The fundamental factor that can spell success with the digital transformation journey is the business leader’s ability to create the right culture and environment to embrace and facilitate the change.
It is possible to make a strong case for digital transformation on the strength of quantifiable metrics such as reduction of costs from better control of inventory or improving supply chain, enhanced customer experience leading to enhanced sales or retention of customers, expansion of market with the introduction of new products and services. These potential outcomes are achieved when the organisation does radical rethinking on the use of right technology, processes and talent under the capable leadership.
However, digital transformation is much more than adopting new technologies or nurturing the innovation ecosystem. The fundamental factor that can spell success with the digital transformation journey is the business leader’s ability to create the right culture and environment to embrace and facilitate the change. Unlike in the past when organisation strategy once developed would have three-to five-year time frame to implement, organisations committing to digital transformation should be prepared to make changes and adapt on a daily basis.
Therefore, aligning values of employees with those of the organisation has to be top priority as it embarks upon the digital transformation journey. It’s as important to assess culture risks of the organisation as it is to assess business risks in order to ensure that changes in processes or new technology adoption planned are successfully implemented. Employee reluctance or cynicism if ignored or not sensed by the management could have a major negative impact as organisations move forward with their transformation plans without the total buy-in from all concerned.
The organisation runs the risk of losing its market relevance or even loss of revenue and hence cultural readiness has to be accorded a high priority for moving forward with digital plans.
A McKinsey survey of global executives has highlighted three digital culture deficiencies—functional and department silos, fear of taking risks and action on a single view of the customer. Therefore, cultural risk management initiative should address factors such as accountability, collaboration, transparency, willingness to learn, risk taking ability, broadening the scope and definition of customer and performance measures.
Cultural risk assessment can be carried out through surveys, town hall interactions and ongoing social media sensing of employees, customers and other stakeholders. Based on this assessment, it may be necessary to revisit organisation values that would encourage changes in performance assessment metrics as well as organisation behaviour. The basic insecurity of people which stems from mindset patterns or lack of right skills for the digital world should be addressed with training programmes.
In this context, businesses need to take care that digital strategy is not developed independently. The first-level roll-out plan should be in sync with the nature of culture that exists and take advantage of those elements of the current culture that supports the digital strategy. It is prudent to identify departments or functions who are willing to be the change champions, with the first movers setting an example.
Every organisation and its culture is unique and so also would be its digital transformation programme. Hence, it is also important to blend informal interventions along with the changes in the approaches for metrics driven performance management, ensuring continuous communication and personal touch of leadership with employees is sustained. The goals for digital transformation would be achieved only by winning the hearts and the minds of people who are part of the journey and by inspiring them to raise their levels of aspirations.