Digital transformation is an immensely exciting part of any business's life - evolving into new models, innovating products and revolutionising the customer experience. But amongst all that excitement is a serious risk of failure if company culture is managed ineffectively.
A massive 62% of business leaders consider culture as the number one hurdle to digital transformation. This figure has remained constant throughout the years, with research from the Altimeter Group in 2014 also representing culture as the largest challenge.
As you lead your business into the future, how can you effectively drive culture change alongside your digital transformation?
What is a digital culture?
Your organisation's culture is the result of the way it operates, down to the individual attitudes and work ethics of your employees. It spans from management principles through to customer interactions, defining the personality of your business and the environment in which your staff work.
Digital culture is the framework for cultural shift required for a successful digital transformation. A fully realised digital culture is:
Agile: Capable of making dynamic decisions with flexibility and speed. Digital businesses must be prepared to adapt to changing customer expectations.
Digital-first: Seeking digital solutions first and foremost.
Innovative: Abandoning traditional risk-averse attitudes and exploring disruptive ideas.
Collaborative: Functioning across departments to achieve mutual goals. The alignment of sales and marketing teams is one example.
Data-driven: Informed by real research - capable of collecting internal and external data for business improvement.
Customer-centric: Prioritising the customer experience at every touch point.
Company culture is built upon what your staff believe in and what they value - descriptive factors that can be influenced from the top down, but not controlled completely. Therefore, cultural change must be effected not only from the top down, but from the bottom up. Achieving bottom-up change isn't easy and it calls for a custom-built culture management strategy, respective of your business's existing culture.
Your culture hurdle may not look the same as another business's, but a combination of top-down and bottom-up approaches may help you overcome them no matter the shape.
A digital culture thrives on collaboration, innovation and a digital-first mindset.
4 ways to nurture digital culture
1. Emphasise the purpose of digital transformation
If your employees are not engaged in the culture change journey, you should expect pushback. Disengagement with digital transformation is often due to generic vision and mission statements. These aspects of your business plan of course play an important part in determining how you operate, but they should also function as motivational drivers for your employees.
Your digital vision and mission statements must be reasonably aligned with your business - custom designed to complement and communicate your existing values.
Leadership need to translate these visions and mission statements into tangible, relatable and compelling objectives for employees. Understanding the need for and intended outcome for culture change helps your staff to internalise the digital vision in their current roles. This is where middle managers become culture leaders.
Working alongside line staff every day, middle managers are the ones who make culture a real thing. Ensuring your middle managers understand and buy into the digital transformation ensures they can take that understanding and break it down into tangible outcomes for your staff.
2. Break your operational silos
Silos are a major barrier to successful digital culture for a number of reasons. Specifically, they hinder collaboration and can hold teams back from innovation. These silos occur when teams become closed-off, disinterested in sharing resources or welcoming feedback from other departments. Naturally, this stops your teams from working together to achieve common goals and improve customer outcomes. It can also foster a single-mindedness among team members, encouraging people to become stuck in their ways, resistant to change and unwilling to disrupt the status quo.
Discourage the perpetuation of silos by adopting looser structures: invite members from other teams to attend training or meetings that might interest them. Allow employees to work away from their desks and establish casual working spaces throughout your offices. Celebrate collaboration and whole-business success, rather than team target achievements.
Breaking down silos for whole-company collaboration encourages the right culture for a successful digital transformation.
3. Invest in digital skills
Digital illiteracy has also been highlighted as one of the top three challenges to transformation. Addressing the digital skills gap in your business is critical to engaging employees and encouraging the right culture shift.
This doesn't mean widespread redundancies - rather, creating new education and retraining opportunities for your staff. Working with a digital business consultancy can help you establish reasonable upskilling programs to equip your staff with the right tools and empower them to engage in your transformation.
4. Develop digital KPIs
While it's important to encourage new behaviours using the above strategies, it's equally vital that you are then rewarding these behaviours. Failure to adapt your employees' key performance indicators with respect to the business's transformation relies on an expectation that staff will continue to act in the same way as the business changes. Instead, you should be assessing the value of transformative behaviours to your business. Can you reward innovation and collaboration? Does the eschewing of operational silos indicate enhanced performance under your new business model?
Your staff need to understand their adoption of new behaviours is important to their success within the business, not just checking the same boxes as before.
Company culture can be one of the most difficult hurdles preventing you from achieving true digital transformation. For help activating digital transformation within in your business, get in touch with FinXL today.