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How Canada’s new digital service for government is approaching culture change

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Pascale Elvas
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The digital transformation of organizations begins with an internal cultural shift promoting agile strategies, a hunger for innovative practices and the ability to change direction quickly.

As serial entrepreneur James Bilefield pointed out in an interview with McKinsey, culture change can be the biggest challenge of any major organizational shift:

In my experience, culture is the hardest part of the organization to change. Shifting technology, finding the right talent, finding the right product set and strategy—that’s all doable, not easy, but doable. Hardest is the cultural transformation in businesses that have very deep legacy and cultural roots.”

That all seems taxing enough. Now imagine the organization in question has more than 100 departments and 250,000 employees. That’s exactly the challenge that the Canadian Digital Service (CDS) is facing.

CDS is a team working within the Treasury Board Secretariat to help the government design and build better services. Structured on the delivery of useful tools, the team is also helping government departments to build greater capacity for digital problem solving. The CDS team retains control of their communication tools allowing for their work to be shown out in the open. And through the government’s Interchange Program, they’re able to recruit private sector talent on short-term assignments.

Pascale Elvas, Director of CDS, has an up-close view of the government’s hunger for change and how many roadblocks there are along the way.

“We’re trying to get departments thinking about digital differently,” says Elvas. “We want them to really understand their users, the citizens that they serve and to unpack the problem.“

Traditionally, the government puts out a request for proposal (RFP) — the average size of the RFP and bids related to it is 8,000 pages long — detailing its requirements, a solution and asking vendors to build that solution. However, this traditional method is far from agile project development.

“By the time it’s deployed, it’s already obsolete and there’s no room for course corrections along the way,” says Elvas. “We’re trying to get departments thinking about digital differently. We want them to really understand their users, the citizens that they serve and to unpack the problem.”

Since Elvas joined CDS a year ago, the organization has grown from three people to 45, they get more than 40 requests from departments per month, and they’re recruiting just to keep up with demand.

Elvas says a change in perspective within government departments is at the root of the work being done by CDS:

“It’s getting departments thinking about digital in a different way, and not necessarily starting with an end-state solution from the outset. So allowing the discovery work to happen, to talk to real users along the way, to iterate and to adapt and course correct based on the insights gained through that work.”

Elvas and her team at CDS are advocating for whole new methods of addressing and carrying out projects, reworking the culture around tasks within the government, in order to put the needs of the citizen at the forefront.

“Part of this work is about culture change: It’s about breaking building projects down into smaller chunks, it’s about building microservices, it’s about using different methods, it’s about moving away from waterfalls to agile, it’s about active prototyping and constant iteration, moving to user needs over government needs, and iterating along the way based on user feedback.”

CDS follows the efforts made by both the Government Digital Service in the U.K. and the United States Digital Service to transform government in the 21st century. While everyone can agree that governments around the world need to revolutionize their use of digital tools to improve user experiences, the way forward can often appear muddy at best.

In one ongoing project, Natural Resources Canada (NRCan) is using CDS to open up data on household energy use in a transparent and reusable way. The initiative is particularly insightful as an early CDS project, as it involves working with legacy database systems, and includes user research sourced from various, unique data sets — specifically, provincial and municipal governments.

The expectations NRCan approached the project with, the kind of solution they already had in mind, changed radically after working with CDS to address the problem with a user-based mindset.

“When NRCan came to us,” says Elvas, “they came to us with a very specific solution in mind. NRCan wanted us to build them a database. They already had an internal database, so they wanted a database that was searchable by the public and that was more of a client-facing version of their internal database.”

“Now in doing the discovery work and talking to department officials and understanding their business, we discovered that what they were asking for wasn’t exactly what they needed. Building an API will enable all kinds of new services to be built and for private sector partners to use the data to do all kinds of other neat things — and open the door for much deeper service redesign work.”

CDS is hoping they can build on the success of projects like the API for NRCan to get government departments to reassess how they approach digital problem solving.

