Is your company culture digital-ready?

Digitalization, artificial intelligence (AI), robotics and big data are driving rapid change, blurring traditional boundaries between industries and creating new business models. Although these changes are profoundly altering the business landscape, many organizations are not changing in the necessary fundamental ways.

According to our Pathways to Digital Enablement Survey, the majority of participants from Asia Pacific (72%) see digitalization as a way to enable business strategy and provide better customer experiences, drive innovation and improve productivity. But only 18% see digitalization success as requiring a fundamental transformation of their business models.

Technology alone is insufficient for true digital transformation

In the course of digital transformation, traditional assets (e.g., physical, media, content, etc.) are converted into information assets to enable new sources of value. Successful digital transformation goes beyond exploiting technology per se. In fact, for many organizations, technology alone is insufficient for a successful digital transformation.

A transformative state requires an integrated digital strategy with full organizational alignment that constantly evolves with the changing business environment. The key digital enablement levers include not only the technology strategy itself, but also new business models, culture, leadership, human capital management and internal processes.

However, almost 50% of participating companies answered that they are only in the emerging or advancing stages, where their digital strategy is reactive. They may be pulling some of the digital enablement levers, but without a formal road map and with fragmented digitalization initiatives.

In contrast, transformative organizations tend to embed their digital capabilities throughout the organization's value chain, and are often redefining:

• Core capabilities and operating models, including key business processes, structures, roles, jobs, and metrics
• New ways of working, mindsets, behaviors and skills
• New ways of rewarding people

Aligning culture with strategy

Digital transformation demands the alignment of culture to strategy. A culture that supports digital enablement sparks innovation, facilitates information sharing across the organization and strengthens transparency. Workers are able to understand and apply automation and digitalization without fear of making themselves redundant. This often means a change in mindset and behavior.

For example, as companies move along the digital transformation path, we typically see a:

• Shift in thinking of success as being driven primarily by one strategic priority (e.g. innovation, efficiency, customer service) to a combination of strategies. In parallel, there is a move away from seeing performance as about annual goals only to driving continual value and innovation. To align to this, leaders are willing to adopt new business structures – often in more of a networked model – where business areas, enabling functions and front-line teams focus on different goals and metrics.
• Changing mindset about customers and product, often associated with a move from waiting until a product is 100% ready before release, to releasing products on a continuous basis, seeking customer feedback, adapting and releasing updates. This is often accompanied by an attitude of valuing deep customer insights and analytics to understand product or service opportunities at critical "touch points", and to guide omni-channel approaches to market.
• Move from a focus on delivery excellence or meeting specifications, to a relentless focus on continually driving great customer experiences.
• Shift from owning assets to potentially renting assets and from rigid governance to more adaptive governance. This can include rethinking work and employment, moving from a workforce of largely permanent, full-time employees to a plurality of work arrangements, such as full-time, contractors, talent platforms, alliances and free agents, all increasingly augmented by AI, robotics and process automation.
• Change from a state where knowledge and information is hoarded to one where information is free, and where winning comes from "insights" drawn from data.
• Move from lengthy decision making that is focused primarily on minimizing risk, to quicker decisions, where mistakes are tolerated, lessons learned and corrected quickly.
• Move away from siloes, and hierarchical and functional organizations, to empowered teams. This often comes with a shift from workplace norms and practices being a secret to being transparent. Symbols may include the way business areas and teams are structured and led and how their performance is measured and rewarded, including collaborative alliances. Examples in the workplace include the use of more virtual teams and enabling technologies, such as collaboration boards, video and chats.

Measuring digital readiness

Culture can be measured, designed and changed. This is also true with the culture needed to support digital transformation. In fact, not surprisingly, technology that enables more agile employee listening is ideal to help diagnose your digital culture and level of digital readiness. In particular, it can enable organizations to:

• Understand the current culture and state of digital readiness. This includes benchmarking on key cultural attributes to understand the gaps, such as digital mindset, use of analytic insights and customer orientation, agility in product development processes, enabling structure, technologies and tools and sourcing, and building digital talent and capabilities.
• Obtain real-time insights on key workforce segments, including their experiences at critical touch points across the employee life cycle.
• Use insights to prioritize interventions for greatest return on investment (ROI) and set realistic targets for changes on the digitalization journey.
• Equip leaders and managers with targeted insight to help them enable the required changes, delivering them at the organization, team and individual levels.

In summary, complete digital transformation goes beyond technology changes and requires full organizational alignment. The levers include reviewing or redesigning your operating model, structures, processes, roles, and work as well as aligning culture, capabilities and rewards.

Author

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Hamish Deery

Managing Director, Employee Experience

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