Is your company going through a “digital transformation?”
The question of how to successfully navigate companies into the digital era is being debated in boardrooms across the world. It’s not a question of whether it’s the right thing to do or not, it’s how to make the move because without doing so, the company will be left behind as others adopt new innovations.
A common view is that digital transformation is all about the technology, but this perception leaves out a crucial factor – people.
Your company culture can be a significant roadblock on your path to digital transformation. For many companies, it can prove to be their greatest hurdle.
You can have the most amazing technological advances brought into your organization, but if a “digital ready culture” isn’t present, your transformation will be hindered.
Does this sound familiar in any way? Let’s take a look at the hurdles companies are dealing with and what comprises a digital ready culture:
Common hurdles in companies
First of all, let’s talk about what we’ve often seen going on within companies. One of the big issues is that this idea of having a “digital ready” culture seems to sneak up on them, especially if things aren’t working as they anticipated. Here are some of the major hurdles we see:
- Leaders in the organization tend to think they’re doing a great job of creating a digital culture, but often—if you dig right down—their employees don’t agree with this view.
- Agility with innovation is a big issue. It often seems that the bigger the organization, the slower they are to be able to make any kind of innovative changes.
- The organization often ends up being siloed. Leaders might think they’ve got great collaboration across departments or business units, but again, their employees will often disagree with this assessment. A lack of optimal collaboration impedes progress for any changes and often leaves people out of the loop.
- Sometimes there’s an issue with vision. The leader thinks they’re articulating something well, but in reality, it’s unclear to their team members.
Do you have true role models in your organization who exemplify a “digital culture?” What about your KPIs—are they in alignment with a clear vision for digital transformation? We have seen a big disconnect between digital goals and what team members are actually being measured on, which again, sends a confusing message.
There does seem to be a worrying trend of leadership lacking self-awareness when it comes to key issues of digital transformation. It’s difficult to make improvements if leadership is already convinced that their organization is a beacon of innovation.
“In a lot of companies, leaders see innovation as a critical factor for growth, but they don’t necessarily know how to develop a true digital culture. Mastering new technologies or building new products falls on the shoulders of their tech departments, when it should really be all about instilling those values at a company-wide level and making innovation one of their core values.” – Nicolas Costa, Director of Sales and Marketing at Koombea.
What is a “digital ready culture?”
How do organizations go about making digital culture a “core strategic pillar?” It’s all about the people, both those who are within the organization and the customers who you serve. Digital-ready cultures tend to rate highly on seven core competencies:
- Innovation – Risk taking, disruptive thinking and exploring new ideas.
- Data-driven decision-making – Making better business decisions through data.
- Collaboration – Creating cross-functional teams to make better use of skills available.
- Open culture – Partnerships with external networks (for example, startups or customers).
- Digital-first mindset – Digital ideas and solutions are the default option.
- Flexibility – Dynamic decision making and adaptability to change.
- Customer centricity – Using digital solutions to transform the customer experience.
Practically speaking, what do organizations need to do to rate well on those competencies and ensure they build a digital ready culture?
Start with leadership
Most senior leaders are very familiar with the concept of organizational culture. It can be one of their most important sources of competitiveness and drives the very DNA of an organization. Culture begins with a shared vision and sense of purpose, which is no different when we’re talking about a digital culture. This is something that all leaders need to understand the importance of.
How can leadership align all team members to a shared vision? A logical place to start is to assess where the company sits right now as compared to where they’d like to be. This shouldn’t be an activity reserved for discussion among leaders – we’ve already seen that there seems to be a lack of self-awareness in many organizations. Leaders should talk to their teams, perhaps send out surveys to team members and generally encourage constructive feedback.
The seven competencies outlined above are a great foundation from which to formulate questions and get a measure of where the company sits. When it comes to transforming the customer experience, it’s a good idea to be surveying the customer too. What are their problems, pain points or wishes?
From here, leaders can set a vision and objectives for digital transformation.
Keep employees involved
While leaders can set visions and espouse an organizational culture, it really comes down to the team members who are deeply involved in the day-to-day operations to be aligned with and follow a shared vision.
Empowered employees can help to drive digital culture. One of the suggestions the report brought forward was to let digital culture be driven by employees by putting them in place as digital change agents.
Align KPIs and compensation
Digital KPIs should be designed to focus on the behaviors which lead to a strong digital culture (for example, centered around competencies such as collaboration, innovation, and flexibility).
At the same time, compensation should be aligned with digital transformation objectives. Companies who excel with a digital culture almost always seem to have aligned their compensation structure with their digital objectives.
Hire for digital culture
Do you hire for people who seamlessly fit on your team or for people with distinct behavioral competencies that will serve a digital culture?
New recruits should display already an alignment with the behaviors which set the foundation for a digital ready culture. It’s not that you want to end up in an “everyone here is someone I’d have a beer with” situation (often accused of leading to homogeneity in Silicon Valley hiring), but they should possess basic digital-conducive competencies.
Top organizations are always reporting and measuring. It totally makes sense – if you can measure something then it is more easily managed. You should be able to look at your strategies for nurturing a digital culture and highlight exactly what is and isn’t working.
Of course, in a savvy, agile organization, you will be quick to assess those strategies that aren’t working and improve or replace them. Organizations might use scorecards, KPIs and surveys to assess effectiveness.
Organizations need to embrace digital in order to progress, there is no doubt. The fast pace of technological changes means that the way we do business has also changed quickly and the right underlying digital ready culture is imperative.
A strong digital culture starts with a good foundation, laid by the leadership in the organization and aligning employees to a shared vision for digital. Team members need to be not only involved but active change agents for the digital culture.
Without this shared vision and focus on core digital ready competencies, it will be difficult for any large organization to transform into a digital frontrunner.
Koombea is an innovative, agile organization helping companies to succeed in the digital era. Talk to us today about how we can help you.