Challenges in digital transformation: culture
In this blog series, we’re tackling the major obstacles that derail many enterprise digital transformation initiatives. Our final piece covers the Culture Challenge.
You can learn about the other two challenges at the links below:
- Challenges in digital transformation: the snowball effect
- Digital Transformation Solutions Start with the Right Partner
The Culture Challenge
Twenty years ago, there was a movement throughout the business world predicated on one question: “What is our core business?”
That question created something of an “us vs. them” mentality within organizations, distinguishing core, revenue-driving parts of the business from the rest the company, which was labeled as “non-core” and, consequently, something to be outsourced. For many, IT was one of the parts of the organization that was considered a non-core business function, and often outsourced to external providers.
Now, several decades later, some organizations have realized what a mistake that was. As software eats the world and promotes the necessity of digital transformation, IT has become recognized as a strategic area that supports revenue-driving objectives. Some organizations course-corrected in time, successfully giving their technologists a seat at the table in discussions around business transformation. However, even those businesses still struggle to understand whether their transformation programs are succeeding.
This problem proliferates when the behaviors and mindset from one department are completely at odds with the demands of digital transformation. Other departments, like HR or Finance, can find themselves on the outside of major transformation decisions, yet still can suggest interdepartmental changes that have a cascading impact on the business at large. Often companies’ thoughts, behaviors and actions are dominated by the existing business model and the need for certainty. However, the volatility, uncertainty, complexity and ambiguity of the new business environment means that certainty is not something that can be guaranteed, regardless of how much we desire it.
All departments are part of the same team, working to achieve the same major goal, and yet this tension persists – a tension rooted in making decisions that each side believes is right for the company, and then defending those decisions to other groups, even when things go awry.
Research underscores this challenge. A survey of nearly 1,700 executives, managers and employees found that 60 percent believe that culture is the number one obstacle to successful digital transformation. Leaders and employees often don’t see eye-to-eye on the organization’s capacity for change. Only 27 percent of employees believe their business has the right attributes to change, while 40 percent of leadership believes so.
This cultural misalignment can create several challenges:
If IT is kept at arm’s length from the rest of the business, they may lack the day-to-day insight to oversee an IT transformation. Instead, they’ll look to analysts for quick guidance on technology decisions that impact the various lines of business, or for the latest methodologies that will be applied to development. They’ll lift and shift their current solution to that new one and then find out that it’s not the right match for the business’ needs. Transformation should arrive as unique, tailored solutions that support the change ambitions and business goals of each team.
A lack of trust
At the same time, when technology decisions are left solely in the hands of technologists, the rest of the business has no skin in the game. They consequently lack any trust or confidence that a newly proposed technology solution from IT is a step in the right direction. In the case of a years-long IT transformation, business staffers may never have a firm idea of what’s going on or where it’s all leading.
That’s a level of complexity that many organizations overlook, often because of conflicting ideas between the business side and the IT side about who’s really running the show. Businesspeople who understand operations don’t necessarily know what IT can do for them. Meanwhile, IT people, who aren’t involved in the day-to-day front-of-the-office business, don’t understand the implications of technology decisions on staff or customers.
Mistrust leads to a situation where neither party can talk to each other easily. When the tech side is focused on nuts and bolts, and the business side is talking about customers and sales, there’s no common language to help bridge the divide. This naturally lends itself to tension between the two sides, undermining one simple fact: business and IT all work for the same company, serving the same customers and the same mission.
Finding your North Star
Getting lost on the path to digital transformation is a very easy thing to do. It’s a journey that is rife with challenges and obstacles on all sides, and that can be overwhelming. However, it’s also a completely normal feeling – many businesses find themselves in the same predicament.
To work towards a solution, take inspiration from a lost traveler in the woods, who pops open his compass, or looks for the North Star, in order to orient himself and determine which way he should head next. A North Star needs to be shaped by the updated company vision, the mission, common guiding principles of working and shared goals.
The principle is the same with digital transformation. A business that is lost on the path to transformation must first determine its current position – is it caught up in interdepartmental tension? Is it struggling with an inexperienced partner? Are there too many cooks in the kitchen? Is there no single, unifying vision to act on?
Once you can figure out where its current position is, your business can start considering its next move.