The Role of Company Culture In Digital Transformation
Technological shifts will unavoidably impact company culture. Can it be for the better?
Digital transformation is increasingly important for companies to be successful — merger and acquisition data shows that companies that have digital skills or capabilities built-in, or that are in later stages of digital transformation, generally have higher valuations than those that don't. And this kind of transformation has always gone hand in hand with company culture — it's less about specific technologies and more about how people work so that they can learn faster and adapt to ever-changing consumer habits and technologies.
As the number of people who work digitally increases, there's a new question about whether it's easier or harder to create or change your culture in a remote environment where everyone works from anywhere. To answer that question, you have to break down several key aspects of digital transformation.
1. Cohesive teams
Cohesive teams with strong emotional conviction are important to digital transformation and achieving general agility because they allow people to connect, learn, improve and perform better over time. In the traditional office, connection between people was relatively easy to achieve because people naturally would bump into each other and communicate. But now, with the typical water cooler chatter going quiet, connections are weaker. With some of the uniqueness of each work environment gone, it might be harder to distinguish from one employer to another. As a result, workers might have a more difficult time forming a sense of loyalty, not just to their employers, but to the rest of their team. And unless they truly feel they belong in the tribe, people may also be willing to switch jobs more easily.
A sense of tribal belonging comes from:
A shared purpose
Pride in what they do and can pass on in positive ways
Gratitude for what the company or team has provided
The uniqueness of what you provide (the value that comes from being distinguishable).
Making a conscious effort to build these four points within your company can ensure stronger connections that contribute to better stability.
2. Recrudescent silos
When connections happen only within a specific functional area of a business, employees can become closed down to anything from the "outside." They can treat others as if they are almost invisible, or even worse, become enemies with people from other departments. Most leaders agree that successful digital transformation requires that you break down these boundaries, but in remote settings where workers aren't physically interacting, companies have to work harder to dissolve existing silos and make sure that people really understand and have empathy for each other. It's just too easy to get consumed by intra-department meetings all day, with no interaction with anybody else.
In these circumstances, companies are trying to mimic daily office interactions and align workers with activities like virtual happy hours, mindfulness sessions, classes or designated times to share experiences. This is all good and important, but it is not enough. It's tough to maintain the excitement with these initiatives over video conferences all day. It's fundamental to bring these interactions to the day-to-day work activities in an engaging, empathetic way that also generates productive results. Design thinking techniques are especially good for this purpose — and yes, they do work in the remote, virtual environment!
3. Customer centricity
Customer centricity simply means understanding customers and building a sense of empathy for their experiences, desires and needs. You can use both quantitative and qualitative information to get an idea of who your customers are and how they behave.
Typically, companies use surveys, focus groups, in-loco observation and of course, digital analytics to learn about their customers. It has become more difficult to observe customers in-loco, however, and leaders have to understand a range of new digital behaviors. Companies already have troves of data for this purpose, but there's variation in how well-prepared businesses are to dissect and apply it.
Enterprises that were already prepared for this are reaping the benefits. Many are still in the beginning of that journey and are scrambling to learn something. But tracking online behavior is easier than tracking what people do in the physical world, and there's virtually no limit to the amount of data one could collect with cloud infrastructure. So there's a huge opportunity for businesses to gather insights from that digital data and build better customer experiences.
4. Value streams
Most businesses organize their teams by functions or what type of task employees are doing. But another way to look at your teams is by value streams, or what they create for your end customers. This reinforces customer-centricity, encourages you to build multidisciplinary teams and helps minimize silos. These value streams are no different than what they would be if the team were in the office. But you still need to design and engineer the organizational process intentionally to achieve the success you want.
5. Agile processes
Agile processes should focus on your complete value stream. They are all about reducing lead time and going through testing and learning in very short cycles. The shift to remote hasn't necessarily made this easier to do, although it definitely made its importance even more evident.
For those teams who still do not operate in an end-to-end agile way, changing is hard and takes time and energy. This was already true before Covid-19, but the pandemic brought an enormous amount of disruption to our everyday lives. People had to change what they did, whether they liked it or not. We've gotten more used to introducing new concepts and processes in general. We've also gained a stronger sense of urgency and learned that we can move faster. So in the end, people have become less resistant to embracing agile methods. Moments like this shouldn't be wasted.
Training opportunities provide your workers with the foundational intellectual knowledge they need to move forward. They will be most successful if they can apply this knowledge immediately.
In the remote environment, it's easier to connect with people who know about specific processes, technologies or design thinking practices, who might not be in the same location as you are. At the same time, you can also look through a bigger candidate pool to find the most ideal workers from anywhere in the world. This can make it simpler to build a team that truly has the specific digital capabilities that can benefit you and support the future transformations you envision for the business.
Moving to remote work does not need to hinder digital transformation, and in fact, workers can change and improve their culture through technological shifts. Before the pandemic, we saw remote workers becoming alienated, tuning out and not paying attention during phone meetings. They would get distracted and do other things because others on the team weren't with them. Now, everyone is on video. The fact that "You're on mute" has surpassed the proverbial "Could you repeat the question, please?" over the phone is an incredibly good sign! It signals that people are learning how to be more present and not monopolize meeting time as a result, and that's helping enterprises change their culture.
Companies that intentionally acknowledge the specific challenges of decentralized environments, such as how to appeal to workers' desire for a tribe, and that take advantage of the unique remote environment benefits, such as the ability to find a better variety of candidates, have the biggest opportunity to succeed. Proactively engage in a balanced way to create the warm, effective atmosphere both workers and customers will appreciate.
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