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Talking with Alfonso de San Cristóbal about Digital Transformation

Talking with Alfonso de San Cristóbal about Digital Transformation

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Talking with Alfonso de San Cristóbal about Digital Transformation
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Monday, 5 october 2020 | Brenda Rodríguez López

<<This crisis has served to make a small journey into the future. The good news is that we have survived this journey and have returned transformed>>

The DHR Index is a report that analyzes the level of Digital Transformation in Spanish companies and the role that the Human Resources Departments have on this transformation. It is an initiative in the framework of the CEU DHR COL-HUB, in which the CEU IAM Business School takes part together with a remarkable group of Human Resources directors from leading companies.

One of those directors is Alfonso de San Cristóbal, International Chief HR Officer at Aegon and professor of our Executive Master’s Degree in Human Resources 4.0. We have talked with him about Digital Transformation with the aim of getting closer to this issue and having a new perspective on the results of this report’s last edition.

 

Alfonso de San Cristóbal

What data or result would you highlight from the last edition of the DHR Index?

There are many interesting aspects. For the first time, you have a vision beyond intuitions and what your close circle conveys to you about what is being done in your sector and in other industries. This is something powerful.

Getting straight to the point, what perhaps has caught my attention the most is the motivational part. I think the fact that the main motivations for Digital Transformation are highly oriented to modernizing systems, gaining efficiency and functioning, organizational agility, etc. is very important, but I see it as a must, a "hygienic" factor. I admit that it is a challenge (not because it is basic or necessary as a first step, it is simpler), but I miss a greater focus on the key issue: the fundamental driver should be to react to the demand of customers and markets.

Does this have to be the main driver of transformation?

I think it is all about efficiencies, updating our way of working and our operations (which is essential to compete), but, above all, about surviving the future and making sure that we continue being relevant to customers in the coming years. We have seen many industries where disruption has come overnight. In the rest, it is yet to arrive. Little by little, I think that the motivation that should prevail is to adapt to what clients want and how they want it.

Apart from the motivation issue, what other aspects have caught your attention?

I think it is very positive to see that we are gaining in alignment regarding which digital skills and competencies are going to be critical for future success. I think that in the case of capabilities the result is quite expected: Big Data, Analytics, Cybersecurity, Process Optimization,… What I mean when I say "expected" is that the demand for these specializations in the market has been huge for a long time and this already gave us the clue.

Regarding the "softest" side –the one related to skills-, agility, continuous learning, adaptive thinking and social/emotional intelligence stand out. This is in line with the prevailing vision in the international environment in which learning agility is placed in the strategic plans at the same level as other business factors. In my opinion this is the critical part and the guarantee for adaptability and, therefore, for sustainability. The rest of the elements are just as important today, but they may lose strength or become a commodity tomorrow.

In the end, learning agility guarantees that the people who are in your company are able to connect the dots, continue learning, be curious, quickly leave something that no longer works behind (unlearning), ... For this reason, the soft aspect is so important. I think this is what is going to be decisive for the future game: companies that have the capacity, beyond just knowledge, to be actually able to adjust and keep learning at the required speed.

Digital capabilities in organizations

You have mentioned this gap with respect to other countries. How does it place us in relation to other neighboring countries? Are we evolving at a right pace? Are we lagging behind?

We kind of have this Spanish inferiority complex that makes us think that "others surely do it better". The reality is that it varies greatly in relation to the industry and the nature of the business. In the insurance sector, for example, there is an important part of the business that is more oriented towards the long term, such as pensions or savings plans, which provides a certain stability. However, car or travel insurances can be more vulnerable to immediate disruption, so I understand that this is more linked to industries than to countries. Anyway, there are some common elements that I have identified. There are some countries that, because of their culture, embrace change immediately. In others, I notice an element of national pride (with historical roots) that makes them more conservative and resistant to change.

I think Spain is not in a bad place right now. We are just as aware as other countries: very strong investments are being made (although not enough), our plans are opening up far more to open ecosystems based on business collaboration, the mentality of managers is changing (although I think we must be more demanding and not allow the dysfunction between the models that we embrace and the standards that we later allow), a lot more digital profiles are being introduced into boards of directors and management committees, etc. It is something that has been evolving dramatically for many years. There is still a lot of work to do, we should not be complacent. Of course, there are countries that go far faster, but I think we are not doing badly.

