Workforce Changes of Digital Adaptation
The advent of technology-empowered global workforces fundamentally changed the way employees and employers engaged. Technology connected workers around the globe, dissolving geographical boundaries. Today, fast-moving markets and customers’ ever-changing needs are creating an almost relentless pressure for companies to reinvent themselves and their employee models ─ again and again. How Offshoring Lost its Luster Digital adaptation arose from two significant workforce changes: (1) technology-enabled global labor; and (2) a geographically distributed workforce. These two fundamental shifts created a category of worker known as the “offshored.” As the Internet-connected workers around the globe, companies gained access to an international workforce that performed like local employees. Often, “follow the sun” development teams fast-tracked projects at near warp speed as compared to domestic-only, traditional workforces. At first, offshoring saved a lot of money for US-based companies that were able to move work overseas, take advantage of labor arbitrage, end benefits programs and layoff layers of middle management. For many companies, offshoring was a beautiful thing until one day it wasn’t. What began as a move to more cost-effective, less management-intensive workforces quickly exposed unintended, negative consequences of offshoring on two highly desirable outputs of work: innovation and collaboration. Lack of business context, ineffective communications, and virtually non-existent creativity constrained offshoring. The desired collaboration, communication, and innovation US companies sought from their offshored workforces did not materialize from a raft of geographically separated, workforces. For some, offshoring has become categorized by an untenable disconnect with customer demands. While the sheer economics of maintaining urban offices doesn’t support bringing everyone back in-house, a compromise must be found that balances budgetary constraints against digital adaptation’s need for collaboration. In many cases, employees’ preference for working from their home offices using online collaboration tools is helping companies move closer to this balance. However, a lack of specialized talent continues to plague companies’ looking for experienced assistance. In these instances, the availability of niche talent prompts companies to accept assistance from specialists who are dispersed geographically. While companies pioneering digital adaptation may have to use some distributed workforces, partnership models need to promote vitally important communication, collaboration, and innovative thinking. Digital Adaptation Matches Teams to Projects In the digital age, scalability, the massive availability of skilled workers, gives way to teams comprised of workers with diverse skills and mindsets. These teams will be created to meet the specific requirements of the project at hand, and they will be disbanded at the project’s completion. The constant change characteristic of digital adaptation demands a flexible approach to skills acquisition. The ability to quickly construct, manage and get the team to full productivity will become a key requirement for corporations. Acquiring new skills and a dedication to lifelong learning will become table stakes for employees in every workforce, whether traditional, distributed, outsourced, or contingent. At its heart, digital adaptation requires more management, more communication, and more collaboration –not less. As Daniel Newman pointed out, traditional leaders quickly became stumped as to how to manage these diverse and divergent groups of individuals. That’s why new workforce models, while a good place to start, require new management models as well. Digital Success Depends on Effective Recombining of the Workforce Workforce models and effective management approaches for fluid teaming present two of the most perplexing challenges in digital adaptation. Simply put, the traditional workforce models and proven management approaches don’t work. How effectively you combine and recombine people will determine your success or failure in the digital world. Companies knee-deep in digital adaptation need to get comfortable with constant change and reinvention on the fly. To learn more about how to navigate this complex landscape, download our white paper on digital adaptation or read the blog series on this fundamental sea of change.
The Four Components of Digital Adaptation
As digital forces business to shift how they view themselves in a new world, it drives the need for new and adaptive approaches. It’s now about rethinking the concept of digital transformation as more of a continual adaptation to a constantly changing environment. In order to embrace this adaptation idea it is helpful to bucket the areas into the following four areas: managing the constantly evolving needs of customers, partners and employees; the willingness to consider original combinations of workforce models; meeting higher expectations of customers, prospects and employees; and the ability to leverage incumbent (legacy) assets into new revenue streams and competitive advantage. 1. Evolving Needs Today, success and survival results from being able to thrive among volatility and uncertainty, meaning that it's difficult to predict what your future needs will be other than that they will evolve... quickly. One challenge in digital adaptation is how to balance the cost of technical expertise with the standard of its output. Another is to possess and manage the variety of workforce models that enable you to match the best-suited development team, with the needs of the business providing speed, contextual understanding, innovation, and communication. 2. Workforce Change As technologies evolve, companies are uncertain what exact skills they'll need and frankly, it changes daily requiring them to have an open mind to original workforce ideas beyond offshoring or staff augmentation. It’s a confusing time. Many companies are now declaring that they want to bring people back in-house, or at least closer to the business. Companies must appreciate that they have been sending mixed signals when it comes to talent management. In this era of technology skills shortages, they will have to be flexible and innovative. The people, and the models used to manage those people, are as important as the technology itself. To maximize the value of the technology being provisioned for the business, companies must simultaneously adapt their workforce thinking. 3. The Experience The consumerization of IT means that customers compare their digital experience with you against all their other digital experiences, not just those of your competitors. These expectations cross the borders that used to separate our work and private lives. These boundaries have melted away raising the expectations of customers. While it is essential, high-quality experiences should not be reserved exclusively for customers. Companies must enable their staff to deliver these great digital experiences. To succeed you should be putting your workforce in the best position to achieve this by providing progressive technologies, as well as, agile and DevOps methodologies which ultimately will enable them to deliver great experiences for your customers. 4. Competitive Threat Traditional barriers to market entry are extinct. Companies can no longer rely on the advantages they used to enjoy from being the industry dominant elephant because competitors are springing up overnight threatening the core of established organizations. And while these incumbent companies have assets at their disposal such as a proven business revenue streams, customer relationships and brand presence, they are not enough. The competition is coming from unlikely sources as vertical markets boundaries become blurred. For example, online retailers morph into insurance carriers and health care providers, as retailers and insurance companies merge to fight unforeseen rivals. All enabled by cheap, fast technology, vast processing powers, petabytes of data and AI’s relentless pursuit of pattern recognition. Digital has and continues to change the rules of business, and life. There’s no going back. Companies are seeing their foundations shaken by digital, artificial intelligence, virtual reality, etc. A series of company “re-orgs” won’t solve the problem, it’s a constant re-org. Consistent adaptation. Learn more in our next blog or download our digital adaptation white paper.