The connected workforce is talking SMAC.Are you ready?

March 2015

The connected workforce is talking SMAC. Are you ready?

Table of contents

The heart of the matter 1

SMAC is changing the way we work—profoundly.

An in-depth discussion 3

Power lies in the ability of the connected workforce to combine SMAC in new ways that drive insight, spur action and create value.

What this means for your business 7

Planning for the connected workforce requires looking through the lens of the connected employee experience.

The heart of the matter

SMAC is changing the way we work— profoundly.

1

Progressive Thinkers Are Talking SMAC

“Talking SMAC” about the workforce isn’t an insult. In fact, if you are already fluent in SMAC, you are likely a progressive thinker about how to best leverage the latest technological foundations to get work done. By combining four technologies—social, mobile, analytics, and cloud (SMAC)—leading companies are aspiring to become something new: “a connected workforce”.

Just as e-mail and cell phones changed the very way we worked in the late 20th century, SMAC is changing the way we work today. Envision a workforce where employees can easily collaborate and connect across the organization, unrestrained by the bounds of job role, time and location. Done well, SMAC enhances the value exchange between partners, customers and co-workers. To put it another way, the value from SMAC is not in the tools, but in the interactions themselves that create new ways of working. Leading companies are those that are combining and recombining these technologies in unique ways to attract and retain the best talent, innovate new products and services and disrupt traditional business models.

Strong collaborators believe in the transformational power of technology and plan to achieve it.

To achieve a truly connected workforce, organizations need to do more than simply invest in and install SMAC tools—they need to go further than the traditional software approaches to which they have become accustomed. This is especially important in a world where 61% of global CEOs state that socially-enabled business processes are strategically important to their business success.1

So how can you capture the full opportunity that SMAC presents?

• For leaders, transformative planning for cultural shifts and more open connections is a key element of the overall employee experience. Leadership needs to guide culture change and innovation by “walking the talk” and ensuring regular participation as part of the connected workforce.

1 PwC’s 18th Annual Global CEO Survey, 20152 Strong collaborator traits and stats from PwC’s 6th Annual Digital IQ

Survey, Top Performer analysis, 2014.3 PwC’s 18th Annual Global CEO Survey, 2015.

SMAC

Social network: A social structure made up of individuals or organizations and a set of interactions between them. Social networking technologies enable and enrich these two-way interactions among people, business, partners and customers across the globe.

Mobile devices: Handheld computing devices (e.g., tablets or cell phones) with an operating system and the ability to run various types of application software (apps). Mobile devices make it faster and easier to connect with anyone at any time, from anywhere, and mobile apps are designed to foster these interactions.

Analytics: The discovery and communication of meaningful patterns in data. Analytics enable organizations to mine public, organizational and workforce data to generate insights and enable better, faster decision-making and new ways of doing business.

Cloud computing: Network-based services, served by virtual hardware, running on one or more real machines. Virtual servers do not physically exist and can therefore be easily relocated and scaled up or down, potentially running in a private or public cloud. “The cloud” maximizes the effectiveness of shared resources and increases flexibility and agility in deploying and maintaining enterprise technology.

• Business units should invest in SMAC technologies to challenge the competition and challenge old operating models. PwC’s Digital IQ Top Performers cite continued or increased investment in mobile apps for employees (34%); virtual meeting and collaboration technologies (29%); and social media for internal collaboration (27%)2

• HR should play a pivotal role by helping to facilitate the creation of a SMAC-enabled organizational vision and plan that brings the connected workforce to life. HR leaders also own the underlying human capital infrastructure and processes that are central to realizing impact from SMAC. For example, HR leaders can hire for and develop new skills and capabilities.

The impact of a connected workforce buoyed by SMAC technologies can be significant—improving products and services, increasing operational efficiency and providing greater customer and employee engagement.

86% of US CEOs think that it is important that they

themselves champion the use of digital technologies.

How are you creating value through digital

transformation?3

An in-depth discussion

Power lies in the ability of the connected workforce to combine SMAC in new ways that drive insight, spur action and create value.

