Digital Transformation Strategy And The Future Of Work

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Meet Rob Hillard. Rob’s rich tenure with Deloitte Australia includes key appointments as the Managing Partner of Consulting, COO of Consulting, leader of the Technology Consulting business and founder of the Enterprise Information Management practice.

Today, Rob is their Chief Strategy & Innovation Officer.

His track record in digital transformation uniquely prepares Deloitte to tackle the disruption of technology, new competitors, challenging economic conditions and changing regulatory priorities.

Learn more about Rob and connect with him via LinkedIn.

Arielle: Rob, great to meet you. Thanks for joining us. 

RH: Great to be here.

Arielle: There’s so much we want to cover with you today. But let’s start with digital transformation strategy trends. Which of the pundit predictions from 2017 didn’t eventuate in 2018? Which did?

RH: The biggest prediction failure of 2018 has been blockchain. It has been hailed as the greatest digital revolution since the beginning of the internet.

It didn’t emerge as important to business in 2018 and won’t again in 2019.

AI was predicted to emerge even more significantly in 2018 and it did. But some of the fear-mongering of loss of jobs through technology has been demonstrated to be false.

(Related: Why Is Leadership Important?)

Arielle: In 2018, what lessons (both pleasant and painful) did Australian business leaders learn about executing a digital transformation strategy sustainably and reputably versus piecemeal?

RH: The last year has seen the Australian public’s trust in business plummet to new lows.

One of the causes is the complexity of so many organisations which means that their products and services are almost impossible to govern.

This complexity is often caused by the evolution of technology rather than deliberate design.

(Related: Build A Strong Executive Presence In 7 Steps).

Arielle: In your experience, how much of getting digital transformation right is about technology, and how much is about people? Are businesses still confused about this ratio?

RH: Digital transformation is technology and people in equal parts. Neither can be successful on their own.

2018 has seen the debate about the “future of work” move to the fore as everyone tries to understand what the technology will change about the way they will live and work in the future.

Some businesses have tried and failed to adopt approaches that have been successful in the “new economy” – such as giving people more discretionary time to innovate or doing away with traditional hierarchies.

It’s not that these changes were wrong, but without properly setting expectations, people just don’t have the work “norms” to behave or self-regulate in the right way.

Before making changes to the way people work, it is important to observe them in action both working as they do today and in small experiments with new technology and workplace rules.

(Related Article: How To Future-Proof Your Company’s Organisational Design).

Arielle: You just noted that people are as critical to the success of digital transformation strategies as technology.

Yet many employees today lack the necessary skills to make the leap.

In an interview you gave on Sky News, you were optimistic about the government’s ability to reskill talent from the mining industry to help build Australia’s budding space program.

Specifically, you mentioned that success would be the result of a robust government plan to retool these individuals.

What tips do you have for leaders around reskilling?

RH: Digital transformation is all about skills. As a leader, it’s not enough to simply gain external support for a project. You need to acknowledge that transformation is ongoing.

The most successful organisations have built-up internal capability to sustain a change programme as the new normal rather than a one-off event.

Arielle: What industries in Australia are modelling this behaviour now, and who needs a push?  

RH: Australia has very advanced digital capabilities in the financial services, telco and resources sectors.

After a slower start, retail is now powering ahead, driven in part by the arrival of international competitors.

All tiers of government are also now ramping-up through demand by citizens. The agricultural sector in Australia will be a major focus in the next two years but currently lags our global peers.

(Related: Interest Rate Outlook: Will RBA Cut Rates Again?)

Arielle: Due to the influence of artificial intelligence, are training and skill development as we know it in 2018 destined for extinction? What trends do you see?

RH: AI is one of the most interesting new technologies to emerge in recent years. The term “intelligence” is misleading and encouraged many pundits to argue that jobs would be at risk.

Artificial intelligence is all about very advanced algorithms that adapt to solve problems in a way that traditional programming techniques can’t match.

