Tag: talent

Digital Reality Episode 15: Talent for the Future | Blog

This month’s podcast is all about the evolution of IT roles and the need for what we call Shift Right. In tech, we say Shift Left; when it comes to talent, three things contribute to the Shift Right: Right Scale, Right Skill, and Right Shape.

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Cecilia Edwards:

Welcome to episode 15 of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Cecilia Edwards.

Jimit Arora:

And I’m Jimit Arora. Each month, we bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results.

When we were entering 2020 and talking about digital transformation, one of the biggest concerns that CIOs had expressed was their ability to get the right talent at scale and speed to support their transformation agendas. Pretty much every hot skill was in the red, based on our analysis, which looked at the demand-supply mismatch between the different skills across different geographies. And in a lot of these hot skills, such as machine learning, AI, and cloud, we saw that demand was exceeding supply by over 40% in select markets.

So, in this very changed environment as we close out the year, we’ve seen a few very different things play out. The one real thing has truly been that digital adoption has accelerated. And one of the things that we’ve always kind of spoken about is that technology is the relatively easy part of the change agenda. It’s the people part, be it the talent or the organization, which needs a lot more focus.

CE:

Right, the culture.

JA:

Absolutely. Absolutely. Any time you say, “Hey, technology is the easy part of digital transformation,” you get a funny look from the technologists. But if you talk to the leaders, you talk to the CIOs, they’ll agree with that. Maybe it’s because they don’t have to actually do it, but essentially it comes down to managing the people agenda, the organization, the culture, as you rightly said, Cecilia. And we see now more than ever before, just given the pace of change we are looking to drive to, the big demands on talent due to the scaled modernization efforts. And then also, if you think about the change that has happened in the operating model, in terms of how we work, where we work, all of this is truly emphasizing the need to look at talent in a fairly different manner than what we were at the beginning of the year.

Which is why today’s podcast is all about the evolution of the talent base, the evolution of the roles, and the broad theme is what we call shift rate. Again, in technology, there is a desire to do more automation, we call it shift left. When it comes to talent, we are saying, “Hey, let’s shift right.” So what do we mean by shift right? It’s building the right scale, it’s creating the right skills, and then defining the right shape of your talent model to really succeed in the talent transformation agenda.

Cecilia, I know we’ve spoken a lot about these three “shift rights.” So talk through the right scale pieces that you’ve been helping clients figure out over the last few months.

CE:

Okay, great. And for those of you who don’t know Jimit well yet, he loves alliteration. So, I will kick it off with our first “R.” so, here are some stats.

JA:

Cecilia, just one thing the “R” and “S”. So, right, right, right, scale, skill, shape. So, yes, I do love my three’s and the alliteration.

CE:

Seeing a double.

JA:

The double alliteration this time.

CE:

That’s right. So, here are some stats. According to a recent study, about 58% of organizations do not have sufficient internal resources to drive their programs. 58%. Furthermore, more than 90% are unable to source and train their talent on key next-generation capabilities. So, that whole model of on-the-job training and seniority, that’s kind of not working. So, these issues get further compounded by challenges related to attrition and project readiness or thinking about the time-to-value of these resources. So here’s where we see a pretty significant challenge in the current environment, and we think that coming out of this pandemic, there really is an excellent opportunity to go back and fix the scale issue at a time when the market’s not yet super hot.

So, some of the key things we see in companies looking to right scale their environments are these. First, they need to forecast the demand to get an objective view of the gap assessment and plan accordingly. That’s obviously going to be a little bit more challenging, but it’s a critical first step that they need to do in terms of right scaling.

Second, they need to create centers of excellence for the areas that are the hardest to find, and they need to drive the company’s recruiting efforts accordingly. You can no longer just have a, let’s say, fair recruiting approach or a generic model. You really need to focus on those areas that are going to be hardest to find.

They need to re-skill. Re-skill and not just replace. So, we’re going to capture this right skilling in a little bit, but you need to do some re-skilling.

You need to partner with the ecosystem. Academia is actually a great place to incubate and absorb talent for the future. I had a client last year who was in the middle of the Midwest, and you’re kind of going, “Where in the world are you going to get the talent?” And there was a school not too far from them. And you know what? They’ve had their best success by partnering with the local universities. So you to actually think about if you’re going to train up the people, why not train them in the skills that you need? So partnering with academia is a great place to do that.

