Human-Centricity Accelerates Successful Business Transformation A FORRESTER CONSULTING THOUGHT LEADERSHIP REPORT COMMISSIONED BY PROPHET, JULY 2023
© Forrester Research, Inc. All rights reserved. Executive Summary In May 2023, Prophet commissioned Forrester Consulting to explore how firms use human-centricity when designing their transformation initiatives and assess how they are performing. We created a maturity model to assess how firms are incorporating human-centricity into their business strategies and change management practices. Those respondents whose organizations have established transformation initiatives, met projected stakeholder expectations, used human-aligned change management principles (i.e., having a defined vision, clear ownership, and distributed decision rights with growth and innovation driving more relevant customer experiences), and aligned their business strategy around the human are defined as “human-centric.” Those respondents whose organizations scored lower were labeled as “less human-centric.” We found the following: 1. Transformation efforts are driven by an average of three value drivers spanning across multiple business areas. These efforts are vital to future business success and have only become more important in light of recent economic uncertainty. 2. Firms focused on human-centric transformations are more likely to see successful transformation efforts. They are: • 10x more likely to see revenue growth of 20% or higher. • Able to engage employees better and create experiences that delight across all the stakeholders that they impact. • Experience improved levels of innovation, time to market, creative differentiation, and ability to capture new markets with enhanced product offerings. 3. Human-centered transformation strategies are: • Anchored on growth and focused on innovation and creativity to create experiences that delight. • Focused on improving the ability to capture and predict customer needs and employees’ ability to deliver on them. • More likely to consider purposefulness and adaptability as key pillars of culture to engage employees and attract talent. • Led by a C-level transformation owner who leads by example. 4. Less human-centric transformations are more likely to look inward at cost optimization through business efficiency improvements in areas like their day-to-day operations and product innovation departments. 5. Human-centricity acts as the “how” behind successful transformation efforts; without it, less human-centric initiatives struggle to get off the ground. 6. Decision-makers focused on human-centric transformations are investing in their people, improvements to their brands, and partners to keep their stakeholders at the heart of every transformation.
Defining The Attributes Of A Human-Centric Business Transformation Strategy HUMAN-ALIGNED CHANGE MANAGEMENT ATTRIBUTES MIND (e.g., talent, capabilities, skills) My organization has defined the skills and roles needed to achieve its vision and developed a mechanism to reskill talent. BODY (e.g., organization, governance, process, roles, systems, tools) My organization has set a powerful, actionable vision and developed a clear roadmap and correlative KPIs, which are assessed on a regular basis. My organization has aligned incentives to drive cross-functional work and set a talent system in service of the transformation. My organization has pushed decision rights downward, enabling the organization to own and drive success. My organization has empowered an independent team outside of the existing organization structure to lead and run the transformation. SOUL (e.g., mindsets, behaviors, motivations, stories, symbols, rituals) My organization has set up mechanisms to rapidly share successes and lessons learned, while recognizing and rewarding progress, not just outcomes. DNA (e.g., purpose, values, brand, EVP, strategy) My organization has established effective transformation governance, with agile decision-making and dedicated transformation teams. My organization has transformation owners who lead by example. HUMAN-CENTRIC BUSINESS ATTRIBUTES CREATIVITY-BASED PERFORMANCE MEASUREMENT My company has adopted creativity-based performance measurement — we intentionally measure creative activities and how they create stakeholder value (e.g., Net Promoter Score [NPS], EX scores, etc.). CUSTOMER-FOCUSED OPERATING MODEL STRUCTURE My company’s operating model enables distributed decision-making at the customer level proximity within the organization. HUMAN-CENTERED BUSINESS OUTCOMES My company is focused on human-centric business outcomes (e.g., new product development is focused on people-centric aspects of our brand and products). HUMAN ANALYTICS My company collects human-centered data and insights at scale to continually optimize and measure all stakeholder sentiments, expectations, changing needs, etc.
