Culture: The forgotten link in digital transformation
26 Aug 2019
Digital transformation has become an obsession with businesses and often not without good reason. Adopting digital technologies not only in their customer-facing products but how companies operate has made companies more competitive and has opened newer business avenues. Netflix, for example, was able to surpass much of its competition through the timely adoption of digital technologies. Even though it wasn’t the first to invest heavily in into digital streaming services during its early years, the company was able to fast identify its potential and pivot their business model towards a more digital-first service. The result today is a billion-dollar empire which spans across the globe and whose reach of streaming services exceeds that of more traditional media giants like Disney and Time-Warner company.
What is also key to note here is the short duration in which the company has been able to build its capabilities. The use of digital technologies hasn’t only helped the company become a strong market player with the ability to set market trends but also to do in a relatively short time. If one was to across other upstarts like Airbnb and Uber who have similarly disrupted established sectors, a similar application of such digital technologies. But what lies at the bedrock of such success stories in establishing a company culture that helps companies make the best of newer opportunities that digital technologies open up.
A digital culture for a digital company
For a company to truly embrace the potential that shifting to a digital way working opens up—and to ensure the negative impact of ensuing chaos is mitigate— a culture that supports that such a digitalization is required. But that sounds like a broad statement. Although clear in its intention, the statement does little clear the specifics. Bringing change to a company culture that enables it to build its digital capabilities although necessary, is often difficult to completely grasp in its scope and methodology. We look at some ways to clear a few misconceptions and build the right practices that can amount to creating the right culture to sustain digital transformation.
Building with a clear purpose: Digital change, although important, can also plunge the company into a labyrinth of ways to reach its intended goal. To reduce junk—and thus reducing the possibility of creating ‘chaos’ in the process, building the company’s digital capabilities with a clear purpose in mind is a key first step. One that can enable both management and their employees navigate the labyrinth successfully. It also enables to bring in clarity in how the work culture needs to change. With multiple functions working towards a similar goal, establishing a clear mandate of digital change helps build the right alignment and cut out unnecessary ‘noise’.
Collaboration is key
Digitalization of company processes has led to traditional work boundaries to become increasingly permeable as teams now require to work together to truly leverage the potential of being ‘digital’ first. While the advantage of working in cross-functional teams are many, chiefly they bring such teams closer to the analyzing customer needs from many vantage points and help build products and services that truly address such needs. This also makes breaking traditional hierarchal setup between management and employees to create collaborative cross-functional teams that are self-organized, non-hierarchical and empowered to execute projects from start to finish. Enabling the work culture to do so without necessarily disrupting how work is done and ensuring employees are still aligned to company objectives.
Self-discipline and taking risks
In a presentation on what drove Netflix to become one of the biggest players in digital entertainment, CEO Reed Hastings identified the company culture to the most important component. To sum up the underlying principles of creating an impactful digital company, he used the following words, “Freedom and Responsibility.”
When it comes to building a company culture that is tuned to the current digital era, its crucial to allow the risk-taking abilities of talent within the company. There have been many examples how over the years companies like Google, Amazon, Microsoft, etc, and even non-tech companies like Nike have been able to build newer products by cultivating a culture of risk-taking. Although traditional wisdom might state to follow the established norms and ‘doing things by the book’, such an approach can be detrimental in allowing the organization.
But company culture under such situations has to play a dual role. While taking risks needs to become a part of how the company works, it needs to be tempered by a culture of self-discipline among teams. This translates into a highly outcome-driven culture which allows for companies to leverage digital tech more efficiently.