What is a digital transformation? There is a lot of talk at the moment about this process, where an organization overhauls its capabilities to reach digital enlightenment. The shift is often accompanied by a need for people in the organization to adopt new procedures and approaches and relate differently to customers. “Organization,” in this context, means much more than the actual structure of the company, with its hierarchy of responsibilities and departments. The organization, in a digital transformation world, includes the work culture and the set of practices and attitudes that are key to executing digital transformations.
Shortcomings in organizational culture are one of the main barriers to company success in the digital age. That is a central finding from McKinsey’s survey of global executives, which highlighted three digital-culture deficiencies:
- functional and departmental
- a fear of taking risks
- and difficulty forming and acting on a single view of the customer
Although culture change is critically essential to transformation, it is painful and time-consuming to achieve. But there’s no way around that! Building a culture of constant change – a state of permanent revolution is vital. Companies don’t make a change and then sit back and wait for the next five years of business as usual – these days are long gone. There is a need to build a new momentum and rhythm in the market that reflects the new reality of the industry in which they are operating. Digital transformation isn’t really about technology; it’s about organizational agility – organizations culture plays a vital role in the digital transformation of any business. Perception leads to the adoption of technology. The ability to innovate depends on the impatience of the organizational culture. Creating a digital banking organization requires a focus beyond new technologies. While many financial institutions focus on technology upgrades as are necessary for digital transformation, cultural change must precede the investment in and deployment of new technology solutions. Unfortunately, this is a difficult challenge for many legacy institutions because it requires embracing significant changes to what has existed for decades. It’s a multifaceted challenge.
In some cases, current leadership may not fully understand the dynamics of the culture change required or maybe ‘willfully blind’ to what is needed. The result may be employees who don’t feel empowered to embrace change, take risks, or disrupt themselves. Finally, with most leaders being in the banking industry for so long, the reality of “This is the way we do things” is hard to change. Being disruptive is just not rewarded in many organizations. According to the report, ‘The Digital Culture Challenge: Closing the Employee-Leadership Gap,‘ from Capgemini in partnership with Brian Solis, corporate culture is the culmination of how a company works and operates. It is composed of the collective experiences of employees — what they believe in and what they value. Leadership, purpose, and vision also play a role in describing a corporate culture. Defined in more simple terms by MIT Sloan, “Culture is what happens when the boss leaves the room.”
In an excellent article published in the Summer 2019 Issue of the MIT Sloan Management Review, authors George Westerman, Deborah L. Soule, and Anand Eswaran show that there are four fundamental values of a robust digital culture:
- it was found that many leaders focus on the ‘impact’ component, but all four costs are required to succeed internally and in the marketplace
- speed is needed to keep up with the needs of the consumer and with other competitive offerings
- openness empowers employees to challenge what was done in the past
- autonomy provides employees the freedom to do ‘what’s right’ without a formal approval process
According to the article, “The greatest advantage of digital companies is the speed with which they create and test innovations.”
In such a competitive market, the need to create and cultivate a digital culture is an integral part of the transformation process. This change requires a work environment that not only embeds digital from the top-down but also ensures that employees are informed, engaged, and, most importantly, empowered to help cultivate a digital mindset in-house.
Embedding a digital culture means that everyone in the company – regardless of their role – is aware of the impact digital can have on revenue, sales, and productivity. Technology is no longer limited to professionals – we are personally embedded in the digital world. The upside is that as technology has been around for a while, most businesses are already digitalized to some degree. The key to digital transformation is to fine-tune that digitalization. The starting point for embedding this type of culture is transparency. This can be achieved simply through internal memos, microsites, social media groups, apps such as Slack, monthly open forums, or blogs from senior executives on crucial developments. All of these forums offer ways for employees to communicate with each other and also senior management that can help facilitate transparency. An open and honest ethos with a clear line of communication will not only help to empower employees but filter down to customers and clients, helping to communicate authenticity and build rapport.
When employees enjoy spending time and working together, the workflow improves considerably. Ideas fly around the room at high speeds, and the progress is measured in real-time. On the flip side, when people have a hard time working with each other, they will avoid interacting with their co-workers equaling low productivity. Sharing learnings and insights between departments is paramount to a productive and effective digital culture. While customer service teams should work with IT to feedback on systems and how improvements could be made, leaders and their teams can encourage collaboration by engaging teams in activities outside the workplace and team building. This way, every employee will get to see the person behind their coworkers’ labels of ‘Director of Marketing.’ This way of working will help encourage collaboration and introduce be more likely to empathize with one another, which adds to the group’s cohesion. The interdisciplinary requirement of digital continues to grow. The possibilities created by combining data science, design, and human science underscore the importance both of working cross-functionally and of driving customer-centricity into the everyday operations of the business.
The most effective way to ensure that employees know digital and its impact on the business is to offer a learning and development program that caters to all levels of expertise. The fact is that not all employees need to know the ins and outs of digital from the intricacies of how to strategize a digital campaign; many need a fundamental understanding of their roles. Therefore a suite of digital training programs from ‘digital awareness’ to ‘specialist’ would be ideal for a workforce in order to educate them in the areas of digital that they need to know and that will add value to their roles, rather than a one-size-fits-all approach that may take up valuable time and can disempower rather than empower an employee. Besides, flexible programs can be precious to a busy workforce. Applications that are available online through a Learning Management System (internal or external) means that staff can tap into knowledge as and when they have time and feel the need to upskill.
Risk doesn’t have to be a scary concept. The beauty of digital is that it lends itself to experimentation, and the wins can be built on to bring great rewards to a business. Due to the fast-moving pace of digital, agility is critical in a workforce, and risk feeds into that as leaders in organizations should cultivate a workplace where employees are comfortable trying new things. However, this approach only works if employees have the skills and mindset to take advantage of the data and insights on offer. Outside talent from start-ups or digital natives can help inject disruptive thinking while empowering frontline workers such as the customer service team with purchase history or detailed account profiles can help to solve customer issues on the spot. Using digital technologies and insights with a digital mindset can significantly enhance the knowledge of a workforce and help them to optimize daily tasks effectively and efficiently. The key to this tactic of risk is to ensure there is trust between employee and employer and an open culture that embraces innovation.
Digital offers a world of opportunities, but not enough companies are capitalizing on them. Innovation in a digital world requires big thinking, aspirational even. This is a thinking that will continue to help companies thrive and grow. The fact is that digital disruption is not going away. There will continue to be new entries onto the market that will challenge how things are currently done. By setting a mission with big ideas and digital at heart, an organization can encourage its workforce and inspire them to not only take calculated risks but also see things in new ways.
Beyond broad announcements, the new culture must be reinforced in private conversations, group meetings, and as part of the review process. Employees will only support efforts where they are free to engage and initiate changes in alignment with the new culture. In other words, actions speak louder than words. When launching the new digital culture, changing everything at once is not required or even desired. Feel free to start small, building momentum with successes. Finally, it is essential to provide the right tools, levels of investment support, and rewards that will provide the necessary foundation for success.
In many cases, what is required is clear communication of the new culture and the acceptance of adjustments to old practices that can be successful in the new digital organization. Digital offers a wealth of opportunities for a business and its workforce. In such a competitive market, employers need to be offering more to both attract and retain employees. The synergy of transparency, collaboration, digital training, inspiration, and comfort with risk could build a digital culture that bridges the gap between management and the rest of the employee base. It also will help cultivate an open culture that embraces collaboration, communication, and results in increased productivity and innovation.