Decision-Makers See Transformation Value Drivers Spanning Multiple Business Areas They indicate an average of three types of transformation value drivers behind their initiatives. 19% 30% 31% 33% 37% 38% 44% 44% Finance Sales and distribution Data and analytics IT and technology Brand and marketing Employee experience/HR Customer experience Products and services Base: 316 organizational growth and transformation decision-makers at global enterprise companies Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 Types Of Transformation Value Drivers
Those Transformation Initiatives Are Vital To Future Business Success Even During Economic Uncertainty 98% noted transformation efforts have become more important due to economic uncertainty. 78% 82% 84% 85% 87% 88% 88% 91% 91% 93% 95% Ward off category disruption Reduce costs Capture new markets and customers Increase efficiency Innovate on the business model Improve or expand product and service offerings Improve agility Better understand and respond to changing customer needs Achieve top-line growth while simultaneously expanding margins Become more data-driven Create a sustainable growth model Important/very important “How important is the success of your transformation initiatives in meeting these goals?” Base: Variable organizational growth and transformation decision-makers at global enterprise companies Note: Showing top 8 responses Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023
Firms With A Human-Centric Approach To Transformation Are 10x More Likely To See Revenue Growth Of 20% Or More “Please estimate your company’s year-over-year revenue growth rate for its most recently completed fiscal year.” Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 20% or more 47% 5%
Successful Firms See Greater Engagement And Experiences Across All Stakeholders They are most likely to experience increasing employee NPS scores — indicative of the importance involving employees has on transformation success. 56% 56% 51% 60% 60% 48% 46% 41% 49% 47% Enhanced company culture Increasing customer net promoter score (NPS) Increasing employee collaboration Improving shareholder value Increasing employee net promoter score (NPS) Less human-centric Human-centric “Which of the following stakeholder benefits have you realized/do you expect to realize resulting from your transformation initiatives?” (Showing “This is a benefit we have already achieved”) Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing “This is a benefit we have already realized”; showing significant deltas between human-centric firms and less human-centric firms Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 +29% +23% +25% +22% +17% % Greater likelihood among those undergoing humancentric transformations
53% 51% 56% 58% 65% 46% 43% 40% 42% 44% Improved or expanded product and service offerings Captured new markets and customers Increased efficiency Improved creative differentiation Improved time to market Less human-centric Human-centric Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing top 5 responses by delta between Human-centric and Less human-centric Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 “Which of the following operations-related benefits have you realized/do you expect to realize resulting from your transformation efforts?” (Showing “This is a benefit we have already achieved”) Successful Firms Benefit From Higher Levels Of Improvement In GrowthDriving Capabilities These growth-driving capabilities include innovation, time to market, creative differentiation, and expanded product offerings to capture new markets.
Firms Prioritizing Human-Centricity In Transformation Initiatives Are 28% More Likely To Innovate On Transformative Ideas And Products Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing significant deltas between human-centric firms and less human-centric firms; not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 Moonshot innovation (i.e., ideas and products that revolutionize and reinvent the business) “Which of the following has your company already achieved or hopes to achieve via your transformation efforts?” (Showing “We have already achieved this”) 51% 65%
Human-Centered Transformation Initiatives Anchor On Growth Rather Than Just Cost Optimization Human-centric firms Less human-centric firms 43% 57% Creating a new business line Optimizing our existing business model 58% 35% Creating a new business line Optimizing our existing business model “Which of the following best describe the rationale behind your company’s transformation initiative(s)?” Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023
Focusing On Growth Requires Innovation And Creativity In Meeting Customer Needs Compared To Simply Driving Costs Out Of The Business Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing significant deltas between human-centric firms and less human-centric firms; not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 Top Business Goal Timeline Next year Next 2 years Innovate on the current business model Create a sustainable growth model Better understand and respond to changing customer needs Increase efficiency
Human-Centered Transformation Is Inherently Customer-centric “What is your company doing to achieve its top transformation goals?” Improving operational efficiency TOP SELECTION AMONG HUMAN-CENTRIC FIRMS: TOP SELECTION AMONG LESS HUMAN-CENTRIC FIRMS: Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decisionmakers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing top option selected for human-centric and less human-centric firms Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 Improving the ability to better understand customers’ changing needs Human-centric transformation efforts focus on improving capabilities around understanding and responding to customer needs, rather than prioritizing internal efficiency improvements.