For the remainder. They need to build a robust pipeline of services partners that can ensure that the talent is available and ready when the demand hits. So, there’s this whole piece around, make sure you know what you need, focus with the centers of excellence, think about re-skilling and not just replacing, and then find ways to create a pipeline that’s going to be helpful in your ecosystem. And then at the same time, go ahead and borrow skills from your partners. A group of service partners that can do that for you when the demand hits. So, that sort of helps you with the flexibility of demand that we all know is part of the current business environment.

JA:

Actually, I just have a quick question for you. So as you go back to that first thing, when you mentioned a forecasted demand, we’ve seen that the time horizon that people need to look at needs to change. So, traditional planning assumptions were for a one-year period. What are you seeing change there? Is that becoming longer shorter? What’s your sense?

CE:

We’re actually seeing this interesting combination. It’s got to be shorter, but it also has to be longer. So, weird mix. They actually are needing to still think through what the one-year and three-year plans are going to be, but that cannot be your demand forecast that you’re reacting to. You’ve got to pull that in into much shorter horizons, which is why, if you think about all of the things that we just mentioned, things like partnering with academia, that’s actually going to help you with a longer-term plan. It’s going to help you next year and the year after that, to make sure that you have a flow. If you think about connecting back into that pipeline of services partners, that’s going to help you with the things next month. And so they’re actually having to plan both time horizons, but it certainly, I think, more than ever before, the planning cycle on the shorter end is something that is going to be relatively new for most organizations. And they’re going to have to think about strategies a little bit differently.

JA:

Yeah, that’s a great point. I think what we’re truly seeing is this whole thesis of agility permeates every part of the IT organization.

CE:

Every part.

JA:

You’ve got delivery, you have agility in budgeting to make sure that you don’t create static one-year plans. And now you’re saying that, hey, you need that same agility as you also start thinking about building your talent pipeline.

CE:

Absolutely. Absolutely. So a great example of this right scale is the right scaling initiative of AT&T. It has a vision to change business from hardware to cloud and from a landline business to a mobile-first enterprise. So, the situation was that about half of their employees didn’t have the necessary skills to keep the company competitive. Those are some pretty big shifts. To move to the cloud, but even moving from a landline business to mobile-first, pretty big shifts, and they just didn’t have the talent. The cost of hiring new employees was greater than retraining the existing ones, and replacing workers meant making new ones learn the company culture from scratch – that was going to be a really big challenge.

So, here’s what they did. They started a future-ready initiative where employees were able to get trained by web-based online courses on things like data science and cybersecurity and agility, all of these skills that were going to be necessary in this cloud-based mobile-first world. They developed an internal portal called Career Intelligence where workers could actually see the jobs that are available and the skills that were required for each and the projected salaries, and whether that area has a scope for future growth because what that did is created some incentive because you could see where the opportunities are and then take advantage of things like the future-ready program to train yourself up on skills. And you have a sense of not just why it was good for the company, but how am I going to benefit from it as well? Because I can look at where the salaries are and where the opportunities are for other jobs within the company.

And then the third thing they did was they collaborated with Georgia Tech to launch an online master’s degree program in computer science. So again, they were focusing on: I have a pool of people here today, I’m going to do what I can to re-skill them, work on the culture a bit to motivate them, and then think about longer-term how I’m filling that pipeline so that the marketplace outside of the organization, that those new people coming in would actually have the skills that they need. So there’s a little bit of a summary of our right scaling.

Jimit, do you want to talk about skilling?

JA:

I sure do. I think the last point you made about what AT&T did with Georgia Tech, it actually serves two purposes. One is you’ve got these programs that help you with right skilling, which I’ll get to in a second. But it also, in some ways, acts as a finishing school where maybe in the last semester, there’s a bunch of specialist courses that just make you AT&T-ready so that the company has to spend a lesser amount of time in the first six months to just onboard them on the things that matter. So bridging the gap between academia and business while the students are, are finishing school.

CE:

That’s a great point.

JA:

I’m a great fan of these collaborations between big business and academia. So, right, scale, and this is the one that actually gets a lot of attention, so I don’t think we need to unpack that too much. Most organizations that you speak to instinctively recognize the need to rescale, upscale, right scale. And what we are now seeing is a new set of operating models, which are causing us to redefine the existing job descriptions. And also new roles are emerging. In fact, in the same study that we’d completed earlier this year, about 67% of the organizations said that they expect new skill gaps to emerge because of structural changes in the business, given the current situation.