“We hope that by demonstrating an alternative way of doing things, we’ll move away from the traditional waterfall approach of launching an 8,000 page RFP with set requirements to really using service design and other methods to unpack the problem, understand the users and to build smaller solutions that can be iterated along the way.”

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What talent factors matter the most in a digital transformation?

Revisiting 30+ digital transformations, McKinsey found several core themes when it comes to talent and their success.

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Digital transformations (DX) can be as simple as the creation of an internal digital and advanced-analytics (DnA) system or as complex as an enterprise-wide technological shift. While these shifts have changed the way organizations operate, they’ve also had a big effect on how they plan to do so in the future. At the end of the day, the success of DX efforts largely comes down to people.

With this reality in mind, researchers at McKinsey Digital recently undertook a review of 30 large-scale digital transformations to better understand the dynamics at play behind the process, and ultimately what talent and tech decisions have the biggest impact on DX success. 

Through this research, several key insights emerged.

Fill senior roles with the right digital leaders

One of the most glaring points McKinsey made in its review was the need for organizations to prioritize their hiring of digital-minded leaders. The high performance of a transformation project often rests on the shoulders of these individuals, even more so than on the technologies they use.

In fact, the research found that up to 50% of a given group or unit’s performance variability could be attributed to the individual leaders driving the transformation. Therefore, it’s important for organizations to invest in hiring and nurturing these data scientists, digital strategists, engineers, and other digital-focused leaders for their digital transformations to be successful.

But in that same vein, McKinsey notes that companies should be wary of rushing into hiring in  these roles. It explains that organizations risk the overall reputation and viability of their programs if they attempt to take shortcuts with early hiring, sometimes delaying progress by a year or more.

Invest in digital learning and development programs

Another key area of impact researchers highlighted was learning and development, and how investments in such programs for DnA rollouts could improve the success of digital transformations. The McKinsey team noted that both on-the-job training and structured learning programs can often do more to improve the success of a transformation than just hiring in new talent.

Furthermore, the review indicated that companies who reward higher skill levels with better compensation were much more likely to be successful in their digital transformations than those who did not. It cited data gathered from leading organizations who comparatively rewarded higher skill levels with better compensation (67%), greater benefits (64%) and more responsibility (78%) than laggard companies who only managed 41%, 23% and 58% respectively.

Similarly, McKinsey emphasized one important fact: digital talent can often be tapped within the organization. Since not all digital products are going to require expert-level skills, upskilling non-digital talent, they found, could potentially cover up to 70% of an organization’s digital needs. Just make sure that you’re being realistic about who can be upskilled and the time commitment. 

And while upskilling is important, organizations need to balance immediate results with long-term capability. Contractors can help fill gaps in the early days of a digital transformation, but need to come with a strong transition plan. 

Take another look at value propositions

McKinsey also discussed the topic of organizational value propositions and their power to influence the quality of talent businesses bring in. It noted that organizations, especially those undergoing digital transformations, should consider the value they offer beyond traditional total-pay packages when it comes to attracting top digital talent.

Including things such as forward-thinking culture, career growth opportunities, and attractive work environments can go a long way in luring the best and brightest digital minds. McKinsey highlighted that companies who have thought hard about their organizational culture and value proposition enjoy a distinct advantage over those who do not, as the quality of digital professionals populating these companies is often much higher.

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U.S. proposes redefining when gig workers are employees

U.S. labor officials proposed a rule change that could make it easier for gig workers to be entitled to benefits.

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A rule change proposed by US labor officials that could make it easier for contract workers to be reclassified as employees shook investor confidence in the future of "gig economy" firms such as Uber and Lyft
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United States labor officials proposed a rule change Tuesday that could make it easier for gig workers such as Uber drivers to be reclassified as employees entitled to benefits.

The move by President Joe Biden’s Labor Department would lower a bar set by his predecessor regarding when someone is considered an employee instead of a contract worker.

