The Key to Successful Digital Transformation: Company Culture

Digital transformation – when a company overhauls its organizational structure in order to reach digital enlightenment – is no small feat.

In fact, for many companies digital transformation will not come so easily. It requires the adoption of new processes and ways of working, as well as new approaches to break down silos and often to overhaul the customer relationship.

The most important aspect of the transformation that many businesses tend to avoid, ignore or find overwhelmingly difficult is the transformation in company culture required to accompany that digital shift.

Company Culture Changes Are The Most Difficult

While hiring the right talent, transitioning technologies and developing a new product and strategy are straightforward enough as challenges and manageable components of a digital transformation – not easy, but doable – a cultural transition in business is an uphill battle due to its complexity and an organization’s traditionally broad and deep legacy and cultural roots.

A recent report published by Boston Consulting Group (BCG) revealed that while a company may accept that digital transformation is necessary to improve operations, many organizations attempting such overhauls don’t actually see significant improvement. In fact, BCG analysts found that a successful digital transformation goes beyond simply changing the strategy, technology, processes, and organizational structure of a company.

Rather, it is perhaps most critical to cultivate a digital work culture as well. But what does that mean?

Indeed, the issues that arise when creating digital work culture make it the biggest hurdle of a digital transformation – not to mention the difficulty and time required for success.

Ultimately, it is imperative to go beyond changing a company’s technologies, infrastructure and structure – an effective digital transformation requires the human element as well. After all, a company’s work culture is its operating system.

Ignoring Culture Can Hurt Digital Transformation Results

The rise of digital technologies like artificial intelligence, Big Data and the Internet of Things require all members of an organization to be prepared for digital transformation, and to be ready to work openly and transparently. Only then can these new technologies, systems and processes be adopted.

In the digital age, however, it is easy for executives to underestimate the influence of culture.

In its assessment of 40 digital transformations, BCG found that of the companies that ignored work culture, only 17% saw improved financial performance. Meanwhile, nine out of 10 companies that did focus on digital culture saw marked increases in financial performance, while 80% of organizations that fostered a digital culture reported breakthrough performance as a result of the transformation.

These figures represent serious gains. Yet many digital transformation programs avoid the topic of culture due to the fact that it is a “soft” competency and one of the most complicated features to address of a digital transformation.

Get Everyone On Board with Cultural Changes

Objectively, it may seem obvious: For change to occur, the staff must be on board. But that is easier said than done.

A company’s leadership cannot simply assume that their workers are ready to transform the way they do their jobs just because they have been so ordered. The cultural shift will occur only if the organization actively fosters digital culture-focused characteristics.

A joint analysis from MIT Sloan and Deloitte reveals that companies failing to transform digitally generally fell short of their expectations because they “didn’t change mindsets and processes or build cultures that fostered change.”

Culture is the cornerstone of all organizational processes and capabilities. A cultural shift demands new mindsets and systems. Crucially, such a significant transformation calls for the support of the entire staff – without a change in the way people work and behave, the digital transformation will fail.

Indeed, culture is the entire company’s responsibility.

An effective method requires digital leaders to build a culture of constant change. No longer can companies define a strategy and execute it over the next five years. Instilling a sense of continuous change and evolution will inspire the momentum and rhythm required for staff across a business to embrace the new digital culture.

It is also important to remember that a cultural overhaul takes time, patience and persistence. Moreover, a concrete action plan must be in place for any organization that wants to undergo and succeed with its digital transformation.

Five Key Parts to Successful Digital Work Culture

The report from BCG outlined five key components of a successful digital work culture:

  • Encourage employee engagement with all stakeholders
  • Value delegation over control
  • Encourage boldness over caution
  • Promote more action and less planning
  • Foster collaboration over individual performance

The bottom line is clear: Digital transformation can only succeed if there is a matching cultural change. Otherwise, you will find yourself with expensive, new, fancy tools…that could well end as useless.


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