Why the right culture is essential for true digital transformation

Published on January 22, 2016 in Digital Transformation

There are lots of things that prevent digital transformation really happening in the enterprise.

Latest research from Fujitsu has highlighted a shortage of the right skills (31%), a failure to prioritise properly (31%) and security fears (27%) as three of the top reasons, amongst UK businesses.

But there’s one important factor that is difficult to quantify, but nonetheless essential for digital success: culture.

As Peter Drucker is quoted as saying: “Culture eats strategy for breakfast”. And yes, as far as I’m concerned, that includes your digital strategy.

When you look at those poster-child digital-native businesses, like Uber, Airbnb and Netflix, what often separates them isn’t so much the technology or business model as their attitude.

I’ve looked at a lot of these types of enterprises and compared them with traditional firms and noticed that there are two types of business.

There are those businesses where employees avoid failure at all costs, versus those where people have the freedom to learn through thoughtful experiment.

The failure avoiders are likely to have a waterfall IT management, work in silos and always make decisions on the basis of “what’s right for our business model?” People feel constrained in their roles, and if you don’t agree with your managers – well, you’d best keep it to yourself.

In companies that have a positive digital culture, it’s the complete opposite. They’re likely to have agile IT, collaboration is expected and the business always looks at decisions through the lens of the customer. People’s views are encouraged from anywhere and they are expected to contribute improvements to the business through small experiments. Failure is accepted.

In essence, the difference between these two types of business is delusion vs truth. Enterprises with a strong digital culture always seek the truth and reject preconceptions. They never say, “it’s the way it works around here”.

The problem is that traditional failure-avoiding firms are ironically doomed to fail themselves. They have existed for so long because of the power of their assets. Think of supermarkets who have owned the distribution network, banks with a high-street presence, through to taxi firms that require expensive licenses – they are all under a huge amount of threat from newcomers.

The strength of the brand has also been a protective asset up until now. Consumers and business-buyers trust certain brands because of familiarity and recent experience. Much of this has been influenced by advertising spend (think how powerful TV, print and billboard advertising used to be).

Nowadays, new entrants can shortcut what has taken traditional organisations years to accumulate. Many of those digital native companies we’ve learned to love simply didn’t exist two to three years ago.

So, how does a business abandon its traditional culture to have a truly digital culture?

Well, sadly there’s no silver bullet. But based on speaking to many digital enterprises over the years, one piece of advice I have is this: drop the vision; create a mission instead.

Business visions, typically, are phrased in ways that employees struggle to identify with. For example, “we want to be a £10 billion pound provider of X services.”

If I’m an employee at this firm, do I really care about this? This kind of objective encourages traditional risk-averse thinking.

A mission is more important. It’s about what a business actually does. Take Facebook; its mission is to “give people the power to share and make the world more open and connected.” Airbnb’s mission is to “help create a world where you can belong anywhere”. People can get on board with these things. They’re immediate and sustainable objectives.

Building a transformational digital culture takes a lot more work, but if you can get the mission right, you’ve taken the first step to leaving your traditional culture behind.