The human capital challenges of digitalising your supply chain

Much has been written about the digitalisation of retail supply chains, and how the arrival of new technologies is disrupting the retail business model both fundamentally and irreversibly.

Most retailers are now aware, sometimes painfully, of the efforts they will need to make if they are to successful integrate the effective use of new tools like robotic process automation, Big Data and predictive analytics, machine learning and blockchain into their operations.

At Proco Global, we focus exclusively on the recruitment of supply chain talent around the world, and the retail sector is one of our key markets. We are already seeing the market leaders taking innovative steps towards digitalising their supply chains, and we are increasingly aware of the challenges that these transformations represent from a workforce and talent perspective.

At the start of this month, I had the pleasure of presenting at the Weave Supply Chain 360 conference in Hong Kong, which brought together a line-up of international speakers to discuss the challenges facing modern retail. In my talk, I highlighted the findings of Proco Global’s recent survey on the digital transformation of retail supply chains, where we were surprised to find that only 53% of respondents saw digitalisation having a broadly positive impact on their businesses. The survey also revealed that nearly 40% of respondents did not yet have a strategy or roadmap in place to manage the necessary transformation of their businesses and nearly half lacked any kind of workforce strategy at all.

This is concerning, not only because the competition is racing ahead, but also because the real challenge of digitalisation is not technology. Rather, businesses need to fear the cultural change that must go hand in hand with technological change, because facilitating a cultural transformation is both harder, and more business critical, than the actual technology.

According to one of our clients, Heinz Gassner, who runs a European thinktank called the Smart Industry Forum, digital transformation is in fact 80% a people challenge, and 20% technology. The technology is out there, but getting your people on board is not going to be easy.

He suggests that the first three steps any organisation should take must be the recruitment of digital transformation competencies in the leadership team, the creation of a cross-functional team with responsibility to drive change, and the development of a culture where people have the courage to question anything.

The problem? This is easier said than done! What makes digital disruptors like Amazon, Google and Alibaba so successful is their cultures, but these companies were ‘born digital’, so there was no need for a huge cultural shift. For traditional, old-school retailers to develop cultures where employees have the freedom to experiment and are encouraged to take risks without fear of failure requires fundamental mindset change.

Digital mindsets are constantly experimenting, deeply analytical, and thrive on ambiguity. But how do companies embed these cultures while keeping their brightest existing talents on board?

Part of the answer lies in generational change. Last summer marked the first time that Generation Zed, born in 1995 or later, entered the workforce. In 2018 they will begin transforming businesses. This new generation is more digital savvy, but arguably less socially savvy. They are fast learners, resourceful, entrepreneurial and eager to work and accept new ideas, but on the downside they are more difficult to attract, harder to manage, and dependent on constant validation.

Those companies that truly wish to transform their supply chains into the digital age must also transform their hiring strategies, because attracting new talent will be about more than placing an attractive ad. Employer brand and the very transformation story itself will become critical, as wooing the best talent morphs into an effort to tell the best story about cultural fit, work-life balance, social and environmental responsibilities, work place values and a true purpose-led mission.

We know that success or failure in digital transformation will depend on human capital attraction and retention. Now is the time for businesses to develop those strategies that will ensure they stay ahead of the pack.

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