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Three big examples of DX culture shift

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Digital transformation is not just about technology and big ideas. For digital transformation to be undertaken smoothly, a cultural change, involving all employees, need to take place.

Most headline messages about digital transformation discuss the necessity of switching from legacy systems; avoiding siloed data; and focusing on developing the digital understanding of C-suite executives.  What is often missing from the discussion is the need to develop a new culture. This is a culture of innovation, understanding and shared values in order to innovate product and service development.

Changing mindsets

Analysis by MIT Sloan and Deloitte into business-focused digital successes and failures concluded:

“The history of technological ad­vance in business is littered with examples of companies focusing on technologies without investing in organizational capabilities that ensure their impact. In many companies, (failures are) classic examples of expectations falling short because organizations didn’t change mindsets and processes or build cultures that fostered change.”

The survey also found, as Sloan Review summarizes, that the ability to digitally reimagine the business is a key factor of clear digital strategy. Such organizational vision, supported by leaders, fosters an innovative, change-friendly culture. For this to happen, the workforce needs to willingly and determinedly take on the digital transformation path.

Taking employees on the journey

This means every employee in the company should understand and support collaborative practices, innovation, open culture and adopting a digital-first mindset; plus, having the agility and flexibility, customer centricity to deliver change. Once this is in place a data-driven culture will start to form and new technologies can be steadily adopted.

This means companies need to implement systemic changes in how they organize and develop workforces. Organizations also need to seriously consider how they drive workplace innovation, and work collectively to cultivate digitally-minded cultures and experiences.

Coca Cola

As to how this might work in practice, one example is Coca Cola. The company acknowledges that culture change is one of the most difficult aspects of digital transformation to realize.

The soft drinks firm’s digital strategy officer, David Godsman notes that changing culture across the marketing team is the hardest thing Coca-Cola has to tackle as it undergoes the necessary transformation to bring the enterprise into the digital age.

Coca Cola is also attempting to alter its customer focus, acknowledging the need to create personalized experiences for consumers and customers, to fit in with consumers seeking multi-channel experiences and fast mobile access, especially when receiving promotions.

Latitude financial services

A second example of digital transformation with a customer focus is with Latitude financial services. According to Caroline Ruddick, who is the company’s general manager of marketing, there needs to be a twin strategy of developing and improving the customer experience. This shift in strategy, says Ruddick, must be bound to the process of ensuring that employees are responsive to the changes taking place within the organization so they can successful and emphatically offer high quality outfacing services.

Tied up with this is recognition that customers are increasingly more concerned about the experience of dealing with a product or company, seeking an easier, multi-channel offering, and they are less concerned about the actual product, or at least with having any significant loyalty to one product over another.

Adobe

Adobe provides a third example of a company that has recognized the value of culture change. According to Vision Critical, when Adobe made the decision to transition from physical software to a cloud-based model, the company recognized that it was necessary to shift its employees’ focus towards the the customer.

This was undertaken by developing a staff Experience-a-thon. Adobe had employees role play testing and providing feedback on Adobe portfolio of products, pretending to be customers. This led to an employee engagement strategy and a shift in culture, paving the way for Adobe’s evolution into a cloud company.

These examples demonstrate that the ‘big moment’ for an organization is when it embraces the fact that digital transformation is not a a technical problem to be fixed, but instead it is a cultural change to be enacted through the enterprise.

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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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How will CIOs define success in 2021?

New research suggests CIOs are prioritizing digital transformation to “future-proof” their organizations and build resiliency.

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Recently, we reported IDC’s 2021 predictions, which noted that while CIOs have faced epic-level challenges this year, they’ll need to be in the front seat of the upcoming economic relief efforts.

At the top of IDC’s list was the prediction that by 2022, “65% of CIOs will digitally empower and enable front-line workers with data, AI, and security to extend their productivity, adaptability, and decision-making in the face of rapid changes.”

Since then, Gartner has also chimed into the CIO + Future of Work discussion. They identified “automation of routine work with AI, digital dexterity, and hybrid work with distributed workforce” as areas CIOs should focus on.

Now, a new report (based on a survey of over 100 Fortune 500 CIOs) from digital adoption platform WalkMe has uncovered how CIOs and IT organizations will define success in 2021, expanding on these aforementioned trends.

Multi-pronged approaches

In The CIO Outlook 2021, WalkMe — who commissioned Constellation Research for the report — found that 77% of CIOs list automation and AI as key to improving the effectiveness of IT. 59% say ROI from IT can be achieved through portfolio assessment and rationalization.

“CIOs are prioritizing overall digital change, keeping the organization safe, and improving the worker condition,” says WalkMe. Looking ahead, “CIOs must invest in finding the right models for enabling remote work while supporting their users.”

In order for organizations to adapt to change and become future-proof, CIOs need a multi-pronged approach, featuring:

  • No-code solutions
  • The automation of repetitive processes
  • Key software integration
  • Training and service through new approaches

As quoted in ITProPortal, Constellation VP and Principal Analyst Dion Hinchcliffe says:

“This data, gathered from top CIOs around the world, shows that they will be seeking dramatic improvements, especially significantly higher ROI (10-20 percent+) from their IT investment next year.” 

Want to read the full report? Find it here.

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