Once you understand that this is advanced programming, you realise that we need to continue to evolve our skills but the fundamentals remain the same.

(Related Article: How Artificial Intelligence Is Transforming The Workplace).

Arielle: How should technology-focused C-Suite members partner with CEOs and CHROs to ensure their training plan is ready for the future?

RH: Throughout this conversation, you’ve probably noticed that I keep talking about digital transformation as being about ongoing change.

That means that all workers need to avoid one-off “set and forget” education or training and focus on continuous skills development.

All roles are increasingly about working “on” the business (that is, changing how business is done) rather than “for” the business (that is, following a set administrative process).

Arielle: In an interview with you published on Medium, you referenced two sides of training happening at Deloitte – structured training and development (both classroom and hands-on) alongside your IP factory.

How does your physical workspace strategy support Deloitte’s learning culture? Anything around internal communications tools worth noting?

RH: This century has seen the use of office real estate change far more than people realise with hot-desking, collaboration zones and newer ways of working.

The result is that business uses less space than ever before per head (about 30% less on average).

However, in-person collaboration remains really important, particularly for skills collaboration.

While e-learning is critical for specific skills, live instruction is even more important than ever when skills have to evolve over time and the instructor can only be a couple of chapters ahead in the book!

Arielle: What should our readers take away from your experiences at Deloitte as they develop their own similar strategies?

RH: Don’t underestimate the role of your own people as instructors as well as students in your learning strategy.

Arielle: Let’s transition to consulting as an option for leaders who are considering support with their digital transformation work.

You wrote a piece on your blog, which you shared on LinkedIn, called “What is a consultant?”

The very title of the article indicates there is confusion around the nature of consulting, correct?

RH: Absolutely. Some years ago, I wrote Information-Driven Business (Wiley 2010) and subsequently kept the discipline of writing a blog post each month.

Every month, I find it fascinating to see whether a particular topic will be popular. In the case of “What is a consultant?” it clearly hit a nerve going viral and being picked-up externally.

Arielle: What misgivings do your encounter from your clients around consultants, and are they justified?

RH: As we just mentioned, there is general confusion about what consulting is. It’s largely misunderstood that neither the provision of labour, nor the application of expertise, are consulting in isolation.

I define great consulting as being trusted, transformative and transferable:

• Trusted: consulting only works if there is a close relationship with the client.
• Transformative: consulting needs to change something about an organisation.
• Transferable: consulting should leave capability behind.

Arielle: You refer to an ideal consulting practice as being akin to a “teaching hospital.” What should our readers understand about the value that brings?

RH: We have learnt that experts working on their own don’t necessarily provide the best advice.

Often, having an understudy—or even a team who are looking to learn—forces more senior practitioners to carefully think through the problem so they can explain their decision making.

This is the principle that is used in medicine and the same is true in consulting (or indeed any profession where expertise needs to be applied to different and complex problems).

Arielle: In the above-referenced article, you write that…

“The best consultant does not talk in absolutes, but rather lays out the options, supporting facts and explains the trade-offs in such a way that their client can easily make the most appropriate decision for their circumstances.”

 Is this approach to consultancy more the exception than the norm? How could the industry do better?

 RH: In life we all look for the absolute answer and yet it is seldom there. Usually every decision is about choices, values and trade-offs.

I think that the majority of consultants are very good at providing structured options.

It is hard and often experts fall into the trap of providing their preference based on experience, rather than codifying the options in such a way that the client can make a sensible decision.

Arielle: How big of a challenge is risk-aversion in dealing with clients?

RH: In Australia we are culturally quite cautious. Often this plays to our advantage, but when a major transformation is needed there may not be a low-risk option.

That’s when boards and executive teams need to display courage and lead their businesses.

Arielle: What advice can you offer to senior leaders about being bold and taking intelligent risks?

RH: It is all about codifying risk in such a way that stakeholders (investors, staff, clients and suppliers) understand why the risk is necessary and what it means in real terms.