Let’s take networking as an area. It doesn’t get spoken about a lot, if you think across, everyone’s focused on the agile development on the cloud side, cybersecurity, underpinning all of this as the big network and, hey, we started talking about AT&T, so let’s stick to the team.

We place significant demands on infrastructure in a work from home environment.

And Cisco, for example, identified five new roles that are focused just on making sure you have resilient networks that are secure, that have the throughput to make sure that people stay productive. The one that I find the most interesting is the one called a business translator, and this role effectively takes the business need into a service level security and compliance requirements that can be applied and monitored across the network. And this is astounding. It’s starting to say that there’s a hierarchy of business needs and the network configurations that you need to support these need to be thought out and planned. That’s what that business translator is doing. I know we’ve had variants of this in terms of within your data center, you’ve got X levels of redundancy, but this is trying to create more granularity into that process.

Similarly, we’ve got new roles coming in such as a network guardian, somebody really got creative with these names, I must say. You’ve got a network guardian, you’ve got a network commander who centrally manages automation and orchestration processes to drive intent-based networking. You’ve got a network orchestrator, and then this is my favorite, truly is, you’ve got a network detective. So, what does a network detective do? They queue network assurance tools to ensure that the business intent we identified is being delivered and then work closely with the ITSM and SecOps teams to really identify if there are any places where, well, if it’s a detective if theft is happening in the network protocols, I guess.

CE:

Yeah. As you think about things like network, it’s one of those things that you mentioned that doesn’t get a lot of attention because you just assume it’s just the pipes and it’s taken care of. And I think that it highlights the need to really take a good, hard look at the kind of talent that you need because this environment that we’re in is making us rethink a lot of the things that we took for granted, and those things that were in place and worked extremely well in the old world now have different demands on them. And you just kind of highlighted a few of them, as people are working from home all over the place, you need to now rethink these things. And it’s not the exact same skill that was there before. This network detective’s job just got a whole lot harder with the entire workforce being distributed all over the world and in homes and in any kind of environment. So, definitely important to rethink all of the roles that you have in IT now.

JA:

Here’s the interesting part. What you see on the network side, you take that to applications, you probably have the best examples there. So, the traditional developer tester is becoming a full-stack engineer. You’ve got DevSecOps engineers. And here’s the part that I find the most interesting or frustrating as you start looking at the job requirements which are cookie-cutter, “Hey, I need Technology X, seven years of experience.” Technology X has been around for three years. So, that’s been the traditional mindset. Guess what? You aren’t going to find these people out in the marketplace. And what you really need to do is you need to take who you have right now, re-skill them to fill the gaps in their capabilities to become what you need. So, we’ve done a lot of analysis in terms of what are the best skill pairs. So, if you want to get to a network detective or a network orchestrator, the places where you will start is with your Cisco-certified network engineers. You just want to augment what they have and take it forward.

CE:

So, Jimit, let me ask you this. It seemed as though, not too long ago, we’ve been talking about talent for a while, that one of the themes was: it’s hard to re-skill. Who’s going to teach people how to do it? Where’s that coming from? Have you seen a shift, as we’ve been dealing with this challenge for a while, that there are more resources available to support this re-skilling?

JA:

So, I’d say there are more resources available. It doesn’t mean that it’s become any easier. And as you mentioned in the AT&T example, it’s always more expensive to replace versus re-skill with budgets being under the pressures they are, and only about to get worse. I just think that companies are getting more and more creative in terms of trying to do what they can with what they have versus just going out to look into the market.

CE:

I’d imagine that the online has become a much more acceptable form of re-skilling?

JA:

Oh, absolutely. And you know what? Let’s take an example from the most innovative company out there, which is Amazon. Most innovative, let me back that up, I’m sure I’ll get hate mail for saying that. But if you look at what they’ve done and to think of Amazon struggling with anything when it comes to technology skills comes as a bit of a surprise, but they’ve made a lot of progress in automation. Where they were lacking was in the areas of data science and solution architects of all things. So what did they do? They initiated the up-skilling 2025 program. So, that’s a five-year horizon to retrain the workforce, create a machine learning university. So, there you go. So, that’s an online program which allows people to do self-service, self-based training.