3

Putting SMAC strategies to work

Until recently, the “connected workforce” was more narrowly defined. Collaboration technologies were the tools that promoted connections between people within and across the organization—intranets, instant messaging, etc. Today, the connected workforce is robust. It is about how social, mobile, analytics and cloud technology are combined in innovative ways to enable the workforce to work smarter and faster. SMAC’s power lies in its potential to connect various elements of a business ecosystem including data, computing devices, apps, enterprise solutions and stakeholders. Data can be gathered from various sources and combined in different ways to monitor transactions, processes and user habits. Trends and patterns can be derived by combining structured and unstructured data to provide insight and direction, spur action and ultimately gain competitive advantage.

Innovation and collaboration

There is no “best way” to innovate using SMAC. Examples of new business ecosystem relationships are surfacing and driving change with the help of SMAC technologies. Consider how social media strategies in the retail and consumer products industry have evolved in recent years. Initially, companies leveraged social networks to market their products and services and create communities with their customers. Today, these social media strategies have evolved to include social listening, data visualization techniques and embedded product sensors. The use of SMAC strategies can be observed across a spectrum of industry sectors.

Social interactions in the business ecosystem

Partners

Mobiledevices

Dataanalytics

Rich Media(video, images,

sound)

Vendors

EnterpriseSoftware

Apps

Employees

SMAC Strategies at Work

• Leveraging social listening programs. Many companies use consumer social communities to collect and analyze patterns of customer sentiment to better understand how customers experience their products and services. For instance, a consumer products company collected information through its online social networks to better understand and improve customer service and maintain its competitive edge. By drilling down into unstructured data, the company was able to identify the need for training in specific stores and geographic locations.

• Utilizing crowdsourcing. A vehicle manufacturer engaged an online consumer community via social media to answer questions about its sophisticated electronics, now common in new car models. The result? Improved customer satisfaction and reduced cost of customer support. Other companies are also using data gathered from online customer interactions as input to research and development around new products and services: 29% of top-performing companies gather ideas for technology innovation through employee idea marketplaces.4

• Embedding product sensors enables unique information-flow. A Fortune 500 logistics company embedded sensors in its products that enable it to monitor location, temperature and other physical factors that impact its brand and reputation. Data from the sensors is analyzed and used to track shipping for customers, troubleshoot operational issues and improve customer satisfaction.

• Enhancing customer service models. Customer service has undergone such a transformation that the ‘new norm’ for customer support is to encourage consumer participation in open online communities. The most advanced forums provide incentives to consumer participants in the form of recognition and monetary rewards.

4 PwC’s 6th Annual Digital IQ Survey, 2014

4 The connected workforce is talking SMAC. Are you ready?

The Process: Listening and leveraging for overall improvement

Almost 1/3 of top performing companies gather data for technology innovation through employee idea marketplaces.5 A connected workforce can derive value across the business to the benefit of consumers, partners, employees, service levels, brand reputation and the bottom line.

1) Company social listening reveals spike in

customer complaints

2) Retailer uses cloud collaboration tools to instantly broadcast to internal/external

community of users and ask for solutions

3) Employee discovers unconventional solution

that can be quickly implemented and proves to

be successful

5) Procurement works with materials

management and supply chain partners to drive

down costs of manufacturing

4) Product engineering team uses information to

inspire new product designs

6) Customer complaints are addressed and solved

5 Source: Ibid

The evolution of the connected workforce

In our experience, most organizations pass through a number of stages in their quest to achieve connected workforce maturity. As companies evolve to greater levels of SMAC sophistication, they inspire more people to become curious and involved. The highest performing connected workforces recognize opportunities to harness the power of SMAC to promote innovation and operational efficiencies by breaking through organizational status barriers and functional silos.

At the Awareness stage, organizations make basic use of social media and leaders are aware of how it can be used for internal communications and marketing. Novice groups and champions begin to embrace the technology.

