Joe Ales & Jason West are joined this week by Mari Milsom and Simon Brown.

Season 2: Episode 19 – The Future of Work: Finding the People to Lead Your Digital Transformation

Jason West: Welcome to the Underscore Transformation podcast. My name’s Jason West.

Joe Ales: My name is Joe Ales.

Jason West: And together with the founders of Underscore. This is the sixth episode, and third round table discussion, in our bonus miniseries on the future of work. In previous episodes, our guests considered their organisation’s initial response to the pandemic, the long term effects of digital transformation on the workplace, and the skills and capabilities that organisations need to develop to take advantage of all this new technology.

This week we’re focusing on buying skills and capability from the market and our roundtable panellists are Mari Milsom, Resourcing Transformation Consultant at Capita, Simon Brown, Freelance HR Transformation Consultant, and in an unexpected twist, our very own Joe Ales Co-Founder of Underscore, most recently Programme Director at the Wellcome Trust.

So, before we dive into the discussion, let’s do a quick roundtable of introductions. If I can start with you, Mari, could you tell us a little about your current role and a bit about your background?

Mari Milsom: Okay, so I’ve been working with Capita as a transformation consultant for the last nine months. I have supported them through the COVID-19 response from a resource perspective. And I’m now currently looking at their global operations with a view to sort of streamline is simplify them.

Jason West: Fantastic. And tell us a bit about your background.

Mari Milsom: Prior to Capita? I’ve worked as head of resourcing for a number of companies, including British Airways and AWE, which is the atomic weapons establishment. So, a big range of companies have also done significant transformation, including with British Airways putting in a completely new fleet for them.

Jason West: Fantastic. So that real mix of operational and transformation roles,

Mari Milsom: Absolutely.

Jason West: Fantastic. Well, welcome, Mari. Thanks very much for joining the show. And Simon, if I can turn to you next.

Simon Brown: Hi, Jason. Good to be here. So as you mentioned, I’m a freelance HR transformation consultant, which I’ve been doing for 10 years now, across a portfolio of clients in different sectors from automotive, professional services, medical technology. Prior to that, I spent 20 years in senior HR management roles with global organisations such as GlaxoSmithKline and the Coca-Cola Company. And as part of the transformations I’ve been involved in, we’ve done systems implementations end to end as well. So, I’ve got experience with Workday and Oracle and SuccessFactors implementations.

Jason West: Fantastic. So again, a real breadth and depth of experience on operational and transformation roles. Thank you for joining really looking forward to this week’s discussion. And Joe, our listeners will be familiar with your dulcet tones. But why don’t you tell them a bit about your day job and your background.

Joe Ales: Yeah, and thank you, Jason. So prior to establishing Underscore with you, I had, in fact, developed my career in HR. So I developed my HR career through the generalist route, spent some time in specialist functions as well, and doing some specialist roles. But my focus in recent years has really turned to helping organisations transform their HR functions and leading large HR operations as well. The topic today, HR capability is something that I’m very, very fond of.

Jason West: Excellent. So, thanks for that, Joe. In previous episodes, our guests have highlighted a really urgent need for a set of skills and capabilities that aren’t traditionally associated with HR functions. That’s capabilities such as data analysis, systems, thinking, solution design, project management, change management, user experience, design and marketing. But before we dive into the topic of buying in these skills from the market, I’d just like to check whether you’ve also seen a demand for these sorts of as call them, digital business skills within HR. And if so, what’s the driving force behind that demand? So Simon, perhaps if I could turn to you first.

Simon Brown: Okay. Yes, certainly. I think very much so. Jason West, the demand for these new capabilities. Data analysis, I think has been with us for some time, but it’s moving more into the analytics area and the diagnostics area, from straightforward data management. Systems thinking, I think we’re now looking ahead when we’re looking to implement systems or change systems and thinking about roles and security GDPR. I think solution to design is a fairly new phrase. So, certainly that’s new across the community. And whilst project management and change management have been around for a while, I think digitalization has changed the way they’re managed. User experience, design and marketing,  again, I think that’s increasingly important because one thing we’ve seen when we’re doing transformations and we’re doing digital system implementation, is that the end-user experience is key, and the adoption to the new ways of working is key. And that really requires quite a lot of focus and effort. So, I fully agree with that comment that these are new capabilities that are coming to the fore in the HR space.