It also comes as “gig economy” companies from rideshare platforms to food delivery services strive to maintain the status quo.

The new formula includes factors such as how long a person works for a company and the degree of control over the worker, as well as whether what they do is “integral” to a business, according to the proposed rule.

“We believe the proposed regulation would better protect workers from misclassification while at the same time providing a consistent approach for those businesses that engage or wish to engage with independent contractors,” Jessica Looman of the US Department of Labor said at a press briefing.

Being classified as employees would entitle workers to sick leave, overtime, medical coverage and other benefits, driving up costs for companies such as Uber, Lyft and DoorDash that rely on gig workers.

The proposed rule change is subject to a 45-day public comment period, meaning there is no immediate impact, but share prices took a hit on the news.

Uber and Lyft shares ended the formal day down more than 10 percent, while DoorDash was down nearly six percent.

“It’s a clear blow to the gig economy and a near-term concern for the likes of Uber and Lyft,” despite uncertainty about how the new rule might be interpreted across the country, Wedbush analyst Dan Ives said in a note to investors.

“With ride sharing and other gig economy players depending on the contractor business model, a classification to employees would essentially throw the business model upside down and cause some major structural changes if this holds.”

Uber and Lyft have consistently argued that their drivers want independence, provided benefits are added to the mix.

In California, the cradle of the gig economy, voters in late 2020 approved a referendum backed by firms such as Uber that preserved keeping drivers classified as independent contractors.

The measure effectively overturned a state law that would require the ride-hailing firms and others to reclassify their drivers and provide employee benefits.

The vote came after a contentious campaign with labor groups claiming the initiative would erode worker rights and benefits, and with backers arguing for a new, flexible economic model.

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How can organizations attract and retain IT talent?

Gartner has outlined three ways

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One of the biggest stories in digital transformation right now? Attracting and retaining IT talent. 

According to Gartner, the labor market has tightened in the last two years. They report that:

  • 60% of HR leaders are “significantly concerned” about employee turnover.
  • 62% of candidates have explored a career change in the last year.
  • Nearly three-quarters of candidates who receive a job offer have at least one other offer on the table.

Amid stories from the ‘Great Resignation,’ workers in all industries are pushing for higher compensation, better benefits, and increased flexibility — and IT talent is no exception. In fact, Gartner’s Global Labor Market Survey found that compensation is the top driver for IT talent attraction and retention. According to a recent Gartner IT Compensation Increase Poll, 50% of organizations reported increasing the salaries of key employees after they received a separate job offer — all in a bid to retain this talent.

How can organizations effectively attract talent and, most importantly, retain these employees? Gartner has outlined three ways.

Make monitoring and raising pay competitiveness a priority

As Gartner explains, “In order to pinpoint where additional funding will be necessary to address pay gaps in the short term, work with your HR team to identify IT roles and skills areas facing higher attrition risk and recruitment challenges due to noncompetitive compensation.”

Limited resources? Prioritize roles in high-risk areas, they explain.

Build flexibility into IT compensation through variable pay programs

“One way to minimize locking in compensation adjustments as long-term fixed costs,” explains  Lily Mok, Gartner VP Analyst, “is to use variable pay components that can be adjusted or removed as talent needs and market conditions evolve.”

Examples of these include skills-based premium pay, a signing bonus (lump sum or split up), and retention bonuses (eg. during a major period of transition).

Make sure managers can have successful pay-related conversations

According to Gartner, there are three important elements needed to make sure these conversations are effective. 

First, never forget empathy — especially since finances are a very personal topic and can be a sensitive issue.

Second, make sure the compensation package’s value is clearly outlined and understood. This includes pay, bonuses, benefits, etc.

Finally, be transparent about the organization’s pay structure, and how pay rates are set. After all, there are many sites out there (eg. Glassdoor) that features self-reported public pay data. 

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