Successful Companies Focus On Building Capabilities And Engagement With Employees To Deliver On Customer Needs “Which of the following actions is your company taking to enable its transformation strategy?” Enhance collaboration between day-to-day operations and product innovation to reduce complexity and increase adaptivity TOP SELECTION AMONG HUMAN-CENTRIC FIRMS: TOP SELECTION AMONG LESS HUMAN-CENTRIC FIRMS: Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decisionmakers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing top option selected for human-centric and less human-centric firms Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 Anticipate customer needs and our employees’ ability to holistically deliver on them
© Forrester Research, Inc. All rights reserved. Successful Companies Are More Broadly Focused On The Needs Of All Stakeholders “How important are each of the following stakeholders to your company when designing a transformation initiative?” (Showing “We have already achieved this”) 44% 47% 47% 56% 58% 56% 42% 43% 35% 42% 42% 39% Partner ecosystems (i.e., the needs and preferences of our partners/how we can be a better partner) Shareholders (i.e., creating value for our shareholders) Employees (i.e., employee experience and the future readiness of our employees) Communities (i.e., creating communities around our products or services) Society (i.e., social responsibility and our impact on society as a whole) Customers (i.e., the needs and preferences of our customers) Less human-centric Human-centric Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decisionmakers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Sorted by greatest delta among human-centric firms and less human-centric firms Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 14
© Forrester Research, Inc. All rights reserved. Companies That Incorporate HumanCentricity Into Their Transformation Strategies Likely Have A C-Level Transformation Leader Who Leads By Example Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 “What is the level of seniority of the owner of your company’s transformation agenda?” 62% 79% C-level
Successful Companies Are More Likely To Consider Purposefulness And Adaptability As Key Pillars In Their Human-Centric Culture 81% of respondents at human-centric firms agree their culture encompasses two or more of these elements compared to just 55% of less human-centric respondents. 42% 44% 49% 56% 38% 38% 39% 42% Motivation: Our culture enables employees to make meaningful contributions and feel recognized. Commitment: Our culture enables employees to feel a sense of belonging. Adaptability: Our culture enables employees to systematically embrace innovative and creative behaviors. Purposefulness: Our culture enables employees to find meaning and purpose in the work they do, which is reflected in our leaders’ and organization’s behaviors. Less human-centric Human-centric Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Showing significant deltas between human-centric firms and less human-centric firms; not showing all options Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 “Please rate your level of agreement relating to your organization’s culture within the following categories.” (Showing “Strongly agree”)
Human-Centricity Is The “How” Behind Business Transformation Efforts Without it, firms struggle with execution. Top Transformation Agenda Barriers For Initiatives That Are Less Human-Centric Conflict between transformation needing long-term focus and shareholder demand for short-term performance Aligning tech and human capabilities (i.e., realizing optimal value from alignment between humans and tech) Having a clear understanding of the market and/or customer needs driving transformation
Those Prioritizing Human-Centricity Focus On Investing In Their People And Accelerating Transformation Initiatives … “How have your company’s investments in the following areas changed as a result of the economic uncertainty in the past 12 months?” (Showing “We have significantly increased investment levels”) 37% 43% 34% 38% 32% 58% 56% 49% 49% 47% Investing in our people Accelerating transformation initiatives Having strong brand recognition Having the right partners aligned on human-centric transformation Maintaining trust in our brand/company Less human-centric Human-centric
