Why Culture Change Is Essential for Digital Transformation

By February 25, 2020 blog No Comments

Shortcomings in organizational culture are one of the main impediments to company success in the digital age, according to a recent McKinsey survey of global executives. The survey highlighted three digital-culture deficiencies: functional and departmental silos, a fear of taking risks, and difficulty forming and acting on a single view of the customer.

Even in technology-focused companies or departments, such as IT, these three deficiencies are often commonplace. When an organization’s culture is fast-moving and digital-dependent, employees often use their own preferred tools and solutions without collaborating or sharing information. This can lead to inconsistent perspectives on customers and their needs. And while technology gives us the opportunity to optimize, organizations can end up focusing on optimization over innovation, dampening experimentation and potentially slowing growth.

Does Your Organization Have a Digital Culture?

Grasping the imperative for digital transformation can be a challenge, especially if nothing appears to be wrong with the way your organization operates.

A common misconception is that if a company upgrades its technology, digital transformation is done. The reality, however, is that digital transformation isn’t about software or technology — it’s about organizational adaptability. To keep pace with the change driven by digital transformation, organizations must be agile and adaptable, and organizational culture is crucial to the success of any digital initiative.

How can you tell if you have a digital culture? Take a look and see which of these sounds more familiar:

The Past The Future
“We don’t talk to our customers. We’d rather see what the research says.” “Customers are at the heart of all we do. They know us and we know them.”
“We use data to measure how we performed.” “We use data to predict and anticipate what customers will want.”
“We read reports.” “We make decisions in real-time, because we have the data we need right in front of us.”
“We avoid risk. All new initiatives require vetted and approved business cases.” “We take risks, but try to fail fast and learn from our mistakes. That’s the only way to grow.”
“Our departments focus on their work and don’t communicate with each other.” “We rely on cross-functional teams to make sure that new initiatives reflect multiple perspectives.”
“We hire so we can do everything in-house, even if it takes longer. Our needs are unique.” “We use our network of experts, including consultants, to get work done faster and better.”
“We know what’s best.” “Customers know what they need. We’re trying to give them something better — what they don’t know they need yet.”
“Our executive team makes all the decisions, and employees will just have to get on board. If not, they know where the door is.” “Our executive team listens to ideas from across the organization, and focuses on communicating new ideas and initiatives.”
“It seems like there are a lot of silos between teams. Information is hoarded and not shared.” “Our directors regularly communicate and collaborate on new ideas to make sure they’re aligned.”
“Many departments don’t know about new initiatives or projects until they read the press release.” “We focus on collaboration through various methods to ensure that there’s plenty of top-down, bottom-up and cross-communication.”

Employees Are Key to Driving Change

The ability to innovate depends on your culture. Building a digital culture is difficult, but culture leads to technology adoption. For true change to happen, company-wide and employee-wide buy-in is critical. Your executive team must provide a clear vision and strategy for how change will be realized, including concrete goals, so your entire organization is pointed in the right direction. Your employees must understand their role in the transformation and how they are driving change.

True change occurs when the entire organization is aligned with your digital transformation strategy and feels like they are participating in it. Your transformation initiative won’t go far if your executive team says one thing — maybe passes out T-shirts at an all hands meeting — but nothing changes in day-to-day operations. If decisions are made the same way they always have been, if innovation isn’t supported at all levels, and if legacy leaders are allowed to squash change and agility because of tenure, employees will sense the disconnect between words and action, and change will quickly grind to a halt.

Cultural change doesn’t make technology irrelevant. But while technology is important, it doesn’t tell the whole story of digital transformation. Culture cannot be overlooked.

CMSWire

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