The modern enterprise is changing in a monumental way, whether or not you are ready for it.
In the last 10 years, nearly every aspect of business has been revolutionized: the way you serve customers; the way you dream up, build, and market new ideas; the way you monetize your business; the way you build connections in the market; and the way you automate your business processes and systems.
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Let’s talk about why the change is happening.
The Forces at Work
Three major forces are radically redefining everything about work and the modern workplace:
Digitization is the conversion of offline work to networked, computer-supported work. It is the new way ideas are brought to market.
It is changing how businesses operate, and, fundamentally, how enterprises work. However, according to McKinsey, industries are on average less than 40 percent digitized.
Despite all we hear about the billions spent on digitization, or the deep penetration of digital technology in industries like media, retail, and high tech, it stands to reason that more change is coming than we have already experienced since Netscape was launched more than 20 years ago.
Millennials are now the largest group of employees in the workplace, according to Pew Research. They are knowledge workers who have grown up in a digital world.
They are highly networked and want more ownership and autonomy in the work that they do. They require systemic changes in how work is managed, prioritized, and delivered. This generation’s influence will only increase over the next several years.
Declining productivity growth is occurring as the nature of work is changing. Employees are spending too much time searching for information across disparate tools and applications, coordinating their efforts, and reporting on progress or roadblocks.
This has resulted in a situation over the past 20 years that saw little-to-no labor productivity improvement, despite massive investments in digital technologies.
What does that mean? Let’s do a little math.
If we take a conservative estimate of 60 million knowledge workers in the United States, and figure in the annual total cost per knowledge worker of $93,200 (according to the Bureau of Labor Statistics), this comes to a total human capital investment of $5.5 trillion.
In terms of productivity, our research, matching an estimate by McKinsey, came to a startling conclusion: workers are spending only 39 percent of their time on the primary job they were hired to do. Imagine that, just 39 percent!
We’re just throwing away massive piles of cash since 39 percent of $5.5 trillion translates into $3.4 trillion of underutilized or wasted human capital investment.
What it All Means
There are key conclusions we can draw from these fundamental trends that are redefining the modern enterprise:
- The technology organizations acquire and use today has created a new revolution in how businesses operate, attract customers, and deliver value. And numbers suggest we are still in the beginning stages of this revolution.
- Your workforce has fundamentally changed. There are now more digital natives than digital immigrants in your organization. Leadership must shape this workforce into a unified team that can seamlessly collaborate and innovate together.
- Reigniting workplace productivity will require a new approach to managing collaborative work at an enterprise scale. Simply spending money on new tech won’t get the job done. Wholesale change management, with digital work automation as the key enabler, will be the way forward to unlocking higher productivity.
The enterprise of today is fundamentally different from the enterprise of just a decade ago in terms of people management, operational management, and how it goes to market. And the change goes on.
Of all the ways your business is changing, I believe nothing is as important as this one: the way your people work is fundamentally transforming.
If the way your people work isn’t changing, then get ready to be left behind, because tomorrow’s knowledge workers will flow to the enterprises of the future, not to the organizations stuck in today’s paradigms.
In my next post I’ll talk about the enterprise of the future.
See our post "How to Get Ready for The Future of Work, From Ian Cleary, Clare Evens, and More: News From Best of Leap 2017" for more on preparing for the future of work.
About the Author
Steven is the Chief Product & Technology Officer at Workfront. He has many years of executive leadership, product development, and software engineering experience across various industries including enterprise software, healthcare IT, and games. Peanut butter with chocolate constitute Steven’s kryptonite.More Content by Steve ZoBell