Diane Gherson on the digital transformation of HR
By Dan Cheuvront | 7 minute read | September 27, 2019
This story is part of Talent Pioneers, a series of profiles on leaders transforming the future of HR.
For most of her professional life, Diane Gherson has dealt with both the pros and cons of how technology can impact people’s lives. With a U.S. patent in the field of predictive analytics, she is a leading voice on the topic of reinventing the profession of HR to create consumer-grade experiences for employees, predictive advice for business leaders, and improved productivity for the business.
In 1983, for example, long before she became the CHRO of IBM, she was in a lab for computer science at MIT. Back then there wasn’t much of an Internet, but there was a fledging email system.
“I got to see my lab mate getting fired on email by his boss in the room next door,” she told a crowd recently at Boston University. Her MIT experience was an early peek into the role of technology in the workforce. Now, more than 35 years later, Gherson has become a stalwart advocate for social issues affecting employees, such as DACA, transgender inclusion, and addressing bias in AI.
What kind of challenges are you hearing from clients?
The first one is they’ve got employees who are coming in the door with fabulous experiences on the outside around how they’re being treated online. Then they come to work, and they’re faced with a very different set of technologies and very different experience. And it’s lower than their expectations, so that’s something that every company is now starting to deal with.
The second thing is the reputational risk that comes out of this, particularly social media. It used to be before, if you had an issue it was sort of inside in the walls of the company, but now if people are unhappy it could go viral. Right? So, what do you do to make sure that there is no brand damage that is going to happen as a result of social technologies? What we’re starting to do is work on a culture of feedback and transparency so that we can avoid that.
The third thing is we used to be in a model where our goal was to be really efficient. We optimized everything for efficiency; now the game is speed to value. So how do you tune your organization for agility so that you can respond faster to external signals? That has a huge amount of impact on how we work and how we lead.
Then the last thing is this issue of skills, which are so different than what we have been training for. Our talent models have been training for a set of skills that had to do with our old business model. But now, they need to have developers in a way they didn’t before. For instance, there’s a need for data scientists, and everyone is competing for this small group of people that are increasingly rare and increasingly expensive.
Given all of this confluence of new requirements and imperative, what does that mean in terms of how the HR function is evolving?
With the development of digital coming along, we have the opportunity for social, for mobile. We can put everything on the cloud; the great thing about the cloud is it’s not just faster – you know, faster run time – but it can integrate data really easily. So instead of everything being in a silo (compensation, benefits, talent, recruitment, finance data, results data in terms of incentives, data from the outside) all that can be brought onto a platform and you can utilize A.I. to do so much more.
In what we call, HR 3.0, the digital era, we’re able to actually make HR cognitive. Instead of thinking about shared services as being a labor arbitrage exercise, it’s actually a cognitive exercise. Now, we’re able to use robotic process automation to take out some of the more monotonous, laborious pieces of shared services. That is funding our ability, so it is like a self-funding mechanism to invest in the use of the data that shared services has.
Adopting agile and design thinking at scale throughout IBM has been a game changer for us. Teams who work this way are self-directed and empowered to innovate, using retrospectives to course-correct when needed.
We’ve made contemporary collaboration tools available to everyone – like Box, Mural and Slack. Training employees to think like designers has helped us think differently about the products we are producing for our clients. Design thinking skills for HR can translate to better experiences for the workforces we support.
For HR specifically, the ability to work with data and analytics tops the list when I think about essential skills and changes to embrace.
Let’s talk about some of the outcomes of 3.0. What are the capabilities that you are driving?
The first one is predictive attrition, so we know with a 99% accuracy rate who has a greater than 50% chance of leaving. That’s something that we’ve been working on for the past five years; we’re now using deep learning. We’re able to say to you as a manager, this person has a likelihood of leaving and if you give them a 10% increase they’re likely to stay. When we first started doing it, we were very good. We said this to managers, but we weren’t really sharing with them why. And we realized we had to be rendering more transparent to managers: Why is that? And it gained a lot more credibility for us, and now we’re off and running.
Another one is predictive selection. We’re also able (to offer) nudges for managers, so if you’re interviewing a candidate, and you’re on a video chat, you have a set of questions that are tied directly to the competencies that you need to interview for and an online rating tool. So right in the moment, you’re getting the right questions to ask that will really get to the bottom of the issues you need to address with the candidate.
Specifically, one capability that we’re using in the digital era is the ability to match candidates to openings. We’re able to scan their resumes and see if there’s a match, and this isn’t like a word match, this is a “we understand that if you’ve been doing this, then you must have these skills and these skills match to our opening.”
Why do you think evolving the HR function is so crucial?
The stakes are high. If we do this right, we can make a step-change in our firms’ capacity to compete. And in the process, we can radically reinvent HR for the next era.
The benefits are obvious for the skills and capabilities of our HR team, but that extends to the overall employee and candidate experience we can drive.
At IBM, we’ve been able to reinvent the skills of our HR team, where a majority are now trained in analytics and applying it to their work. For example, some are now coding to create chatbots to answer employee questions about benefits, on-boarding, and performance management. We have trained our operations teams in robotic process automation and they are re-thinking work design in areas like payroll, global mobility, and expense reimbursement.
In Recruiting, team members trained on agile methodology have enabled faster innovation and improved the experience of hiring managers, reducing time to hire.
Why is AI important for HR to be leaning into (today, and in the future)?
HR needs to create different kinds of employee experiences because outside the company, the workforce is getting truly fabulous experiences – this ensures that our employees’ expectations are higher when they come into a company.
But AI isn’t just all about experiences; it’s also about skills, process improvements, and working smarter. Learning new skills and harnessing the power of AI allows HR professionals to move to higher-value work. Because of that shift, we have HR team members coding chatbots, creating AI-infused solutions, and using robotic process automation (RPA) to improve productivity along with the employee experience.
How are you helping to drive transformation within your company currently?
Our own transformation began when the tech industry was undergoing a massive shift about six years ago. We had to rethink HR with skills at the core of our management systems, employee experience as an outcome of our work, and new leadership models to take the company through the transformation and into a more agile world.
As context, like many HR organizations, we were very process-driven. Adopting digital technologies disrupted all of that as we were able to shift from optimizing for efficiency to optimizing for speed and innovation – two essential organizational competencies of the digital era. We realized that we had to radically change HR, move out of our HR-speak and pivot to outcomes and solutions versus process-centricity.
We also addressed “continuous skills renewal” which is so critical for our talent management functions. We developed an irresistible learning platform, Your Learning, which is personalized and regularly serves up new suggestions based on the learner’s skills and preferences. It has helped us move from episodic learning of the past to learning embedded in the workflow. Learning can now be ‘on the go,’ anytime, anywhere.