While you may consider yourself fully prepared for the new digital transformation, that might not be the case in reality. Although it has massive payouts, the financial and time investment for initiating a digital transformation can be extremely high. As per the “Unlocking Success In Digital Transformations” study by McKenzie Digital, many initiatives under their survey’s ambit has paltry success rates ranging between 4% – 11%, going up to a maximum of 26% for companies in the technology sector. These numbers are ridiculously low!
However, another study from Economist Intelligence Unit claims that successful companies were able to present positive effects within 24 months. More than 72% state Organizational Culture Change to have been the most crucial factor affecting the results of Digital Transformation initiatives. Therefore, if you pull it off right, you can expect MASSIVE PROFITS!
Why aren’t organizations tasting success in their Digital Transformation initiatives?
Most organizations tend to commence culture change and digital transformation initiatives simultaneously, which can have disastrous effects, especially if the organizational culture isn’t compatible yet. Unless an evolved organizational culture is in place, it’s easy for organizations to fail in their digital transformation efforts. And when culture change initiatives get implemented on a top-down basis, you can give up any hope.
The solution to this isn’t expensive or complicated. You can start by benchmarking how mature and evolved your organizational culture is, for understanding whether it’s agile and capable enough for surviving the Disruption Responsiveness phase. (see the full document on how to succeed in Organizational Culture Change)
Culture Evolution goes through 5 distinct phases:
The Blame Culture – Here, people have little trust and need to be given proper direction. There’s almost no innovation or member cooperation.
The Multi-Directional Culture – Members start forming cliques within their respective departments. However, cooperation and trust levels remain low between the management and other departments of the organization.
The Live and Let Live Culture – While objectives get fulfilled, people remain complacent. Creativity and passion remain at all-time lows.
The Brand Congruent Culture – Members start believing in their services or products and begin supporting others to fuel expansion. Passion and innovation take the lead, thanks to better culture, management, and processes.
The Leadership Enriched Culture – An effective leadership ability is instilled in everybody with people transforming into dedicated believers for both the organization and the brand. Creative levels start rising, fueling further excitement. A feeling of ownership is present in all members at this stage.
Digital Transformation needs an established, agile culture with high trust levels. In order for Digital Transformation initiatives to succeed, a Brand Congruent Culture is absolutely crucial to propel culture evolution.
Most organizations that attempt Digital Transformation wind up failing, because they’ve only reached the Live and Let Live phase, where they stagnate. And that’s a best-case scenario. A DCI culture evolution study in 2017 found that 61% of all organizations were stuck in their Blame Culture phase. Less than 9% advance to their Brand Congruent phase and only 4% reach their Leadership Enriched phase, which is in line with the success rates provided by the McKenzie study.
How to know whether you’ve got an effective strategy in place to implement the culture evolution initiative?
In order to reach the Brand Congruent phase, you’ll have to promote the right kind of psychology. There are three important psychological factors, which enable agile and sustainable evolved cultures.
A system of principles (or behaviors) created by stakeholders (employees) for ensuring a culture that allows everybody to succeed.
A comprehensive way that supports people in expressing and feeling their importance to their organization and objectives while also displaying a set of desired behaviors.
An effective measurement system that measures and communicates both points mentioned above.
Here are five steps you must take before implementing Digital Transformation:
Start benchmarking the existing organizational culture evolution: You can do this using OCEAN Organizational Culture Assessment. You’ll require perspectives gathered from at least one-fifth of your organization from different levels, including non-management, middle management & senior management for gaining a better understanding.
Identification of existing gaps and obstacles in your path to reach the next phase must be done (But if you’re at the Brand Congruent Culture Phase, you can skip this)
Start sharing your culture goals and results with others. Include a description regarding the Culture you want as well.
Start your initiative by implementing the three points mentioned above. Include ‘Key Influencers’ & others involved in the implementation and feedback in order to ensure it gets carried out successfully. Three factors will dictate how successfully you’ll be able to implement your objectives here: i. It has to be a bottom-up, top guided initiative. ii. All desired behaviors have to be measured at specific intervals for understanding progress made so far. iii. The organization’s members have to experience quick results in order to maintain their momentum.
Once 4 – 6 weeks have passed, analyze the culture in order to view progress. Compare evolution improvement and other statistics. Share this progress and understand where you stand in your overall progress. By sharing this measured progress, you can increase the excitement and motivation that people enjoy when they realize that they’re making steady progress in the right direction.
For succeeding in this Pre-Digital Transformation Culture Change Initiative, you must inculcate several positive behaviors, including:
Zero blame game
Transparent and friendly communication
Short, effective meetings
Leveraging or synergizing with people with different Ambiguity Relief Processes (This is a genetic process that affects clarity)
Active trust (This refers to the process of trusting people to work together even when you don’t actually trust them)
All change initiatives face resistance. However, understand that people aren’t resistant to change all the time. Think about this: A person gives away $100 million to you for free. You won’t decline it, will you? You’ll embrace this change, take your $100 million, and lead a happy life for the rest of your days.
People don’t tolerate ‘Stupid Stuff’, which refers to things they think won’t be of any benefit to them or to things that might make their life difficult. However, when people live in a culture and are implementing a bottom-up, top-guided initiative, they’re the masters of this change, creating what they need on their own terms. They’re not doing this for more salary. This change is being implemented so that they can have a fun, trusting (see the article on why trust fails), supportive, and clear work environment that helps them feel successful on a personal level as they achieve organizational goals.
When people get on the bandwagon and become excited about their possibilities and start to feel that they can help their brand and the organization with their creativity, that’s when you should commence your Digital transformation initiative.
The likelihood of your Digital Transformation working out successfully just went up by a staggering 300%. Isn’t that cool?
This article first appeared in thriveglobal.com
About the Author
Ranked in the Top 10 of the world’s top 30 Thought Leaders in both Leadership and Organizational Culture categories by Global Gurus, Arthur F. Carmazzi has 25 years-experience specializing in psychological approaches to leadership and corporate culture transformation.
He is the founder of the Directive Communication Psychology and his unique methods and ideas are applied globally throughout fortune 1000 organizations.0