How ACs Can Help Digital Transformation Martin Lanik, CEO of Pinsight

ACSG 2020

20 years later and everything’s changed!

Many companies went bankrupt

Today’s Agenda

• The impact of digital transformation on businesses & workers

• How ACs can help with the people side of digital transformation

• Case study of $4.3 billion-dollar healthcare company

Impact of Digital Transformation

Digital transformation is in full swing!

0% 10% 20% 30% 40% 50% 60% 70% 80%

… for faster time to market

… to meet changing customer expectations

… to improve operational efficiency

Have a digital transformation strategy in place …

PERCENT OF ORGANIZATIONS

Source: Forbes (2019)

Jobs that no longer exist:

• Human alarm clock

• Lamplighter

• Switchboard operator

• Scribes

• Typesetter

• And many, many more

Jobs that didn’t exist 10 years ago:

• Social Media Manager

• SEO Specialist

• App Developer

• Uber Driver

• Podcast Producer

• Telemedicine Physician

• And many more.

Prediction for the next few years

In 2025, more than 50% of labor (by hours) will be done my machines

In three years, more than 54% of all employees will require significant reskilling

Source: World Economic Forum

What does this mean for talent management?

What does this mean for talent management?

• You’re making decisions about people in jobs

that either won’t exist in the next 3-4 years or

don’t exist now.

• SHRM: You need to make decisions about

people based on their future potential

How do you do it?

• Organizations have been doing this for decades

• With the war for talent, they built HR practices to help them identify “high-potentials”

By far, most companies rely on management to identify high-potentials

Source: World Economic Forum

0% 10% 20% 30% 40%

Other

Third party assessment (personality, intelligence, etc.)

Manager nomination

Manager or performance ratings

Talent review or 9-box ratings

How are high-potential employees identified in the company? Data from 129 U.S.

companies

Here’s the problem with managerial ratings:

They’re not accurate!

Question: Will the leader help us retain more staff?

Source: World Economic Forum

Data from Fortune 500 tech company. Their average retention rate today is 86%.

50% chance will

retain

less staff

50% chance will

retain

more staff

9-box ratings of

Potential

r = - .13^

54% chance will

retain

less staff

46% chance will

retain

more staff

51% chance will

retain

more staff

9-box ratings of

Performance

r = .04

49% chance will

retain

less staff

39% chance will

retain

less staff

61% chance will

retain

more staff

Virtual AC

r = .34**

^ marginally significant at p < .10 ** statistically significant at p < .01

Most managers show unconscious bias against women and racial minorities when deciding who has potential

Men are 3x more likely to be

identified as having leadership

potential than women

White men are 2x more likely

to be identifies as having

leadership potential than Black

men

Male managers show stronger unconscious bias than female managers

5x

For every woman organizations actively groom for a leadership position, they groom almost twice as many men.

5x

We see more parity in racial group representation.

When selecting high-potentials, we found unintentional discrimination against women and minorities in almost 1/2 of organizations

5x

Is there a different way?

5x

0,32

0,45

0,54 0,54

0,25

0,3

0,35

0,4

0,45

0,5

0,55

0,6

Cognitive ability Cognitive ability + personality

Cognitive ability + personality + simulation

Smoking & lung cancer

Best predictors of success at work and in life

Source: Meriac et al. 2008

Case Study

Digital Transformation of a Healthcare Company

Industry trends:

• 77% of patients are going online to book doctor appointments

• Telemedicine is projected to grow to $130.5 billion by 2025

Company’s response:

• Board put ambitious operational plans into place

• HR tasked to quickly change the behavior of 700 leaders across the company

$4.3 USD billion revenue | 4,600 employees

Steps in the Process: 1. Future-focused competency model to

identify important leadership skills

2. Build VAC to measure those skills

3. Assess 700 leaders & provide feedback

4. Change their leadership behavior through development support

Leader Competency Model

Adapt to Changing Business

Focus on Customers and Patients

Understand our customers and patients and bring their needs to the forefront of

business decision making

Create Buy-in Influence others to embrace and facilitate

positive change

Execute Strategy

Make Good Decisions

Think critically - gather data and analyze the problem, understand root cause, and

take logical action

Drive for Results Identify priorities and set clear

expectations – who does what by when

Lead Effective Teams

Build Relationships Build trust, show caring, and treat others

with compassion

Communicate Effectively

Create two-way communication channels, ask questions, hear and understand

others

Develop a Strong Team

Actively develop others through coaching, feedback, stretch assignments, reflection,

and suggestions

The Virtual Assessment Center Challenge:

• How do you make it relevant to every level of leadership – CEO to charge nurses? Clinical and administrative roles?

• How do you make it short – 1 hour max?

Simulation Exercises

Formulate and deliver a 100-day plan for the new Digiteam startup Case Study

Review performance appraisal with a direct report and sketch out a development plan Coaching role-play

Respond to an email from a direct report asking for guidance, and an email from the boss concerning delegation of projects/tasks Delegation emails

Angry Customer Act in response to an angry customer’s email concerning a project implementation

What the exercises measure:

Case Study Coaching Role-Play Angry Customer Delegation Emails

Mentor and Coach X X

Show Caring X X

Listen Actively X X

Influence Others X X

Make Good

Decisions X X

Manage Priorities X X

Focus on Customers X X

Live Simulation Timeline

Simulation: Pre-Work

Simulation: Pre-Work

Simulation: Dashboard

Simulation: Example File

Simulation: Example Email

Simulation: Example Email

Simulation: Incoming Role-Play

Simulation: Role-Play Example

Group Analytics for Decision-Making

• How strong are our leaders?

• Who are our top performers?

• Who are our high-potentials?

• Where are our biggest gaps?

EXECUTION

Understand the Competency Ratings

Dive deeper to see how

participants performed in

each simulation exercises,

which micro-behaviors

they showed, and how

consistent their

performance was across

different exercises.

Where Should You Focus Development

Where should you focus

development when putting

together a development

plan? Where can you grow

at the fastest rate? What

skills come to you naturally

and require the least

amount of effort?

Now: Take Action!

After the assessment, the

app generates a

personalized development

plan for every participant

and helps them practice

key leadership behaviors

daily while measuring their

progress.

Development App

Integrated with reporting

and progress tracking –

giving participants a

modern, proven way to

continuously improve, and

administrators to view

progress.

Outcomes • Compared to common

psychometric tests (personality or intelligence tests), 94% of participants viewed the simulation as interesting, rewarding, challenging, and insightful.

• 97% of participants would recommend it to others to improve their performance

• After 12 months of development, 79% participants improved their leadership skills as measured by a post-test.

• Overall, participants’ performance on leadership competencies increased by 11%.

4

6

Concluding Thoughts

• Organizations are undergoing digital transformation

• Most of the important decisions about people are based on biased data

• ACs can help drive the people side of digital transformation

Get the research study at:

RepairTheRung.com