Company culture is one of the most significant drivers of digital transformation, and it can also become one of the greatest challenges. A recent study conducted by MIT Sloan Management Review and Deloitte Digital found that organizational cultures, along with the inertia they sometimes encourage, often create the largest obstacles for companies pursuing large-scale digitization.
The collective values, attitudes, standards, and general mission that guide a company’s operations play a fundamental role in determining its agility and adaptability in the face of change. For this reason, organizations are increasingly focused on building a culture that fosters digital innovation. Deloitte and the MIT Sloan Management Review also found that 80 percent of digitally mature organizations are actively engaged in efforts to develop a strong digital culture.
How exactly does a company’s culture play into its digital transformation? The link becomes clearer when you examine the following cultural traits:
In order to successfully implement digital initiatives, an organization must have a culture that values speed and agility. It is no surprise that Deloitte’s 2016 Global Human Capital report pinpointed “speed in the exponential economy” as one of four major contributors to organizational change. When inefficient processes, decision-making protocols, and communication channels permeate an organization, they can generate infighting, cause misunderstandings, and ultimately stall progress.
Digital transformation requires efficient and reliable systems for decision-making and company-wide communications. While focusing on streamlining the internal structures that drive their organizations, leaders should also strive to create a culture in which employees are empowered to work productively and pursue efficient innovation.
A Collaborative Environment
In addition to being efficient, companies with digitally empowered cultures also tend to have more decentralized decision-making processes. By allowing employees at all levels of the organization to have a say in issues that will impact the firm’s direction and day-to-day operations, leaders offer a sense of ownership and autonomy that can help teams remain productive and focused on shared goals. It also ensures that individuals on the frontlines of operations have the chance to offer their valuable insight during strategic planning, and it can spur the development of more evenly distributed operational structures that allow for a project-focused, multidisciplinary approach to digital transformation.
In order to foster a collaborative culture that can support digital transformation, business leaders must be comfortable with easing horizontal and bottom-up flows of information, as well as with new topical experts emerging at all levels of the organization along the course of its digital transformation. It is important that they view this not as a loss of control, but as a strengthening of the company and its mission.
Trust in Data-based Assessments
In order to assess the progress of its digital endeavors, an organization must have dedicated systems in place to track project progress and analyze return on investment. Business leaders and senior managers must set visible, specific, and measurable objectives, developing a plan of attack that allows them to honestly assess the pros and cons of their digital efforts. Companies that already rely on data analytics to make and assess decisions are more culturally equipped to pursue digital transformation.
A Broadened Awareness
An up-to-date understanding of the latest happenings within a particular industry, the economy, and the world at large is necessary for an organization to successfully adapt and change. Companies that value research, curiosity, and the consideration of outside opinions on a cultural level are better equipped to take advantage of emerging technologies. When leaders have a broader perspective of how new technologies are driving business decisions and affecting consumer expectations, they place their firms in a better position to develop digital priorities and accurately analyze the return on their digital investments. A more comprehensive awareness of the business landscape can also help companies speed up their decision-making, prioritize digital goals, and maintain a focus that extends beyond merely implementing technology to encompass true organizational transformation.
Receptiveness to Change
Digital transformation can often elicit resistance at all levels of an organization because it threatens existing structures and protocols. While employees at the operational level may worry about digital’s impact on their day-to-day responsibilities, executives often fear that digital transformation will disrupt current management practices.
Despite these concerns, leaders should work to establish a culture that embraces change. Rather than fearing a loss of control brought about by innovation, business leaders should empower employees to pursue new ideas and act on behalf of the company’s mission. In companies that are culturally equipped to embrace change, leaders accept the possibility of failure as a necessary part of innovation, viewing it more as a portfolio to be collectively examined rather than a group of individual successes and failures. A company with this type of culture— in which change is embraced and innovation is actively sought—is most likely already on the right track to a successful digital transformation.