Jason West: And Mari, from your perspective, we’re talking about HR here, but is this a kind of a broader demand for these types of skills and, you know, in other functions, in other parts of the business?

Mari Milsom: Yeah, absolutely. These skills have been needed by business for the last 15, 20 years, increasing demand. So, certainly over the last 15 years, I’ve seen the increased demand for, say, project management from something that was barely used by a lot of businesses, to something that’s now an integral part of the business. From a HR perspective, we’re really a lagging indicator on this. We are now catching up with some of these skills and particularly where we’ve put in new ERP systems. But they’re skills that the wider business has known it’s needed and has been developing for some time.

Jason West: Yeah, and Joe what’s your view, when did HR start picking up on these skills here?

Joe Ales: Not soon enough. I mean, since the rise of cloud technology, actually. I think I think as organisations and HR functions have started to digitalise the experience, some of the employee experience and digitalising some of those processes, a lot of this has come to form. But actually, I think user experience will play an even bigger role in the future. And I think we’ve talked about this before with previous guests as well, actually, in that, organisational culture will be very much determined by employees’ touch points. And now that individuals are working much more flexibly, the employee touch points, whether it’s people processes, finance processes, procurement processes, have got to provide a positive experience so that the user experience will be much more important even going forward. So I’ve seen in years gone by, you know, HR transformation programmes being dictated by the fact they actually HR functions or people functions, wanted to, in inverted commas, “outsource” some of its to-do lists to the line managers, wanting to simplify, in many cases, the HR functions processes. So I think organisations will have to take a very different view to employee experience and designing of those future employee experiences, employee processes, because it’s no longer about that. It is about providing that great experience, almost, that type of experience that people have in the commercial world, you know, the use of apps, etc. everything’s at your fingertips. The right information is presented to you at the right time. So, I think that will become much more relevant post COVID as well.

Jason West: Yeah. And Simon, as you look across your different clients, the different organisations that you’ve worked with over the years, how well resourced are HR functions with these types of skills and capabilities today? Are there any particular gaps that that stand out?

Simon Brown: I think it’s a growing awareness of what’s required. And I think, as Joe mentioned, very much, it’s been driven outside in, because typically an employee experience would be outside of work to leverage the internet, to do online banking, to do online shopping, to source information through Google for themselves. And they have an expectation to be able to do that in the workplace. So, HR clearly is responding to that, although at different rates, I think depending on the technology that they’re leveraging as an organisation. It’s something that’s evolving, probably, as Joe mentioned, not quite as quick as we’d initially hoped. But there’s certainly a demand from the customer, let’s say, for this type of digitalisation and I think HR are now working with managers to clarify roles and responsibilities from the traditional HR “Let me take care of that for you” to HR as an enabler and a coach, and the manager having the ability to do their own direct access reporting on their own transactions.

Jason West: Yeah, it does really change the role of the HR function, the people function as managers they take on more themselves and demand more.

Simon Brown: Yes, indeed. Yeah.

Jason West: And Mari, from your perspective, when you’ve been building up HR teams, what are the kind of the key gaps that you’re looking to fill as your hiring in members of the senior HR leadership team?

Mari Milsom: It’s interesting because I think it’s changing quite dramatically. So in the past, HR would buy in, through consultants or contractors, the project management, the transformation skills, the analytics and even some of the systems thinking. What’s now happening is it’s recognizing it needs those skills in its senior leadership team on a permanent basis. This isn’t something that they’re going to do just every three years, it is going to continue to evolve. I think it’s a really interesting point that Joe made earlier and Simon as well about employees, actually, how they want to access services like banking, like through Google, and they want the same from their HR services as well. I think on demand available any time access self-access to information is going to grow and actually go into other areas of HR, and we’re going to see increased demand and increased control from people demanding where and when they actually work.

Jason West: And if an HR function is missing some of these capabilities, whether that’s solution design or its user experience, what what’s the actual impact on the business? What does it matter if HR doesn’t have these capabilities?

Mari Milsom: It’s going to be around attraction and retention of employees because they’re going to go somewhere where they can work it this way. They’re not going to want to work with companies where they can’t access information, access learning when they want to do it in the place they want to do it and work flexibly. If we think we’re going to go back to people being prepared to queue up at a desk, in a head office to get access to I.T. services, we’re not. The longer we’re out and working from home of working flexibly through COVID, the less people are going to want to go back to that restrictive way of working.

