With the advancement in technology as well as changing consumer trends, many companies are forced to undergo digital transformation to keep up with competition. Unfortunately, not all companies manage to reap the benefits of digital transformation. In fact, research shows that 70% of the companies who underwent large-scale digital transformation failed to achieve their initial goals. Major pitfalls that were reported include insufficient support from the leadership team and lack of collaboration across functions. A prime example is Singapore Press Holdings (SPH) who announced plans to restructure their company into a non-profit organisation on 6 May 2021. This move will allow SPH’s media business to invest in talents and new technologies to strengthen their digital capabilities, which is necessary given the decline in their revenues from print advertising and print subscription. Through their digital transformation efforts, SPH revenues have doubled within 2 years.
In all kinds of transformation, including digital transformation, it is important to first deal with the mindsets and behaviours of people in the organisation, especially the leadership team. Therefore, business and culture transformations should come hand in hand with digital transformation. As leaders of the organisation, it is important to create a positive culture among the leadership team first, so that they can act as role models to guide the rest of the organisation towards the desired culture. The building of a winning organisational culture is the crucial first step in allowing the organisation to reach its full potential. Unfortunately, approximately 80% of companies do not have any plans to build their company culture. What these companies have yet to realise is that they are missing out on the long-term benefits of culture transformation due to their focus on short-term goals, such as a push to increase revenues next quarter.
So, why should companies care about establishing a positive organisation culture? There are 4 main benefits that organisations can expect to experience if they choose to strengthen their organisation culture through business and culture transformation.
Firstly, building a winning organisation culture can help to increase employee engagement. Organisations with strong organisational culture have 72% higher employee engagement rating than those with weak cultures. With a strong organisation culture, employees will feel more empowered to do their work due to the stronger connection to their work and the company (Hall, 2020). In fact, 49% of employees feel that the company culture plays a bigger role in influencing their work experience, as compared to the physical workspaces or advanced technology that they use.
Secondly, transforming an organisation culture can lead to an overall decrease in the staff turnover rate. Organisations should focus on create a culture that closely aligns with the organisation’s mission and core values, to sustain employee engagement. 65% of employee said that company culture is a key factor when deciding whether they should stay in their current job (Carter, 2019). This shows that companies should transform their company culture is they wish to retain their talents, so as to avoid spending extra time and money to groom another talent.
Thirdly, a strong organisation culture can improve recruitment culture. Companies that create a positive candidate experience enjoy a 75% in the quality of the people they hire (Carter, 2019). A positive candidate experience comes from creating a positive employee experience, which is a result of a strong organisation culture. As such, a positive organisation culture is likely to attract equally motivated job candidates that will help to strengthen the company’s culture and improve overall business performance.
Lastly, transforming the organisation culture can increase productivity of the employees. Building a positive work culture will allow employees to feel more engaged and motivated to work harder. Companies should build a culture that balances between managing employee’s individual needs and aligning it with the organisation’s goal. 77% of employees believe that a strong company culture enables them to produce their best work (Carter, 2019).
From these benefits of a culture transformation in an organisation, we can conclude that without a stable foundation brought about by the establishment of a strong organisation culture, the positive impact of a digital transformation will be limited. Leaders influence the company culture heavily as they are deemed to be the role models of their employees. Hence, the first step to building a strong organisation culture starts with the leadership team. Upon the establishment of a strong positive corporate culture, the company will then be ready to reap the full benefit of a digital transformation.