© Forrester Research, Inc. All rights reserved. … But They Don’t Go It Alone They rely on help and expertise of external partners for business transformation success. 49% 53% 53% 56% 60% 38% 43% 42% 43% 45% Providing customer or employee-centered design expertise Helping define the business case for transformation Helping stand up a new business line Helping create organizational buy-in with transformation initiatives Helping us understand what we need to survive today and thrive in the future Less human-centric Human-centric “How valuable are external partnerships and expertise for transformation success in each of the following areas?” (Showing “Very valuable”) Base: 316 organizational growth and transformation decision-makers at global enterprise companies; 43 decision-makers at high-maturity, human-centric transformation organizations, 273 decision-makers at lower-maturity organizations Note: Sorted by greatest delta between human-centric and less human-centric Source: A commissioned study conducted by Forrester Consulting on behalf of Prophet, May 2023 19
© Forrester Research, Inc. All rights reserved. Key Recommendations For Successful Human-Centric Transformation Unlock outsized returns by taking a human-centric approach to growth and transformation. Our research shows that human-centric firms are 10 times more likely to see revenue growth rates of 20% or more. They achieve this by delivering differentiated products and experiences at speed. Acknowledge that human-centric muscle doesn’t come out of the box — it needs to be built. Enhance your culture and keep your talent engaged through human-centric growth and transformation. Most organizations can hire great talent, but only a few organizations can provide an environment that keeps this talent engaged and productive. Invest in employee experience and build a change-confident culture. Ensure that your brand conveys purpose to the organization and attracts the right people. Make human-centricity a reality by adjusting outcomes, analytics, and incentives. Advanced organizations define, measure, and reward success based on human-centricity. Drive your change initiatives based on human-centric outcomes. Make them measurable by collecting humancentered data and insights. Incorporate these metrics into employee performance evaluations to reward creative solutions that deliver tangible client value.
© Forrester Research, Inc. All rights reserved. In this study, Forrester conducted an online survey of 316 organization growth and transformation decision-makers. The study included respondents at enterprises in North America, EMEA, and APAC who are in the process of undergoing a transformation initiative. Participants were involved in healthcare, financial services, retail, TMT (technology, media, and telecom), or manufacturing and industrials. Questions provided to respondents asked a variety of topics related to their transformation agenda, their transformation strategy, and how they are performing. Respondents were offered a small incentive as a thank-you for time spent on the survey. The study began and was completed in May 2023. Methodology Project Team: Ben Anderson, Associate Market Impact Consultant Mandy Polacek, Senior Market Impact Consultant Contributing Research: Forrester’s Enterprise Transformation research group ABOUT FORRESTER CONSULTING Forrester provides independent and objective research-based consulting to help leaders deliver key transformation outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute on their priorities using a unique engagement model that tailors to diverse needs and ensures lasting impact. For more information, visit forrester.com/consulting. © Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to forrester.com. [E-57150] 21
© Forrester Research, Inc. All rights reserved. Company revenue 12% 15% 72% $500M to $999M $1B to $1.9B $2B+ Industry 4% 7% 9% 17% 19% 19% 25% Media and/or leisure Technology and/or technology services Telecommunications services Manufacturing and industrials Financial services and/or insurance Retail Healthcare Respondent level 18% 55% 27% C-level executive Vice president Director Country/region NA EMEA APAC United States (31%) United Kingdom (17%) China (9%) Mexico (10%) Germany (9%) Singapore (8%) Canada (10%) Switzerland (3%) UAE (3%) 3% 6% 6% 7% 8% 11% 11% 13% 17% 18% Sales Employee experience (EX) Operations Customer experience (CX) Human resources/training Finance/accounting Product Marketing/advertising IT Innovation Position/department Demographics
Explore More RELATED FORRESTER RESEARCH “Technology’s Future Is Human-Centered,” Forrester Research, Inc., December 15, 2022. “Creativity Feeds The Future Of Work,” Forrester Research, Inc., August 2, 2021. “Stop Burning Out Your Best People,” Forrester Research, Inc., January 11, 2022. CONTACT PROPHET TO LEARN MORE ABOUT HOW THEY CAN HELP YOU WITH YOUR HUMAN-CENTRIC TRANSFORMATION EFFORTS. 23 Thought Leadership Landing Page Prophet Inquiries Prophet U.S Prophet Germany Prophet Asia
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