Companies are spending millions on digital transformation, yet studies find many leaders feel their projects aren’t achieving their objectives. Why? Workfront CEO Alex Shootman says digitization is happening in most companies on a function-by-function basis, leaving teams to work in silos instead of executing new strategies together. Listen here to learn more about what Shootman calls the “digital work crisis.”

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Angelia Herrin, HBR

Welcome to the Quick Take, a conversation with Harvard Business Review Analytic Services. I’m Angelia Herrin, Editor for Special Projects and Research at HBR. And today I’m talking with Alex Shootman, President and CEO of Workfront. He’s also the author of a new book, Done Right: How Tomorrow’s Leaders Get Work Done. Alex, thanks so much for joining us today.

Alex Shootman, Workfront

It’s great, thank you for having me. I’m excited to have the conversation.

Angelia Herrin, HBR

Alex, you use a term, digital work crisis, to describe what’s going on in our workplaces today. What do you mean by that term? What’s behind it?

Alex Shootman, Workfront

Well, Angelia, according to a recent study by McKinsey, over $1.3 trillion will be spent by companies on digital transformation, yet over 70 percent of those projects will not achieve their intended objectives. And when you start asking the question of why do they not achieve the objectives, that “why” is really the source of the digital work crisis. And let me explain to you what I mean.

Companies have spent enormous energy responding to the existential threat of new entrants. In fact, only eight percent of companies’ CEOs believe that their business model will remain economically viable if their industry continues to digitize at its current course and speed. We’ve got a very large customer that’s a financial services company. And they told me that they have spent tremendous time and money transforming and digitizing their customer experience, yet it is still connected to an analog and siloed internal organization.

And that’s really the source of this digital work crisis. Companies know that digitization is the path forward. But most organizations do this kind of function by function. And so it makes it impossible for teams to execute together. And because of that, executives are flying blind; they’ve got no way to play, no way to execute, no way to measure what’s going on. And this is the digital work crisis. The digital work crisis is this unnerving pace of technological change, complex global networks, and lists product and service variation in almost infinite work streams, a whole tone of digital distractions, and fundamental access to more data than humans can handle. And that is what is causing what we see in our customers every day — an inability to get stuff done.

Angelia Herrin, HBR

So, we’re facing a very different workplace. Can you talk a little bit about what your research has found, about the challenges we’re facing? What’s changed in our workplace today?

Alex Shootman, Workfront

We’ve done a piece of research every year for five years straight. And it’s the state of work. And we surveyed over 2,000 individuals who do modern work inside of large enterprises. So, these are enterprises with over 1,000 employees. And because we’ve done this over five years, we can see some things that have not changed about this digital work crisis, and some things that are changing.

So, let me start with some things that haven’t changed, and this is amazing to me. Every year over the last five years, respondents to this survey say that they spend only 40 percent of their time doing their real job. Think about that, Angelia. If you or I were the CFO of a manufacturing company, and we were in a board meeting, and the board asked, “What is your manufacture and capacity utilization?” And you and I said we didn’t know, or we said it might be 40 percent; we would probably get released to pursue other opportunities. And so it’s staggering to me that every year for the last five years, this number has not changed. And that basically only 40 percent of human capital in modern work is doing their real job.

The other thing that hasn’t changed is a lack of transparency. People continue to report that work is complex, and they really don’t know what they’re supposed to do, and they don’t know what their peers are doing. And the other thing that has not changed is executives really want their people doing high-value work. They know they’ve got a lot of money invested in their folks, and they continue to ask “Why are they not spending all their time doing high-value work?”

So those three things have not changed. Let me tell you what’s different this year than the past years. The first is this notion that the challenges at work, the challenges of managing modern work, really are a crisis. Five years ago, when we started asking questions around the challenges of work, people reported that it was a nuisance, you know. People were frustrated, made them not really like their job. But now what people are saying is, “I cannot execute the business strategy of the company.” So, this challenge at work, the crisis of trying to manage modern work, has gone from a nuisance to a business imperative.

The second thing that’s changed is how people think about automation. Five years ago, it was all about “the robots are going to take my job.” Now what people are saying is they are demanding automation to help them do their job. Almost half of the respondents say that they are requesting tools to manage work. And what’s interesting to us is that we also do kind of a generational survey within the questions that we ask. And so millennials are more likely than Gen X and baby boomers to say that their team is requesting more technology to manage their work; 51 percent of millennials say that and 40 percent of baby boomers say that. So, their crisis is impacted by the ability to execute. People are welcoming automation.

And the last thing that is awesome that I see people saying is that there’s an increasing importance of purpose. People are starting to say, “You know what? It really matters to me what I do, and I want to do a great job, and I want to spend time doing great things that have purpose, instead of just doing business work.” So, what hadn’t changed was very underutilized folks, lack of transparency, executives demanding people to do high-value work. What has changed is people are seeing this as a work crisis. People are welcoming technology investments, and people want to do great work that has a purpose.

Angelia Herrin, HBR

So, you’re talking about some tough issues here, as well as some opportunities. So, as you talk to leaders, how are they thinking about how they are driving toward changes?

Alex Shootman, Workfront

One of the things that we see our customers doing as they drive toward changes in the modern workplace is they’re beginning to treat work, the work that their people do, they’re beginning to treat it as a tier-one asset. What they realize is that they’ve always treated finance and financial management as a tier-one asset. They’ve treated human resources and human resource management as a tier-one asset. How they manage their customers, right, customer relationship management, that’s a tier-one asset for the company. Even technology, information technology, you know, they’ve invested in treating that as a tier-one asset.

They’ve invested millions of dollars to manage these important assets of the company really well. And now what they’re saying is, “You know what, I’m no longer willing to manage work that is a tier-one asset using a kind of cobbled together set of legacy capabilities.” So that’s truly one of the things that we’re seeing. And we’re seeing these business leaders of tomorrow they’re really championing a new operating model of work. They’re realizing that they’ve got to have cross-functional collaboration.

Think about this, if you think about a legacy product company. Let’s say it’s an apparel company, right. And then you think about how new entrants come into the market. They will design a product faster. They will create a campaign with a celebrity on YouTube very fast, get all of that to market, create a whole lot of buzz around it. And that product, the life cycle of that product, may be very short, but they strap together many, many iterations of that cycle.

And so, the business leaders in some of the larger traditional apparel manufacturers, as an example, realize that they’ve got to have cross-functional collaboration, visibility, accountability, a model that allows product marketing, distribution, technology to kind of all act together as one team. And so that’s what we’re seeing the business leaders of tomorrow do — is champion a shift to this new kind of operating model of work.

Angelia Herrin, HBR

Alex, what opportunities are you seeing in the market for these emerging leaders, and how can they capitalize on the skills that they’ve built?

Alex Shootman, Workfront

You know, one of the most exciting things that I’m seeing is young leaders seizing the opportunity to improve work at their companies and get promoted as a result. One of the stories that I share in the very beginnin