How does a company outside the tech/IT field develop the workforce it needs to compete for customers who expect every company to interact with them as seamlessly as Amazon or Orbitz? Especially when that may require competing for talent directly with Amazon and Orbitz?
Finding and retaining the skills they need to bring about digital transformation is a critical matter for companies outside the tech sector — and not being able to do so is one of their biggest concerns.
More than one in four respondents (28 percent) ranked lack of skills to drive strategy as one of their top three barriers to implementing a digital strategy in The Economist Intelligence Unit’s recent survey of board and C-suite members and other top executives at more than 600 companies worldwide. That compared with just 20 percent of tech/IT companies. And 33 per cent of the entire survey sample cited lack of a tech-savvy workforce as one of their top three concerns, compared with just 20 percent of tech companies.
Barriers to digital transformation
Underlying these concerns is the need for organization-wide digital transformation: without a workforce that’s tech-savvy or at least culturally receptive to a more digital environment, it’s much less likely to happen.
Twenty-seven percent of respondents to the Economist Intelligence Unit’s survey said that becoming a more data-driven organization was one of the three areas that will be most critical to their company’s digital decision-making in 2019. Yet 29 percent placed internal cultural resistance among the top three barriers to implementing a digital strategy. And more than half (55 percent) expressed concern that their organization is not making optimal use of digital technologies.
Some non-tech industries are making faster progress than others and offer lessons that companies in other sectors can draw from. Many companies in financial services and healthcare industries, for example, have recognized for some time that they must place digital transformation at the core of their business culture — and that they can’t do so if they don’t have the digital talent.
“When Chuck started Schwab, he was already very tech-focused, so being digital-forward has always been fundamental to our business strategy,” says Neesha Hathi, executive vice-president and chief digital officer at Charles Schwab Corp. Over the past several years, the big bank and brokerage firm has accelerated digital recruiting, both internally and externally.
Appealing to digital natives
The first step in appealing to tech natives, says Ms. Hathi, is to look beyond the tech context and appeal to digital natives in more personal ways.
“In the talent market today, everybody talks about the attraction of a focus-driven organization if you’re looking to attract someone straight out of university or who is five years at Google and looking at a career move,” she says. In this respect, Charles Schwab benefits from having a well-defined mission and purpose.
From the start, the company framed itself as “democratizing investing” — helping ordinary people achieve their financial goals in a field that had traditionally reserved the best-quality service and advice for those who could afford to pay the most. “People want to work where they feel they’re doing some good,” Ms. Hathi says.
“People want to work where they feel they’re doing some good.”
It also helps to go where the talent is. “Most of our digital and tech hiring is in the Bay Area, Austin and Westlake, near Dallas,” Ms. Hathi says. The first two are long-time tech hubs, and the third is developing into one. Apple signed a lease for an office building in the Westlake area in 2015, and Charles Schwab announced plans last summer to double the size of its regional employment center there.
Sometimes, the talent already resides within your organization; the trick, even for companies steeped in technology, is to steer it in the right direction.
From the waterfall to agile teams
Another critical factor in attracting talent, Ms. Hathi says, is “making sure people understand how we’re working differently.”
Systems and product development at tech companies used to follow the sequential “waterfall” model, starting with requirement gathering and analysis and proceeding through system design, implementation, integration, deployment and maintenance — with little or no opportunity for re-evaluation or revision. Tech companies have largely moved away from this time-consuming model; so are forward-thinking companies in other industries that are intent on developing better digital and interactive experiences for their clients and doing so in a timely manner.
Development at Charles Schwab, for example, is now located in several hundred “agile teams” that collaborate on specific projects — for example, client onboarding and chatbots (or “intelligent assistance”). “A lot of our teams are focused on mobile now,” says Ms. Hathi.
The agile teams structure helps Charles Schwab produce applications and systems for its customers that meet their needs more precisely. Teams are able to “test and tweak their models” along the way to make sure the end product remains customer-focused.
It also makes Charles Schwab a more attractive employer for many digital natives, Ms. Hathi adds, “who like the satisfaction of working faster — but faster to the right outcomes.”
A talent for attracting talent
Our survey suggests that improving internal digital development processes — and finding the right people to execute these projects — will become increasingly critical as the digital era unfolds. Thirty percent of survey respondents said their company’s business units are digitally enabled today (i.e., use an appropriate range of advanced digital tools with a high degree of effectiveness to enhance their activities) and 39 percent expect that to be the case in three years.
Getting there will require internal talent equivalent, in many cases, to the level of talent that digital-native organizations like Amazon have assembled. Non-tech companies will continue to look for new ways to make their profile attractive to these employees.