“Why, What and How” of Culture in Digital Transformation

“To get digital transformation right, focus not on tech but on culture.”

– The Straits Times, 28th Feb 2021

Why culture and what is culture?

To start off, a commonly held definition of culture is “The Way We Do Things Around Here”. Whilst many leadership teams today can intuitively relate to culture being important in driving Digital Transformation (DT), few know how to and are lesser inclined to invest in it.

Why Culture?

Many organisations have invested significant time and money in crafting the “best” digital strategy, curating the latest digital solutions, and attracting highly qualified digital talents; yet as the article suggested, 70% of all DT initiatives do not reach their goals. Of the US$1.3 trillion (S$1.7 trillion) that was spent on DT last year, it was estimated that US$900 billion went to waste.

Culture should be viewed as an “amplifier” of investments in Strategy, Systems and Capabilities. The right culture amplifies the positive benefits of these investments. McKinsey research shows that organisations with enabling culture experience significantly greater growth and returns1. Conversely, those organisations experiencing apathetic or dysfunctional culture remain frustrated or disappointed despite investments in the same…

What is the Desired Culture?

Based on my experience working with clients, we won’t get to the desired culture unless we start to define it and if somehow, we do reach there (without defining), it’s likely driven by some form of crisis and likely unsustainable. Let me elaborate this through an illustration:​

“In most organisations, there is often a certain level of silo behaviours that exist across functions or business units. This may exist in the form of lack of information sharing, low priority placed on corporate matters outside own scope of work, or simply “drawing lines”. It is however observed that during periods of crisis, everyone can identify as ONE and work collaboratively towards achievement of goals and/or resolution of challenges. When the crisis is over and when it is back to “Business as Usual” mode, the silo behaviours miraculously return.”

Just like there is no perfect corporate culture, there is also no “best” digital culture even though there is often a call for organisations going through DT to call out behaviours associated with successful Digital Natives’ beliefs/ traits such as: Collaboration, Agility, Courage, Accountability etc.

Call to Action:

Have you defined the key tenets of your Digital Culture and the underlying beliefs and expected behaviours? Are your staff engaged on these? What are the promoters and inhibitors currently experienced by the staff in living out such behaviours?

Organisation Culture Building is a Journey. Where Do You Start?

Let us take the view of an organisation driving DT and the leadership team urging staff at all levels, to “speak up” and be more “courageous with risk-taking, fail fast, learn and adapt”. Does that sound familiar? In an environment where there is currently a lack of “Psychological Safety (PS)”, chances are that people would be less willing to voice up and experiment, for fear of failure, blame and/or perception of incompetence and there is a Chinese saying which goes like… “多做多错，不做不错“.

A useful working definition about PS is “the belief that you won’t be punished when you make a mistake. Studies show that psychological safety allows for risk-taking, speaking your mind, creativity, and sticking your neck out without fear of having it cut off…”2

So before one gets overzealous in communicating transformation outcomes, initiatives and what you aspire for your staff to “do more of or less of”, it is critical for the organisation to take stock if the current work environment avails PS or not. In the instance where it is lacking, interventions need to start at the top leadership team level. As members of the leadership team, do you feel that it is safe to:

– Voice out and share different views from others in the team?

– Acknowledge that you might not be 100% clear of what lies ahead, or you simply do not know what to do?

– Conflict on ideas and issues without fear that the other party gets hurt or will get back at you?

– Hold one another accountable for team commitments even if it is outside your domain area?

– Apologise without being perceived as weak?

If your answers to the above is No, No, No, No and No, then you need to seriously reprioritise your DT agenda and focus on culture, beginning first on establishing psychological safety, or what others may deem to be “Organisation Trust” or “Vulnerability-based Trust”.

Where PS is present, you will start to experience meaningful and well-intended dialogues and/or conflicts, essential to challenging the status quo and driving change. When people express their unfiltered thoughts and care to listen to one another, they establish clarity and greater buy-in to team commitments; finally, when commitments are clear, people are then better able to hold one another accountable to the desired outcomes. Only then will you truly realise the investments in your Digital Transformation efforts and investments.