Advisory | | Feb 10, 2020
Over the past several years, the concept of digital transformation has become a top business priority. As adoption of artificial intelligence (AI), cloud-based systems, the Internet of Things, and other advanced technologies continues to expand, organizations are weaving these tools into every business process and, in many cases, changing how they operate to optimize productivity, efficiency, and the customer experience.
More and more organizations are investing heavily in technology-driven initiatives, as they should.
People are the building blocks of any organization. At the end of the day, your people are still what creates the value through ideas, especially for a service business like ours. While technology can enhance service delivery, these services and ideas are still delivered by people.
Advances in technology make investing in human capital that much more important. People need to be retrained for a future in which technology and data play a bigger role in how businesses function, how tasks are performed, and how services are delivered. Nobody knows exactly what that future will look like or how quickly it will come; we just know it is coming.
According to the 2019 Global Human Capital Trends report from Deloitte, the ability to lead through more complexity and ambiguity was at the top of the list of unique requirements for 21st century leaders. Future leaders will be expected to navigate:
- New technologies (75 percent)
- Rapid pace of change (66 percent)
- Changing demographics and employee expectations (57 percent)
- Changing customer expectations (53 percent)
For these and other reasons, every organization needs leadership with the vision to build a self-sustaining company by investing in people. However, this isn’t just about succession planning. A true leader needs to invest in the people who deliver services on the front lines right now to remain competitive and meet evolving customer needs in a constantly changing marketplace.
Preparing for the Future, Top to Bottom
In 2011, the first Baby Boomers turned 65. Since then, about 10,000 people per day have reached retirement age. This will continue until 2030 when the last of the Boomers turn 65. As this generation retires, who will step up to replace them? Are these people in your organization? How will you identify and mentor new leaders?
According to the Deloitte report:
- 80 percent of leaders believe succession planning is an urgent or important priority.
- 41 percent believe their organization is ready or very ready to meet their leadership requirements.
- 25 percent said they are effectively developing digital leaders.
- 30 percent said they are effectively developing leaders to meet evolving challenges.
In other words, leaders know succession planning and leadership development are important, but their organizations struggle in these areas. If this sounds familiar, look outside the organization for help and seek the expertise of outside consultants, trainers, and coaches.
The benefits of investing in your people go beyond seamless transitioning to new leadership. These efforts build bench strength, creating a workforce that’s better prepared to adapt and succeed as market conditions change. When your team sees opportunities for career growth and a commitment to their success, they become more engaged. They buy in to the company culture, which improves retention rates.
Looking farther down the line, it is essential to evaluate how you train your entry-level team members. In many cases, the work previously performed at entry level positions ten or twenty years ago is now done by machines. The people joining the workforce in this age will not have the same experiences as the previous generation; those roles and tasks that are now automated. So, how do you ensure that they are gaining valuable experience that enables them to grow in their careers?
No matter what your position, many of the skill sets that enabled you to grow to your current level today will not get you where you want to be tomorrow. Instead of using outdated training methods and job descriptions, it is important to invest in training, coaching, and mentoring for today’s roles, as well as the roles of the future, using tools such as virtual learning methods.
Ultimately, organizations need to invest in people in the same way they invest in technology – boldly, strategically, and with a vision for the future.
What Is Your Model for Investing in People?
In today’s dynamic business environment, there is no one-size-fits-all approach that works for any area of your organization. Investing in the development of your people is no exception. At Prager Metis, we’ve taken a number of steps to position our team for long-term success and career growth.
We’ve invested in a Director of Training and Development, who manages our mentoring program with the help of a growing staff. While a certain amount of continuing education is mandated by our industry associations, Prager Metis goes far beyond these requirements with internal and external learning programs for our team.
We also created Prager Metis University, which is essentially a leadership program for non-partners. Prager Metis University “students” begin with group learning before moving to an individualized program that is supported by a coach for each participant. This includes the use of outside coaches who work with people in new leadership roles to help them overcome challenges and achieve success.
In addition to leveraging outside expertise, Prager Metis has a Chief Success Officer, who is responsible for managing the coaching of newly appointed leaders and partners. Our philosophy is that every partner should focus on mentoring future leaders as a primary goal. As CEO of Prager Metis, I have a hands-on role in this initiative, training and mentoring people who could step into my role someday.
While these steps have been extremely successful in building up our investment in our people, we also know it is important to look at the bigger picture and adapt when necessary. Just this year, we created a new position within the firm – Chief Strategic Innovation Officer. This individual oversees and advises on all aspects of strategic focus, direction, and execution while promoting a culture of innovation. This includes analyzing every process across our firm to determine if tasks should be performed by humans or technology and identify new ways to retrain and refocus human capital.
We view traditional technology as a means to reduce costs by automating certain fundamental tasks, while newer technology such as AI can provide insights that inform our team’s decision-making and strategic planning. We believe human capital should focus on higher level, value-add work for the organization and our clients. It is people who ultimately build relationships. It is people who create the value we provide to our clients through creativity and ideas, which makes it possible to take full advantage of technology to maximize service delivery and maintain those relationships.
Your organization is your people. If you want your team to be a true asset that accumulates value over time, you must invest in the growth and success of human capital. It’s the smartest investment you’ll ever make.