Digital Transformation Is Nothing Without Cultural Transformation
Digital Transformation is all the rage these days – as businesses try and deliver customer centric value to the market quicker than their competitors. However, it is often done without consideration for the cultural impact of these changes to your business.
Gone are the days when a company decided on a strategy and executed it over the following five years as planned. The lifespan of a company on the Fortune 500 or S&P 500 is, on average, only 15 years. Digital businesses such as Uber and Airbnb, which didn’t even exist before 2008, are now considered the multibillion-dollar poster children for digital disruption.
Today, with customers increasingly adopting digital lifestyles, every business is under pressure to change how it operates and how it interacts with its customers on a daily basis. For this reason long term strategies are no longer appropriate or sustainable – change is constant.
The most successful transformation is grounded in cultural change. We can change technologies, infrastructure and processes but without considering and addressing the people element, lasting change can never happen. Your people and your culture is very literally the heart of any organisation, and without a functioning heart no business can survive.
As stated by Mckinsey back in July 2017 – “Shortcomings in organisational culture are one of the main barriers to company success in the digital age.”
The fact is that culture will always enable the adoption of any new technology; the ability to innovate depends on the impatience & maturity of the organisational culture.
So how can you achieve a successful Cultural Transformation?
Match your Strategy to your Culture
Too often a company’s proposed transformation, imposed from above, is at odds with the ingrained practices and attitudes of its existing culture. Executives regularly underestimate how severely a transformation’s effectiveness will depend on its cultural alignment.
Culture trumps strategy every time.
Focus on a Few Critical (and Achievable) Shifts in Behaviour
Change is hard – so choose your battles. No organisation is able to make a single leap from current to end state so pick a few areas you know you can win at and prove you can change. For example, in a digital transformation one of the key success factors will be the breaking down of organisational silos. Rather than thinking you can do this overnight, focus on getting small teams to shadow each other or rearrange seating so that they can sit next to each other.
Honour the Strengths of Your Existing Culture
It’s easy at the beginning of a transformation to focus on what you need to be doing differently/better. Whilst this is necessary to plan your transformation you must always consider where it is that your culture is at its strongest. Acknowledging your existing cultural strengths will also make any major change feel less like a top-down imposition and more like a shared evolution.
Integrate Formal and Informal Interventions
As you promote critical new behaviours, be sure to integrate formal approaches—like new rules, metrics, and incentives—with informal interactions. In our experience, most corporate leaders favour formal, rational moves and neglect the informal, more emotional side of the organisation. They adjust reporting lines, decision rights, processes, and IT systems at the outset but overlook informal mechanisms, such as networking, communities of interest, ad hoc conversations, and peer interactions.
Measure and Monitor Cultural Evolution
Finally, it’s essential to measure and monitor cultural progress at each stage of your effort, just as you would with any other significant business initiative. Rigorous measurement allows executives to identify backtracking, correct course where needed, and demonstrate tangible evidence of improvement—which can help to maintain positive momentum over the long haul.
If you’re interested in learning more about this – or understanding how we can help we’d love to talk. The challenge (and the joy) of Digital Transformation and Culture Change is that it’s never one size fits all, every situation has its own varying difficulties but we’re here to help!
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