So many transformation failures can be traced back to poor articulation of the risks being taken and then an overreaction by stakeholders when things go wrong.

(Related Article: Leading Change In The Digital Age).

Arielle: How can leaders shift their mindsets, their processes, and their org designs to embrace digital transformation holistically versus creating new departments that eventually become organisational silos?

RH: Businesses of the twentieth century became experts at engineering their processes and governing through reporting and data.

The new generation of businesses emerging this century (such as the FANG giants) are turning this on its head and executing through information and relying on process for governance.

Leaders can emulate the data masters and pick-out the data that is genuinely valuable, maybe product features, price comparisons, customer reviews or user collaboration to solve challenges.

It’s hard to change and in Australia we’ve sometimes found it necessary to have a bit of international competition enter our local market to drive these new business practices.

Arielle: What relationship are you seeing between digital transformation efforts and cyber security in your work?

What should leaders be on the lookout for?

RH: Cyber cannot be an afterthought. While security has to be architected into the technology, it is even more important that thought is given to simplifying the business to reduce the opportunity to attack.

A simplified organisation can identify the most risky data and make it the focus rather than trying to protect every byte.

(Related Article: Current State Of Cyber Security In Australia).

Arielle: Late last summer, the Australian HR Institute surveyed almost 1200 of their members on their hopes and fears for the workplace of the future, focusing specifically on the impact of technology.

While the study was a moderate mix of both hopes and fears, there seems to be some doubt about the speed at which driverless cars become main stream.

The delay was attributed to two factors: trust (can humans make the leap of faith to give up the wheel), and love of old technology (some folks love to drive).

How do you see trust and love of old technology shaping the workplace—and the world—of the future?

RH: There are a lot of questions about the timing of certain technologies, autonomous vehicles being the highest profile example.

We sometimes call these “exponential technologies” because they seem to take forever to get to the first 1% but then explode onto the scene in a few short years.

The challenge is how you differentiate an exponential technology which is simply slow to get going from a dud technology which is simply overhyped.

A good example of a technology that we thought was going to be huge, but has been quietly abandoned, is computing embedded in glasses.

Having said that, if we were speaking 15 years ago we might have pointed at personal digital assistants which became the technology behind today’s smartphones—sometimes it is all about timing.

Arielle: What should our readers take away from your experiences at Deloitte as they develop their own similar strategies?

RH: Don’t underestimate the role of your own people as instructors as well as students in your learning strategy.

Arielle: What will leaders have let go of, and trust in, to move forward?

RH: Let go of: Preconceived notions of what works, and what doesn’t. Trust in: The ability of their people and customers to absorb change.

Arielle: Recently, scientist Alan Finkel said that Australia has an important role to play in ensuring new technologies are rolled out ethically:

“We are capable technology innovators, but we have always imported more technology than we develop. However, that doesn’t mean that we have to accept the future we’re handed by companies in China, or Europe or the United States. We can define our own future by being leaders in the field of ethics. And that is my aspiration for Australia: to be human custodians.”

How does this concept of ethical leadership apply to Australian executives and C-suite members?

RH: Australians are eminently sensible! We get frustrated at our conservatism, yet we seem to make sensible decisions as a society.

I have confidence that the current business trust deficit will challenge us to come up with a better approach to business ethics which can, over time, become an exportable skill!

Arielle: On this topic, Salesforce just announced they hired their first-ever Chief Ethical and Humane Use Officer, Paula Goldman. Is this a trend, or a one-off?

RH: I’ve seen so many different job titles over time that I have given-up predicting which ones will stick, but the idea of having someone accountable for ethics makes a lot of sense.

Arielle: What are your thoughts on the link between government and corporate regulation of technology in the future?

RH: The internet is an accident of history.

Without a confluence of events, rather than seeing the academic network that the internet evolved from take centre stage, we would have had a number of commercial networks that were developing converge in much the same way as the phone network.

The problem is that the unstructured internet without governance is causing us significant social problems which are the domain of government.

