Business culture as a driver of digital transformation

The year 2020 has taught us several, arguably hard, lessons, but for organisations, two of the biggest takeaways have been the importance of business culture and digital transformation.

Across the region, we’ve seen businesses either thrive or struggle depending on their ability to quickly adapt to new ways of working and their capacity for supporting and motivating their staff throughout an incredibly challenging period. And although much has been said about both culture and digital transformation, it would be interesting to unpack the inextricable link between the two.

We must remember that culture is not just about people, and digital transformation is not just about technology. It’s not enough to buy tools and hope that they will revolutionise your operations, just as it’s not enough to implement a positive and supportive company culture and assume that makes up for poor processes.

Those businesses that don’t take the time to address this symbiosis will risk falling behind.

Importance of agility
The key characteristic that sits at the crossroad of culture and digital transformation is agility. Being an agile business is not purely about buying in the right technology, nor is it just about building a culture of innovation and excellence. Agility is truly achieved when both of these aspects are working together harmoniously.

However, this agility piece is what is still lacking for many businesses and where they need the most support.

What became abundantly clear throughout 2020 is that moving towards flexibility and embracing remote technologies is no longer enough. Businesses that hang on to legacy, largely offline processes are too slow and too siloed in today’s environment, where speed, resiliency and agility are needed continuously.

Many businesses have found they are not far enough into their digital transformation journeys to deliver the agility that is needed to face the challenges of the COVID-19 crisis. They will lose any competitive advantage and fall behind their peers quickly.

This claim is reinforced by data from ServiceNow’s Work Survey, released in October. The global study into the impact of Covid-19 on innovation, business and the future of work found that 91 per cent of EMEA executives say their company still has offline workflows, including document approvals (51 per cent), IT workflows such as security incident reports (45 per cent), and technology support requests or processing (42 per cent).

Progress has been made, but months into working from home, 60 per cent of executives and 59 per cent of employees across the region say their companies do not have a fully integrated system to manage digital workflows.

This is why the combination of the right culture and the right tools is so important. Overcoming this challenge and converting legacy systems into truly agile practices is not simply a question of buying tools.

Indeed, a McKinsey study of global executives from 2017 showed that ‘cultural and behavioural challenges’ were cited as the biggest barriers to true digital effectiveness. The same survey also found that there was a clear correlation between the businesses displaying a weak digital culture and negative economic performance.

Impact of culture on digital transformation success
The businesses who are leading the way in successfully moving away from slow and siloed processes are those whose culture is fully attuned to embracing and affecting digital change. Ocado, for example, has outperformed its rivals in retail in 2020 by further evolving its digital capabilities, and others such as IKEA and Unilever have managed to transition rapidly to new ways of working without skipping a beat.

Here are some of the key cultural characteristics that set these businesses apart from their peers:

Champions in the C-suite. Digital transformation isn’t a KPI for just the CIO. Every other player in the executive leadership team — CEO, CHRO, CFO, COO, etc — should be as invested as the CIO is in their understanding of, and focus on, digitisation. If all of these individuals are convinced of and vocal about the benefits, their teams will be too.
Clear communication. Communication of the benefits and outcomes of making change and clear explanations of how it will be rolled out are essential in achieving company-wide buy-in and adoption.
Organisation-wide collaboration. To be successful, digital transformation must be a team effort. It’s about the cross-functional successes that can be enjoyed and celebrated, not the ideas and projects of a single leader or one specific department.
Focus on customers and employees. It’s vital to assess digital transformation success through the lens of impact on customers and employees. Constantly ask questions about what benefits these two groups are looking for and what would be required to delight them both even further.

Adopting a positive, accepting attitude towards digital change is therefore as important as implementing the digital practices themselves. There is no doubt that technology is the enabler of digital transformation but simply providing employees with the tools and systems that will help them perform with agility and resilience isn’t enough. Leaders need to build a cultural infrastructure that will allow these tools to deliver maximum returns.

Matt Taylor is global VP for GTM Operations at ServiceNow