Peter Drucker’s legendary quote “Culture eats strategy for breakfast” may have been recorded in a different era but it remains incredibly valid in today’s digital age. During digital transformation efforts, much (often too much) attention is paid to the technical nuts-and-bolts of such initiatives, be it ensuring that legacy systems get the touch of modernity, mundane projects get the whip of automation, or that data is used and stored securely but the vast majority does not pay much heed to the humanistic side, which bares the eventual responsibility of all this. A harsh reality is that while digital should be second nature to most organizations by now, most transformation efforts continue to fall flat in alarming fashion, just because of the very fact of ignoring the people’s side. Rolling back the years, in 1993, Hammer and Champy posited in their timeless business gospel, reengineering the corporation, that 70% of organizational change processes fail. For digital transformation processes, in 2017, the figure stood at 84%, far from surprising. Why such initiatives fail can take one of many reasons, from technical to financial, however, the consultants at Implementation Management Associates (IMA) believe that “in order to get to full value realization, the people side of a project needs to be managed with the same rigor and discipline as the technical side,”. Technology, they say is not tough, people are, and these people form the cultures we operate in.
Is virtually non-replicable
While strategy may be useful in providing the organizational vision, culture is what makes people loyal. It is these people, at the heart of the engine that keeps the whole complex running, who lend their hand to the project’s success, especially one as radical as digital transformation. With competition simmering from both inner and outer-industry forces in the digital age, companies with best cultural practices might be the ones that follow the Darwinian doctrine of the survival of the fittest. Exactly what makes culture such a big consideration over everything else surrounding it? Technical details and operational expertise can be quantified and replicated. Intangible aspects like culture and workplace affinity are intelligibly harder to do so. A culture that breeds innovation is much harder to cultivate, however, once it is, it can be among an organization’s most-valuable assets, as according to Wazoku, it both results in more satisfied employees and bolsters productivity.
A quick Google search reveals a bundle of failure stories whenever organizations have tried to copy their competitors. You could try hiring every one of their competitor’s employees and still fail horrendously, because once a culture has set in, with hiring of a particular skill set doubling down, that’s when the magic starts flowing. Similar power structures and controls might be in place, but where would you find the leaders that set the culture, or the stories everyone has been discussing for ages, but no one can point to the origin of? For digitally-driven organizations, where digital skills (and tools which enable them) are a part of life, we believe culture is even harder to copy. Digital culture requires an all new mindset, which as McKinsey points out, should be more risk-taking, customer-centric and implemented organization-wide (rather than in silos). These are all major considerations which are far from the conventional and risk-averse way of doing business, every one of them taking years to develop on their own.
Organizations with the strongest of inter-company bonds claim culture as a competitive advantage, too. An example of this is Salesforce’s Ohana philosophy, which acts as a support system between all its employees as well as its external partners. The approach was no coincidence, since it was categorically cultivated by the company’s founder during its very inception, which shows as the company was dubbed the 15th best place to work at in 2019. In the Middle East and Asia Pacific region, organizations such as Careem (bought by Uber in 2019) are well-known for providing a strongly-bonded culture, which promotes diversity through women empowerment and old employee benefit programs, and, as a result, finds itself among the region’s top employee satisfaction lists.
Its spillover affects everything else
A vision shared by all the employees creates indirect spillover effects in other domains, too. For one, it helps the hiring process by earning the attention of like-minded, skillful people, who are attracted by the affinity between employees and the faith in their service. Companies that feature on one of the “best places to work at” lists usually start out by taking an employee-first approach. “I am obsessed with taking care of [my employees],” says Chris Nassetta, CEO of Hilton Hotels and Resorts, which was named the best place to work for in 2019, by Fortune. The results show as the hotel was also ranked top in customer service in the hospitality industry by the American Customer Satisfaction Index during 2018. The approach can help customers too, as employees who believe in the company’s vision can serve customers with a better belief than those who don’t. Backed with digital tools, representatives with digital profiles of their clients can truly fulfill their potential. During transformation initiatives, employees can better persuade consumers to get on-board with new digital tools and methods. Within the company, this unifying approach can help accelerate the pace of the initiatives during transformation as well as improve their chances of success.
It supplants strategy
It is becoming increasingly apparent that a strategy backed by a culture has a better chance of success, than one without. For it to be successful, strategy needs the backing of culture, which helps raise the engagement level of employees, attract new talent and better service consumers, among other things. However, the opposite can’t be said to be true, as culture usually grows organically without much in the name of guidance from the top echelons. At best, strategy can codify existing rituals and best practices (however, as we’ve discussed, efforts to copy culture have almost universally fallen flat). Culture unifies companies in times of trouble and distress, which means any hurdles during the digital transformation process become easier to cross. The digital skills which people obtain overtime help consolidate the company’s long-term vision and can form part of another advantage which is difficult to replicate. It would be a case of short-term-ism to not consider culture when setting out your digital business strategy.
Weave culture into your digital transformation; the TransformX way
Organizations that focus on building culture during transformations are 2.5 times likelier to succeed. The question then arises is, what can ideally be done to create a culture that works? While examples of great corporate cultures can be found aplenty, what’s common with each is they all have their own identity, rituals, and power structures which were just relevant for their enterprise. Every organization’s take on what that specifically means for them can differ. But a key to building an effective digital culture is reaching consensus on what your organization’s core digital values should be.
As is the TransformX way, for such initiatives, we recommend that our clients bring an open state of mind to defining digital. ‘Digital’ is far more than technology, a process or a mission statement; it is a way of doing things, a state of mind, a belief system. Elements of our two signature offerings Organizational Transformation and Employee Enablement are combined to run Digital Maturity Assessments and Digital Acumen Assessments that provide a baseline of where things stand on the organization and the employee side and identifies key areas that need to be addressed from a strategy, process, technology or a skill-building level across the board. These insights are then used to create bespoke Digital Transformation Roadmaps and Digital Learning Journeys to set our clients on a path of growth, profitability and the exploration of new digital, data enabled business models and revenue streams. We look forward to partnering with you on your next culturally infused digital transformation initiative.