They set up an Amazon Technical Academy, which allowed people with non-technical backgrounds to take up more technology-centric roles, and then most important, and I think this is key to the success of this, is you create learning pathways, which are tailored to the … I wouldn’t say individual, in some ways they are, but you identify personas or archetypes. And then you make sure there are trainings and certifications which help you advance these capabilities. And at the same time, you link performance incentives, where it’s not a penalty, but you get additional growth if you keep progressing on those milestones as defined. So, they’re making it very easy and they also incenting the right re-skilling behavior because they know it’s cheaper for them in the long run.

CE:

Yeah, and I think in both of those examples, AT&T and Amazon, they have a combination of, I’ve got to put the training in place, but I also have to address the cultural component. I have to provide some level of motivation for the people in order to want to participate in these things. So, very interesting.

JA:

Absolutely.

CE:

So, should we talk about right shaping? That’s the third “R.” We see that the third turn that companies need to make is really to ensure that the shape of their workforce is aligned to contemporary requirements. So, that classical pyramid-based approach to services delivery and the commoditized role definitions is really giving way. And I think, Jimit, you mentioned this in an example, just a few minutes ago, it’s really giving way to that full-stack, multifunctional teams, which have both business- or customer-aligned pods that combine technology and functional skills and essentially collapse the previous pyramid structures.

So, I know that was a big mouthful. The takeaway is multifunctional, business-oriented. You’ve got to look at tech and function all combined. So, that whole pyramid structure is really giving way to product-aligned teams, with some companies creating DevOps factories or benches to manage all the different variances in demand.

Another very important dimension of the right shape is also in terms of how companies think of the transition from STEM to STEAM. So, there’s an extra “A” in that second one. The “A” in there represents arts and humanities. So, if we think about digital transformation as helping organizations create breakthrough impact in customer experience and user experience, non-technical skills start to have a really important role to play in the shape of the delivery organization. And so, all of those become really important. So again, you take the full-stack, multifunctional, business-aligned technology, functional product, and non-technical all working together in this very collaborative way that actually helps collectively deliver the talent and skills that organizations need.

JA:

You mentioned this before, and I think it’s important to underscore the point. The whole focus on culture is really key to making sure that the scale, the skill, and the shape really come together to deliver high performance. So, the terms you tend to hear a lot is this whole thesis of a high-performance culture. And again, anytime you get into some of these squishier aspects in a budget constraint environment, then you get a few of the eye rolls, but then if you go back and unpack, why are people really putting this culture in place? It is because it’s actually a very tangible ROI defined through better productivity, velocity throughput.

So, don’t let anyone talk you into, “Hey, culture can be relegated to the sidelines, not important. I’ve got a budget to meet.” The way you meet those budget numbers is by creating this high-performance culture. What research also shows is that the high-performance culture at a team level eliminates the rock star developer role, and then you find that the team always outperforms a collection of very capable individual contributors. So, some very profound implications of not just setting up the right talent model but also making sure that you have the culture backing it up to make this succeed.

CE:

Absolutely. Whenever I hear that conversation, I’m always reminded of the All Star games. I don’t think they’re very good. You get the rock stars from a bunch of different teams together and just throw them together, and there’s no magic because they don’t have a culture. They haven’t worked together. They’re not really a team and they all want to do the rock star thing. And I think that the teams that have worked together and create that culture and rely on each other and have the mix of skills all blended nicely, definitely have the opportunity to perform better.

So, this has been a really interesting year for talent development, from a position of demand significantly exceeding supply. We have some normalcy in the talent market and more talent is available now and organizations have that opportunity to shift right on their talent journey.

So, in every podcast we call out our lessons – we call those the digital reality checkpoints. So now, obviously, I have three again for us this month. The first is put the three-year roadmap in place to shift right. That’s right scaling, right skilling, and right shaping of your organization. You need to think about that long term, even though you have to act short term. So put that three-year plan in place. The second is emphasize a culture in the organization that rewards high performance teams and drives greater alignment between business and IT. And finally, define the skills passport and the learning platform to enable your organization to respond to the dynamic needs of the business environment.

JA:

Thank you, Cecelia. And thank you for listening to this episode of Digital Reality. You can check us out at www.everestgrp.com or follow us on LinkedIn @jimitarora and @ceciliaedwards. If you’d like to share your company story or have a digital topic that you would like us to explore through alliterations you can reach out to us at [email protected]

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