Organisational culture is a critical success factor in any digital transformation. This is because a true digital transformation first affects the people working in an organisation. Only then come the processes and, finally, technology follows.
Unfortunately, many digital transformations tend to focus on technology. Ken Polatan does have an explanation for this. "Technology is real, shiny and easily quantified." Technology is visible and concrete. People are just inconvenient and are subsumed into the "soft values. In my view, this is an extremely misguided approach.
Improving technology and processes is not enough
More mature organisations are addressing both technology and processes in digital transformation. But that is still not enough to achieve the intended goal of digital transformation, which is to better meet the demands and capabilities of the digital age in which we now live.
Digital transformation requires a more holistic approach, where the "human aspect" and in particular the organizational culture is decisive. That organisational culture determines whether the organisation is sufficiently prepared to embrace a new way of 'digital' thinking and behaviour.
Digital transformation is a radical change
Digital transformation is not incremental or evolutionary change. On the contrary, it is a fundamental and radical change in the way the organization looks at its own value, customers, competitors, innovation and information. Digital transformation reinvents the organisation.
The only constant in digital transformation is change - continuous change. And many people don't like change at all, especially if it feels imposed by someone else or by circumstance. Especially if an organisation is currently successful, it becomes quite a challenge to argue for disruptive innovation.
Three pitfalls management must avoid
Vineet Nayar in his Harvard Business Review article 3 Traps That Block Corporate Transformation lists three pitfalls that leadership must avoid in a business transformation.
The Logic Trap - Leadership must have the courage to set goals that others think are impossible. Digital transformation is not about small, incremental changes and cost reductions.
The Continuity Trap - Uncertainty about the future can paralyse people. Management must be able to get the organisation excited about the challenges of change.
The Leadership Trap - It is tempting to tell others how to change. But digital transformation changes the role of the leader who issues orders to an "enabler" of bottom-up innovation. The customer experience (customer experience') is all-important, so leaders must inspire employees to make that experience excellent.
Leadership in organisational culture
Ken Polatan offers six tips that can help leadership prepare organisational culture for digital transformation.
1. Communicate shared values. Remember Simon Sinek's Start With Why? Make clear why we need to change and what purpose we have in mind.
2. Focus on longer-term sustainability. Stop thinking short-term and focusing purely on shareholders. Digital transformation pursues long-term improvement.
3. Engage your real 'stakeholders'. The real stakeholders ("stakeholders") of organizations are your customers, employees, partners and suppliers. "Let's prioritise stakeholders over shareholders" according to Ken.
4. Become truly 'Agile'. One of the main goals of digital transformation is to become more agile ('business agility'). An 'agile' organisation can quickly change priorities and redeploy resources if changed customer behaviour demands it.
5. Move from cost savings to investment. Digital transformation is a long-term strategy. It requires investment.
6. Embrace the' Intrapreneurial' mentality. The market is so changing that it is not wise to sit back contentedly when business is good. You have to keep innovating.
Servant leadership
Ken believes that management has an "enviable" role in changing organizational culture. By having a clear vision, not being afraid of the unknown, leading by example themselves and being humble in their own role and authority. He calls the latter "servant leadership," which translates as servant leadership.
Read the article The Leadership Is the Company Culture by Ken Polotan
Read the HBR article 3 Traps That Block Corporate Transformation by Vineet Nayar.
Also of interest is the book The Innovator's Dilemma by the late Harvard professor Clayton Christensen.
Nayar wrote the inspiring book Employees First, Customers Second based on his experiences at HCL Technologies.
Leadership in digital transformation
In the Leadership dimension you measure the extent to which the leadership has a vision for the transformation, shows visible exemplary behaviour in function of the transformation and provides support during the transformation,
Teams - The extent to which team members can function, cooperate, learn and experiment optimally and in safety. With attention to a diverse and inclusive team climate.
Well-being - The extent to which employees feel good about themselves in terms of health, safety and psychosocial aspects and are encouraged to do so by the organisation.
Digital competence - The extent to which employees have the right digital skills and are trained and supported in this by the organisation.
Change competency - The extent to which the organisation is skilled in (continuously) dealing with change, sees the added value of this and optimally guides the transition.
Leadership first
The maturity model can help identify pain points in leadership and organisational culture before embarking on digital transformation. There is really no point in starting digital transformation if the leadership is unable to lead the transformation properly.
