Successful Digital Transformation begins with a Cultural Transformation


As a business leader, you should know that digital transformation is more than just a trend. It is a means to grow and stay ahead of the competition.

45 percent of companies reporting a positive business impact of digital transformation also reported higher net revenue growth. (Deloitte)

Likewise, you should also know that going through digital transformation requires a change in organizational culture, business processes, and business models.

Changing the organizational culture to digital culture.  Organizational culture is how your company works and operates. It is the beliefs and values of employees. It is the company vision and steps taken to meet that vision, your leadership style, business processes, and more.

Businesses must not forget about the organizational culture when going through the transformation. Ignoring your company culture may risk your business to digital transformation failure.

“When organizations undertake digital transformation and focus only on technology at the expense of culture, that can hinder progress in many areas,” says Carey Oven, a partner with Deloitte Risk and Financial Advisory at Deloitte & Touche LLP. Deloitte

You can go through some of the successful examples of digital transformation. You will understand how small to large enterprises have gone through cultural change during digital transformation.

Organizational Culture is Key in Digital Transformation

Business transformation requires redefining organizational mindsets, processes, and talent to prepare for the change. Changing the existing culture of the organization seems to be a lot. As a business leader, you should consider that everyone should be aware of the change and motivated to participate in it. 

Executives should organize their culture for digital transformation long before it may become a barrier to the transformation. They should take a step for driving the organization towards a digital culture that is customer-obsessed, empathetic, agile, experimental, and collaborative. As your business goes through digital change, everyone in the company has to consider the change in their roles and responsibilities. As a business leader, you should include your frontline employees while making the decision.

Source: Gartner

During the transformation process, your business will be moving from traditional culture to digital. Although the journey of cultural shift is not easy, your company will benefit from digital culture.

Benefits of Digital Culture

Digital Culture Empowers People

Culture is the glue that either keeps us doing things well or keeps us doing things poorly”

Professor Ethan Bernstein, Harvard Business School

Digital culture seems intimidating at first, but a simpler way to look at it would be to consider it as an improved version of the traditional culture of an organization. Going through organizational change requires proper training for employees to meet digital needs. It helps employees to adopt digital tools that help to deliver results faster. And these tools help employees to work in new ways by having open communication, collaboration, and developing an innovative mindset.

Digital Culture Attracts New Talent

Digital culture facilitates collaboration, openness to ideas, and open communication. People with a digital mindset are willing to work in such a workspace. And having digital talents in the pool can help you to achieve your business needs.

Besides attracting new talents, digital culture also helps to retain the employees. The culture facilitates employees to put their ideas, engage, and make an impact on the change process.

Digital Culture Builds an Open Culture

Open culture means partnering with external networks such as third-party vendors or startups.

Nearly one-half (47%) of companies in the survey say that they plan to enter a partnership with technology giants like Google and Facebook. (The Economist)

Collaboration with other companies and enterprises will help them to build a product that meets consumer needs. This may not be possible when done alone. Partnerships provide a multitude of benefits through expertise, product offering, which allows the businesses to grow and stay ahead of the curve. 

“The future belongs to SMEs and entrepreneurial start-ups”

Roy Green, Dean, UTS Business school, University of Technology Sydney

(Source)

But there are certain challenges to changing your corporate culture during business transformation.

Challenges in Shifting to Digital Culture During Digital Transformation

Before heading into the challenges, let’s talk about ‘digital culture’. Now you know that during the transformation process we shift from traditional culture to digital. It includes a customer-focused approach, data-driven decision making, collaboration, innovation and agility.

Source: McKinsey

The Gap between Leadership and Employees

The main reason for transformation failure is the gap in communication and teamwork between business leaders and employees. Employees are not empowered to take on new challenges. They will not be able to adopt new digital tools. Thus, your business cannot welcome the digital culture.

Also as employees do not understand the change and they will not embrace the change. This leads to resistance to change. They will see the new culture as a risk and this will become a barrier to progress. 

Lack of Expertise

This can also be related to the disconnection between leaders and employees. When shifting from traditional to digital culture, you require the right talent to meet the digital needs.

Firstly, it is crucial to adopt the right digital tools and technologies that meet your business needs. Then, you should find digital-savvy people. Those who have a digital mindset. They should be able to adapt to new and innovative tools and technologies. 