Simon Brown: Yes, it’s an engagement and retention factor, isn’t it, because if an employee has experience that way of working where they can be self-directed, they can access information for themselves, it really is frustrating if they can’t access that immediately or indeed have to queue. And again, it’s that sort of banking analogy, isn’t it, where we used to queue up to go and cash in with the cashier, we used to go to the HR department and wait till the HR department is available. Now we go to the portal and we look for information for ourselves. So as people move in a mobile from organisation to organisation, that’s an expectation now. It’s almost like an entry ticket for employees. And I think, without focusing anything around age, I think generationally it is become more of an expectation now as people have grown up using this technology from infancy. And therefore, I’m massively surprised if that technology is not acceptable or accessible to them in the workplace.

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Mari Milsom: Yeah, and actually using technology to know if your employees. Most of the new ERP systems enable you to gather information on skills, expectations, on learning needs. And yet we don’t actually utilise that from HR function. So rather than putting job roles out or if a piece of work needs to be done actually in the future, could we actually allow employees to bid on a piece of work based on their skills, that either they have or they want to develop? I’m thinking about the workforce in a very, very different way in order to give access to more to employees. Companies, like the Tescos the Ocados, the First Directs really know their customers and gather lots of information, and use that information to sell products them. We have to do the same with employees now. They expect us to come and find them and sell the opportunities to them.

Jason West: So are you envisaging kind of a broader sweep of almost like the gig economy where there’s fewer permanent roles and more gigs, projects and teams are forming around particular task?

Mari Milsom: Yeah, and actually even within your permanent workforce, rather than expecting a manager or somebody in another department, who could only see his immediate workforce, actually, if this piece of work you need done, why don’t you put it out to the whole community and enable people to learn?

We all know that learning is best done in an activity on a project, in a job. Actually, how do you allow all your employees to access, or how do you access, all that information about your employees so that you can give them more opportunities? So, it could be around the employee value proposition.

Joe Ales: Absolutely, if I could just make a couple of observations. I think data analysis, which we talked about that just a few minutes ago, I think HR functions really need to up their game in in people insights and really being able to interpret people data. I think people in HR functions have been all too traditional with what they’ve been recording and presenting to the board. But actually, some of those data points are no longer relevant. And I think you’re absolutely spot on, their capability and skills and competence are fundamental to business success, aren’t they? And I don’t think HR functions and people functions are doing enough of that. I’ve seen too many HR projects and HR transformation ones and system implementation ones at that, where the talent agenda isn’t sort of front and centre of the objectives of that transformation programme. And I think that’s a failing in some of these is projects, like it’s automating or replacing the is the existing HR ERP with something a little bit more sophisticated. But actually, you’re missing the point here. This is really about the consumer experience that you talked about, the Marks and Spencers, they know everything about you. They know what products you buy, the regularity of the products you buy. And yet we’ve got the capability to know that about the people that we employ, our colleagues, and we just don’t do enough of it. And many organisations are actually struggling with issues or topics that perhaps in the depths of the of their business, there’s a capability or skill to get them out of it, but they just don’t have the means of tapping into it.

Simon Brown: I think also talent, you know, talent management as a as a discipline within HR still needs to move from a traditional approach. You need to move from succession planning, from organisational hierarchy to organise work and identify opportunities in a different way, as you discussed earlier, where the ability is for to have, and for people to network to bid on projects and outcomes rather than sort of linear or hierarchical ways of looking at looking at work.

Joe Ales: Yeah, HR functions really need to be more creative with some of their policies. And I see far too many examples of organisations still using those traditional performance management/talent management processes that work probably well in years gone by. But are they fit for purpose for today or indeed the future? That’s a big, big question mark.

Mari Milsom: There’s a couple of points on that. The first one is that HR is still very reactive. It is reacting and scrambling especially during COVID. And suddenly HR is front and centre of the organisation and having to come up with people policies, ways of working very differently. It needs to start being proactive and strategic. And if it knows those skills, it knows what skills it’s got a what skills it wants to develop. It also needs to be working with the business to understand the skills it will need in the future, as opposed to reacting when the business demands those skills. It needs to be really partnering hand in hand. And the other one on the enabling workers to bid for projects, bid for learning, experience, opportunity. It will really help the diversity agenda. It’s still a known fact that if you are white, middle class and male, you are more likely to be picked to work on some of these projects and work. There are less opportunities for our BAME and female colleagues.

