"Why, What and How of Culture in Digital Transformation
Whilst many leadership teams today can intuitively relate to culture being an important part of driving digital transformation, few know how to and are less inclined to invest in it.
Many businesses have invested significant time and money in creating the best digital strategy, curating the latest digital solutions and attracting highly qualified digital talents.
The right culture can amplify the positive benefits of digital investments, and both must work in tandem to maximise these investments.
Investments in digital technology alone is not enough for organisations to achieve their goals.
Photo: Canva Pro
To get digital transformation right, focus not on tech but on culture."
- The Straits Times, 28th Feb 2021
To start off, a commonly held definition of culture is “the way we do things around here”. Whilst many leadership teams today can intuitively relate to culture being an important part of driving digital transformation (DT), few know how to and are less inclined to invest in it.
Many organisations have invested significant time and money in crafting the “best” digital strategy, curating the latest digital solutions and attracting highly qualified digital talents. However, as mentioned in The Straits Times article, 70 per cent of all DT initiatives do not reach their goals. Of the USD$1.3 trillion (S$1.7 trillion) that was spent on DT last year, it was estimated that USD$900 billion went to waste.
Culture should thus be viewed as an "amplifier" of investments in digital strategy, systems and capabilities. The right culture can amplify the positive benefits of these investments, and both must work in tandem in order for these investments to be maximised. Research conducted by McKinsey showed that organisations with enabling culture experience significantly greater growth and returns. Conversely, organisations experiencing apathetic or dysfunctional culture remain frustrated or disappointed, despite similar investments.
It is important for companies to define the culture they want to achieve beforehand. Photo: Canva Pro
What is the desired culture?
Based on my experience working with clients, we will not get to the desired culture unless we start to define it and if we do reach there (without defining), it is likely driven by some form of crisis and probably unsustainable. Let us elaborate this through an illustration:
“In most organisations, there is often a certain level of silo behaviours that exist across functions or business units. This may exist in the form of a lack of information sharing, low priority placed on corporate matters outside an individual’s own scope of work, or simply ‘drawing lines’. It is however observed that during periods of crisis, everyone can identify as one and work collaboratively towards the achievement of goals and/or resolution of challenges. When the crisis is over and it is back to ‘business-as-usual’ mode, the silo behaviours miraculously return.”
Just like there is no perfect corporate culture, there is also no “best” digital culture, even though there is often a call for organisations going through DT to call out behaviours associated with successful digital native beliefs or traits such as: Collaboration, Agility, Courage, Accountability, etc.
Have you defined the key tenets of your digital culture and the underlying beliefs and expected behaviours? Are your staff engaged on these? What are the promoters and inhibitors currently experienced by staff in living out such behaviours?
Organisational trust must first be established before driving digital transformation. Photo: Canva Pro
Organisation culture building is a journey. Where do you start?
Let us take the view of an organisation driving DT and the leadership team urging staff at all levels, to speak up and be more courageous with risk-taking, to fail fast, and to learn and adapt. Does that sound familiar? In an environment where there is a lack of psychological safety (PS), chances are that people would be less willing to voice up and experiment, for fear of failure, blame and/or perception of incompetence.
A useful working definition about PS is “the belief that you won’t be punished when you make a mistake”.
So before one gets overzealous in communicating transformation outcomes, initiatives and what you aspire for your staff to do more of or less of, it is critical for the organisation to take stock of the current work environment and whether it avails PS or not. In the instance where it is lacking, interventions need to start at the top leadership team level. As members of the leadership team, do you feel that it is safe to:
Voice out and share different views from others in the team?
Acknowledge that you might not be 100 per cent clear of what lies ahead, or you simply do not know what to do?
Conflict on ideas and issues without fear that the other party gets hurt or will get back at you?
Hold one another accountable for team commitments even if it is outside your domain area?
Apologise without being perceived as weak?
If your answers to the above is no, no, no, no and no, then you need to seriously reprioritise your DT agenda and focus on culture, beginning first on establishing psychological safety, or what others may deem to be “organisational trust” or “vulnerability-based trust”.
When PS is present, you will start to experience meaningful and well-intended dialogues and/or conflicts, essential to challenging the status quo and driving change. When people express their unfiltered thoughts and care to listen to one another, they establish clarity and greater buy-in to team commitments. Finally, when commitments are clear, people are then better able to hold one another accountable to the desired outcomes. Only then will you truly realise the results of your digital transformation efforts and investments.
Are you prepared to be vulnerable and invest in culture?
Author: Vincent Ho, Director, aAdvantage Consulting
Vincent has led business transformations, customer experience and corporate structuring projects across diverse industries such as government services, telecommunications and media, healthcare, education, hospitality, manufacturing services, financial services, property development and consultancy, security services, distribution and retail.
He is also an experienced business facilitator and has facilitated many senior and staff workshops in areas of Vision, Mission and Values, Strategic Planning, Customer Experience, Work-planning and High Performance Team Development.