Culture Change in a Digital Transformation

 

Executing a successful Digital Transformation means delivering technology changes, process changes, and changes to the corporate structure.  Underpinning the success of the digital transformation is a culture change – which embodies how we work – and can often be the most difficult part of the transformation. But do we really need to restructure in a transformation?  And why is it so important to change the culture?

Do we really need to restructure?

Corporate restructures are risky investments of time, energy and resources, and history has shown that most do little to improve the business. A Bain & Company study of 57 major restructures found that less than one-third produced any meaningful improvement in performance. Some actually destroyed value.

The reorganisations that work best don’t just reshuffle the boxes and lines on an organisation chart. Rather they:

  • Speed up decisions

  • Facilitate better decisions

  • Improve the ability to handle important decisions

  • Increase the number of decisions that are executed effectively

In fact, re-drawing the organisation chart is usually counterproductive if leaders fail to think through what the critical decisions are for the business, who should be responsible for them, and how the new structure will help people make and execute them better. The companies that keep critical decisions at the centre of their efforts are likely to emerge far stronger than those that merely reshuffle the org chart.

Notwithstanding these concerns, there can be many reasons to restructure, including accessing new markets, out-growing an inflexible business structure, merging, acquiring another business floating on the Exchange, a need to raise capital, keeping pace with competitors, addressing outdated and inefficient work practices or because there will soon be no alternative. Therefore, digital transformation does generally require a restructure, so it’s important to understand how to make it work.

The key to a successful restructure is aligning your culture to your transformation vision, to enable the restructure and the culture change to go hand-in-hand.

Placing Your Customers at the Center of Your Culture

“If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.” – Jeff Bezos, Amazon.com

Digitisation, especially in the area of social media, has tipped the balance of power to the customer. It’s very simple to see what is on the minds of customers these days. A single tweet or blog post can go viral in a matter of minutes and for many organisations, this can be a blessing – or a disaster.

It has never been more important for businesses to be customer-centric and to be able to react or anticipate the needs of the customer.

Our digital world requires that you give them what they need, not what you think they need. Such a simple statement that reveals the value in observing “good old fashioned” selling techniques. 

Your Digital Assets are the Face of your Culture

The key to successful selling is being good at getting the customer reveal their needs, wants and concerns. How does the traditional salesperson establish this?  There is a simple technique that gives sales people:

  • Control of the conversation (which all good salespeople establish)

  • Confirms the salesperson’s sensitivity

  • Confirms their interest in the customer’s problem.

The technique is – to ask questions, questions and more questions – it is really that simple.

So in our digital world, when someone discovers your product and asks the questions: “What is this?” and “What should I do next?” Your call to action should be prominent and clear – project your desire to satisfy their interest in the simplest way. The Golden Rule is “treat customers as you would like to be treated yourself”.

How to Put the Customer First

Here are some simple ways for you to put the customer first:

  • All online reviews should receive a message, even negative ones. Take time to hear what customers are saying, read the customer comments and respond respectfully.

  • Experience face-to-face contact with customers and ask for regular feedback on their experience.

  • Spend time at the sales counter or taking customer calls. Online retailer Amazon.com requires executives to spend days working in their call centres.

Being “customer service oriented” boils down to one idea: helping people. As simplistic as it sounds, this ethos is the key to making it work. By inviting and encouraging the people to engage – whether online or in person – leaders can lead a change from a negative to generative culture. Indeed, this is their responsibility. 

Commitment to Change

In the fast changing world, shaping an adaptable organisational culture is becoming a survival essential.  All organisational change is challenging, but cultural change that gets to the heart of entrenched beliefs, values, attitudes, relationships, and habits that have driven success in the past, but won’t serve the future…..is perhaps the hardest of all.

Having defined your vision and strategy, you need to ensure your culture supports it. Taking on a major cultural change and alignment is not for the faint-hearted, under-resourced or overstretched senior management team. For many senior teams, the term “culture” is esoteric, too subjective and hard to measure. While culture is acknowledged to be important and a key to the success of many organisations, it can be a puzzle for many.

It is hard to identify and create buy-in if there is no strong sense of “we” — a mutual commitment and sense of group loyalty and cohesiveness. This is especially possible in an industry that has a tradition of hiring, celebrating and rewarding stars — individualistic, solo operators. 

These people want to know WIIFM (what’s in it for me) whether they say it or not. If the key players in the company have no commitment to each other or to their joint future, cultural change will not happen.

The Challenges of Cultural Change

When introducing cultural change, the broadest responses will relate to collaboration and time.

Two questions are useful in highlighting people’s attitudes:

  1. Would you prefer rewards to be based more on individual performance or more on joint rewards for joint performance?

  2. Would you prefer the business to invest more in its future, understanding that would impact current income in the form of salaries and current bonuses?

It is recommended that allowing people to express their views while remaining anonymous (via secret poll) will elicit the most accurate responses.  

If a majority of the key people don’t wish to act collectively in building for the future, then the change program needs to address how to work with those who do not fit in with the future vision of the company.

Yet, few organisations have these type of open discussions which should be viewed as a pre-condition for a transformation strategy.

Embedding Cultural Change

One of the biggest challenges with developing any strategy is the implementation. For a strategy to work, leaders must have sufficient commitment to each other and the shared vision throughout the entire transformation program.  

For cultural change to really take hold, leaders must live and breathe the cultural vision before, during and after the implementation to demonstrate the expected behaviours to the entire organisation. 

One theory of change suggests that people will change by either “the carrot or the stick”.  When it comes to culture change, the carrot is the promise of a better future and of rewards through KPIs and bonuses.

While many believe that the stick does not effectively work, in a world where many organisations have been put together via mergers, acquisitions and use of lateral hires, the underlying problem of misaligned values may grow.  This means that demonstrating cultural expectations by example is even more important. And if people do not change, then leaders have to make difficult decisions.

Conventional wisdom is that great client service is the key to running a successful but, but great client service is itself a product of a strong corporate culture and that the most important benefit is an energised workforce.


 
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