Fostering a Culture that Embraces Digital Transformation

Culture is driven by the company’s vision and values. It represents the mindset and behavior of its stakeholders, informs strategic decisions, and determines how work is done at all levels. It also makes or breaks any digital transformation.

It’s culture, not processes or technology, that determines whether your transformation projects succeed or fail. Something worth keeping in mind, given the staggering failure rates of DX projects.

A BCG study of 40 digital transformation initiatives found that companies that prioritized culture were five times more likely to see breakthrough performance. And, 80% of participants said their ability to blend human and technical capabilities (aka culture) was what got them through the COVID-induced economic slowdown of 2020.

But – culture is also the hardest part of digital transformation. Sure, leadership can technically make rules and enforce compliance, but they can’t mandate creativity, trust, or enthusiasm.

So, what does it take to create the kind of culture that embraces and accelerates transformation?

In this piece, we’ll answer that question and provide actionable advice for transforming your culture.

Use Data to Inform Decisions and Strategies

Fostering a DX-friendly culture demands a clear vision and strategic direction – backed by real data, a proven need, and the board. But it’s not just about using data to define the strategy or secure buy-in from the C-suite.

In order to achieve long-term digital transformation success, organizations need to embrace a data-driven approach to change.

This means, you’ll need to start with a clear strategy that aligns with current conditions, industry trends, and customer needs – as they are at this very moment.

Using data to inform all aspects of your transformation enables you to implement the right tools, data strategy, and intelligent processes you need to achieve your DX goals, change course as the strategy evolves, and make intelligent decisions across the entire business.

But – it’s important to understand that a data-informed digital transformation starts with a data-informed culture. Everyone in your organization must be able to work with data effectively. They need to be able to interpret insights and put them into action. To measure progress toward critical goals. To adapt the game plan when something’s not working. And, crucially, to use data in innovative new ways that actively generate value.

According to the World Economic Forum, there are four pillars that define digital culture: collaborative & open, data-driven, customer-centric, and innovative.

These pillars work together to create the conditions necessary for companies to have a positive impact on all stakeholders.

That means, you’ll need to make sure that everyone understands how to interpret and manipulate data to drive outcomes – in context with their role and the bigger picture. And beyond that, continually adapt and improve your data strategy over time.

Prioritize Investments in Learning & Development

Learning can’t stay on the back burner forever.

Corporate culture has changed. We’re finally seeing business leaders come to the realization that investing in talent doesn’t just generate a short-term boost to the bottom line, it’s one of the most effective ways to build long-term resilience.

According to an internal survey of Velosio clients, 70% of business leaders believe that keeping up with software and app trends plays an important role in helping their organizations attract and retain quality talent.

And, per Microsoft’s Nine Emerging Trends for the Futurist CFO report, more than half of respondents say reskilling employees is the best way to close capability gaps. In a tight labor market, companies that don’t prioritize learning are in a tough spot.

The report calls out research from the 2008 recession, which demonstrated that cutting employee development programs didn’t result in cost-savings – it only delayed essential investments that could have generated more value to struggling orgs.

Now, putting together an effective learning program isn’t exactly a straightforward task. Ultimately, the goal of your program should be to prepare employees for disruption – so you might focus on things like data literacy, leveraging low-code/no-code tools, and embracing new, agile ways of working that make it easier for people to respond to change with little resistance.

You’ll also want to focus on providing employees with a learning management system that integrates with everyday tools and serves up relevant materials in the flow of work.

Encourage them to utilize training platforms and run simulations using predictive modeling and real data, which will help employees adopt technology more effectively and prepare for different future scenarios.

Cultivate an “Innovation Mindset”

Innovation should be an expectation that is consistently enforced throughout the entire organization – across all departments and at every level. However, business leaders can’t just tell people to be more innovative. People need to speak a common language and work from a unified vision, shared values, and the same methodologies.

A recent Enterprisers Project piece shared this little nugget of wisdom: the innovation mentality never dismisses ideas or says “this won’t work.” Instead, it asks “how can we do this?”

In Microsoft’s recent ebook, Becoming an Innovative Organization, experts express a similar sentiment. But – they add that other attributes need to be in place in order to achieve this collective culture of innovation. Microsoft experts also add that cultural disconnect prevents orgs from innovating to their full potential.

Cultivating an innovative culture requires internal alignment, a shared mindset, and the right set of skills.

For a culture of innovation to take root within an organization, leaders need to model a growth mindset – embracing curiosity and rewarding attempts, wins, and even failures.
– so that people feel comfortable (and excited) to try new things. Employees should feel empowered to problem-solve with others, take chances, and, in many cases, fail.

Change management is also about removing the stigma of getting things wrong. Look, “psychological safety” has almost achieved buzzword status — but don’t write off the concept based on think-piece over-saturation.

That said, it’s critical that everyone feels comfortable sharing ideas, brainstorming solutions, and testing new theories free from the threat of being shamed or punished. That sense of safety is central to building the kind of environment that produces innovative solutions – fostering curiosity and collaboration.

Use Technology as a Catalyst for Collaboration

An essential part of DX is integrating technologies into daily work that encourage collaboration and teamwork. But, that can only happen if you tear down silos first.

See, silos pit people against each other. They create a competitive environment and erode trust, which, in turn, makes people less open to change – a death sentence for any digital transformation initiative.

Resistance to change comes from a culture where keeping information close to the chest is the norm. Silos are fundamentally at odds with data maturity, preventing businesses from unlocking the value in their data. And, of course, they’re completely toxic.

Using technology to improve culture isn’t necessarily about investing in the latest tech.

Instead, focus on finding the best way to enable cross-functional communication and collaboration – whether that’s reimagining how you existing tools or replacing them with something that better meets your needs as they stand right now.

Consider adopting org-wide transparency via digital tools. For example, you might build an intranet for internal users, create virtual communities for collaborating on shared documents, or set up a knowledge base for helping employees find answers to their own questions.

Final Thoughts

Digital transformation is a cultural change involving the entire organization – from the front lines to the C-suite and everyone in-between. Without culture, the rest of the plan falls apart.

Luckily, there’s a lot that business leaders can do to foster a strong digital culture that supports – even embraces – transformation. It’s just that all of these things – investing in learning, changing the collective mindset, etc. – require commitment from everyone in the organization.

Velosio’s Digital NEXT Program was designed to help businesses leverage next-gen tech like AI, blockchain, and the IoT. Our Microsoft experts can help you implement solutions that drive collaboration and innovation, arm your team with future-ready skills, and develop a data-driven business strategy. Contact us today to get in touch with a digital transformation expert.