In the Opportunistic stage, curiosity and experimentation expand the use of technologies. Unless fostered and promoted, great ideas untethered from strategy often die here.

During the Pilot stage, organizations begin to understand both the power of SMAC and the need to structure experimentation and tie it back to measurable business value.

At the Strategic level, formal programs are introduced to assess cultural norms and drive digital transformations. Companies can intentionally bridge the gap between old ways of thinking and new ways of working as formal governance structures are put in place.

At the Mastery level, using technology to imagine new ways of creating value is a day-to-day activity rather than a periodic planning process. Diverse talents of the organization are brought together to collaborate across geographic and cultural boundaries. Leadership consistently models the behaviors that support innovation and effective execution.

5

Level 5: Mastery

Level 4: Strategic

Level 3: Pilots

Level 2: OpportunisticLevel 1: Awareness

Variety of individual leaders, no overall SMAC strategy

• Social media as a marketing lever

• Document repositories and video conference, trial and error

• Novice group interactions

• Initial enthusiasm, inconsistent engagement

• Ad hoc experimentation with social applications and apps

• Lots of lurking• Unofficial pilots

• Individuals become social collaboration champions

• Communities and networks begin to form

• Multiple strategies articulated

• Formal pilots

• SMAC vision, strategy and implementation

• Social assessments and alignment on cultural aspirations and maturity gaps

• Social governance structure supports evolving social business maturity

• Formal change and adoption programs drive SMAC strategy execution

• Cross-organization/ group collaboration

• User-initiated innovation across organizations

• Internal and external SMAC strategies roadmap

• The connected business transformation is articulated as a strategic priority

Strategic partnership between IT, HRand business

The Connectedness Curve

Creating a cultural shift requires practical application

While it seems simple to move along this connectedness curve from one level to the next, many organizations struggle to get started or maintain the momentum necessary to truly enable a connected workforce. In reality, very few progress beyond the awareness or opportunistic stage. Technology does not transform companies on its own. A significant cultural and behavioral change is required.

Leaders must look at this transformation to a connected workforce from both a strategic point of view as well a people point of view. They have to consider the employee value proposition for implementing and using these technologies--will it enable them to do their jobs better, connect with customers better, perform more efficiently?

What this means for your business

Planning for the connected workforce requires looking through the lens of the connected employee experience.

7

Sustaining the connected workforce relies on the connected employee experience

At the core, a connected workforce relies upon an employee experience. There are four dimensions of the connected employee experience: Leadership, Development, Recognition, and Culture.6 Each of these dimensions can be further supported with SMAC-enabled innovations.

By carefully designing these four dimensions, tailored to the company’s unique brand, value proposition and strategy, leaders can further support organizational aspirations for a connected workforce:

• Leadership. Leading by example with focused thought and energy that inspires is cascaded through the organization.

• Development. Coaching and training that allows employees to continuously learn and grow personally and professionally.

• Recognition. Designing programs so that the hand, heart and mind are recognized and rewarded to motivate employees to do their best work.

• Culture. Surfacing the shared assumptions that drive organizational norms for how people interact and get work done.

Employee Value

Proposition

ManagementVision & Strategy

Flexibility & Diversity

Day to Day Work

Learning & DevelopmentEnvironment

Compensation Benefits

1. Leadership

3. Recognition

2. Developm

ent

4. C

ultu

re

The Workforce Journey Through the Connected Employee Experience

6 PwC’s The Connected Employee Experience: Capturing hearts and minds drives greater employee engagement and business performance, 2014

8 The connected workforce is talking SMAC. Are you ready?

Leadership The C-suite collaborates on the high-level SMAC strategy. HR should facilitate the discussion on the trends and the disruptions that are likely to impact the employee value proposition.

The combined power of SMAC technologies has already influenced the workforce and set new expectations for connectivity and information sharing. But a focus on technology means that the the primary leadership for SMAC initiatives often falls on the CIO and business unit leaders. Failing to seek HR’s guidance on how to effectively create a culture that enagages virtual collaborators often results in employee sub-optimization. The result is missed opportunities for advancing operational effectiveness and innovation.

