Organizational Culture - The biggest barrier for Digital Transformation


Today many organizations are challenged for their very survival with the life span of even a "Fortune 500 company" being reduced to mere 15 years. This has been brought about by the ability of certain organizations to dramatically impact the customer experience by creating digital eco-systems and platforms where suppliers, partners and customers could collaborate with greater convenience, personalized services as well as enhanced experience - The Digital Disruption!

 

Due to this disruption caused by Digital, every business has been driven to a point of compulsion to change how they operate, interact and do business with their customers or loose them to competition who are leveraging the digital stack for their competitive advantage. This Digital Transformation has become the most critical transformation initiative of the 21st century for most enterprises who have realized it. Even then most of these enterprises who have embarked on this journey are struggling to gain traction and build inertia around same to be able to impact their organization the way it should in bringing about compelling transformation that digital promises. What's the reason for this? It's simply that most are missing the key aspect of any transformation mandate and that is the organization's CULTURE and TRANSFORMATION of it! This is the CRITICAL PRECURSOR to any TRANSFORMATION, let alone DIGITAL!

 

It's an imperative that one addresses an organization's culture as part of the transformation journey. An Organization's culture is conditioned by many aspects in today's context. It's defined to be a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the ORGANIZATION and dictate how they dress, act, and perform their jobs.

 

Cultural issues are at the root of many failed business transformations, yet most organizations do not assign explicit responsibility for culture in these transformation initiatives. These kind of initiatives need the buy-in and support from all team members and thus it must start permeate through an organization's cultural maze by conditioning same to be able to energize, rally and sustain the long-term interests of the organization.

 

Since culture is driven by people’s values, beliefs and behaviors and that often tie into underlying emotional constructs, we cannot simply expect people to change their culture over night. We need to convince people, why the cultural change is necessary and explain the consequences of not doing it and what's in it for them so as to construct and internalize an alternative CULTURE that drives a new set of values, beliefs and behaviors that the organization aspires to inculcate in the transformation.

 

As per Gartner, there are four closely related attributes of business culture that have a strong impact on enterprise tempo, collaboration, direction and business value:

 

1) How we make decisions – the general leadership style in a business unit, department or enterprise, and its effect on the speed of the organization’s response to incoming signals.

 

2) How we engage – the methods groups use to collaborate internally and externally to deliver on their goals.

 

3) How we measure – organizational performance metrics and their effect on the focus and direction of a group’s efforts.

 

4) How we work – the working style of a group, including how innovations are developed and how problems are solved, which affect the group’s perception of the business value it creates.

 

 

Culture is a key determinant of any successful transformation. It's easy to change business models, technologies, infrastructure, processes, platforms, etc., but without changing the people factor by addressing the organization's culture any lasting change will remain a pipe dream. Culture is the "LIFE LINE" of any organization and if that is not right then what-ever you do will remain purely cosmetic to say the least.

 

It's important for leadership to understand the business's current cultural context and map the right transformation strategy and action plan before any other transformation is initiated. In doing so, one need to bare in mind that no two organizations are alike neither are their cultures, hence merely copying what worked for someone else may not be the right answer. Most executives underestimate the importance of culture in an era of digital and tend to think technology is what matters, hence risking the very transformative journey they undertake at the risk of not reaping the outcome they set forth to achieve at the onset. We must realize that people are normally risk averse and will not take it unless they have are confident of the outcome and have adequate comfort that the organizational context is suitable for them to take that leap of faith. The only means by which one could facilitate same is by setting right cultural context that gives them the motivation to get out of their comfort zone, take the risk, broaden their horizon, get involved, cooperate and work towards the end goal since they believe that everyone is aligned and not because someone told them to do so! 

 

Prepping up an organization for a successful adoption of digital technologies like Social, Mobile, Analytics, Cloud and IoT requires everyone in the organization, from leadership to the front-liners, to be prepared to work in an open and transparent way taking course corrections as required and learning from each other. It’s hard for an organization to undergo such a transformation, if the culture is one built around individuals and in silos unless the cultural transformation is adequately addressed as a precursor. Culture leads the adoption of technology. The ability to innovate is a factor of the people's attitude, aptitude, appetite for a CHANGE CULTURE built on shared learning, experiences, rewards, etc.

 

The success of your organization's DIGITAL TRANSFORMATION greatly depends on your ORGANIZATION's CULTURE! Digital transformation isn’t really about technology it’s about organization's AGILITY. AGILITY is the ORGANIZATION's ability to CHANGE at a PACE faster than it's ENVIRONMENT and this can ONLY be facilitated if the ORGANIZATION's CULTURE is ATTUNED to it!


(This blog was originally published on LinkedIn and has been re-published here with prior permission from the author.)


(Image Courtesy: Pixabay.com)

Categories: Digital

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Ramesh Shanmuganathan

Ramesh Shanmuganathan is Executive Vice President and Group CIO at John Keells Holdings. Ramesh is a dynamic, multifaceted, experienced Business ...

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