by McCree Lake

Build digital DNA: Leveraging M&A to reshape the IT workforce

Mar 22, 2017
CareersIT LeadershipMergers and Acquisitions

Tech leaders cannot simply navigate an M&A transaction and then hope for the best — there has to be a clear and actionable road map for building digital DNA.

dna abstract
Credit: Thinkstock

Authors: Seth Van Winkle, McCree Lake, Daniel McCarthy

As organizations going through M&A transactions begin to emerge from the massive surge of work, CIOs must consider how they can pivot toward an operating model that drives digital value. We have already explored the areas of the IT workforce to assess before M&A activity, and how to seize the value of the surge to reconfigure IT. Mapping the digital journey from the surge to a longer-term vision is a significant challenge for every business, because over half of IT leaders do not even have a digital transformation plan. For IT, this means having a road map that addresses the technological changes like cloud, modular applications and data management, as well as the cultural changes required to shift the way people learn and work. Given the massive level of disruption, it is not enough for tech leaders to just navigate the transaction and then hope for the best — there has to be a clear and actionable road map for building digital DNA.  

Design an IT workforce road map

Assuming that talent strategy and management are the responsibility of HR alone is a mistake for IT leaders, especially in the aftermath of a complex M&A transformation — success after this level of extensive change requires more than just a scale-up or a scale-down of the existing operating model. During these major inflection points, there are often significant cultural changes and shifts in responsibilities. CIOs should not allow the “chips to fall where they may” but should instead take time to think strategically about the IT workforce and design a flagship set of activities to build the future labor force. Specifically, this means redefining the way that IT sources talent, redefining the way people are managed, measured and trained, and shifting how IT roles fit into the broader enterprise. Developing a road map is typically done by considering the maturity of specific areas associated with managing the IT workforce — recruiting, performance and engagement, skilling and development, and organizational positions and structure. For example, when considering jobs and structure, is the IT organization adapting to roles that may live within technology and business domains? Additionally, are there plans for how to classify people aligned more to projects than traditional fixed positions? Activities should consider the strategic goals the company is expecting to achieve, both broadly and as a result of the M&A activity, and take into account opportunities presented by emerging technologies and new ways of working. IT leaders should focus on shifting delivery models and better “selling” people-related investments from a technology perspective. A workforce plan is one of the tools to ensure that IT is well positioned to support the business in creating value in a systematic way.

Build a “digital-as-a-service” workforce

M&A and divestiture transactions bring tremendous complexity and demand to IT organizations, but this inflection point allows the IT workforce to flex from a rigid, role-based hierarchy into a collaborative, project-based organization. Shifting towards a “digital-as-a-service” workforce during M&A allows the leadership to break down existing silos and hierarchies and accelerates the evolution of the IT organization into a more fluid and networked form. Organizations can even begin to experiment with talent marketplaces, crowdsourcing and collaboration technologies to enable this transformation. According to Accenture research, 79% of executives agree the workforce of the future will be structured more by projects than by job functions. For example, as large IT groups move to multispeed delivery to support both legacy and new investment, emerging delivery methodologies such as agile and DevOps embrace the adoption of a digital teaming model over traditional job roles. Leaders use digital teams to plug and play as needed on innovative projects as they also pivot legacy platforms to the new over time. Focusing on a project-based model is particularly relevant as leaders begin to look past the immediate impacts of M&A and try to figure out how to recognize synergies as well as continue to innovate. As major technology programs are initiated for M&A transactions, they present a phenomenal opportunity for organizations to build the new ways of working as well as new processes and organizational structures that drive long-term change.

Reskill around a digital competency model

As IT leaders look to build a digital identity as part of an M&A integration or divestiture, they first need to refresh traditional competency models around IT strategy and service delivery to focus on digital transformation, collaboration and innovation. Identifying and prioritizing these new digital skill sets is foundational to the reskilling of a digital labor force. Successfully operating in a more fluid workplace combined with the continued emergence of new digital technologies means that every person in the IT organization will need to strike a balance between people skills, cross-cultural competency, and design and technical expertise. As an example, the World Economic Forum suggests that the hot skills in 2020 will be people-oriented (e.g. EQ) and focused on collaboration, but there will also be a need for emerging technical competencies like using statistical frameworks to support decision-making.

To establish the competencies and skills needed in the organization, leaders must assess the existing workforce to identify digital skills that already exist in the current environment. Leverage this assessment to build off what the organization already has from a competency perspective and prioritize development of high-demand skills that are in low supply.

Finally, utilize digital to learn digital. Collaborative tools, such as interactive portals, virtual classrooms and even wearables, allow individuals with different learning styles and environments to build proficiency in these new skills. Embedding this digital DNA as part of M&A activity will help enable IT leaders to collaboratively align “skill-based” work with the aptest members of the workforce.

Change the way people work in IT

It is a mistake to carry over every part of existing IT operating models and traditional job frameworks to a new organization post-M&A or divestiture. IT leaders need to recraft their thinking about the role of IT and subsequently the way that IT works to be fit for purpose in the new environment. When architecting a future IT workforce, leaders must give considerable thought to emerging workforce concepts such as liquid workforce and crowdsourcing — plug-and-play frameworks allowing the workforce to scale across capacity, skill sets and geographies — to change the way IT works. One example, crowdcoding, promotes the ability to take a large-scale effort and break it down into microtasks that can be accomplished by many individuals in a short period. The flexibility of these adaptable workforces affords IT organizations the ability to gain significant advantages of digital skills, quickly ramp capacity and tap into capabilities that were not before possible — all with the intent of being more agile and flexible, and of getting to market faster.

Technology leaders essentially have two choices as they navigate M&A activities — they can focus on simply meeting the demand of the day or they can focus on using the change to establish their organizations as the digital leaders of the enterprise. While business leadership may tolerate IT simply meeting demands during the “height” of work associated with a transaction, that is not likely a viable solution in the long term. Building digital DNA into the workforce is a crucial step in navigating the market demands and expectations of the near-term synergy expectations of the transaction. It also helps position IT for longer-term success.

This article is the third in a series of four that will explore the IT workforce implications and opportunities of M&A. Stay tuned for the final post on “How Every CEO Should Use M&A for a Fresh Start to IT Leadership, Culture and Brand.”