.
In fact, when transformation projects fail, it is mostly because they prioritize technical tools and solutions over what the change really means for the company and its employees.
Putting people first means considering a whole range of challenges but every time positioning the CHRO as the leader of digital transformation.
HR challenge #1: developing a digital corporate culture
When defining a digital strategy, it is essential to remember that implementation can be undermined by the corporate culture. Various solutions exist for making the company more “digital friendly,” promoting buy-in and ensuring the fast adoption of new value-generating behaviors.
This involves raising awareness among teams (through conferences, immersive experiences, training, etc.), clarifying the changes driven by digital transformation and putting them into perspective. It is important to explain new practices to employees and managers to facilitate adoption and enable greater collaboration, delegation and agility.
Digital transformation is also an opportunity to develop an innovation culture, while avoiding paradoxical demands (e.g. “be creative” vs. “follow the rules”).
For real, long-lasting results, efforts to digitize the corporate culture must be part of a wider change management approach, organized in four phases:
- KNOWLEDGE: giving meaning and clarifying objectives
- SKILLS: empowering people to change
- ACTION: getting started
- SHARING: generalizing and anchoring action
HR challenge #2: helping managers with their own digital transformation
This means helping managers update their management styles by challenging and changing their roles and responsibilities. Support must be provided to employees at every level of the hierarchy, especially middle managers who are most often focused on top-down approaches, which are undermined by digitization. In particular, providing constructive criticism and taking a more entrepreneurial, less hierarchical approach are strong indicators of digital management practices.
HR challenge #3: reinventing and (finally) using workforce planning
Workforce planning refers to all the programs and tools used to anticipate evolving business needs and their impact on human resources.
Unfortunately, with legislative changes and inconclusive experiences over the years, workforce planning has become more of a negotiating tool than a corporate strategy.
In a context where 50% of jobs may disappear over the next 20 years due to the expected wave of automation (source: Bruegel think-tank report) and banking sector leaders have already announced plans to close branches, workforce planning seems to be making a revival. Competency management systems are re-emerging after a radical methodological overhaul:
- A focus on corporate strategy and a successful digital transformation
- Updated skills assessment (frequency, participants, simplified skills definitions, etc.)
- Effective and adaptable new training approaches
HR challenge #4: developing more agile HR processes
Like any other department, the HR function must be prepared to rethink its key processes:
- Better align with business strategy and respond faster through workforce planning
- Simplify and speed up training process and employee reward scheme
- Manage and promote group performance and innovation
- Simplify HR processes for jobs, skills, training, etc.
- Better exploit new technologies: manage communities to develop skills and facilitate mobility, develop the employer brand, use big data to identify new trends, digitize processes and documents to free up time and boost productivity, etc.
HR challenge #5: rethinking the employee experience
While HR teams must remain specialists in their field, they also need to develop marketing skills to position themselves “talent boosters.”
Improving the employee experience means considering employee satisfaction as key to business performance. It must therefore meet the following needs:
- New digital HR processes
- Improved communications (by introducing a corporate social network)
- More collaborative work
- A stated principle of goodwill (the right to make mistakes)
Contrary to popular belief, digital transformation increases the complexity of organizational and relational models, obliging the HR department to adapt and evolve its service offering.
This highlights the need to place employees at the heart of any transformation strategy, ensuring that it will be operational and bring results. A change in behaviors and habits cannot be imposed. Instead, it requires companies to raise awareness of the stakes internally and put theory into practice.
First published in Point Banque