Beyond Machines, Why the Digital Economy Needs Empowered and Talented People to Fuel Innovation
As new technologies cause value chains to rapidly evolve and organizational boundaries to blur, human roles and tasks are also digitizing, as machines alter how knowledge work is performed.
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Everywhere you look, leaders in old and new companies are using technology in a wave of supercharged innovation that is creating incredible opportunities. And it’s a business narrative that extends beyond the usual digital suspects (e.g., Google, Facebook, Twitter):
By marshalling machine data around its products, processes and value chains, manufacturing titan GE now charts a dynamic future as a software powerhouse.
Insurance start-up Oscar issues fitness bands to each customer and then uses the data to reduce costs for healthy behavior. It’s no surprise that customers love the discount.
Banking giant JPMorgan Chase is investing billions and partnering with Digital Asset Holdings, a tech start-up, to explore and ameliorate the havoc that blockchain could wreak on trading, loans, payments, investing and overall bank performance.
Thriving in this digital era of promise and uncertainty means increasing the velocity of innovation, experimentation and collaboration. The main engine for this is not some magical technology – it’s talented people. Leveraging talent with digital capabilities is an antidote to slow innovation cycles and can help instill a culture of speed in today’s dynamic and volatile business world.
Attracting and managing the talent needed to make this shift will be radically different from what worked in the past. But make no mistake, technology will matter – a lot – because new technologies will impact how knowledge work is organized, distributed and completed. Human talent must adapt to this new reality.
The workforce of the future, therefore, must evolve amid a digital revolution that will undoubtedly upend revenue flows, business models and cost structures. To help understand these changes, Cognizant’s Center for the Future of Work, in partnership with the Economist Intelligence Unit, surveyed over 420 decision-makers in the U.S. and Europe.
Our study reveals a clear imperative for leaders to build a roster of digital skill to accelerate innovation. Key findings from our study include:
Digital investments are catalyzing innovation. The results are in. There is now a clear imperative for companies to add the digital skills that will counter stodgy innovation cycles that can jeopardize their very survival. Sadly, we found that the vast majority of executives who answered our survey (94%) cite a “moderate” or “severe” digital skills gap that prevents their organizations from reaching their digital future. Many teams are under-resourced for key skills, and the situation is set to get worse.
Talent shortfalls will drive the digital “gig”economy. This dearth of digital-literate talent will drive more distributed work over the next three years. This is no temporary fix. When done right, externalizing digital work creates a more flexible, distributed and transient workforce that can adapt to rapid cycles of business reinvention.
Linking platforms to “talent clusters” drives innovation. Companies are starting to build proprietary platforms and driving third parties to engage in co-innovation initiatives around R&D or customer engagement. Our analysis charts the global explosion of talent clusters – collections of entrepreneurial activity coalescing in one location and another – that offer “hot” digital technologies and capabilities that can speed innovation or deliver game changing impact.
Future performance requires a bold digital reorganization. Rigid approaches to organizational management – remember the 1980s value chain mania – is giving way to more fluid, connected and nuanced organizations. Silos are being broken to improve knowledge flows and redraw organizational power structures. Many companies are starting to junk old and rigid organizational models and building smaller, nimbler clusters of talent that serve a particular market or niche.
The workforce of the future needs a new rules engine to work. Analytics, algorithms, big data and automation dramatically enhance innovation, productivity and decision-making, but they will also automate and abolish rote tasks previously performed by humans. Our analysis indicates more back-office work will be handed over to software tools as new human-plus-machine workflows become the business norm.
The digital era will rely on machines, but winning will require – perhaps more than ever – talent pools that can thrive in an increasingly digitized economy. Navigating this shift will be one of the defining success criteria for leaders.
Digital technologies and what they enable – new business models, new revenue flows and radical new cost structures – are redrawing industry structures and the talent companies need to thrive. It’s time to get hyper-serious about how your organization’s most important asset – its people – will work in this exciting digital age.