How Digital Transformation Is Transforming The Demand For Talent

Last week I had the pleasure of sitting down with Gene Chao, a technology executive who’s been on the frontline of digital transformation for the past 30 years and who is now leading a new initiative with me on digital transformation and talent. We talked about what’s changing inside companies, the impact on the need for talent, and ultimately, on higher education.

Ryan: Great to meet you, Gene. Tell me a little bit about your career journey.

Gene: I started on Wall Street with a firm called Shearson Lehman, then went to Andersen Consulting, now Accenture. I was in the New York Office one morning, walking down the hallway with a cup of coffee in my hand, when I was called in to help with financial modeling for a new deal called the Pinnacle Alliance. It turned out to be the first billion-dollar IT outsourcing deal. Back then, it was all about data centers, shifting from mainframe to distributed computing, and connected systems before the Internet. In time, I found my way to Hewlett-Packard where I ran the global technology group. I was part of the re-invention team with Computer Sciences (now DXC). We were creating new technology services. Then I was recruited by Ginni Rometty at IBM to figure out how to make a business out of automation and this cool asset called Watson. I was the guy who set up the software and services business of IBM Automation. So I’ve had different points of view on digital transformation, how it’s changing business models, and the skills and talent pool needed to make it all work.

Ryan: Sounds like you started your career at a time when spreadsheets were considered leading-edge technology. How would you say that digital transformation has changed the work that goes on inside companies?

Gene: You make me smile because you’re right. I started in the era of Lotus 123. I would say the biggest change is it that the lens has been inverted. What do I mean? Up until maybe even five years ago, the question was: how do I design a system for a certain technology specification? In other words, looking up from within the company’s infrastructure, picking or designing a system to effect or replicate an existing function. That view has now been completely reoriented. So now we’re looking at business process by design, pulling SaaS platforms, leverageable models, and other technology components as needed. Workflow is now front and center, and that might mean rethinking current infrastructure, functions, and process.

The impact on talent is profound. There won’t be good jobs that don’t interact with digital technology. Technologies are running processes supported by people. The orientation of workflow – the balancing of what people, algorithms and software/systems do – has changed dramatically. That doesn’t mean we’re subservient to technology. It just means that human-machine collaboration, the user interface and user experience, are top priority if we want these new processes to work.

Ryan: So what you’re saying is that technology is now permitting new, more efficient or effective processes that we’ve never been able to execute before. It’s basically helping us reinvent work.

Gene: Very well said. I love my silly analogies, but this is a good one in terms of thinking about processes. Twenty years ago, when we wanted to get from point A to point B, we’d use MapQuest. We’d go online, download directions, and we’d get 3-4 different travel options. We thought it was great. It got rid of paper maps, but it still involved work on our part and wasn’t dynamic. Now we have Waze: not only crowd-sourced, but an intelligent sourcing engine behind it that provides real-time driving information without having to reset everything. And that means less work for humans, so we can focus on driving. This design principle is now being applied to business functions. In finance, it used to be about payroll, accrual systems, inventory systems. That’s all changed to real time dynamic workflows that require different human work and it’s aligned with a digital labor model. It’s a huge difference.

Ryan: So let’s talk about humans. As technology enables more and more dynamic processes, what does it mean in terms of demand for entry-level talent in the enterprise?

Gene: The most obvious change is the rise of what Ginni Rometty called new collar workers. This means specific skills required to engage in these dynamic workflows and not necessarily college degrees. While I was at IBM, we created the P-Tech program: a multi-year curriculum for high schools that gave students the necessary technology training and skills to get these jobs. There are a lot of jobs like this and P-Tech graduates as well as bootcamp program graduates have been successful getting them.

Ryan: In the past year and a half, generative AI has entered the picture. What happens now?

Gene: I think about the story of AI unfolding in several chapters. We’re already in the first one, which are systems of engagement leveraging natural language engines like ChatGPT. The next chapter is machine learning advancement, which is the backbone. I also like to think of reasoning engines as a distinct segment; I’m talking about logic and decision-making capability. After this, the emergence of quantum computing will change the overall fabric of reasoning and computational logic. Finally, the movement from tasks to job role automation continues to accelerate. Going forward, workers won’t need to be as technically oriented; they’ll need to be design and experience-oriented.

Ryan: But won’t that mean that technical skills will become less important and cognitive skills or durable skills more important? Will the pendulum of tech skills and new collar jobs swing back to four-year degrees?

Gene: If we believe we can get to technical environments that are not just low-code, but no-code, then it’s possible. But I don’t believe technical skills are going away. They’re going to be around for quite some time, especially due to legacy systems. C#, C++, and Unix still haven’t gone away. Interoperability is a top mandate on both CIO/CTO and CEO agendas. So it’s likely that the technical skills companies require today will still be relevant years from now. New collar jobs won’t only continue, they’re going to continue to grow.

Ryan: How are companies thinking about upskilling and career mobility in a world of new collar workers?

Gene: The way we approached it at an IBM is robust cross-training or, for lack of a better word, job rotation. So workers are cross-trained across different areas and not only build new technical skills and domain expertise, but also, hopefully, soft skills and interpersonal skills. I know Accenture does this as well. There is an opportunity for digital transformation players who anticipate this and begin upskilling their talent not just across platforms and tools, but also across contexts.

Ryan: Thanks for speaking with me.

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