Many companies remain unable to fully adjust to consumer and customer digital lifestyles two years into the pandemic and a subsequent digital transformation rush.
A case in point is when I recently used a leading local bank’s mobile app, which was supposed to send a one-time password (OTP) to my mobile phone as an added security measure. I never received any. Tried and tried again during that day and even the following day but the OTP feature just didn’t work.
Other grocery apps, meanwhile, don’t have a seamless customer experience: you get a call from a person telling you that they don’t have the stocks you ordered online.
Covid-19 may have accelerated the shift to digital services but it also highlighted a major barrier to successful digital transformation — people and culture. Organizations hurriedly transformed their business models and how they engaged with customers, managed supply chains, and leveraged data. Scaling digital transformation, however, requires team members at every level to go along the journey.
This is where culture plays a critical role. Organizational culture is a collection of the core values and beliefs of an organization’s members plus policies and practices such as the treatment of customers and employees and rules on employee behavior.
Culture has been recognized as the biggest barrier to the success of digital transformation initiatives. In consulting work, I have discovered that traits such as the lack of innovation, risk-taking, distributed decision-making, and the presence of ingrained organizational silos precluded organizations from successfully implementing digital transformation.
A recent World Economic Forum (WEF) guidebook, aptly titled “Digital Culture: The Driving Force of Digital Transformation”, notes the urgent need to develop and nurture a digital culture given the shifts we are witnessing.
“Organizations with a strong digital culture use digital tools and data-powered insights to drive decisions and customer-centricity while innovating and collaborating across the organization”, it emphasized. “When implemented purposefully, digital culture can drive sustainable action and create value for all stakeholders”.
Digital culture should be collaborative, data-driven, customer-centric, and innovative. There is a need to develop collaboration across the organization and with ecosystem partners to create innovative solutions. Organizations need to leverage data to guide decisions and unlock value.
Customer centricity, meanwhile, is about creating positive customer experiences through product and service offerings and relationships. Being innovative, lastly, means adapting and continually improving products and processes, taking risks, and trying new things.
A digital culture also helps organizations integrate environmental, social and governance commitments and action across the organization, according to the WEF.
Transforming and changing culture is never easy because it requires changing many things: the behaviors and mindsets of employees, the organizational practices that influence them, and the company values that guide them.
The WEF prescribes a four-stage transformation process, which my firm has been applying:
* Assess the current culture. This is when the creation of and empowerment of the transformation office begins. A transformation office is typically a temporary governance and delivery vehicle whose sole purpose is to drive the successful implementation of critical projects and programs that enable an organization to be transformed. This stage also covers culture baselining through data collection from focus group discussions, surveys, and reviews of policies and procedures. My firm uses the Six Building Blocks of Innovation for baselining.
* Define the target future state, i.e. the digital mindset and customer-centric culture. This is also where the digital competency model — a set of knowledge, skills, attitudes, and abilities needed in the successful execution of digital transformation — is crafted.
* Experiment. This stage involves piloting new programs such as enablement of employees, introducing new ways of working, conducting skills workshops, and running experiments to determine what works.
* Scale. This is when digital learning journeys and upskilling programs are instituted in the rest of the organization. New policies are introduced and new organizational structures are implemented. This is when communication campaigns are run to institutionalize a digital mindset. Progress is tracked through leadership dashboards.
Implementing these stages requires the oversight of the CEO and senior executives to make digital transformation successful.
The author is the founder and CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation and teaches strategic management in the MBA Program of De La Salle University. The author can be emailed at firstname.lastname@example.org