Culture is King!

by | 16/01/2018 | Change Management |

The strategic importance of corporate culture in digital transformation and its impact on change management.

Let’s face it: the topic of culture still does not get enough attention within a company. But when it comes to digital transformation, no company can afford a lukewarm approach of this existential topic.
What exactly characterizes a digital corporate culture? Is it an unambiguous way of thinking and behavior? How valid are special values and norms in that context? These and other questions were analyzed by the global consulting firm Capgemini in their large-scale study “Culture First!”, conducting qualitative interviews with 20 scientists and pioneers of digital transformation, such as Google, IBM and SAP. In cooperation with the University of Innsbruck, the following eight dimensions of corporate culture were worked out (and I am going to talk about them in more detail in one of my upcoming posts):
  • Customer focus
  • Digital technologies & digitized processes
  • Digital Leadership
  • Autonomous working conditions
  • Entrepreneurship
  • Innovation & learning
  • Collaboration
  • Agility
The study identifies company attributes such as “openness, willingness to learn, change, joy and diversity” as indispensable.

«The culture of an enterprise reflects the DNA of the company.»

 

Patrick Samson, Change Expert in Digital Transformation, Brain & Heart Communication

The cultural dimension of digitization

The authors of the study identified culture in the digital age as a strategically relevant source, classifying culture on the same level as, for example, location, capital and information. However, digitization can only be effective when integrated into the appropriate corporate culture – and vice versa. Digitization can contribute tremendously to a change of corporate culture as shown by the most important study findings:

 

  • It is imperative that digital strategy and digital culture are conceived and implemented together.
  • Companies with a strong digital culture have been proven to be more successful in financial terms and employee satisfaction.
  • The more digital culture is anchored within a company, the sooner the digitization will succeed.
  • The most advanced digital culture can be found in agile organizations, followed by matrix organizations and functional organizations. Surprisingly, process organizations rank last.

  • The digital front-runners focus on the ‘human being’ as a success factor, while the late adopters mainly rely on the use of new technologies.
  • Technology only represents a necessary prerequisite to bring digitization in companies to a higher level of added value.
  • Sustainable and successful digital cultural change only happens when employees remain involved and keep up their own initiative.
  • Corporate cultures that do not impose barriers to critical thinking fit perfectly into the digital age.
  • In 80% of digital front-runners, the CEO assumes responsibility for the digital cultural change as opposed to only 10% of the late adopters.
  • According to the study, the biggest obstacles for digital cultural change are the lack of communication between employees, a silo mentality, and the inability to deal with the fears of employees.

  • 2/3 of the respondents consider the established corporate culture as the biggest obstacle to a digital organization.
  • Those not using corporate culture as a strategic resource will face problems with digital transformation.
  • Cultural change is not an end in itself but rather a means to an end – and hard strategic work.

Change Management 4.0

As rightly pointed out by the authors, change management itself needs to change in the course of digitization and transformation of the economy. In the case of change projects, the cultural dimension of process design and technology projects has been pushed into the background for too long. Culture is one of four relevant elements in organizational design. The other elements are structure, employees and routines as well as formal and informal processes.

Agility and stability at the same time

For change management, digital transformation represents the main challenge and a stroke of luck. At the same time, the era of digital transformation puts change management to the test. If agility is demanded of companies, then change management must also become more agile.

Ideally, a 360-degree company analysis and an intervention-architecture with a long-term horizon as well as short sprints should alternate and complement each other.

After all, digital transformation is all about transforming the entire organization in terms of potential and opportunities made available by the digital age – and, of course, about the change of entrepreneurial analog-digital synergies and resources. Therefore, the entrepreneurial question in change management can no longer be: why or when? But simply: how do we do it?

« If culture is king, then modern change management adds the crown. »

Patrick Samson, Change Expert in Digital Transformation, Brain & Heart Communication

Communication as a motor for change

Communication is the classic tool for change management to mobilize, motivate and inform stakeholders. For this purpose, digital channels including social media platforms are ideal due to their efficiency, ability for dialogue and their reach. In addition, the cultural analysis belongs in the tool kit of every change manager, and should be made mandatory especially when dealing with digitization projects.

Change management models try to establish a framework and instruments to observe, predict and control the complex actions of the actors in social systems (organizations). They also try to clarify the relationship between corporate values, observable behavior and results. They define roles, persons responsible, tasks, solutions, methods and tools. For example, naming responsible people for change and introducing new roles such as the Chief Digital Officer (CDO) is a clear success feature of the digital front-runner.

The topic of corporate culture can simply not be avoided in change projects. As culture is omnipresent, it is reflected from the smallest actions to the most far-reaching strategic decisions.

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