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To digitally transform, think like Clive Davis

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By: Ben Pring

If you’re a music fan, you probably know the name Clive Davis. If you’re not though – and heaven help you – Clive Davis is one of the most successful music producers and record industry executives of all time. He’s worked with a who’s who of rock and pop musicians, from Janis Joplin to Rod Stewart to Whitney Houston, over the last 50 years. Now 85, he’s still in the game as the chief creative officer of Sony Music Entertainment. By any measure of success and longevity in what is, after all, an extremely precarious and fickle business, Davis has earned his place in the Rock and Roll Hall of Fame.

What, you may be wondering though, does the archetypal A&R man have to do with “digital transformation?” Well, let me explain …

The “digital” alarm bell has been going off (literally and figuratively) now for over 20 years. The transition to the cloud, the slow decline of ERP, the rise of Google and Apple and Amazon, the primacy of “consumer IT,” the move to Agile and containers, the awakening to the power of data, the importance of design thinking – none of these are new. And yet, in the second half of 2017, many, many organizations still struggle to master them, let alone leverage them, to thrive in markets changing all around them faster than ever.

Related: Designing Manufacturing’s Digital Future

The question is, why? In my humble opinion, it’s because the executives running these organizations don’t think like Clive Davis.

It’s Not About You

Clive Davis’s success can be attributed, in no small measure, to his ability to separate his own personal tastes from those of the market. As an octogenarian, Davis probably favors Frank Sinatra or Tony Bennett when he’s doing the dishes or mowing the lawn (as if). But when he’s working, he’s listening like an 18-year-old and can hear the magic in Lil Uzi Vert or Rex Orange County – music that to his contemporaries must sound like the aural equivalent of a dislocated shoulder. Or at least the decline and fall of Western civilization.

Davis recognizes that he is not the target audience, that the music is not aimed at him and has nothing to say to him. He knows he wouldn’t buy the music. But yet, he can still make judgments about its quality and its commercial appeal. And he can do this precisely because he knows the music isn’t being made for him.

[Download]: Designing Manufacturing’s Digital Future

This is the mistake that is hampering so many executives in so many businesses facing the onslaught of change being rendered by digital technology. They don’t personally like the new generation of technology and technology mediated solutions, and they don’t appreciate that the new technology/solutions aren’t aimed at them.

Twitter is ridiculous. Facebook is for egotistical blowhards. What even is Snap? Why do my kids spend so much time on it? Social media is destroying a generation. We can’t do this transaction online because of the threat of hackers. Pokémon Go? Give me a break. Virtual reality? What are these guys on? The cloud? But we’ve got a data center. Monetize our customer’s data? Why? Isn’t that illegal? How does this Slack thing even work? What’s wrong with e-mail?

How to Love What You Don’t Love

To the average 50-year-old, running an insurance company, a bank, an airline, a retailer, contemporary technology, contemporary business approaches and contemporary norms are the commercial equivalent of Lil Uzi Vert – terrible, ugly, ridiculous, not nearly as good as the things we listened to, aka, the technology solutions we built and used.

These executives fail to see they are not the target audience. That new solutions shouldn’t be built for their contemporaries but for their kids. They fail to separate their own personal tastes from the tastes of where the market is going.

Doing this – separating your own personal judgments from those of the market – is terribly hard (hence why so few executives can do it). It’s tough for people who have ascended slippery career ladders to admit they don’t know something. It’s tough for them to even contemplate that they are “aging out,” that they are no longer “hip to the hop,” in touch, on fleek. But mostly, it’s hard to admit – privately to yourself, let alone publically to your staff/boss/board – that you’re no longer that interested in something and that you don’t really like X or Y.

[Download]: Designing Manufacturing’s Digital Future

To truly grasp the promise of the Fourth Industrial Revolution, you’ve got to really love it, and everything about it. Or, if you can’t, you’ve got to surround yourself with people who do. In Clive Davis’s case, this means A&R people who trawl the clubs and SoundCloud and YouTube and Spotify and SXSW. In your case, it could be a youth mentor or a digital whisperer you trust in the industry.

So next time you’re in a meeting with your team trying to inch forward with your digital transformation initiative, remember to think like Clive Davis. It’s not about you – it’s about the next generation and the stupid things they’re interested in. Play your Sinatra or Costello or Counting Crows tunes all you like at home. But don’t pretend that, now that you have the turntable (aka the digital transformation budget), the kids are going to dig what you all say. They ain’t lit with that.

This article originally appeared on the Cognizant Center for the Future of Work site.

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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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