Digital transformation? Culture is the key

lan633 digital transformation culture is the key

A few weeks ago we looked at the connection between digital transformation and change management, recognising the fact that when an organisation strives to ‘become digital’ this is a change process and, like any other change process, must be managed if it is to be successful. We compared the top 10 principles of change management as set out in 2004 with an updated list from the same organisation in 2014 and noted that corporate culture — ‘Assess the cultural landscape’ and ‘Address culture explicitly’ — that had been priorities seven and eight in 2004 had risen to number one position in 2014 (‘Lead with the culture’).

Now, thanks to research undertaken by MIT Sloan Management Review and Deloitte — published as their report Aligning the Organization for Its Digital Future — it’s possible to identify the optimal culture for successful digital transformation.

To understand the challenges and opportunities associated with digital business these organisations conducted a survey of more than 3,700 business executives, managers, and analysts in 131 countries and 27 industries, from organisations of various sizes. Here's what they had to say (our emphasis).

“Preparing for a digital future is no easy task. It means developing digital capabilities in which a company’s activities, people, culture, and structure are in sync and aligned toward a set of organisational goals. … A key finding in this year’s study is that digitally maturing organisations have organisational cultures that share common features.

These features consistently appear in digitally maturing companies across different industries.”

The report then goes on to list these features: an expanded appetite for risk; rapid experimentation; heavy investment in talent; recruiting and developing leaders who excel at ‘soft’ skills.Significantly, it also says: “Leading a digital company does not require technologists at the helm.”

While organisations might not have a clear vision of how their culture needs to change, there seems to be fairly widespread recognition that change it must.  In response to the question “What is the biggest threat facing your company as a result of digital trends?” culture topped the list. Nineteen percent of respondents cited “Lack of agility, complacency, inflexible culture”. The more obvious threats “Product obsolescence,”“lower barriers to entry” and “More intense competition, faster or new competitors,” were rated the biggest threat by, respectively, 17 and 16 percent of respondents.

The report’s conclusions about culture are backed up with some case studies from successful digital organisations: Adobe, Salesforce and Slack (developer of a messaging app for teams), and the report quotes several times from Richard Gingras, senior director of news and social products at Google, to whom it gives the last word: “The main issue is whether or not companies fully accept that this is a dramatically different marketplace and a dramatically different world. In my own personal analysis, not accepting that still holds back many companies. They just don’t recognise how extraordinarily different the world is.”

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