A guide for leaders: How to create a digital culture?

Important takeaways from this blog:

  • What is digital culture?
  • How to create digital culture?
  • What are the possible obstacles and how to solve them?

Culture is organizational dark matter – you can’t see it, but its effects are obvious.” – Marcus Blosch

Today everything around us is digital, it’s shaping and affecting the way we live our everyday life. The digital revolution has fundamentally changed the way we do business and the way that organizations operate a business.

Mckinsey reports that, due to the Covid 19, digital transformation has been accelerated for 7 years and made a huge difference and challenges in the business market.

In the past two years, skills gaps and cultural differences are considered leading obstacles for the organization in digital transformation, reports Statista. Also, 64% of CIOs consider culture as a barrier to digital transformation.

Why is that so? And how digital transformation impacts the organizational culture?

Everything begins with people, and digitalization is a change that needs to be led by highly engaged employees.

Global leader of McKinsey Digital, Rodney Zemmel emphasizes that “The point of digital transformation isn’t to become digital. It’s actually to generate value for the business.”

That refers to changing the habits, values, experiences, and beliefs that reflect on the entire workforce.

To respond to challenges, the organization needs to change and adapt: decision-making, leadership, risk aversion, customer centricity, and siloed mindsets. The traditional hierarchy model is breaking. Many processes are accelerated and rapid changes require a quick and appropriate reaction. For that, it is necessary to ensure a fast flow of information and encourage collaboration between teams. 

Decision-making is data-driven and requires innovation and creativity to adequately respond to challenges.

Business today demands major changes in working practices, organizational models, and cultures.

What’s my organizational culture? Does it fit the Digital Culture?

The answer to that question refers to communication, behavior, decision-making, reward and recognition, and celebration in the workplace. Culture represents a company’s personality. It matches the answer to the question:

“What is it like to work in that and that company?” Hardware Business Review describes culture as a “…guide of discretionary behavior and it picks up where the employee handbook leaves off. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.”

How to measure your company culture?

There are several methods of measuring company culture and some of them are Employee surveys, Focus groups, Exit surveys, instruments, and scales like the Organizational culture assessment instrument (OCAI) and Behavioral Observation Scale. They can be combined or used separately depending on the size and needs of the company.

The right organizational culture can help a company attract and retain top talent. Employees who say their culture is positive are 3.8x more likely to be engaged.

What is Digital culture? How to create one?

Digital culture represents an organizational culture that has successfully adapted to new conditions and leads digital transformation. 

MIT and Capgemini report highlights 7 key attributes to build a Digital-first culture: 

  1. Customer Centricity
  2. Innovation
  3. Data-driven Decision making
  4. Collaboration
  5. Open Culture
  6. Digital Mindset
  7. Agility and Flexibility.

Customer Centricity is an important tool that requires a customer-centric culture. That type of culture ensures that the experience and products they provide meet customers` needs. Customers nowadays are well-informed and their experience and reviews influence the business…

Get to know your customers by collecting data and giving them the best customer experience. To provide optimal service, employees should be engaged and empowered to do their work with customers in mind. 

Digital culture is always in motion and requires innovation. By encouraging your employees to take risks or to bring new ideas to the business they can be more open to trying new techniques to improve workflow.

In the digital age, everything is about data- collecting, analyzing, and interpreting. Digital culture needs data-driven employees who make their decisions based on data analysis and interpretation.

In order for the company to respond to the challenges of the rapidly changing market promptly, the collaboration between employees is required. Making cross-functional and inter-departmental teams enables information flow, ideas, data-sharing, and it also increases productivity.

Open culture is alive and transformational. She nurtures transparency, inclusivity, adaptability, collaboration, and community. Core values and principles both represent and reinforce an organization’s culture through processes, communication, structures, and even technologies.

A digital mindset includes a set of attitudes and behaviors that enable people and organizations to see how data, algorithms, and AI open up new possibilities and chart a path for success in a business landscape increasingly dominated by data-intensive and intelligent technologies.

Agility and Flexibility are one of the most desirable features of the digital age. To be agile means to react fast, adapt, accept failure as a part of the process, and chance to learn from it and seek constant improvements. 

In the creation of organizational culture, everyone participates and each role has its contribution. Research shows that the greatest responsibility in creation rests with leaders – 83%, and Managers – 75%, while in third place is HR and individuals’ contributions – 57%.

The six barriers of digital transformation

According to Gartner’s report any business in digital transformation is faced with these six barriers:

  1. Change-resisting culture
  2. Limited sharing and collaboration
  3. The business is not ready
  4. The talent gap
  5. The current practices do not support the talent
  6. Change is not easy.

At the beginning of every process, a plan and strategy are necessary. In order for the digital transformation to proceed successfully, it is necessary to set a specific strategic plan. According to research, culture is one of the six most applied dimensions in Digital Transformation Models and Frameworks. Changing the organizational culture is not easy, but it’s necessary.

People like to have a routine, and any disruption to it creates discomfort and stress. For that, being consistent and transparent is crucial. It is important to explain to the employees why this change is indispensable, how it will be carried out, what their role is and what is expected of them. Big changes require powerful leaders with a strong vision who are skilled in increasing the employees’ capacity for change and responsiveness of the organization.

One of the frequent obstacles today is the talent and skill gap.

According to an enterprise study, 54% of organizations said that they’re not able to accomplish their digital transformation goals because of a lack of technically-skilled employees. Today, companies struggle to find qualified workers in various ways. Possible solutions are outsourcing or upskilling and reskilling your employees.

In order to get your culture in line with digital strategy Mckinsey offers three steps to overcome barriers: 

  1. In order for the change process to be successful, support from the top is necessary to flow top-down, through the management hierarchy right to every front-line employee, so the full organizational pyramid is tuned towards digital. Support during digital transition can include hiring new roles like a chief digital officer, chief innovation officer, and another C-level role often included during digital transformation. Leaders and managers across levels can act as mentors to their teams. They provide conditions for change and set an example for their employees.
  2. Removing silos between departments, functions, and reporting lines is key to building a digital culture. It is important to have good information flow and data sharing between teams because these silos can impact workplace productivity and result in collaboration failures. There are a few ways to break the silos mentality and build collaboration instead: Start with department managers and create a unified vision, use collaboration tools (Google Docs and Sheets, etc), set common goals, and create cross-functional teams that are self-organized, non-hierarchical, and empowered to execute projects from start to finish.
  3. Breaking through risk aversion- Due to the fast-moving pace of digital it’s key that we’re agile. Taking risks and making mistakes and learning from them, requires the existence of trust between the employee and the leader. Everyone is the bearer of change, but it is the leader who enables the conditions for change to happen. He/She needs to cultivate a workplace where employees are comfortable with trying new things.

Digital culture doesn’t happen overnight. It takes time to adapt to a new mindset and new processes for organizational change to occur. 

For that, it’s good to keep in mind that:

Success is not a big step in the future, success is a small step taken right now”.

Author: Branka Vuletić


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