As companies ramp-up their investments in SMAC technologies, the Chief Human Resources Officer (CHRO) has the opportunity and responsibility to enable a connected workforce. The CHRO should facilitate C-suite discussions that hone in on the talent and culture changes required to realize the full value of SMAC. The entire C-suite should work together to ensure that the strategic intent of SMAC initiatives map to the organization’s goals for culture and employee development. This can pay off, as research has shown that companies with collaborative C-suites are four times as likely to be Top Performers.7

HR can help strengthen collaboration in organizations by taking a leadership role and by:

• Assessing cultural and talent gaps that could have the greatest impact on successful SMAC implementations

• Gathering diverse perspectives on the most pressing people issues, involving staff and middle managers via internal online communities

• Partnering with C-level colleagues to co-sponsor strategic pilots that align SMAC technologies with innovations in work processes, decision-making, knowledge sharing and other team interactions

7 PwC’s 5th Annual Digital IQ Survey, 2013. Top Performers are those Digital IQ respondents who said they are in the top quartile of margin growth, revenue growth and innovation.

Companies with collaborative C-suites are four times more likely to be Top Performers.

The CHRO needs to be part of this collaboration. However, the voice of the CHRO is often missing. Integrating talent strategy into “digital conversations” can enable more companies to assume Top Performer status.

CIO

The DigitalConversation

CHRO

9

8 Source: PwC’s 6th Annual Digital IQ Survey. PwC, 2014.9 PwC’s NextGen: A global generational study. PwC, 2013.10 The power of the net generation: How to engage Millennials using

workplace technology. PwC, 2012

Development Achieving a connected workforce places inherent demands on the acquisition and development of talent, not just for today, but for the future. Leaders should consider these demands through the lens of strategic workforce planning in order to set the stage for where they want their talent to be in three, five and ten years.

Only 46% of respondents to PwC’s Digital IQ survey said they have an adequate supply of talent to capitalize on the promise of Big Data analytics.8 Acquiring the right talent is already proving to be a challenge. Big data analysts, social media strategists, cloud architects, community managers and mobile technologists are relatively new roles that have emerged in response to the introduction of SMAC. HR expertise on employee recruitment, talent sourcing, and learning and development are essential elements for creating an employee value proposition aligned with a connected workforce. HR leaders need to proactively consider the implications of building and maintaining all the competencies and organization structures that will support their unique connected employee experience.

Online communities provide additional new talent options for recruiting and sourcing new talent. And the latest performance management techniques and cloud–based HR solutions are increasingly available to transform the traditional annual review and make learning and development more adaptive and agile.

Recognition The shift to the connected workforce will result in behavioral shifts and new ways of working. Companies and their leaders need to acknowledge and reward not only those who design the technology, but also those who demonstrate the behaviors required to realize its strategic intent.

SMAC represents a different way of behaving and approaching work. Traditional adoption and change management methods are generally insufficient to support the progress to self-sustaining mastery on the connectedness curve. New behaviors are built around what it means to be part of a community and learn new ways of interacting across traditional organizational boundaries.

To successfully move up the connectedness curve, organizations need to acknowledge SMAC as one of the fundamental catalysts for culture change. Leaders should make upfront decisions about how SMAC technologies are going to support the business strategy—and then support and reward the workforce for its achievements.

Key to making the connected workforce ‘shift’ is making rewards meaningful to a diverse workforce that spans generations and geographic cultures. This is especially important to the leaders of tomorrow: 41% of millennials prefer to be rewarded or recognized for their work at least monthly, if not more frequently.9

Gamification—applying gaming techniques to motivate change—is one SMAC-enabled engagement strategy that is being used with increasing success. With 70% of the millennial workforce stating they are motivated by non-monetary rewards and 58% saying they value personal development and progression over money,10 technology-enabled techniques can play a key role in communicating and reinforcing behavioral change across the organization.

