Corporate culture as the most important factor in digital transformation
Technology will always change, but will the company?
The question of whether technology or culture are more important for the digital transformation is a recurring one. Technologies will change quickly, but it makes a big difference whether an organization can change just as quickly or not. Thus, corporate culture is becoming one of the most important aspects of digital transformation.
The world around us is changing rapidly, and the digital revolution is transforming customers and businesses. But how can companies adapt to this change? How can they prepare for their own digital future? – The answer to both questions is probably not to be found in technology. Companies need to be agile, and that includes a flexible corporate culture.
Technology seems to be evolving every day. Cloud technologies, artificial intelligence in all sorts of areas, the Internet of Things (IoT) found in more and more products, and more. But no matter how fast technology evolves, it’s becoming increasingly important to keep up with the trend. This requires employees who can handle it, organizational structures that can adapt, and also a culture of innovation that enables sustainable adaptation to changes in the market.
Digital disruption and corporate culture
Blockbuster, a company with 8,000 stores, 84,000 employees, and over $6 billion in revenue, was confronted with the flexible Netflix. In 2004, Blockbuster was still one of the largest companies in the media industry, and today it is a tiny fraction of the empire it was then. There were many factors that led Blockbuster to miscalculate back then. But one of the most important factors that led to the demise of the billion-dollar company was its slowness and lack of adaptability.
At the same time, it was also a key moment for Netflix. The agile company understood its customers and used the Silicon Valley mentality to grow and evolve at a rapid pace. Its focus on people, customers and culture was the cornerstone for revolutionizing the media industry, upsetting the competition and opening up entirely new market segments.
Digital transformation puts people at the center
Once you understand the difference between digitization and digital transformation, you know that people are at the center of the digital transformation. Technology will continue to evolve and customer needs will change. An organization can only function sustainably if it can adapt to these changes in an agile manner.
This is as much a challenge for managers as it is for employees. Shorter decision paths, flat hierarchies and new ways of dividing work are helpful but also a cultural challenge. Every corporate culture must be built to adapt to external changes in the best possible way and should offer enough space to try out new ideas.
The right environment for a good corporate culture
Digital transformation happens on all levels and with all people. It is important to understand that people can only unfold when you offer the right environment. Basically, one can also say that transformation is easier to carry out if one changes the environment beforehand.
By putting people at the center of the process, answering the questions and also addressing the problems in more detail, you will not only be able to better serve your customers, but you will also be able to drive your own digital transformation. A strong focus on people and customers also ensures that there is less internal struggle in the process of your own digital transformation and more attention is paid to how you can provide a better experience for yourself and your customers. A common goal is very helpful in focusing on what is important, creating happy customers.
Be faster than the competition
A harmonious and goal-oriented corporate culture is all well and good. But the great benefit of it comes when it makes you faster. Focus and improved efficiency ensure that you can adapt more quickly in the long term and thus stay one step ahead of the competition. Digital transformation is an ongoing process and will always reinvent itself, but a good corporate culture can ensure that this process can flow unhindered and that the company can adapt agilely to new technologies, new markets or even new competitors.
6 steps for an agile corporate culture and an agile mindset
One of the biggest challenges in change management is undoubtedly to change the corporate culture. It will never happen over a short period of time and certainly not overnight. Especially if companies are organized in a very rigid and traditional way, if a longer corporate culture is built up this way, this change will take much longer and require more resources.
The steps shown here are of course different for every branch and every industry, but there are a few points that are always important and we will show you how to do it.
1. Communicate the urgency for change
We are all afraid of change, even if it is usually the only way to save ourselves. This natural fear of new things leads to the fact that companies do not want to change, because things have worked out the way they are. To break out of this comfort zone, all employees must clearly understand that there is no other way and that their own change is necessary. But the goal is to inspire the employees to new things and make them understand why an agile mindset is better.
2. Understanding uncertainty and ambiguity as an opportunity
Many companies spend weeks, months or even years working towards the certainty of working out and miss important opportunities. It may be good to work only for the certainty, but change and certainty never go well together. In a good transformation it is important to break up existing paradigms. Structures must be questioned and statements like “We have always done it this way” must be avoided.
3. Allowing and celebrating error culture
As described above, it is difficult to make a change without knowing what will happen next. In order to make sure that one develops further in the long run, it is necessary to allow for mistakes. Employees have to learn that there is also the possibility to make mistakes, to learn from them and thus to make the next step better. If it is understood that mistakes are a central part of one’s own development, then new ways of thinking and new approaches will work better and the digital transformation will be faster.
4. Bringing in new perspectives
In order to break up existing cultures, it is also necessary to get input from other sources. It is always helpful to integrate new ideas and new perspectives from outsiders into your own culture. External experts and partners can help and can also be used to bring a fresh breeze into your own world of thought.
5. Listen to customers
Many people think that after tens of years in the business they know their customers by heart and know what they want. This can be a fatal mistake, because these customers also continue to develop. The goal is not simply to make assumptions, but to actively ask the customers and to strive for a brainstorming with them. This can help to understand the customers better, the customers feel taken seriously and one can orient oneself to their needs in order to prepare the own digital transformation.
6. Building strong partnerships
Partners are not only good for new perspectives, but also when it comes to positioning in the market. Ecosystems and strong collaboration partners are the fuel of the next business relationship. It is therefore advisable to look for innovative partners in order to learn from their innovations and corporate culture. Together we are stronger – this is true today more than ever.
Focus on the “WHY
Simon Sinek has said an important sentence, which is representative for many big companies like Apple, Netflix etc. “People don’t buy what you do. They buy why you do it.”
Digital transformation is not only a project or a phase of transformation, it is also a matter of attitude. The process of digital transformation is never-ending and is a long-term concept. The vision is becoming more and more important in the fast changing world and so the corporate culture becomes the central point for this vision and how to implement it.
To really answer the WHY you need people who believe in it, who want to work for the Why and who are behind it. Fresh talents, new partners and an agile mindset are good ways to pursue this common vision and achieve long-term success.
Here is a video by Simon Sinek about the WHY, which I would recommend to everyone.