Culture As A Business Enabler

In my previous article, I discussed the importance of strategy as the primary driving force in digital transformation. Strategy plays a critical role – it has potential to positively impact the building blocks of transformation: data, process and technology.

In my experience as transformation advisor and consultant, I have witnessed many engagements focus primarily on technology. Admittedly, technology is very real – we can see and feel it, it’s easy to quantify and measure it, both from a costing and ROI perspective. However, businesses which take on transformation engagements will fail miserably when they focus solely on technology. Others may be slightly ahead of they curve as they attempt to optimize both data and processes. This is the common rationale behind IT modernization and optimization.

And yet, it is a rare type of company that all three (data, process and technology) are addressed and also prioritize the human factor - beyond the traditional lip service to change management, and perhaps a governance model. What I am referring to in "human factor" is the corporate culture itself - the values, aspirations, motivations, collaboration and leadership styles of all stakeholders in the business ecosystem.

In Digital Economy, culture has become a strategic advantage.

I can understand why the “people” aspect is usually not taken into consideration or even relegated as after the fact. Let’s face it: people are the most complex and difficult to manage. Focusing on technology is easy. Process is measurable and thus, manageable. Data can be standardize and consolidated. People, and I mean specifically, culture? Not that easy.

My colleague, Jane McConnel, wrote an interesting article about culture and digital transformation on Harvard Business Review. In her survey, she claims that there are specific work cultures that promote Digital Transformation:

• Strong, shared sense of purpose vs. weak, inconsistent or ambiguous sense of purpose

• Freedom to experiment vs. absolute compliance to rules and processes

• Distributed decision-making vs. centralized, hierarchical decision-making

• Open to the influence of the external world vs. internally focused and closed to the external world

The first step in addressing the people aspect in transformation is creating stakeholder engagement. By stakeholder, I am referring to all the actors in the business ecosystem - employees, leaders, suppliers, regulators, etc. A strong sense of purpose is key if organizations would like to build employee engagement.

The “why” of a business has to be articulated consistently by the leadership in a manner that resonates with all types of stakeholders. Adoption of agile principles like “fail and fail fast” creates an atmosphere of play and experimentation – basic ingredients for innovation. From a governance standpoint, top-down decision making is gradually being replaced by a sense of collaboration and trust. And these days, no business can afford to live under a rock. The market has become a bedrock of hyper-change and hyper-complexity.

And I would like to add my own ingredients that would make for a resilient and innovative company culture. The target culture will be a resilient one: not only able to weather the challenges of a digital transformation, but actually facilitate it:

• Operationalize Values. Majority of businesses talk about shared values. But it is rate that these values are "lived" on a day-to-day basis. Business leaders must articulate and then socialize core values. It’s not enough to pay lip service to these either. The leadership must lead by example.

Here are some guiding questions:

• What’s really important to the company?

• How are these values lived in every operational day?

• Behaviorally, are these values reflected in the action of the leadership and employees?

In my own personal life and my business, I offer my own core values: trust, respect and transparency. What’s yours?

• Act Sustainably. Public businesses live and die by their quarterly earnings report. This is the reality they choose. This is the business reality we created for ourselves. Unfortunately, strategic initiatives don't deliver business value or demonstrate ROIs in three months. Transformations by their very nature take time. I admire companies that look way into the future even if it means making an earnings sacrifice in the present. Amazon and Apple are strong brands not only because they focus on their customers but also because they think and act with the future in mind. They just keep their eyes on the prize.

• Prioritize Humans. I believe that if leaders build people, people will build the business. Unfortunately, our management thinking and practice view businesses in a fundamentally limited, perhaps flawed way - that the only gauge to business performance is financial performance. You see it on your day-to-day environment at work - the obsessive focus on crunching data and managing numbers at the expense of the people development and motivation. Look at your leaders. What are their priorities and focus?

A strong and vibrant company culture with stakeholder engagement will produce a successful digital transformation. It is the tie that gently binds every employee, partner and customer to the company mission, vision and goals. In essence, the culture is the brand.

And guess what truly defines culture in a business? The leadership team. And this is the topic for my next article.