Competing with Culture in a Digital Age
The human work of solving problems, facing challenges and overcoming obstacles tends to share a common goal: creating stable, secure and predictable environments. The tendency for most humans is that once we solve a challenge, we want to be done with it. That propensity, however, does not fit with today’s reality of perpetual change.
In the digital business world, organizations have no choice but to operate in an unclear, uncertain and continuously shifting environment that requires a new mindset and approach to formulating business strategies. Digital winners recognize that change is part of the game, and that they need to develop ways to exploit continuous ambiguity. In fact, in our surveys of high-tech professionals, when we asked how long they thought digital transformation initiatives would last, about one-third of the surveyed technology professionals answered “forever” – and as we all know, forever is a long, long time.
In the Fourth Industrial Revolution, change is not something to be solved; instead, change is the energy that propels organizations into perpetual motion – creating new innovations, designing new business models, identifying new threats and opportunities. Business leaders must continuously recognize new trends, competitive forces and markets, and then retool, reprioritize, re-educate, culturally align and retrain employees to capture new opportunities profitably. They must constantly fight “normalcy bias,” which is the desire to keep things the same. They must foster an environment that embraces change and recognizes competitive opportunities reside in every instance of change.
Three Cultures that Block Change
Our executive interviews revealed the extent to which company cultures can block or restrict change efforts. One healthcare executive listed this as his biggest challenge, ahead of resistance to re-engineering workflows and outdated technologies. Additionally, about 20% of the surveyed technology professionals revealed cultural issues were the biggest challenges they’ve encountered with digital transformation.
In our research, we’ve identified three different cultural types that can impact an organization’s ability to engage in digital transformation:
Leadership Culture
A culture of change at the leadership level is one that embraces the use of digital technologies to compete, and defines the high-level digital transformation doctrines and strategies from the very top of the organization. If business leaders don’t convey a full understanding of how digital technologies are impacting their industries, markets and customers, and then acting upon it, they are a detriment to their organization’s future. Executive interviews for this report revealed the following insights:
- Leaders struggle with accepting change – adjusting their mindset, and appreciating the true significance of digital transformation on their business and future.
- Leaders often require a major failure event to wake them up to the need for decisive action and digital transformation.
- Leaders must realize that different segments within their workforce view digital technologies in different ways, and they must be managed, educated and trained differently as a result.
Institutional Culture
A company may have insightful leaders, but if the organization does not follow, even the best leadership efforts will be ineffectual. Here is a few insights from executives that we surveyed:
- Digital transformation means it’s not only the IT infrastructure that must change, but all segments of the business.
- Digital transformation and organizational agility must be embedded deep in the culture of an organization.
- Without continuous education and engagement the workforce will resist change.
Customer Culture
It’s critical for businesses to understand the culture, practices and fast changing behaviors of their customers and align with them quickly enough to matter. Among the surveyed technology professionals, 65% reported the prime motivation to engage in digital transformation was fast-changing consumer behaviors. Further, the executives we interviewed repeatedly credited customer requirements and demands as a top motivation for digital transformation:
- Customers’ are adopting digital technologies and changing their online behaviors faster than many companies can change their business processes and models to compete.
- Customer demands are interrupting organizational priorities, budgets, strategies, investments and plans.
- Digital transformation is unevenly distributed and some customer and industry segments are far ahead of others, which creates opportunities and competitive advantages for fast movers.
Our research revealed a need to purposefully monitor and develop our digital mindsets. Accept that digital technologies and a connected world are here to stay, and that the path to business success resides in and through them. Understand digital technologies and their capabilities, and rethink every aspect of our business with a digital mindset. Recognize we don’t control our digital customers and we cannot dictate their behaviors. Our role is to observe, support and align with them faster than our competition.
Our research revealed a need to purposefully monitor and develop our digital mindsets. Accept that digital technologies and a connected world are here to stay, and that the path to business success resides in and through them. Understand digital technologies and their capabilities, and rethink every aspect of our business with a digital mindset. Recognize we don’t control our digital customers and we cannot dictate their behaviors. Our role is to observe, support and align with them faster than our competition.
Our organization’s culture plays a big role in our ability to compete in the digital age. Our leadership, institutional and customer cultures all have an impact. It’s important to purposely develop a digital culture built to support the continuous and rapid changes that comes with the Fourth Industrial Revolution.
If you find these articles valuable, I am available to provide in-house workshops and analyst briefings. Visit my website at the Center for Digital Intelligence.
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Kevin Benedict
President, Principal Analyst, Futurist, the Center for Digital Intelligence™
Website C4DIGI.com
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