Microsoft CEO Satya Nadella described experiencing two years of digital transformation in just two months due to the pandemic business environment.
A webinar from Business Talent Group (BTG) and Heidrick & Struggles explored how companies can close the digital skills gap. Four digital talent strategy thought leaders discussed how to secure the skills needed (and figure out exactly what those are) in order to innovate, grow, and compete in this rapidly changing digital landscape. Here are some of their key insights.
Principal, Digital Innovation, Heidrick Consulting
Global Managing Partner, Specialty Practices and DIT EMEA Digital Leader, Heidrick & Struggles
Chief Knowledge & Innovation Officer, Business Talent Group
Digital Innovation Lead, Heidrick Consulting
THE DIGITAL SKILLS GAP ISN’T NEW, BUT IT IS GROWING WIDER
Years before the COVID pandemic, digitization was accelerating and transforming industries—from changing customer expectations to reshaping how people work and springing up new business models. Yulia Barnakova notes that “to remain competitive, organizations really have to stay ahead of these digital shifts and constantly reinvent themselves for the future. And to do that, they need leaders with the right digital skills to enable that kind of transformation.”
Yet, a recent MIT survey found that only 9% of leaders felt that their organizations had the skills they need to thrive in the digital age, and only 40% agree their organizations are building robust digital talent pipelines.
“Once an organization starts to fall behind, it is really challenging to catch up… and that is why it is really critical to address this gap before it becomes even wider,” Barnakova says. “A lot of times they don’t see these disruptive shifts coming until it’s too late.” Furthermore, the path to obtaining necessary skills is often unclear.
ADDRESSING THE DIGITAL SKILLS GAP
Adam Howe has experience helping leaders clarify digital strategies and goals. He shares a proactive talent strategy framework that entails defining necessary digital capabilities for business units and functions—including both technical and non-technical capabilities and mindsets. From there, leaders can determine optimal roles and teams and then compare future digital talent needs to existing talent within the organization. The resulting skills gap presents an opportunity to create an integrated, future-focused digital talent strategy that utilizes the right mix of three key talent solutions: permanent hiring, on-demand talent, and upskilling.
In the webinar, Howe addresses some of the ideal situations for each type of solution—e.g., turning to permanent hiring for the critical, cornerstone leadership roles, tapping on-demand talent to capture fast-moving opportunities, or employing upskilling to ensure business leaders raise the bar across the organization.
With regard to permanent hiring, Sam Burman provides some best practices for companies to follow to help increase chances for success when hiring digital leaders. Among other tips, Burman recommends understanding what the digital role(s) aim to achieve versus the context of the overall strategy—so that the digital transformation agenda augments all areas of the business—as well as how the role fits in among other leadership roles with digital responsibilities. It’s also critical to focus on the cultural aspects of hiring digital leaders and the strategy they’re hired to deliver.
“The biggest challenge [executive leaders] always have is the cultural implications of a digital transformation—far more challenging than the people side, the technology side, and the strategy side,” he notes.
THE MOST IN-DEMAND DIGITAL LEADERSHIP ROLES
What positions make the most sense to establish? The digital and tech leadership landscape continues to evolve, with enterprises primarily bringing in five key C-suite roles (often in the form of blended hybrid versions of the following):
CHIEF TECHNOLOGY OFFICER — Runs the organization’s engineering group and uses technology to enhance the company’s product offerings and improve top-line revenue
CHIEF INFORMATION OFFICER — Leads the organization’s internal IT operations, streamlining business processes and increasing the bottom-line with technology
CHIEF DIGITAL OFFICER — An evolving, but frequently transformational role, responsible for the adoption of digital technologies across the business
CHIEF PRODUCT OFFICER — As the company’s top product leader, this role defines the product vision, strategy, and execution—inclusive of designing and developing new products
CHIEF DATA OFFICER — Serves in one of two capacities: as governance focused Chief Data Officer—defining how the organization collects, stores, and secures data—or in a commercial oriented role, driving commercial value from data and helping the organization make data-driven decisions
“These are the slate of roles that we typically see as ‘digital leadership roles’ within enterprise environments,” Burman says. “You don’t need all of them in your organization, and certainly one is not better than the other. And there are no silver bullets.”
AUGMENTING DIGITAL CAPABILITIES WITH ON-DEMAND TALENT
Regardless of how an enterprise defines and fills these C-level roles, the leaders need teams to support the evolving functions around them. On-demand talent can be a perfect solution for addressing this aspect of the digital skills gap.
“[On-demand talent] is an increasingly important piece of the puzzle as organizations build their capabilities and just move through business cycles and the evolution of their business strategy,” Sandra Pinnavaia says. “And we’ve really seen an enormous rise in the percentage of leadership-level freelancers available to be on-demand talent with digital skillsets.”
Such independent executives are increasingly choosing to work this way. In fact, an MBO study found that more than 80% of skilled independents report remarkably high levels of satisfaction, optimism about the future, and a desire to continue working independently.
Virtually all levels of digital talent are now present in the on-demand segment, from interim CIOs to manage near-term challenges and deliver value on digital transformation initiatives to data scientists and technologists to implement tech and tool changes involving AI, IoT, analytics, and other emerging technologies. Project managers are also represented in the segment to help companies keep digital initiatives on track, and so too are digital marketers who can develop and implement campaigns harnessing digital capabilities for brand awareness and lead generation
In these ways and others, on-demand talent is a tool for much more than covering gaps. It is key to achieving digital performance goals that require speed, innovation, and facilitating change. These needs come into play across the enterprise—whether in the form of rapid digital transformation to compete in the COVID economy, a first ever Chief Digital Officer to create a new AI and machine learning COE, a team to stand up an innovative data-driven business unit amid uncertainty, or highly skilled tech talent to upskill team members and help manage a change initiative.
“Setting up and integrating on-demand talent into your company requires intention,” Pinnavaia says. She notes that BTG often facilitates implementation of on-demand talent with clients in two different ways: working with the hiring manager to create a distinct project with explicit deliverables—also known as “projectizing” the role, and leading clients through an exercise in describing and outlining a nontraditional role—in other words, differentiating the on-demand role from a permanent role.
“ Agility really underpins everything here. Agility is the personal ability to foresee and adapt to disruptive shifts, let go of your legacy mental models, and always lean into learning to stay on the leading edge. ”
— Yulia Barnakova
STAYING AHEAD OF THE DIGITAL SKILLS GAP
In today’s business environment, all leaders, especially in the C-suite, must be digital leaders. Innovating in a digital age requires a unique combination of skills across technology awareness, innovation culture, and executive excellence. A digital strategist stays ahead of market disruptions and finds opportunities to win. A digital innovator disrupts the status quo, leverages data, and enables innovation. And a digital driver leads strategic change and enables rapid execution on innovation initiatives. Today’s enterprise leaders must gain the skills to execute on all three levels, with the ultimate goal of staying agile in order to adapt to market changes, stay resilient, and lean into continuous learning.
“Agility really underpins everything here,” Yulia Barnakova says. “Agility is the personal ability to foresee and adapt to disruptive shifts, let go of your legacy mental models, and always lean into learning to stay on the leading edge.”
For more on how permanent hiring, on-demand talent, and upskilling are critical to a fully integrated digital talent strategy, check out our guide, "Why You Need a Dynamic Digital Talent Strategy."