10 The connected workforce is talking SMAC. Are you ready?

There are many examples of companies “doing it right” at each level of the connectedness curve. Every organization needs to map their business strategy and priorities to their unique goals. To get started, ask some key questions:

• How will the workforce use SMAC technologies early on to create new ways of working? What will be the impact on organization design and work processes?

• What gaps might appear? In what ways will we assess and address the gaps between the current culture and our aspirations for a connected workforce?

• How are our leaders aligned? How will we ensure their regular participation as part of the connected workforce?

• What processes are in place to manage the risks—e.g., cyber security, regulatory, brand reputation—through policy and education?

• In what ways can we bridge cultural gaps in our workforce—considering generations, global diversity and technical capabilities?

• How do we plan to implement agile change methods and incorporate SMAC technologies in supporting the change?

• How will we combine residual data from social interactions with other system data and harvest new insights about how to strengthen our connected ecosystem?

• What hard and soft measurement parameters are in place to measure return on investment (ROI)?

• How will we regularly revisit best practices as we move up the connectedness curve?

Starting the journey

Culture Realizing the value of SMAC requires an increased level of trust in employees and the confidence to try new ways of interacting across traditional organizational hierarchies and functional silos.

It is essential for leaders to use adaptive approaches to manage technology-driven change and to get the corporate culture “on board”. This entails applying principles of agile change management as well as using new models for motivating and engaging people working in a globally-connected, multi-generational workforce. The work habits of millennial ‘digital natives’ can create organizational issues: 41% prefer to communicate electronically at work and 78% say that technology makes them more effective.11 Conversely, Boomers have rich institutional knowledge but may lack technological prowess and confidence in the newest technologies.

As the nature of work evolves to a more diverse, distributed and independent workforce, HR can enlighten and modernize its organization’s strategies for diversity, inclusion, and communications transparency by spearheading cross-generational engagement while preserving and nurturing institutional knowledge. Analytics can be used to assess individual experiences and role competencies and matching cross-generational mentoring expertise based on competency gaps. Boomers can serve as business mentors and share their institutional knowledge and business wisdom. Digital natives can help train and coach mature colleagues on innovative ways use SMAC technologies to create a mobile, flexible and connected workforce.

11 PwC’s NextGen: A global generational study. PwC, 2013.

11

Summary

HR has an opportunity to maximize the benefits that SMAC can bring by enabling a connected workforce. They should involve and align business leaders; HR, business and IT executives should move quickly to set the example and guide the change by preparing their workforces for the future. Neglecting to do so impairs your company’s ability to compete in today’s rapidly changing world.

Connected workforces can do more than simply adopt and use technological solutions. They embody the power of collaboration and innovation in their organizational DNA and should be deployed to exploit new opportunities. With the proper guidance and planning, companies can successfully change how people behave and how organizations operate. In so doing, they will unleash the full potential of a connected workforce.

The connected workforce is talking SMAC, and expecting more.

Are you ready to meet their needs?

www.pwc.com

To have a deeper discussion around your journey to the connected workforce, please contact:

Antonia Cusumano Principal People & Change 408 817 1286 antonia.m.cusumano@us.pwc.com

Sayed Sadjady Principal People & Change 646 471 0774 sayed.r.sadjady@us.pwc.com

Jean Lee Principal People & Change 408 817 5776 jean.e.lee@us.pwc.com

Lucy Garrick Manager People & Change 206 398 3229 lucy.e.garrick@us.pwc.com

Please also reach out to our People & Change Leadership team to discuss this and other organizational challenges you may be facing:

Christine Ayers Public Sector People & Change Leader 703 918 1173 christine.ayers@us.pwc.com

Bob Gruman Products & Services Industries People & Change Leader 713 356 4638 robert.gruman@us.pwc.com

Marla Graeber Health Industries People & Change Leader 267 330 2517 marla.a.graeber@us.pwc.com

Bhushan Sethi Financial Services People & Change Leader 646 471 2377 bhushan.sethi@us.pwc.com

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