Organisational Culture is Essential to Digital Transformation

Culture sits at the heart of every thriving business. Yet, so many neglect its importance. 

And this can be particularly dangerous in a time where digital transformation acts as not only your new normal, but as a moat to your kingdom.

A Lack of Culture

Pop open your favourite search engine. 

See for yourself that the research is clear on the impact that company culture has on not only the growth and success of your business, but also your brand identity.

Why, then, do so many persist in getting it wrong? 

According to a study, only 15% of organisations have succeeded in their culture transformation efforts. 

The other 85%? Struggling to retain, satisfy (and attract) both the necessary talent and customers.

Now couple that with the rapid emergence of new technologies. 

Digital transformation is becoming a staple among virtually every single industry. The benefits of AI, machine learning, data engineering, UX Design and the rest are like that of science fiction.

It provides an extensive range of solutions to some of the most mundane and complex problems. It allows for greater innovation, scalability and resilience.

But without a cohesive and tempered culture, your move towards transformation could be greatly hindered.

Culture, Talent and Customers

Let’s unpack the importance of organisational culture a bit more.

We all know that a happy employee leads to a happy customer.

This means that culture has a noticeable impact on staff productivity, turnover and overall morale. 

Let’s define culture quickly:

“Organizational culture is 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.”

If executed right, it’s great for driving teamwork, improving onboarding, strengthening retention and much more. 

And, no. We’re not talking about superficial tactics like printing your “company values” on a bunch of mugs and t-shirts. 

It’s also not as simple as throwing out plagiarised value statements like “Respect. Integrity. Excellence” and expecting the world to believe you. Harvard Business Review caught on: 80% of the Fortune 100 share the same values – word for word.

But just how important is culture?

Where organisational culture is concerned, there is a clear impact on your entire business ecosystem. 

Research has shown that with the talent

  • 48% of employees will seek out other employment due to a poor culture.
  • 15% of job seekers have turned down an offer because of the company’s culture.
  • 58% of employees would take a job with a lower salary to work for a great boss.

How Does Culture Impact Digital Transformation?

For a successful digital transformation, it requires more than technological updating. It requires alignment in beliefs and values. It requires a shift in employee behaviours and efforts.  

According to The Wall Street Journal, “Failure to align the effort with employee values and behaviors can create additional risks to an organization’s culture if not managed properly, whereas a comprehensive and collaborative effort can help shift the culture to understand, embrace, and advance digital transformation”.

By neglecting culture to focus solely on technology, companies often face reluctance from employees. Usually because it could pose a risk to their jobs and livelihoods.

And to top it off, if your culture has weaknesses then it can create further risks to the culture, as a whole.

“…failing to align the goals of a digital transformation with employee values and behavior can create additional risks to an organization’s culture, such as low morale and inability to attract talent”.

If you’ve opted for digital transformation, your organization’s core values might be in need of some revising.

You will need to reinforce desirable behaviors and offer new approaches. Focus on cross-functional collaboration and continual, shared learning in relation to digital tools, processes and systems will be required to expedite the process.

And what could happen if you ignore alignment between culture and transformation?

Well, there are a range of pitfalls:

  • Loss of market competitiveness. 
  • Negative effect on organisational adoption of digital technologies.
  • Reduction in productivity and thus, revenue.

It Starts at the Top

Senior leadership, C-suites and boards need to make the goals of the digital transformation clear across the company. 

They need to focus on communicating and practicing values such as transparency, accountability, openness to risk and an inkling towards experimentation. 

A healthy, balanced culture aligned with the strategic vision of a company acts as a catalyst to better performance and an improvement in competitive advantage.

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