Digital transformations: The five talent factors that matter most (with summery)
| Digital transformations: The five talent factors that matter most (with summery) | |
|---|---|
| Published By | Articles by McKinsey |
| Publish Date | January 5, 2023 |
| Authors | Vincent Bérubé, Cyril Dujardin, Greg Kudar, Eric Lamarre, Lapo Mori, Gérard Richter, Tamim Saleh, Alex Singla, Suman Thareja, Rodney W. Zemmel |
| Topics | B2B, Tech for business |
| Statistics | |
| Article Size | words |
| Diagrams | Yes |
| Downloadable Version | Yes |
| Reviewers | |
| Page Owner | Nikolay Sidelnikov |
| Summary Author | Nikolay Sidelnikov |
Introduction
The article "Digital transformations: The five talent factors that matter most" is published by McKinsey in 2023 and describes best practices of digital talents management. The recommendations are based on analysis of 30 successful large-scale digital transformations conducted after 2020.
Article summary
Digital transformations often encounters challenges with sustaining improvements over time, with talent and technology proving crucial throughout the journey. McKinsey made a research of 30 large-scale digital transformations conducted in various industries within the past three years. Five core themes emerged from this research.
Prioritize hiring senior digital
Prioritize hiring senior digital leaders to attract talent and sharpen your value proposition.
Individual leaders account for as much as 50% of the variability in group or unit performance, and the success of digital transformation hinges on choosing the right individuals for these roles, emphasizing the crucial need to invest the necessary time in conducting a comprehensive search.
The correct appointment influences subsequent hires, with the Chief Digital Officer (CDO) playing a crucial role in the company's employee value proposition for attracting top-tier talent. Allowing the CDO to hire from senior to junior roles is essential, and the CDO's experience and credibility are instrumental in convincing top-tier talent to join the company.
Organizations need to take additional steps and proactively position the digital leader for success, ensuring that the CDO holds influence and that the program's scale demands commitment and conviction from the C-suite.
Rethink your value proposition
Rethink your value proposition for digital talent.
Take into account the local hiring market, industry-specific factors, and enhance your local work environment. Don't assume you'll always compete with big tech. At the same time remember, that local companies in various sectors are often compete for the same digital talent.
Once basic criteria like salary and esteemed tech leadership are met, focus on how your industry aligns with each candidate's unique needs. Identify what motivates specific candidate categories and tailor your pitch and work environment accordingly. Acknowledge that certain industries can readily provide what a candidate seeks. The article contain some examples that illustrate this idea.
Employers need to closely examine their collaboration models, giving thoughtful consideration to the value some employees place on collaborating with teams beyond their specific expertise, like data engineers collaborating with business functions. Also ensure that you accurately convey the dynamics and responsibilities associated with a particular team. Both the peer groups and the anticipated level of responsibility are crucial aspects to emphasize.
Hire digital talents internally
Hire digital talent internally, but keep a high bar on technical skills, and be realistic about reskilling.
Internal sources within the organization can contribute valuable digital talent. Evaluation and hiring procedures for technical positions should incorporate assessments of technical competency. Companies possessing robust non-digital talent have the potential to address up to 70 percent of their digital requirements by upskilling existing employees. Realistic expectations are crucial regarding the number of employees suitable for upskilling and the time needed for the training and development process.
Organizations ought to position internal hires in roles that facilitate learning and development, alongside experienced engineers, whether externally hired or sourced through a third party. When opting for internal upskilling, carefully consider the pace at which you aim to fulfill use cases. Certain roles, like cybersecurity engineers and system architects, may be too specialized for reskilling, making it more prudent to hire individuals with the required expertise from the external market. Keep in mind that the conversion of talent may involve a substantial time commitment.
Build a learning program
Build a learning and development program specifically for digital talent.
To cope with rapid technological changes, skills development should go beyond formal training, emphasizing a mix of on-the-job training and structured programs. The apprenticeship model, starting with senior leaders, paired with junior employees facilitates powerful on-the-job learning.
Companies at the forefront are significantly more likely than those lagging behind to recognize elevated skill levels with increased compensation (67% versus 41%), enhanced benefits (64% versus 23%), and additional responsibilities (78% versus 58%).
Recognizing the need for ongoing skill enhancement, employees are aware of various avenues, particularly online platforms offering free or affordable courses that can be pursued either during work hours or personal time. For those with potential, the crucial aspect is offering opportunities and incentives. While structured learning contributes to refining new skill sets, it also supports a more extended and continuous learning experience.
It is crucial to establish cohort- and role-specific learning paths throughout the entire organization, spanning from the top down. Realism is also key; top-tier data scientists invest numerous years in education and work experience before joining leading companies. Attempting to replicate this with a six-month internal training program is not feasible.
Evaluate trade-offs
Evaluate trade-offs between immediate results and long-term capability building, leveraging temporary contractors to supplement delivery.
Here are some recommendations:
Ensure early internal product ownership by allocating responsibility in the transition process and seeking guidance from external experts. Involve employees from the beginning; aim for 60-80% internal talent within six to twelve months, adjusting from an initial higher external ratio. Encourage internal team members to step out of their comfort zones, recognizing the productivity gap between external and internal talent. Establish strong norms from the start by creating clear protocols and ways of working, as exemplified by a mining company's success in codifying practices in collaboration with external consultants. Achieving a balance between speed, sustainability, and innovation often involves making trade-offs. Successful iteration relies on a culture that embraces quick failure and learning from mistakes. Without this, it becomes crucial to ensure that plans align with long-term success.
Included diagrams
- Digital and advanced-analytics transformations center of five core talent factors.
- Making the right trade-offs can help you find the right balance for your organization.