Jason West: Yeah, and we’ve all seen lots of business cases over the years that lay out this wonderful future of an agile, flexible workforce, that that’s actively managing the talent in the organisation and nurturing all this great stuff. And then you look at the implementation and you go, “but you’ve just implemented a system and you’re focused on all the operational stuff.” There’s got to be some reason for that; is it that we’re falling down when it comes to implementation? Is it it about design? What’s driving that mismatch between what’s been promised and what actually ends up being delivered?

Joe Ales: I can make an observation. I think a lot of it is that the operational realities of of what functions are faced with when they’re making design decisions, they’re not looking into the future and they’re just coming up to solutions to the problems that they have today. So, it’s about digitalising what we do today, rather than leveraging the technology that you’ve acquired to give you those great insights.

And I think the second one is that that promise, the technology vendors have got the capability and technology has the capability to do that and the promise is there. But then with the implementation, the organisation or the function isn’t structured in a way that enables it to implement those technologies and those talent platforms, and the organisation might not have the data and insights team to be able to leverage the data that comes out of the system. So, actually, the system gets implemented into the current BAU team that didn’t have the capability to do that in the first place. And now you’re asking it to do something they still doesn’t have the capability to do. So, when we implement the technology, you have to look at the operating model and the capabilities that you have within your HR function to operate our technology in a new world.

Mari Milsom: I absolutely agree that I have seen now two major ERP implementations where the skills, capabilities that are needed are not brought in as the system is, and therefore and then they struggle to use the system, let alone really get the full benefits from it. So, yeah, I absolutely agree. The other problem is that when these systems are brought in and HR talks about transforming, it is about cost, and it focuses on cost and headcount reduction. And again, doesn’t think about the other skills that it needs to bring in order to capitalise on the transformation.

Jason West: On that point of bringing in skills, let’s say you’re a Chief People Officer, you’ve identified, you’ve got this skills gap in your function and you need to buy in that capability from the market. So, you don’t have the time or the capacity to develop your people in-house, you’re left with, broadly speaking, three options. You either engage a management consultancy, you hire perhaps a small team of independent contractors, or you hire permanent staff onto your payroll. So how do you best decide between these three options? What sort of considerations do you need to take into account when you’re making that sort of resourcing decision?

So perhaps Mari, if I turn to you on that one start.

Mari Milsom: I think it’s going to depend on the size and scale of the challenge you’re facing and the environment that you’d be potentially putting this these people into. If the environment is potentially going to be hostile to change, and there’s a lack of capability within the current function, in that instance, a management consultancy company or some really experienced, seasoned independent contractors could come in and really be the catalyst for the change.

Whereas, actually, if you bring in permanent employees, you probably need to have already started to establish some of that change beforehand. The challenge with management consultancy is it’s being the intelligent client, so that you’re really clear on what you want to get out and not necessarily just what the management consultancy wants to give you.

Simon Brown: Yeah. I think also it may not be just one or the other. Sometimes I think it can be a blended situation. I think as Mari said, a lot depends on the conditions for success. So, how equipped are the leadership team to share their vision for change and to enable that vision for change and to create the right conditions for that to happen? And sometimes it’s about a blend, because a management consultancy can bring certain processes and methodologies and have experience of having done that time and time again.

Whereas, sometimes a project management or programme management team, which comprises also of internal leaders, aspiring and developing talent within the organisation, who can grow from this experience, and then maintain and run once the programme is initiated. And then specialists, you know, sometimes a particular specialist in a certain area can help bring that objectivity or that fresh thinking. And sometimes it can be a specific technical competency that’s required, for example, data integration as a competency, which tends not to be something that’s part of the DNA of the ongoing organisation, but tends to come in, you know, to help solve a particular issue.

And I’ve seen some good examples where you’ve got a blended solution, where you’ve got a strong leadership team, with a clear vision and a momentum/sense of urgency for change with some project methodology through consultancy, and some individuals, both internal, who are learning and growing, who then maintain and run, and people that come in for a short period of time in an interim situation to provide specialist expertise. I’ve seen quite a few examples where that approach can work quite well.

