The greatest culture disruption is playing out in companies everywhere, and many leadership teams aren't aware of the implications. The digitalization of the workforce and work place will require companies to operate in ways they've never anticipated, and move with a risk tolerance and speed that may seem unnatural. Gone are the days of 3-year and 5-year strategic plans.
Capgemini has identified 8 specific dimensions of a digital culture:
- Digital leadership
- Digital technology and processes
- Autonomous working conditions
- Innovation and learning
- Customer orientation
All of these components represent the new DNA of organizational culture.
All corporate cultures share a common framework consisting of three elements:
- Vision & Strategy (where are we going, and how are we getting there?)
- Leadership & People (who is leading us on our path, and who is essential in executing our vision?)
- Processes & Organizational Structure (how will we perform our work and engage with one another?)
If these 3 pieces don't incorporate the 8 dimensions of a digital culture, then the company will struggle to adapt to a digital world.
For example, if a company's leadership team doesn't support an organization in which employees can work autonomously, and insist on micromanagement, then its people will not be able to work at the speed of the technology.
If processes are cumbersome and bureaucratic, and require multiple steps and permissions for change, the company will never be agile enough to keep up with digitalization.
McKinsey identified the 3 biggest risks to organizational success in a digital era:
- A silo mindset: Functional and departmental silos that operate with limited engagement and connection with other organizational departments
- A fear-of-failure mindset: Not empowering leaders and managers to make decisions without first following a complex chain of command.
- Weak customer focus: Companies are more focused on their products and services than their customers.
These cultural changes must come from the top of the organization.
Change management expert Torben Rick identified 9 differences in traditional versus digital cultures that all leaders must understand and address:
- Proactive vs. reactive. Companies don't wait to respond to changes. They proactively seek ways to innovate, and stay ahead of market shifts.
- Customer-centric vs. product/service-centric. Customers expect swift responses to product enhancements, customer service inquiries, and easy access to company people and information.
- Data is future focused vs. historical. Companies use data for rapid decision-making and real-time analysis. Tracking trends of what happened last month or last year is irrelevant.
- Innovation is fast/agile vs. heavily research dependent. Companies no longer require detailed business cases to make decisions on products/services.
- Failure is embraced/expected vs. discouraged. Risk aversion is now a liability. Leaders expect managers and employees to take calculated risks.
- Frequent user testing vs. focus group insights. Companies frequently poll their customers and shift according to real-time findings.
- Listen-and-learn vs. Market research. In keeping with the customer focus, companies invest more time and resources in knowing what the customer wants versus what the market research says.
- Flat organization versus hierarchy. To be as agile as possible, companies are removing unnecessary layers to speed up decision making, break down silos, and improve communication.
- Cross-functional teams versus silos. Companies are no longer divided according to functions, but instead are matrixed and easily reconfigured to quickly respond to customer needs and organizational changes.
Digital transformation is impacting every aspect of business, including customer engagement, human resources, sales & marketing, operational performance, and service delivery.
Corporate cultures must reflect the speed and agility of digitalization to remain competitive, and to continue attracting the best talent.