In Digital Transformation, Culture Comes First

When it comes to digital transformation, culture should come first.

Unfortunately, many organizations put culture last – if they put it anywhere.

However, many of today’s most successful organizations recognize the critical importance of company culture.

Does “culture eat strategy for breakfast,” as Peter Drucker supposedly said?

Or does strategy trump culture?

The value of company culture can be difficult to measure quantitatively … but that doesn’t mean it doesn’t exist.

A company culture:

• Impacts employee happiness, engagement, and productivity
• Reflects a companies mission and values – which affects relationships with employees, customers, and business partners
• Can either improve or detract from the business model as a whole

Below, we’ll look at why culture is so important in digital transformation efforts.

In Digital Transformation Culture Takes Precedence

Many confuse digital transformation with technology adoption, but digital transformation is much wider in scope.

Digital transformation implies transformation of many aspects of a business, including:

• Technology
• Business processes
• Revenue models
• Strategic priorities
• Culture

Because culture is so integral to all of these processes, we’ll examine cultural transformation.

Below are 5 traits that should be adopted during digital transformation:

1. Innovation

Innovation is a hallmark of the world’s most successful digital companies, from Airbnb to Zappos.

Actively investing in innovation – by dedicating teams, budget, and time to research and development – is the most common way to develop creative products and solutions.

However, to create a company-wide innovative culture, you need to go further.

The best way is to democratize innovation. That is, encourage and allow anyone to contribute.

Here’s how:

• Communicate clearly about your intentions, spearheading innovation as a core cultural principle
• Be open to innovative ideas, no matter where they come from
• Invest in systems that actively encourage and solicit innovative solutions

In short, create mechanisms that proactively encourage innovation.

This is how organizations can accelerate transformation towards an innovative, creative culture.

2. Agility

Agility is essential for modern, digital organizations.

Creating agility gives businesses the ability to react, respond, and act quickly. These are essential survival traits in today’s fast-paced market.

Agile thinking can be applied to a variety of business processes, including:

• Software development
• Product development
• Manufacturing
• Change management

And virtually any other business process.

Plenty of information about agile business can be found online. 

But key characteristics of this operating model include:

• Frequent, regular collaboration
• User-driven development
• Responsiveness over static planning

By establishing agile processes within a business, a company can build a culture that is more flexible, open, and able to change.

3. Digital Fluency

Digital skills are essential for any digital culture.

Creating digital fluency means a few things:

• Adopting digital technology and using it to its fullest extent
• Building and maintaining employees’ digital skill sets
• Using digital adoption tools – such as digital adoption platforms – to streamline training and onboarding
• Implementing data-driven solutions (see below)

Today, every role within an organization involves technology to some degree or another.

In some cases, technology-fueled workflows can be extremely complex. In others, less so.

Developing a robust in-house education program, though, can greatly improve employee productivity and output.

4. Data-Centricity

According to McKinsey, data culture is part of the data revolution.

Based on conversations they had with business leaders, they identified a few key principles for successful data cultures.

Here are a few:

• Data-driven decision-making should be standard
• Leadership should remain committed 
• Data must be democratized, or shared, across the organization
• Someone must champion the internal data revolution – and that someone is not necessarily a “digital native”

These and other principles can help companies create cultures that integrate analytics with organizational strategy.

With a culture that prizes and prioritizes data, however, 

5. Human-Focused

Despite the fact that we are discussing digital transformation, culture, and technology, humans still run things.

Today, organizations put great emphasis on human-centered business practices.

Successful company cultures:

• Focus their efforts on the customer experience, using it to create great products and services
• Build excellent employee experiences, from onboarding and training to the physical work environment
• Use feedback, data, and analytics to inform decision-making in every business area

Human-centric business models – ones that create great experiences – perform very, very well in the marketplace.

It is no secret that Amazon is obsessed with the customer experience … and their results are a testament to the success of this obsession.

When transforming a company culture, it must be remembered that “digital” does not mean putting humans last.

On the contrary, it means putting them first.

Final Thoughts

Digital transformation is fueled by technological progress and innovation.

However, this transformation extends far beyond software deployment. 

For companies that truly wish to transform, businesses must:

• Fully adopt digital technology
• Implement digital business models
• And build digitally fluent, modern business cultures

A transformed culture will positively impact every area of the business, from employee engagement to product development.