Forging a People Strategy for the Digital Age

Making sure that a company has the talent to deliver both today and in the future has always been a critical element of the CEO’s job. And these days, the task is tougher than ever. Emerging technologies are driving seismic shifts in the way companies operate. And leaders must find ways to simultaneously attract digitally skilled talent, help existing employees adapt and integrate a multigenerational workforce.

What’s more, all of this is taking place against a backdrop of organizational upheaval as traditional hierarchical corporate structures are gradually replaced by more agile models characterized by faster decision making and wider information sharing. These talent and organizational challenges are intertwined, noted Ted Bililies, managing director of AlixPartners. “If you talk about how to attract, develop and retain talent, people will not be attracted, developed or retained by hierarchical organizations,” he told participants in a roundtable discussion on talent development co-sponsored by AlixPartners. “Good companies are investing time in developing talent and beyond that they’re looking at creating environments that are adaptable, empowered and collaborative.”

Yet the path to a flatter, faster organizational structure is often bumpy. Embarking on a carefully orchestrated effort toward a less hierarchical model nearly derailed Sodexo, recounted Sylvia Metayer, CEO of worldwide corporate services at the food service company. Despite three years of preparation meant to engage employees in the change, “when we flipped the switch, the culture shock was so enormous that for a while I thought the company would go under,” she reported. “For nine months, everything froze. Then it took off again.”

In hindsight, acknowledged Metayer, the senior leaders who made that call underestimated the impact the change would have on middle management. “We should have realized that going from hierarchical to multi-dimensional, collaborative, adaptable and empowered is actually a huge shift, much larger than we imagined,” she said.

Alan Masarek, CEO of Vonage, experienced similar pushback when he sought to encourage a move away from top-down management after joining the company in 2014. “I found it difficult enough for my senior leadership team, but the folks who can really kill this are middle management,” he reported. “When you tell them, ‘We have to innovate relentlessly, we have to be customer-first,’ you get a lot of nodding heads. Then, they go back to their desks, where there’s a stack of work to be done, and they go right back to looking at it as, ‘Hey, I’ve got a job to do.’”

While seasoned employees may struggle to let go of established processes and a formal structure, younger workers are not only willing to embrace a collaborative, flatter work environment, they often demand one. “Younger professionals want more recognition more quickly and feedback pretty much continuously,” noted Bililies. “Their managers have to be prepared to give them something verbally or symbolically on more of a regular basis or they will lose interest.”

At the same time, it’s important to look at workforce needs holistically, pointed out Scott Beck, CEO of CHG Healthcare. “Are we overthinking the needs and preferences of one generation as we’re building our companies?” he asked. “Is there too much focus and energy on what’s happening with the ‘young professionals’ and not enough around what your people—all of your people—want?”

Ultimately, companies hoping to excel at developing talent today need to identify ways to cultivate all of the various factions within a multigenerational workforce. “We spend a lot of time talking about segmentation in the consumer population, but we don’t turn that same science to talent and to understanding the millennial [employee] population from the data we have,” says Karen Crone, chief human resources officer at Paycor. “We know they’re the most educated and that only a quarter of them have grown up in families that have a mother, a father and two children. If you can understand talent the same way you have a fanatical understanding of your customer, you can make your culture hum.”

“It’s consumerization of HR,” agreed Ken Joel, partner, strategy and transformation at IBM. “As more and more companies start transforming into digital enterprises, we will have very personalized HR programs for the different segments. It will not just be Generation X to Generation Y. It will be single mothers or [however you cut the data]. It will be part of your culture that you can create and develop programs for the populations that are critical to your organization.”

Within some companies, the differences are functional rather than generational, noted Michelle Beiter, VP of people operations at Safelite AutoGlass. At Safelite, agility and flexibility are embraced by operational teams, such as marketing and IT groups, while the company’s skilled contact-center associates are more comfortable with a hierarchical structure. “In our survey, year after year, we find that younger workers, particularly in skilled labor, want to know their career paths,” she explained. “They want to know that if they work hard, they can do this or go over here. So, you have to be careful. It’s not one size fits all.”

As companies feel their way toward understanding and adapting to the needs of digital workers, a few early lessons have emerged. Several roundtable participants commented on the need to update training programs by adding multimedia and interactive features to accommodate the different learning styles typical of younger workers. “We’ve been having a lot of conversations about being conscious of the fact that we have four generations in the workplace,” said Brad Neilley, chief human resources officer at AvalonBay Communities. “The learning styles of baby boomers vs. millennials are very, very different.”

At Western & Southern Financial Group, HR SVP Kim Chiodi found that introducing shorter, more intense training programs and delivering them online works well for both time-pressed, long-tenured managers and younger professionals accustomed to learning in short bursts.

“People can’t afford to sit in a classroom for eight hours, and young professionals may have different attention [spans] than more seasoned folks,” she explained. “We’re doing a lot of modularization of our training programs to get them down to two hours or less and to make them more interactive.”

As critical as having the best talent may be, participants roundly agreed that cultural fit trumps performance when it comes to hiring and retention. “A Fortune 50 CEO once told me, ‘Digital and technology is the easy part; it’s people and the culture and fit that’s hard,’” said Bililies, who noted that pre-hire assessments can help companies screen for cultural fit.

At Western & Southern Financial, concern that the company’s culture was being diluted by an influx of new talent led to the company “memorializing” it. The resulting 10 principles it adopted are now shared up front with potential hires. “Some young professionals want the culture to be something different,” explained Chiodi, “but our company culture is what it is. We try very hard to select the people who will best fit the culture—and then you adapt. We don’t want you to be a different person than who you are, but we do want you to adapt to the culture. And if you can’t, there are lots of other places you can go to work.”

At a time when employees choose their employers just as much as employers select employees, culture is a two-way street, observed Tom Marth, VP of WorkDay. “Young people want opportunity, but they really care about culture,” he said. “I don’t remember talking about culture in my first job interview the way that kids do now. So it’s a challenge for organizations to, first, articulate your culture in a crisp, concise manner across your whole organization and, second, have what you articulate embraced by your whole organization.”

A culture shaped by faith has become a competitive strength for Covenant Retirement Communities. “It’s a significant advantage to be able to bring life full circle for people,” reported Michelle Kozloski, VP of HR. “When you walk in, you can really feel it. It’s a place where you can work, serve your spirituality and have a great career.”

Done effectively, a strong culture, effectively presented both internally and externally, can be a powerful recruiting tool. “Culture is a topic whose time has come,” asserted Bililies. “A lot of companies haven’t really looked in the mirror and thought about their culture. Maybe you’re in insurance, but when you actually think about what that insurance does—you save families, save communities. When you look at it through that lens, you get a whole different reaction from the people you’re recruiting.”

" Jennifer Pellet : As editor-at-large at Chief Executive magazine, Jennifer Pellet writes feature stories and CEO roundtable coverage and also edits various sections of the publication.."