Charlene Li on Succeeding at Digital Transformation

Charlene Li on Succeeding at Digital Transformation

Charlene Li, a leading expert on digital transformation strategy and leadership, shares how the pandemic gave organisations renewed confidence to thrive amid previously unimagined digital disruptions and why HR needs to be at the strategic table in driving digital strategies. She also talks about the internal barriers that can cause HR executives to hold back from fully embracing the digital future of work and how corporate leaders can become more technologically savvy.


Only after the pandemic began did many organisations truly invest in their digital transformation efforts. In your view, what have organisations realised about digital transformation as a result of the pandemic?


The digital transformation that organisations went through with the pandemic was out of absolute necessity and survival. If they hadn’t done it, they would not have been able to function. I think it wasn’t so much a digital transformation as a forced move because the whole idea of transformation is going from one state to another in a planned and intentional manner.


Even before the pandemic, many organisations were undergoing digital transformations, but they were moving slowly at a pace they were comfortable with. There was a tension between having to change and not wanting to change very much, and as a result, things moved slowly. When the pandemic hit, companies had to adapt quickly, and they did so in five days, seven days, and two weeks. The reality is that they could’ve changed all along. They could have made this transition less difficult than it was, but they didn’t embark on the process until they were forced to.


The COVID-19 crisis gave organisations renewed confidence that they could bring about far greater change than they previously imagined. So, they didn’t stop with the initial transformation brought about by the pandemic and are now taking advantage of this time to focus on how they can change the fundamental ways in which they do business.


You often say that digital transformation is more about people rather than technology. What do you mean by that?


We think that digital transformation is about the digital. The reality is yes, it’s about the technology and the impact technology has, but the transformation part is about people — how they must change their mindsets and the way they work.


Digital transformation isn’t just about the technology we use, but also how we interact with each other, the processes we follow, and the collaboration that must take place to create things together. Technology is the first and easy step. The next and most important step is changing how everybody does the work and interacts with each other.


We don’t pay nearly enough attention to the people side. Many times, HR isn’t sitting at the table thinking about how this will impact people, culture, and so forth. The people dimension is by far the biggest area that organisations struggle with.


With many organisations pursuing audacious and ambitious digital transformations, there will be a lot of pressure on HR to speed up culture change and quickly shift people’s mindsets in embracing the digital imperative. How can HR approach this challenge?


For people to talk about all the change and its impact on culture and people when HR is not in the room, let alone at the table, is just not right. Again, the number one reason why digital transformation succeeds or fails is because of leadership and culture. HR absolutely has to be in the room to ensure that leadership and culture move in the right direction to support the digital transformation.


The issue, I believe, is that HR is seen as a risk mitigation function. They minimise the risk that somebody you hire could be a failure, unsuccessful and unable to do the job or, more importantly, that they could put the company at risk for doing a bad job or acting irresponsibly. So HR makes sure you don’t hire those people. Then, it’s about retaining those people, making sure they don’t leave. Is this really about transformation? A significant concern here is that HR has people as part of its remit and responsibility, but does it really have leadership and culture as part of its responsibility? If they don’t, it’s tough for them to come into the room and know how to participate or what to say.


Are there any limiting beliefs that HR executives might themselves have about their participation in digital transformation strategies?


The most significant limiting belief that HR might have is that they are not technologists. They may think that they don’t know the technology and that it’s about CRM, digital e-commerce and curbside pickup, so why do they need to even be here? A couple of years ago, we did a study showing that merely 4% of HR executives were even in the room participating in digital transformation.


The second limiting belief is that the way we’ve done things has worked in the past, so let’s keep doing it. If you don’t understand what a future change could be or what the potential benefits are, then it’s difficult to give a good reason why you want or need to change.


How can corporate leaders become more technologically savvy in order to better drive digital transformations?


The biggest key is to ask the right questions. It will be difficult for leaders to be experts on technology. They don’t need to know the details, but they must know how to ask the right questions. The key ones are: How would this technology improve our business? How will this technology improve the customer experience? How would this platform help us move forward with our ambitions around a great employee experience?


I see a divide between technologists and executives. Technologists talk about the technology and how it works, whereas executives are like, “Well, what does it have to do with the business?” Being able to meet in the middle ground requires the executives to glean meaning from the technologist and for the technologist to understand the business implications of the technology. That’s the divide that needs to be bridged.


I often highlight to executives that it’s their job to make it very clear to everybody what the organisation is trying to do with technology. What impact and change do we expect, and what can we do differently? What’s the benefit going to be? If you can’t communicate that to people and lead them, they’re just going to be saying, “Why should we go through this change? I’m going to stay exactly where I am. I’m not going to change.” Thus, your transformation effort won’t succeed.


Creating a compelling employee experience (EX) entails more than just figuring out how to make hybrid work possible and workplaces safer. There’s a lot that goes into creating today’s EX. How can organisations meet changing employee expectations and create meaningful experiences for them?


First of all, it’s about listening to the employees and understanding what makes them happy or frustrated. They speak all the time, internally and externally – so simply listening to what they’re saying is a key part.


When organisations talk about returning to the office and say things like everyone has to be back at the office, five days a week, 100% on this date, or we want to see each other again, and so on, employees don’t understand why they need to go back. They might feel it’s risky, and they’re not ready. Not being tone-deaf to them is a crucial part of the employee experience.


Employees want to be heard and seen in order to feel that they are in a trusted relationship with the management. This is not to say that employees are always right. People are aware that their wants and expectations will not always be met, but they need to be heard.


Do you believe human skills will be more valuable in the digital future of work?


Automation takes away things that don’t require a lot of human interaction because machines can do them, and that allows us to focus on the things that only humans can do. There’s a tremendous amount of judgment and creativity required for every job that automation can’t do.


I believe that most manual jobs still require a human element because jobs are never static. Things are constantly changing, and the machine can have machine learning, but unless it has learned about a new experience, it isn’t good at it because it may have never seen it before. Humans, on the other hand, are extremely good at this. However, automating jobs requires a significant amount of training, planning and upskilling for the people who used to do those jobs replaced by machines.



Ankita Sharma is working as Senior Editor with Human Capital. With 6+ years of experience, she has performed diverse roles across the entire spectrum of corporate HR — from hire to retire.


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