I predict greater involvement of politicians and regulators in the years to come in the content, ratings, security and privacy of the technology.

This will bring significant challenges (as we’ve seen with the latest laws on security) but ultimately will be a good thing in a society that is as sensible and ethical as Australia.

(Related Article: Bold Predictions For The Future Of Work In Australia).

Arielle: Earlier this year, Deloitte conducted a study that examined the readiness of global executives to navigate the Fourth Industrial Revolution.

Specific to Australia, you shared in a LinkedIn article that only 2% of Australian CEOs felt they had enough of an understanding of what the fourth industrial revolution meant to them. 

Let’s talk about what this indicates for these executives’ career potential. Here’s more context for the conversation.

Management guru John Hagel cites 3 career area opportunities that will thrive in Industry 4.0: Crafts people, Coaches (such as wellness or leadership) and a third one he calls “Composers of Experiences”.

An example of this he shares is AirBnB.

And you, in your interview with ACS CEO Andrew Johnson, reference the T-shaped professional who is both broad and deep.

How can very senior people, who have perhaps gotten pigeon-holed by their own past successes, reinvent themselves?

RH: This is a big deal. We need our senior people to get across the next wave of technology.

It is amazingly easy to pick up, but it requires a sense of play, being willing to try things out and get involved with the different technologies.

You can’t manage Industry 4.0 as a project, you have to experience the new working environments, IoT technologies and try out making things using additive manufacturing.

Arielle: What advice from your own career can you share to help these executives understand this career challenge?

RH: It’s not about the CV, it’s about the experiences. I never wait for the strategic opportunity, I try to look at how I can do whatever is in front of me in a better way and learn from it.

Arielle: While we’re on the topic, let’s delve into your personal career a bit more.

How has your passion for (and degree in) physics influenced your career trajectory?

RH: In many ways my career actually started with a passion for computing, prior to studying physics, as a teenager when I saw the first generation of home microcomputers and managed to convince a local business to hire me to program theirs!

Back to your question about my degree, I have always believed that transformation and innovation (digital or not) is about the juxtaposition of ideas from different areas.

My background in physics sparked my passion for the information economy, which borrows many concepts from physics. To this day, I continue to look for interesting ideas in science which can be applied in business.

Arielle: Was there a particularly defining moment (or perhaps an outstanding mentor) that brought you to where you are now?

RH: Actually, there was a defining event. Just as I was about to graduate from university, the recession of 1990 hit.

I was planning to get a traditional job or continue studying, but neither was possible (grad jobs disappeared overnight) or affordable (I needed to work part-time to pay my way).

I was left with no choice but to take a higher-risk approach of continuing to work with a small business working in pioneering IT. This turn of events was a positive for me.

The high-risk opportunity has always been more interesting to me, but I otherwise would have had difficulty convincing myself to take the leap.

Arielle: What has been the biggest challenge in your career thus far?

RH: Every step of my career has involved major challenges—whether it was convincing financial regulators at the turn of the century to store more data in a standardised form, reorganising Deloitte Consulting’s business model for the needs of this decade or helping some of our largest businesses take a leap into the digital unknown.

I’ve loved being a consultant for the simple reason that, done well, the profession brings the best capability in the world to each complex business problem.

Arielle: What advice do you have for Australia’s senior corporate leaders and entrepreneurs on future-proofing their careers?

RH: There is no low-risk future for any business or any of us as individuals.

Once you get over the idea of a change-free future, you can embrace risk and be optimistic that something interesting will come out of any path that you take.

Arielle: Anything else you would like to share about the future of digital and its influence on the future of work? Society?

RH: There is much that could go wrong in the future of technology. After all, much of what George Orwell predicted for 1984 has come to pass.

However, with sensible executives leading our best institutions, and starting our most innovative businesses, there is far more to be optimistic about than pessimistic.

Arielle: Rob, it’s been terrific speaking with you. Thanks for your time and let’s connect again in the future.

RH: Thank you. I look forward to it.