In the race to outpace the competition and cater to an increasingly digital audience, many companies are investing in new technologies and undergoing digital business transformation. In fact, research shows that more than 80% of organizations are now holding their IT teams accountable for delivering a connected customer experience.
While selecting the right technology is important, it’s equally critical to align your company culture with the new direction and ensure your teams are able to support your new digital strategy for the long-term.
Today, we’re discussing why culture change is essential for digital transformation, and how to approach this effort with the attention it deserves.
What is Culture in an Organization?
Even if it isn’t clearly defined in your employee handbook, your organization has a culture. In short, this is the collective attitude, behaviors, goals and practices that define your employees and management. It directly influences not only how your team members make internal business decisions, but also the way they approach outside business transactions.
Company culture is built through the people you hire, the processes you employ and the values you uphold. As you might imagine, the changes wrought by digital transformation interact with these cultural factors. Therefore, if these factors don’t shift to accommodate impending change, your digital transformation will suffer.
Why Culture Change is Essential for Digital Transformation
With so much on your plate as you roll out plans for a digital transformation, why should you focus on adjusting your culture? Let’s take a look at a few reasons why this should be a priority.
1. Digital Transformation is About More Than Technology
You could have the most sophisticated digital strategy in the world, but unless your workforce is dedicated to supporting it, your effort will be wasted.
Before you make any big investments, take a look at your current culture. What changes need to occur to ensure employees embrace the values that the digital transformation embodies?
2. Cultural Misalignment can Impact Productivity
If your digital transformation is misaligned with your culture, you could experience slow user adoption and loss of productivity. That’s why we recommend changing your organizational culture wherever you find it conflicts with the mindset of digital transformation or clashes with your specific project goals.
One survey found that nearly 30% of companies with successful digital transformations offered training programs that not only focused on technical knowledge but also new behaviors and mindsets.
Change Management Case Study
The client recognized their need for more comprehensive change management, so they asked us to fill in the gaps. We developed a robust communication plan to supplement the vendor’s communication approach.
3. Certain Cultural Attributes Contribute to Digital Transformation Success
In our experience, companies that build a culture of transparency, accountability and a willingness to experiment are more likely to realize full business benefits within expected timeframes. Similarly, a continuous improvement culture is also more conducive to timely benefits realization.
When these values are woven into the foundation of your organization, any new ERP software you implement becomes a vessel for growth, and any other technology you deploy will similarly enable your business goals.
How to Ensure Your Organizational Culture is Conducive to Your Digital Transformation
1. Assess Culture at All Levels of Your Organization
Culture isn’t limited to your C-suite. To make sure your culture is capable of supporting your digital transformation, we recommend taking the time to assess culture at every level. The best way to do this is to develop a change management plan that includes organizational assessments. What is change management? This refers to the actions required to manage the “people side” of change. It’s about helping your workforce embrace the new technology and business processes.
As you assess your culture, it’s important to identify any potential cultural barriers that may exist. Unless these are resolved, they could negatively impact your digital initiative.
2. Identify and Communicate Helpful Cultural Attributes
Your employees should understand the specific cultural attributes that will help your transformation succeed. This way, you can begin to change the organization’s core values and embed desirable behaviors.
Will the transformation require employees to be more customer-centric? Will they need to be more collaborative with other departments? What about engagement and accountability? Clearly define your needs so everyone can get on board.
3. Explain How the Project Aligns with Current Values
Yes, your organization is about to undergo many changes. However, there are certain aspects of your business that may not change, and the new technology will likely align with at least some of these existing attributes.
By recognizing these connections, you can build enthusiasm early in the project before you’ve had a chance to implement cultural changes.
4. Develop New Performance Metrics and Incentive Structures
Throughout the project and the years following go-live, it’s important to track benefits realization using key performance indicators (KPIs) – but not just any KPIs. These metrics should align with your new organizational culture.
For instance, say you implemented a CRM system, and at the same time, created a highly customer-focused culture. A few metrics you might want to consider during employee performance evaluations might be lead response times and conversion rates.
We also recommend creating incentive structures based on these KPIs. In other words, employees should be rewarded whenever their contributions or innovative ideas drive the benefits your digital transformation is aiming to achieve.
Your Company Culture Influences Your Competitive Position
Your company culture influences your company’s pace of innovation because digital transformation requires both executives and employees who are willing to take risks and seize opportunities.
Now that we’ve explored why culture change is essential for digital transformation, are you ready to take the next step? We can help your organization succeed with a new digital strategy. Contact our digital transformation consultants below, and we’ll answer your questions and suggest the best path forward.