Culture, the X-factor for a successful lech, digital and data transformation!
Culture is at the heart of an organization and your ability to succeed in your transformation depends on cultural alignment. What does a successful culture transformation strategy mean? Paolo Coelho said: 'The future is made to change… and he was more than right'.
We live in a period of successive crises (politics, pandemics, armed tensions, etc.), which are no longer cyclical but permanent and affect individuals, companies, and economies. But paradoxically, these crises are also extraordinary moments, as they provide opportunities to advance scientific research, raise fundamental questions about supply chain control, food and digital sovereignty, and bring forward major technological innovations. The world says VUCA[1] is more current than ever.
As consumers, users, and customers, we have entered a cycle of evolution in our consumption habits and behavior that have often fundamentally changed. Indeed, we have voluntarily or compulsorily agreed to this change and have agreed to a comprehensive and profound digital transformation of our daily lives. We regularly work remotely, shop from our smartphones, consult our doctor via telemedicine, and use a wide variety of online content. It is a change of society, a change of paradigm, a change of culture!
It is on this last point, “Culture”, its drivers, importance, and impact on the transformation—digital, data/IA, or organizational—of our companies that we have made it, with my 2 co-authors (Pejman Gohari and Jean Barrère), the main pillar of data-driven transformation of our latest book[2].
Statistically, digital transformations have not been easy for all businesses and their success rate is far from meeting expectations. Unfortunately, more than 70% of companies fail to create value through their digital transformation efforts alone. Interestingly, 62% of organizations cite culture as the biggest barrier to digital transformation according to a recent study in collaboration with MIT Sloan School of Management[3]. And even if it may be surprising, the reality is that digital transformation is first and foremost a transformation of people and a transformation of the model.
Most companies understand the need to make digital transformation. The most forward-thinking people go beyond modernizing their operations and processes to introduce efficiencies and even invent new customer responses to keep pace with their competitors but don’t invest in cultural change that extends this transformation within their organizations and with their employees must take place.
Historically, the design of any organizational transformation has been structurally linked to a technological transformation. Organizational research identifies information technology as one of the major, if not the only, forces of change, as noted as early as 1995 by Baskerville and Smithson[4]. At the risk of neglecting many social, environmental, innovation strategy, or just talent factors within the company.
It is true that the short-term urgency and the chain of digital disruptions that have accelerated in recent years require a systemic vision of change to succeed in the digital and data transformation. The implementation of successful digital transformation strategies implies taking a number of measures and actions upstream, including the cultural dimension. Hence the importance of exploring and, above all, highlighting the failures and successes of these transformations, so that any organization wishing to evolve can ask itself the questions closest to its context, its own history, and thus its culture.
What does this cultural dimension mean as beliefs or behaviors that determine how your company will have to evolve? How do these digital, data, and AI transformations fit into an organizational strategy and with a specific cultural dimension? What legitimacy or skills does the “Maker” have?[5] Or should the “Grand Chef” equip himself to make this transformation and embody this culture internally and externally?
In today’s competitive and changing environment, companies cannot afford to have unhappy customers, let alone employees who do not identify with their company. Culture encompasses the common beliefs, values, and behaviors that determine how things are done in the company. When employees can connect with and embrace these beliefs and behaviors as their own, they develop a sense of affinity and collaboration that can drive and integrate any organizational, operational, or technological transformation. Cultural transformation strategies aim to reduce the risk of employees disagreeing or disagreeing with established cultural norms and becoming a failure factor themselves, explaining the importance of culture in a company’s transformation.
Cultural transformation is a lengthy and continuous iterative process in which you question the fundamental values of your organization that you have defined at some point in its existence. Do you recognize the situations where you are or are not aligned with your values, your missions, and your strategic objectives? You develop, together with your managers and employees, action plans to communicate and encourage the approval of any change related to the evolution of the company, the core activity, or simply to be in harmony with the times.
However, all cultural transformations are not essentially about organizational change. It can be subjected to gradual adaptations and use the right resources that allow an evolutionary adoption that guarantees its long-term success. It’s just a reshuffle!
The “Culture” or the “Cultural Transformation” of the organization is based on the leadership style of the manager(s), participatory management approaches, appreciation and promotion of talents, ability to question oneself, stimulate innovation, improve decisions based on data and not just on experts, and knowledge sharing internally and with the ecosystem.
A change in strategy, environment, management team, or the introduction of new organizational structures, for example, questions your culture without fundamentally questioning it. Your culture is certainly well established, but it must be dynamic and evolving. This dynamic translates into the formation of new norms and complementary beliefs that integrate your company’s DNA and are now part of the cultural foundation. So instead of undergoing cultural transformation, organizations that want to succeed in the evolution of their model or respond better to changes in their market are integrating cultural transformation as part of their strategy.
It is therefore important to understand that cultural transformation is a process of change that must be clearly identified so that a positive, measurable, and sustainable outcome can emerge over time. By neglecting “Culture” in digital and data transformations or hoping for quick wins, companies fit reorganizations into a series of cycles aimed not at improving performance, meeting employee aspirations, or better serving customers, but rather to master the failure of the previous transformation that calls for a new one.
References :
- [1] VUCA: Acronym derived from a US military then economic doctrine that describes the aspects of volatility, uncertainty, complexity, and ambiguity of the current world and is used to describe the societal, economic, technological, and environmental transformations facing companies. “Strategic Leadership Primer” – Department of Command, Leadership and Management – United States Army War College, 4th Edition 2019.
- [2] Barrère J., Cherkaoui N., Gohari P. (2022), “The new horizon of digital transformation: 9 pillars for development a Data Driven strategy”, Dunod Edition, Corporate Strategy Collection, Paris, p.43.
- [3] Loredana Padurean, Lecturer, Associate Dean, Asia School of Business, MIT Sloan, Apr 16, 2021 – businesschief.asia.
- [4] Baskerville R., Smithson S. (1995), “Information technology and new organizational forms: choosing chaos over panacea”, European Journal of Information Systems, Vol.4, n°2, p.66-73.
- [5] Superception Podcast
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