In a period of rapid technological advance, almost every organisation is going through some form digital transformation project. AICPA & CIMA’s Associate Technical Director Peter Spence explains that the key component of these projects is human capital.
I sincerely believe that the people building their careers today are extremely fortunate to be doing so at a time when technology is pushing the boundaries of the possible. For finance professionals, the potential power of modern data analytics and artificial intelligence could turn out to be our own industrial revolution.
Organisations everywhere are rightly scrambling to find ways to take advantage of this new technology. While these transformation projects come with risk attached, the danger of being left behind by more digitally enabled competitors is too great to ignore, so the chances are all finance leaders are going to be involved in managing one.
The issue I want to discuss here is the temptation to be so dazzled by the potential of technology that you forget about the people who will be using it. It is human capital which is at the heart of a successful digital transformation, and it needs investment if the project is to deliver returns.
To state the obvious, you and your team need to have the skills to use whatever new tech your organisation invests in. It is vital that this upskilling is included in the budget for any transformation project, because without it the project will certainly fail. There are tech skills gaps in the finance profession. AICPA & CIMA’s (where I work) Future of Finance research, released this year, found that largest gap was in data analytics and data modelling, so that is clearly an area for you to consider investing in.
At a time like this, when there is innovation and experimentation happening all around us, you need to think more deeply about developing the right mindset to take advantage of the new digital opportunities, which goes deeper than learning new operational skills. A few years ago we conducted some research with KPMG on what makes for a successful transformation project. We found that workforce motivation to embrace change was the most critical success factor, followed by the motivation of the workforce to learn and evolve, which we refer to as the growth mindset. Once again, these are aspects of human capital rather than technological capital, and for that reason they often get overlooked.
To stay competitive, your team needs to actively learn and grow. If you as a leader foster a growth mindset, your team will understand that their abilities can be developed, and their efforts to build new skills and apply them in new ways will yield positive results. You must make sure that everyone is confident that they can take on these challenges, learn from mistakes and actively seek new knowledge.
It is worth thinking about what developing human capital means for a multi-generational workforce. Our skills have a much shorter shelf-life in a period of rapid technological advance. At a time like this you cannot expect to stop learning once you have achieved a professional qualification or become proficient in a certain technology. We must all push ourselves and our team members to continually learn, unlearn and relearn to remain at the leading edge of these advances. This will become more important because of the probable trends in workplace demographics.
It is a simple (and positive) reality that people are going to be working for longer to fund longer retirements, and so we should expect to see more experienced workers remaining in the workforce in greater numbers in the future, creating a truly multi-generational workplace. In consequence, the idea that learning new digital skills is just something for young workers is outdated. For the benefit of both the individual and the organisation there needs to be a focus on investing in all team members to make the most of this technological revolution.
The organisations which are able to develop their human capital in such a way that they can make the most of this generation of digital advances are the ones which are going to thrive. The most successful finance leaders will be the ones who recognise this reality as they plan and manage their transformation projects. Whatever you do, don’t let your people be an afterthought.