But at the same time, they should also be able to use the tools to drive the business towards digital. As a business leader, you should take the leadership role to train the employees and involve them in the change process. Otherwise, you will risk failing to adopt a digital culture.

Your Business is not Ready yet

When it comes to digital transformation, adopting digital tools and technologies is not enough. You need to have a proper vision. Then a structured plan that supports the vision. Then comes the right digital tools, the right approach like agile methodology, the right talent to drive the business towards change. All of which, when put together in the correct balance leads to the prosperity of the organization.

But despite nailing down the technical aspects, you will continue to face internal challenges until the whole company embraces the digital culture. If you are the transformation leader for your company, like the C-suite executives, it is your responsibility to play the lead role to align everyone on the same path. Digital transformation requires a change in a larger perspective. So, your business must be ready for the challenge to shift towards the digital culture.

How to Shift the Organizational Culture to Digital During Digital Transformation

Engage your Employees

The success of business transformation depends on the participation of the people behind it. The transformation brings disruption to the work. First of all the role of employee changes. Employees feel disrupted by the change brought by digital tools. People will fear the change if they do not understand the vision and fear that they may face certain risks.  And if you guessed it right, they will resist the change. So, engaging the employees in the transformation journey is crucial. 

Good communication plays a great role in engaging your employees. Adopting the right digital technologies like Slack will facilitate two-way communication and also collaboration. There are always people in the company behind every success story.

Developing a Leadership Role for the Digital Age

You are shifting your traditional organizational culture to the digital culture. Surely, it is intimidating to embed a new culture in your workplace. And it is even more work when your workforce is diverse and cross-functional. So, in addition to engaged employees, you also need someone with strong leadership skills. In fact, keeping employees engaged requires leadership skills.

As your company moves toward a new culture, a leader needs to set the path for everyone involved. If you are the leader, you need to develop the leadership skills required through the transformation process. In our experience, the best way to inspire team members is by setting an example. Being a leader, you will also need to be tech-savvy to deal with the new array of possible problems. 

According to Mckinsey, transformation is successful when business leaders are committed and digital-savvy. 

The leaders of the digital age should be open to new ideas, should be able to encourage people to take risks, should be data-driven, and a warrior who leads by example. The leader should create a work environment where people can work in new ways. They should facilitate collaboration and open communication in the company.  Additionally, one should also develop a customer-centric, entrepreneurial, and innovative mindset to adapt digitally.

Tools and technology plays a part in digital culture

We have been talking all about the organizational culture. And digital tools and technologies are just the means to change the business digitally. But your business cannot move towards digital without the means of digital transformation.

Digital culture demands focusing on your customer, engaging your employees through collaboration and communication, and facilitating innovation and data-driven decisions.  You should create transparency and let the employees know about the need to change and its benefits to the whole company. 

All of these are possible with digital tools and technologies. Collaborative tools like Trello, Slack, or cloud storage technology like Google Drive will surely help your business to move toward digital culture. The key part is that business leaders should use the right tools to drive digital transformation.

Your Business should be Ready for Cultural Change

It all comes down to your business being ready. Changing the existing business culture is never easy. As I mentioned above, there are certain challenges to it. And it depends on leaders like you to steer your business forward and stay ahead of the competition.

In this digital age, the risk of not taking any risk is higher than taking the risk. Does it sound confusing? Let me simplify, you have to take the risk and be ready to face the challenges. Not doing anything is the biggest risk you could take for your business in this modern age. Removing silos in your organization will be another important step. Businesses should focus on developing cross-functional teams who are self-organized and can handle projects independently. One person in the company cannot bring change. The whole company should be ready to move towards digital culture.

Organizations that focus on transforming culture and building capabilities during a transformation are 2.5 times more likely to succeed. McKinsey

Cultural/organizational change is a long-term requirement of success. Everyone should develop a digital mindset to meet the ever-changing needs of the modern world. The truth is, a business should take a step to create cultures that bring together the best of technology and human resources.

Leapfrog is specialized in digital transformation. Since 2010, we have been creating world-class digital products and helping companies to transform their business digitally. Book a free consultation now, we will discuss your business needs and plan further about digital transformation.

Anish Sthapit

Anish is a Digital Marketer at Leapfrog. He loves to create content and help companies to leverage their online presence with the help of digital marketing.

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