Jason West: Absolutely, and I think we’d back up your thinking and your experience on that, I think having that that blend of roles is really important and being clear about how and what you’re using the management consultancy for and being that intelligent customer to Mari’s point.

Joe Ales: I think engaging management consultants, some of these large management consultancies have got great expertise and capability. I have seen, on many occasions, management consultants being consultants is being brought in to initiate a piece of work, maybe a strategic piece of work, but the challenge is that the organisation doesn’t have the capability to drive that change after the management consultancy has left. And management consultancies are there to, well, they also want to make money. So, they want to create a dependency on you needing them to see through the work. So my word of caution is when you whenever you engage in management consultancy, A) be clear on what it is that you are expecting to expect it to do, and B) be sure that you understand the effort needed internally to execute and what it is that you’re going to execute long after the management consultants have disappeared. So you don’t have that dependency on them. And you’ve got sponsorship behind what it is that you’re trying to achieve. Too many programmes or strategic initiatives launched there just lose momentum because the organisation doesn’t have the capability to drive it through.

And on a contingent side, on a contractor side, absolutely it can be great to bring in seasoned contractors and individual consultants to kick start a particular piece of work. But to Mari’s point earlier, some of these skills are going to be required more and more permanently. So actually, be sure that you make the right call strategically as an organisation, whether you want to have that capability embedded in your permanent workforce. And it becomes a strategic skill that you look to nurture and develop over time rather than one that you just acquire for a period of time, because that contingent worker, that consultant will walk away after six months, nine months with an awful lot of IP that they would have gained. So, organisations should look to hire contractors, but for the right purpose and make sure you’ve got that knowledge transfer. And on your exit criteria, be sure that, yeah, you’ve got knowledge transferred internally if you’re going to need that knowledge internally,

Simon Brown: Because success really would be to be able to build that internal capability, wouldn’t it? So that post a programme having gone live, there’s the internal capability to maintain and grow and evolve the change and create momentum. Too often you do see a large consultancy being brought in for a project, but then one month have to go live, they’ve gone, and that knowledge hasn’t been transferred. And that’s why I think going back to the earlier discussion, if you can build a blended team, where you have expertise from consultancy, from individual seasoned specialists who have been there, seen the movie play out several times before, and know where the traps are and know where the fast tracks are, and then have internal talent, which you are growing, who can then assume responsibility post-go live and start to build adoption of this, you know, evolving journey. I think that’s a good way of looking at it.

Joe Ales: Absolutely. It’s the only way you can sustain change. And I think Mari made a point earlier around, organisations launch these programmes and implement these technologies on the promise that it’s going to do X. But actually, when you go live, they just about struggle to operate the system, let alone leverage all that great benefit. And a lot of it stems down to the point that the in-house team, the client team, hasn’t been developed along the way, through the design workshops, through testing, operating models not being done correctly, the skills to sustain the change haven’t been acquired into the organisation at the right time. So, there’s an awful lot of that. And I agree with you that these organisations, these consultancy companies will leave a month after the systems gone live along with all the contractors, and they’ll move on to the next project. And a client is left with a machine that they need to operate, that they can just do.

Mari Milsom: I think there’s an interesting point there about the skills as well. When these transformations come in and make these great changes, put in systems, put in new ways of working, if you look at some of the skills that we’ve talked about, so the systems thinking, the project, the change, the transformation, these are quite different skills to operational admin skills that have traditionally been in HR. And yet, what tends to happen is the assumption is that those are operational teams can assume the skills that are needed in the future and they can be trained and learned. But some of these are very fundamental, different behaviours and ways of working. So, it’s the difference between the person that sees the trees and the person sees the forest. And actually, if you’ve currently got a team of people who could only see trees as much as you train and try and give them these new tools and new ways of working, they will always struggle to see the forest. And, you know, it is a fundamentally different behaviour that you need.

Jason West: A different mindset. Well, isn’t it comes down to fundamentals – the way you’re built sort of stuff.

So we’re going to take a pause in the conversation here this week. Next week the panel are going to share their experience of hiring people with the digital business skills that we’ve been talking about on this episode, and how to fill some of these really challenging skills gaps in organisations. They’ll also touch on the importance of taking an holistic approach to transformation activities and provide some really practical advice on attracting, selecting, and retaining some of the hottest skills on the market.

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