Less than one in ten Australian companies understand how to build a future-ready organisation, according to a new research report, which recommended a 5-step approach to future-proofing organisations.
Given that the Australian workplace is being revolutionised by artificial intelligence, robotics and digital disruption, Australian HR practitioners and senior executives are in danger of losing their ability to manage their workforce cost-effectively according to David Brown, leader of Deloitte’s human capital consulting practice.
Reviewing the Australian cut of Deloitte’s 2017 Global Human Capital Trends report, Rewriting the rules for the digital age, only 9 per cent of Australian companies say they understand how to build a future-ready organisation, even less prepared than global respondents (11 per cent).
“At present Australian HR professionals are closely focused on retention through improving the employee experience, such as setting up systems to help employees deal with the volume of communication and level of administration in their lives,” said Brown.
“If employees are happy, a company will see better productivity, greater collaboration, less turnover and greater retention of corporate knowledge.
“But digital disruption is affecting business models, work practices and staff lifestyles, and effective management of this change will be critical to business growth in the short term, so Australian companies must understand and elevate digital HR as a priority,” he said.
“There is a significant danger that Australian companies are not moving fast enough to adapt to the needs of the workforce of the future.
“Companies must embrace the speed of change, learn how to rewrite the rules or risk losing the game.”
“A company will see better productivity, greater collaboration, less turnover and greater retention of corporate knowledge”
The Deloitte 2017 Global Human Capital Trends report surveyed over 10,000 businesses around the world on their HR practices, including 197 respondents in Australia.
It found that, globally, there has been significant growth in digital HR systems and practices: well over half of the companies surveyed (56 per cent) are in the process of redesigning their HR programs to leverage business and mobile tools.
Similarly, 51 per cent are in the process of redesigning their organisations for digital business models.
“Technology, both in business generally and specifically within HR operations, is advancing at an unprecedented rate and there has been an explosion in artificial intelligence (AI), mobile platforms, sensors and social collaboration systems that are revolutionising the way we manage the workforce,” said Brown.
Some 33 per cent of the global respondents to the 2017 survey have confirmed that they are already using some form of artificial intelligence technology to deliver HR solutions, and 41 per cent are actively building mobile apps to deliver HR services.
Brown also observed that significant change presents opportunities, and he said the opportunity for HR practitioners to play a key role in driving the agility that keeps businesses competitive.
“There is a significant danger that Australian companies are not moving fast enough to adapt to the needs of the workforce of the future”
As such the Deloitte report recommended organisations should adopt five steps to future-proof themselves:
1. Embrace the speed of change: Think carefully about the ways in which digital demands the considerably slower traditional operating model to be speeded up.
Understand how strategy, connectedness, customers, and talent pools are all changing as part of the digital transformation.
2. Make talent mobility a core value: Require executives to move from function to function so that they understand the new, more agile career model.
Build in processes to support team fluidity so that team members can quickly return to their home base or move to a different team once a project is done.
3. Form an organisational performance group: Ask the group to interview, analyse, and study how high-performing teams, projects, and programs actually work.
By examining the company’s job titles, reward systems, and career paths, this group can help chart the way to a more agile, bottom-up model for business units.
4. Examine new communication tools: Consider technologies like Workplace, Slack, Basecamp, Asana, Trello, Workboard, and others.
Then standardise and implement them as a complement to the organisation’s core ERP/HRMS infrastructure.
5. Adopt continuous, feedback-based performance management: Regular feedback empowers people to reset goals continuously, change projects, and feel rewarded for their “work,” not just their “job.”
Employee survey tools give managers immediate input on their own performance, boosting transparency.
“Up to 70 per cent of reorganisations fall short because of ‘creative disobedience’ from the executive team”
The report also explained that high-performing organisations operate as empowered networks, coordinated through culture, information systems, and talent mobility.
“Companies are focused on redesigning the organisation itself, with nearly half actively studying and developing new models,” it said.
“And many organisations are not only designing but also building this new organisation.
“As networks and ecosystems replace organisational hierarchies, the traditional question ‘For whom do you work?’ has been replaced by ‘With whom do you work?'”
The research report found that 88 per cent of respondents believe that building the organisation of the future is an important or very important issue, however, only 11 per cent believe they understand how to build the organisation of the future.
“Organisational design and change are complex,” the report said.
“Many organisational redesigns fail because they are reduced to an exercise to cut costs. Others face resistance from company leadership.”
In fact, many consulting firms anecdotally report that up to 70 percent of reorganisations fall short because of “creative disobedience” from the executive team.
The report noted that many consulting firms anecdotally report that up to 70 per cent of reorganisations fall short because of “creative disobedience” from the executive team.
“Frustration is also common. Designing the organisation of the future is a difficult, sometimes messy project of trial and error, not an exercise on paper,” the report said.
“It is a continuous, dynamic, and, in a sense, never-ending process.”
“Successful organisations must be designed for speed, agility, and adaptability to enable them to compete and win in today’s global business environment”
In the past, most organisations were designed for efficiency and effectiveness, leading to complicated and siloed organisations.
However, the report observed that the resulting business models, which were based on predictable commercial patterns, are unsuited to an era of unpredictability and disruption.
“Instead of mere efficiency, successful organisations must be designed for speed, agility, and adaptability to enable them to compete and win in today’s global business environment,” it said.
An important part of designing for adaptability is a shift away from hierarchical organisational structures toward models where work is accomplished in teams.
Only 14 percent of executives believe that the traditional organisational model – with hierarchical job levels based on expertise in a specific area – makes their organisation highly effective.
Instead, leading companies are pushing toward a more flexible, team-centric model, and as organisations make this transition, they find that smaller teams are a natural way for humans to work.
“Research shows that we spend two orders of magnitude more time with people near our desk than with those more than 50 meters away,” the report said.
“Whatever a hierarchical organisation chart says, real, day-to-day work gets done in networks. This is why the organisation of the future is a ‘network of teams’.”
Deloitte said top companies are built around systems that encourage teams and individuals to meet each other, share information transparently, and move from team to team depending on the issue to be addressed.
“Different networks can have different specialities, such as innovation or getting to market quickly, but the principle is the same,” the report said.
“For a company to stay agile, teams must be formed and disbanded quickly. High-performing companies today may build a ‘digital customer experience’ group, select individuals for the team, and ask them to design and build a new product or service in a year or two.
“Afterward, the team disperses as team members move on to new projects. This ability to move between teams without risk is a critical attribute of today’s high-performing companies.”
For more information see Deloitte’s 2017 Global Human Capital Trends report. Image source: iStock