Article: How company culture can hold back digital effectiveness

#CultureForDigital

How company culture can hold back digital effectiveness

We look at some of the cultural aspects of modern companies that might be holding them back from truly becoming digital-first companies.
How company culture can hold back digital effectiveness

The rapid rise in consumer-facing digital products has meant that companies too have had better ways to create values for their customers. It opens up newer ways to reach their customers and in turn, increasing competition as the first ones to adopt digital tools soon became successful in toppling established companies and capture market share. Startups like Airbnb and Amazon are major examples of such companies. It also opened up newer revenue channels and helped companies that weren’t the first to adopt digital means, but rather were able to use it more strategically, to become successful. Netflix is a prime example in such conditions. This, in turn, has triggered the age of digital transformation and today companies are lining up to ramp up their digital presence.

But not all companies that invest in digitalization are assured success. Impediments, both technological and cultural often hinder companies from becoming a truly digital company and although technological hindrances can still be avoided, or even surpassed, cultural impediments become much harder to tackle.

Company culture comes up in a discussion where sustainable changes are to be brought about within how the company operates. But often, not adequate importance is given to its role in shaping employee preferences and finally the impact of it on their productivity and in turn the company’s performance.

The Global Human trends report defines culture as “the way things work around here.” Specifically, it includes the values, beliefs, behaviors, artifacts, and reward systems that influence people’s behavior on a day-to-day basis. It is driven by top leadership and becomes deeply embedded in the company through a myriad of processes, reward systems, and behaviors. Culture includes all the behaviors that may or may not improve business performance. 82 percent of the respondents to a Global Human Capital Trends survey believe that culture is a potential competitive advantage.

 While the role of company work culture cannot be underestimated, its often ignored as long as things within the company are enjoying smooth sailing. The process of digital transformation is anything but smooth sailing and companies embark on newer waters, a toxic or ineffective work culture does more harm than good.

• A slow decision-making process: The bifurcation of functions and with numerous C suite positions all have the possibility of creating unnecessary delay in decision making. There could also be internal politics or a lack of efficient communication that hampers quick decision making.

• Fear and risk aversion: This can also translate to a lack of risk-taking tendency within the company and culture that promotes being risk-averse might end up doing more harm than good.  Senior-level managers may fear they’re losing control of basic company functions because of digital transformation

• Narrow vision: A company culture which is too focused on just meeting deadlines and holding meeting wouldn’t do much to make a digital transformation process a success. A company’s digital presence can only truly be leveraged when long term vision is kept in mind. It also enables teams to be open to opportunities previously unaccounted for.

Some steps that can be taken to avoid such problems can be

• Eliminate rigid silos: Its necessary for companies to become truly digital, cross-functional and effective teams. They have to be then led with a clear sense of vision and shared a purpose. From the C-suite down to every associate, should be moving in the same direction.

• Distributive decision-making: A sense of autonomy goes a long way to keeping employees productive. Centralized decision-making is an outdated mode of thinking—let those on the frontlines of customer engagement have their say in what works

• Promote risk-taking:  Allowing teams to take risks and modify established use of digital services differently should be an important part of the company culture.  When people feel free to make their own decisions, they can innovate and make better, more impactful use of technology.

Fixing working culture and digitalization: balancing both

Building a digital presence today is greatly benefitted by using digital technologies. A company can create superior customer value and leverage changing consumer preferences betters. But to do so a company's culture plays a key factor. And one that’s easy to overlook. With digital transformation, companies tend to focus more on technology rather than about people. But the cost of ignoring culture is huge. The willingness and the right working conditions that motivate people tasked with making digital transformation work is crucial.

Topics: #CultureForDigital, Culture

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