Insight

Achieving a digital HR mindset to enable everyone as an innovator

Learn how your HR function can get from where it is now, to where it needs to be.

John Doel

John Doel

Principal, Human Capital Advisory, KPMG US

+1 503-820-6471

Demographic changes, shifting expectations, skill shortages, and enabling technologies have changed how HR services can and should be delivered. COVID-19 has revealed the nature and extent of these challenges, and more importantly, it has created an acute urgency for digitally transforming the world of work.

In a new paper entitled “Reinventing Work – A sequel to the Rise of the Human Series,” KPMG International’s Robert Bolton (Global Head of People & Change Center of Excellence) describes the imperative for HR’s reinvention. Specifically, he advocates for a “digital mindset for HR,” one that supports a humane culture as machines proliferate across workplaces. Apart from the accelerating need for such an evolution, Bolton notes that employer-centric and customer-centric organizations that achieve a digital mindset routinely outperform others, often by an order of magnitude.

In my role as the Digital HR leader for KPMG LLP (U.S.), I am often asked the how question. How do we get from where we are now to where we need to be? In this case, how can HR take a leadership role in organizational innovation by engendering a digital mindset to meet the human challenges of the new normal? How can HR implement both the digital skills to deploy and manage AI and the human skills to live and work with AI?

To develop the capabilities that leaders need to create a digital mindset, we recommend four key principles:

Drive end-to-end enterprise service connectivity

Research by KPMG International indicates that truly customer-centric businesses achieve three times the revenue growth of the average FTSE 100 or Fortune 250 company.1 Increasing awareness of the connection between employee experience and customer experience is critical, as is connecting all aspects of the enterprise in the pursuit of desired customer outcomes.

Tactics to accomplish these ends begin with the application of platform- and product-oriented strategic thinking and understanding. HR will need to understand the overall value chain and be able to apply platform and product capabilities across the enterprise, maximizing value and benefits from enterprise platforms, HR products, and digital experience solutions in a fully cohesive way. During redesign, it’s important to consider required outcomes with the enterprise digital service experience as the primary driver, which for most companies means recognizing how HR services fit within the broader people services of an organization.

Future-focused businesses are shaping new operating models in which every part of the organization, from sales to the supply chain, are working with every other element to deliver against the big picture. It’s also no surprise that, according to the KPMG global Future of HR 2020 survey, 95 percent of HR executives view employee experience as a top priority.

Be open to delivery model ideas from alternative external sources. For example, certain HR functions (e.g. rewards) need data from other parts of the business to be effective. Given that accurate compensation payment enhances the employee experience, an accurate reward management process is essential.

Enable everyone as an innovator

Everyone in an organization has a productive role to play as an innovator in areas including the breakdown of tasks between humans and machines, the creation of new roles or jobs, and the delivery of new products. Tactics again include the application of design-thinking techniques in redesigning jobs and work across the enterprise end to end—and across processes including automation, cognitive augmentation, product/service innovation, and redesigned roles for humans and machines. Also important is engagement with the workforce to develop new approaches that improve control and balance in individual roles.

A robust target operating model (TOM) allows for a more complete design that understands which tasks need to be human and which ought to be automated. These capabilities are particularly important with performance insight and governance, which are both often overlooked in “traditional” transformation projects, but are integral to user and organizational acceptance. A great example of this is the digitizing of the role of the business partner, which doesn’t mean replacing business partners with AI, rather ensuring that the business partner role is fully digitally enabled through analytics and responsive automation channels in order to best allow them to strategically support their customers.

We recommend evaluating the full TOM across six critical “layers” designed to help drive a successful transformation outcome: functional processes, people (and roles), service delivery models, technology, performance insights (and data), and governance. Used in this way, the TOM enables leaders to validate their future way of working and acts as the foundation for the transformed HR function.

Adopt a growth mindset

An innovative and flexible culture, or a growth mindset that encourages agility, collaboration, and change, requires a work environment in which roles can evolve and people can collaborate across role boundaries. Adopt an experimental mindset and involve workers in the design. Help ensure flexibility by design, so that roles and people can evolve. Plan for upskilling early and instill a “learning to learn” mindset that maintains a focus on tomorrow as well as today. Learning should become part of the flow of work, meaning that it needs to be designed, curated, and available/pushed to employees to be accessed on-demand at the moment of need.

Demonstrate the courage to act/challenge

Across the function, everyone should be seen as a leader and encouraged to act and challenge, possessing autonomy and the freedom to act, while being accountable for meeting business objectives. Tactics include ensuring everyone across the enterprise shares details and updates on priorities, projects, and progress, with a focus on interdependence among team members in new work structures.

Speed will be of the essence, particularly during interactions that will promote customer relationships. Speed is even more critical in the virtual environments in which we now operate most often. Employees who are not empowered to execute independently and operate with limited oversight will disengage from distrusting employers and find a better employee value proposition. Improvement in access to meaningful data and analytics at all levels enables decisions to be information led. These capabilities can give the entire workforce the ability to tap into what is happening in real time and back up their observations with evidence.

A means to a digital end

The KPMG Powered Enterprise family of technology solutions can help organizations create the digital business function of tomorrow, today. Powered HR provides the platform for reinventing work by reshaping your workforce, focusing on the employee and customer experience, dealing with disruption and, ultimately, helping to drive higher revenues and profitability.

For more information, visit KPMG Powered HR.

Footnotes

  1. KPMG and Forrester research 2016 and 2018, cited in “Reinventing work: A sequel to the rise of the humans series,” KPMG International 2020.