One of the core topics that always arises during organizational change management conversations is the topic of culture. How important is culture to not just the digital transformation, but the overall transformation of any business?
Culture brings team members together throughout an organization to work towards and deliver a common goal. Whether you’re a retailer, manufacturer, service provider, or in an entirely different industry, you’re still providing a product or service, marketing and selling it, and servicing it.
The underlying connection? All of this ultimately comes down to people. No matter your organizational structure, you can’t function (or at least not very effectively for very long) without first ensuring that the human side of your company has a cohesive, healthy culture.
It may seem like a simple statement, but it’s all too easy to get caught up in business processes and forget about the importance of people.
Defining Digital Transformation
So what exactly is digital transformation?
Digital transformation is improving your digital maturity to compete in an increasingly digitized world. Digital maturity simply means being able to deliver experiences that make your products more discoverable, learnable, buyable, and serviceable through digital channels.
Classifying Digital Channels
There are four classes of channels in regards to digital transformation: customer, employee, machine, and partner/distributor.
To become increasingly competitive and mature across these four classes, you need to become an easier company with whom to do business.
While many legacy companies have been around for decades, establishing strong reputations rooted in stellar service, chances are that these businesses did not get there using today’s digitized channels. Legacy companies were established long before the world became digitized, which means they have to adapt to today’s market.
The good news is that legacy companies already have customer, employee, machine, and partner/distributor channels. So they don’t have to create these channels, they just have to mature them.
Top 3 Challenges in Digital Transformation
1) What innovations and experiences should I deliver across different channels, and what should they look like?
Many legacy businesses don’t even know where to begin. They don’t have a strong understanding of what those innovations and experiences are, let alone how they apply across different channels.
2) How do I deliver them?
Even if you’re able to identify what experiences you want to deliver, determining how to deploy them and effectively managing their delivery can be overwhelming. You may not know which architectures and platforms are best for your business, and really, why should you?
If you’re a distributor, manufacturer, or retailer, you certainly aren’t a technology company . . . and you shouldn’t try to be! Unless you build that technical competency and capacity within your organization, it doesn’t make sense to try and take it on.
While you may have internal teams thinking through precisely what experiences you’d like to deliver across the four classes of channels, you’re not going to have the internal talent to determine the best solutions and architectures available to rapidly deploy those solutions.
3) Who do I need to be?
This final challenge is where culture really comes into play. How do you modernize your culture to take advantage of the experiences and technologies that you’re delivering? This is the question that plagues leadership teams, involving everyone from human resources to operations to management teams.
These three core challenges must be addressed in order to achieve digital transformation and improve your digital maturity to compete in an increasingly digitized world.
It will come as no surprise that the solution to these three core challenges isn’t improved change management strategies or more progressive vision statements. Rather, the answer to the what, the how, and the who, is people.
To determine which innovations and experiences you should deliver across different channels, you need people who can research, collect and interpret data, and make informed decisions about what those user experiences should be.
Once you’ve got people in place to identify which innovations you’re deploying, you’ll also need people who can rapidly deliver these changes. That means people who understand modern architectures (ex. headless), and the strengths and weaknesses of various technology stacks.
These people can marry your desired experiences with deliverability, and then measure the effectiveness. Testing deployed innovations allows your team to optimize your systems, and ensure that your efforts are enhancing user experience.
To address the challenge of “who to be,” you’ll need to people to reference other organizational structures that have been successful in digital transformations, and align with one that works best for your company.
Breaking Down Culture
Often culture seems nebulous at best. Defining culture for digital transformation can be its own challenge.
But there are a few key components that we can break out to better identify what comprises an ideal culture. We’ll call them: the meat, the potatoes, and the gravy.
What is the structure of your organization, what are the roles in that structure, and what are the processes that tie them together? As an established business, you already have all of these pieces in place. What you need to do next is evolve the structure, roles, and processes so that you’re more digitally mature.
Why do you have structure, roles, and processes? So that you can set, execute, and measure your priorities.
You can think about the gravy in three levels. Your corporate level (how you structure the entire organization), your program level (your digital transformation program), and the operational level (your day-to-day logistics).
The Culture Wrap
When you put these three ingredients together, and evolve them to be digitally mature, you can solve your core three challenges. You don’t have to start from scratch - you just have to identify what existing roles can be modernized, and what new ones need to be created in order to achieve maturity.
Then, you’ll need to ascertain that you have the correct people in those existing roles, and identify additional internal or external people to fulfill the new roles.
A Sample Structure
It’s often smartest to start cultural transformation at the program level. Beginning with the corporate level requires significant heavy lifting, and at the operational level there are a lot of changes that will impact your day-to-day.
But program level cultural transformation has an inherent momentum to it, because you’re changing the actual program to become more digitally mature.
Companies often make the mistake of assuming that digital transformation is a project, and not a program. They’ll start by identifying a project: “we need an eCommerce platform.” But this is narrow thinking.
Instead, you need to think programmatically: “will an eCommerce platform help my business become more digitally mature? Will it enable me to deliver experiences that make my products more buyable, accessible, and discoverable?”
One way of handling this is to create a Chief Digital Officer (CDO) role. A CDO basically becomes a service provider of transformation to the organization. A good CDO isn’t a database or marketing person, but someone that has experience in driving digital maturity, and has a track record of implementing transformational change that makes it easier to do business with a company across one or more channels.
Once you have a CDO in place, all of the key enterprises throughout your organization donate roles to the CDO’s team, representing each line of business and what those lines need.
Ultimately, the CDO will leverage each of these key roles and provide them with their own development teams. Those teams are responsible for delivering transformation to each of the lines of business.
Prioritizing which lines of business experience transformation first is a collaborative effort between the CDO, the CDO’s team, and the various lines of business. This way, management ensures that there is cross-functional buy in and that everyone collectively agrees on the prioritization.
Once you achieve this organizational alignment at the program level, skeptics throughout the organization will sign on as well, and you’ll usher in a digitally mature culture that can be established in the operational and corporate levels.
Good change management strategies recognize the importance of culture, and just how critical it is to have the right people.
You can achieve digital maturity with the right culture, ensuring that your business remains competitive in modern markets.