The cultural and digital transformation crossroads: Why company culture must intersect with technology
When talking about digital transformation, the emphasis is largely on how a business can be reimagined through technology. But, regardless of cutting-edge tools or best-in-class processes, companies need to transform the culture at the same time -- if they don’t do this, digital transformation simply won’t work in practice.
Cultural transformation underlines all the changes established by digital transformation initiatives, ensuring these changes are implemented and embraced. This requires enterprises to completely shift their way of interacting with employees, partners, and customers -- which is far more difficult than technology adoption alone.
Why is culture so important?
Enterprise teams have to adapt and evolve to the requirements of new ways of working to make digital transformation a success. Here are three areas of everyday business that could fall down if culture does not keep pace with technology:
- Business and tech team collaboration: One major factor impacting a company’s ability to deliver results is the lack of communication and collaboration between departments. In a typical organization, it’s the business teams who best understand the services and products. This means it’s crucial for technology teams who build the platforms and run the IT functions to work closely and collaborate with them. With business and technology units better understanding each other, teams can continuously deliver more tangible results --whether it’s IT processes or new technologies.
- Globally distributed teams: The ability to collaborate virtually, and effectively, has become an important cultural change needed for digital transformation. And while the pandemic drastically accelerated the virtual collaboration of globally distributed teams, this trend was always going to become a reality. With the expanding complexity of digital transformation, organizations are increasingly working with technology teams that are distributed across the globe.
- Cross-dimensional teams: Digital transformation has led to the need for cross-dimensional teams that intersect many areas of an enterprise. For example, some design teams will need to look at both user experience and design of business processes, as well as needing the help of technology teams to deliver those designs. This cross-cultural collaboration is taking place in a virtual world at a higher pace and frequency, which is driving agility, but is also creating a cultural barrier to change for a lot of enterprises.
What are the key challenges?
For many enterprises, the biggest blocker to cultural transformation is resistance to change. Larger organizations can sometimes find it is more complex to instigate change, as there are many siloed teams who don’t realize what the potential benefits of digital transformation could be. This causes friction and a resistance to change.
Ineffective and inconsistent communication can have a similar effect. One of the biggest mistakes that organizations can make is to be inconsistent with messaging about their vision for digital transformation and the benefits that it will bring. If everything is changing, employees need to understand the reason for introducing new ways of working and the benefits it will bring. If this is not communicated effectively by leaders, change resistance will infect the workforce.
Overcoming change resistance
In most cases, digital and cultural transformation success comes down to leaders. Whether it’s the CEO, CIO, CTO, or wider leadership team -- all business leaders need to understand why cultural transformation is integral to business success and convey this effectively to the wider company. In order to bring everyone along on the digital journey, it’s vital to define the digital aspirations of the enterprise, and what success looks like. For example, is the enterprise’s aim to improve product and service experience to its end users? Or is the focus on transforming the core of the business? Key questions must be answered and effectively communicated to employees and customers, to ensure change adoption with minimum resistance.
On top of this, there must be continuous and consistent communication of results on the digital transformation journey -- using matrix KPIs, industry frameworks, OKRs, or data frameworks -- to ensure cultural transformation is achieved. This will help leaders define the benefits in various metrics, from business to IT, technology, and overall effort outcomes -- improving employees’ receptiveness to change adoption and participation.
The continuous journey of cultural and digital transformation
While traditionally enterprises approached digital change through a waterfall methodology -- where all tasks and processes are completed in a linear fashion -- there is now a realization that all the individual enterprise differentiators need to be constantly changing. Moving away from the waterfall methodology to the adoption of continuous change requires a holistic cultural transformation, communicating with employees at every stage of change. This will provide forward-looking enterprises the ability to continuously take insights from business data and use them to inform decisions in real-time.
Today, digital change produces high velocity or disruptive results. Looking at digital pioneers -- such as Uber, Airbnb, Facebook, and Google -- they use technology to continuously innovate and deliver change. These companies are creating transformative change in their markets and in fact, the whole of society. Businesses just have to make sure they are getting the cultural element right, as well as the technology, if they want successful transformations of their own.