Digital Transformation And Its Impact On Organizational Culture

Any organization worth its salt has attempted to transform its culture, technology and policies to reflect the new needs of its employees and customers. The changes are imminent, and a recent Deloitte study shows 86% of executives believe employees will have greater independence and influence with their employers as opposed to before.

However, transformation is mainly technology-related: Only 56% of responding organizations in PwC’s 2022 Digital IQ survey expanded their training on tools and new processes. This gap between adopting new technologies by organizations and employees can be plugged by focusing on organizational culture and making concerted efforts to maintain it during transformation. Reluctance to let go of existing procedures stops them from setting and achieving new goals that contribute to the growth of their employees and organization.

Defining Digital Culture

Leadership, the way employees interact with each other, processes that define the operation, etc. form the base of an organization’s culture. A digitally transformed culture takes different approaches to all of these attributes, and a report by MIT and Capgemini identifies the following as key attributes in adopting a digital-first culture: customer-centricity, innovation, data-driven decision-making, collaboration, open culture, digital-first mindset, and agility and flexibility. From my perspective, there are nuanced reasons as to why these key attributes have been isolated by industry professionals.

Focusing on customers is an important sign of digitally transformed organizations. The leaders in such organizations consider the customer’s perspective first and foremost then align internal and external processes toward simplifying pain points across every touchpoint in the customer life cycle.

Innovating in a digital culture translates to calculated risk-taking. The organizations that adopt disruptive technologies tend to be the frontrunners in this category, as their employees are constantly on the lookout for new ideas. Data analysis provides organizations the opportunity to improve their decision-making and identify roadblocks well before they can cause any disruptions.

Promoting collaboration is another hallmark of digital culture. It encourages employees across departments and functions to come together as a team and optimize processes, which leads to an increase in efficiency. Championing transparency allows an employee in a digitally empowered culture to reach out for help as soon as they hit a snag instead of worrying about the reactions of their seniors and team members. It also fosters trust and helps employees share their opinions, suggestions and criticisms freely.

A digital-first mindset helps employees think in terms of optimal solutions to solve the issues they’re facing. They can point out their observations to their managers, who in turn can discuss the advantages and disadvantages of these solutions and adopt the best one for the team. Being agile and flexible provides the freedom to pursue different solutions and pick the best possible one for the employees. The resulting speed in decision-making accelerates the adaptation to more suitable solutions.

Challenges In Achieving A Digital Culture

Digital transformation and culture go hand in hand—both have to have well-thought-out processes in order to deliver the most impact. Here are a few salient points that can hinder the entire transformation process:

• Reluctance to let go of existing procedures: Employee resistance to change could be an important factor in the failure of digital transformation. This stops them from setting and achieving new goals that contribute to the growth of the employee and the organization.

• Emphasizing infrastructural costs above everything else: From having an omnichannel presence to ensuring employees’ goals are aligned to those of the organization, there are plenty of tools that can simplify the lives of employees. But they come at a cost—and since this cost can be seen upfront, it dampens the enthusiasm for transformation.

• Inconsistent resource allocation: Employees need to know how the new resources added to workflows can simplify their lives. Listening to the issues encountered by employees can shed light on the points that leaders and managers should focus on.

• Being wary of automation: Automation when done haphazardly, can make employees feel that their jobs are being replaced by programs. It is up to the managers to ensure employees understand the importance of automating repetitive tasks and how it can free up their time to take innovative ideas forward.

Accelerating Digital Transformation

A Glemad study found that the culture of an organization requires planning and an attitude of developing alternatives to handle contingencies. Some ideas that can help are listed below:

• Define digital transformation. Every organization has different processes that require a different approach to digital transformation than others. Clearly defining where the organization stands in relation to its goals can help leaders understand how to reach them. Also, defining the requirements of transformation can allow the employees of the organization to see the bigger picture.

• Cultivate leadership qualities in employees. Transformation requires leaders to take control of the situation and explain the need to their subordinates so that the work necessary for the transformation is properly planned. Identifying employees who can lead parts of the process is a good way to bring about change when the need has been clearly explained to the employees in charge. Leaders and managers across levels can act as mentors to their teams.

• Divert focus from the job description. Listing the qualities essential to manage the job and finding candidates who fit that profile can help the organization cultivate an innovative culture that isn’t afraid of trying out new processes, tools or avenues.

• Tweak the operational model. Leaders and managers should take a close look at the operating models of the organization along with its review systems, feedback mechanism, etc. to identify surface issues employees face. This in turn can lead to more robust process tweaks and infrastructure changes that have a higher chance of getting adopted by the majority of employees.

Conclusion

By treating digital transformation as a cultural change, organizations can help their employees focus on the aspects of their work that can be streamlined. Effective leadership is necessary to convince employees of the advantages of change. When done right, it gently nudges employees to get out of their comfort zone and identify the cracks in current processes. These issues can be handled at an organizational level, and employees can focus on adding value to the system they work in.