 

Talking with Alfonso de San Cristóbal about Digital Transformation

Are companies in danger of trying to progress at a pace that they cannot handle?

It happens sometimes. I have seen how strategies of more advanced countries are replicated and, because of that, certain traditional distribution channels are closed. This is a good decision regarding direction, but a bad one in terms of timing: you could still do business there for a few years, with very high margins that may help finance digitization. You may run too fast and end up losing everything only to realize: "We rushed".

It also happens when people make disproportionate investments in digital channels and the markets are not prepared for it. They end up with a lot of media and tools waiting for the market to mature. That is not ideal either.

There is no doubt that there is a general sense of urgency, a sense that you have to run. I do not know what the risk of running too much really is. I think that no matter how fast we try to move forward, we will never run too much. I assume that we all go as fast as we can "without bursting the seams of the suit". The exceptions would be cases like the ones I just referred to.

You take risks because you want to move really fast, but I think the biggest risk occurs when you try to undertake Digital Transformation through partial plans. You implement very powerful systems, but the processes of your organization are old-fashioned. The system works, but your processes do not make the most of the performance. You are using a sledgehammer to crack a nut. Another classic example is hiring top-division digital talent when you still play regionally… Even if you can afford it, it will end up in frustration and withdrawal, if it is not accompanied by other elements that promote change.

Digital Transformation requires a holistic approach, it is not enough that you just update or automate your processes, you must have a clear strategy and business model and the appropriate leadership, technology, capabilities and mindset for each moment in the process of transformation. Additionally, you need all this by managing professional change in an effective and human way. If you have eight gas pedals and you only step on four of them, the machine will destabilize and you will come out the bend. It does not work. It is better to move slower, but stepping on all of them at the same time.

I would not like to finish this interview without talking about the pandemic. Do you think there is something that will change forever within companies after the COVID-19 experience?

This crisis has served to make a small journey into the future. The good news is that we have survived this journey and have returned transformed. Suddenly, everyone has had to work from home and it has worked. Although it has been unequal, the systems have responded. People have been able to telework and the activity and services have continued. I think that is the good news. We know now how one feels in the near future, so there are no doubts.

In my opinion, “the first slap in the face” has been for corporate antibodies. Everyone has seen that it is possible. There are many nuances and things that do not work in the same way and, of course, this crisis situation is not equivalent to the "new normal", but several new aspects experienced during 2020 that will transform the new work scenario. To a large extent, the "deniers" of Digital Transformation have run out of arguments and that is a huge advance. COVID has clearly lowered the barriers of resistance.

Another important point is that the personal experience that we have had at home is now transferring to the business world (they are normally different environments with different expectations). When you realize overnight that your best friend is the Amazon delivery man, that you know the children of your colleagues in Hong Kong or Turkey because they have appeared in video calls in the background or that you have to organize virtual drinking parties with your friends because there is no other alternative in the lockdown (and you discover that it is not the same... but it also works!), you experience an important part of the new world and you imagine everything as being more agile in the world of work. The fear you had to change disappears a little bit. Through this personal experience, the minds of all employees have become much more open.

The most obvious thing that has arrived to stay is the hybrid models (remote working and office working). We have experienced it and now we know it can be done and that it brings advantages and disadvantages. We will have to find the right balance. Everyone has theories right now, but I think each company will have to find the model and assessment that works best for them.

There is also the issue of performance management. Suddenly we lose sight of all the people around us and we have to be guided by deliverables. You realize that those who were already working in that way get results, and those who were not doing it now have to work more focused on goals, deadlines, quality of work, etc.

And perhaps the final aspect is trust. Where there was a pre-COVID relationship based on trust, teleworking has worked, the activity has continued and people have responded even better. Where it did not exist and people wanted to create it in the distance from the ground up, they have not connected and engagement has suffered. It seems obvious; we all identify trust as a core characteristic in a leader's profile. However, not all leaders have gotten the same response from their teams. This is something that should make us reflect.

This reality will continue to change and there is no handbook, we have to adapt and learn with a more agile approach

Alfonso de San Cristóbal, International Chief HR Officer at Aegon

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