Does organisational culture impact digital transformation?

It does, and significantly so. It is up to the leaders to make the transformation smooth and exciting.


Digital transformation is not easy to achieve. Besides technological hurdles, there are many barriers that obstruct its path, the biggest one pertaining to organisational culture. It is much simpler to upgrade an existing technology or even introduce the latest technology. However, creating an environment and culture that is conducive to digital transformation is a different ball game altogether.

According to a study by Singapore Management University in partnership with Tata Communications, DBS and KPMG, 87 per cent of the respondents admitted that culture created bigger hurdles in digital transformation than technology.

“A closer look at organisations that have undergone or are going through digital transformation will show that far less attention is dedicated to addressing the people and cultural aspects of change management and change leadership than the processes and technology behind the transformation. That said, conversations about managing employee experience as a core component of digital transformation have risen in recent years. The growing awareness and recognition of the impact of transformation on people and culture underscore the urgency to place cultural change at the centre of organisational transformation,” says Ram Lakshminarayanan, head of people & change, KPMG Singapore.

For digital transformation to succeed, cultural shifts are necessary. Throughout the transformation process, the people should take care not to ignore the values and purpose of the organisation. After all, digitisation does affect the culture of the organisation. For instance, there are organisations that emphasise on collaborative problem solving, team work and establishment of human bonds and relationships. For such organisations human interaction is an integral part of their culture, which can be threatened by digitisation. Around, 92 per cent of the respondents of the survey believed that human intervention will continue to be important in the digital age.

To ensure smooth transformation, there are some simple steps that can be taken, as per the Research Report on Transformation in the Digital World.

Lead by example

There are positive impacts, provided the leaders take it upon themselves to lead by example. They should behave just the way they expect their workforce to behave. Therefore, they should be the first to welcome and adopt digitisation before they can expect their teams to do so.

Leaders of today will need to be adaptable, and be well aware of what they know or do not know. They will also have to be willing to learn from others and not be afraid of making mistakes. For this, the organisation has to follow a culture of trust and belief in relationships. Since ownership and accountability will now be of utmost importance, the culture will need to evolve to enable employees to be open to risk taking, and feel safe even if they happen to fail. These things will have to be first demonstrated by the leaders, only then can the employees feel secure.

While 41 per cent of the leaders surveyed felt they possessed the skills required for the digital age, 71 per cent admitted that they needed to adopt new leadership behaviours.

“As a leader, you must have an appreciation for technology, deep appreciation for any change, the creative thought that comes along with that and be able to aid and nurture that thought process to take it to its logical conclusion,” says CR. Srinivasan, chief digital officer, Tata Communications

Awaken employees’ interest

One way of making employees comfortable is to introduce an economical digital platform that will let the employees experience the joy and value of engagement, sharing knowledge and practices, and so on. Such interactions over digital platforms will help the employees open up to digitisation and develop a positive attitude towards the same. In fact, such simple platforms facilitate positive communication and establish a bond amongst the employees as well.

Most senior executives believe that digitisation will never completely take the place of human interaction. After all, humans will be required for their ability to think critically and also apply their brains to implement and master the latest technologies to further create advanced solutions.

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Be agile, flexible and willing to adapt to change

A successful organisation is one that is agile, flexible and willing to adapt to change. These traits can only be found in organisations that have a culture of learning, and of embracing change. Organisations that tend to always preserve and protect their existing state of affairs will not progress much.

Agile organisations are the ones that have a culture of learning from their mistakes and failures; a culture that facilitates a growth mindset.

“Agility and experimentation are really important and with that creating an environment for people to learn, and not feeling like failure is a failure, but a part of a journey,” says Tina Lawton, regional director, Asia Pacific, Syngenta.

Take baby steps

Taking baby steps is the right approach to transformation. If something drastic is introduced overnight and the employees are expected to simply accept, adjust and adapt without any questions, they may actually fear the change and get intimidated.

Successful digital transformation can be brought about by first bringing in smaller changes that do not make a very drastic impact on the culture of the organisation all at once. This is where small, internal agile teams come into play, that indulge in small-scale experiments that do not require a huge investment. Simply put, digital transformation should be first tested through small pilot projects at the level of a small unit, department or team. The success of these experiments can then determine the application of the change on a much larger and wider scale in the organisation.

According to Atul Khosla, senior vice president, Mondelez International, “It is important to make the process digestible… rather than a big digital shift, make it more as an enabler. If you make it a big deal and say everyone needs to start using it tomorrow, it does not really stick; people get intimidated, they sometimes feel threatened.”

Provide incentives to employees to change

Employees often seem unwilling to adapt anything new because they are afraid of failure. Therefore, leaders should look at providing them incentives to give up their conventional ways. Also, with digitisation, data becomes more accessible to everyone, which affects power dynamics across hierarchies.

Those who once felt powerful because of the information they had in their possession, may end up feeling insecure and tense. The focus shifts from who requires the information to the reason why the information is required and the significance of the same.

Encourage tech savviness and spread the excitement

With 11 per cent of the respondents believing that digitisation was a passing fad, it is up to the head of the organisation to lead digital transformation from the front, for which she/he will need to engage with the employees.

Such a leader should also appreciate technological advancement and do everything possible to allow change to enter. Such a leader is able to nurture an organisation culture conducive to embracing digital transformation and ensuring its success.

The leader need not necessarily possess digital expertise or high level of technological know-how, but he should be able to convince all the stakeholders of the positive impact of the transformation and also ensure the right environment for successful implementation of the same. He should have the right talent in place and enter into appropriate collaborations that will take the goal of digital transformation forward. The head of the organisation, the CEO, should be so convinced about the forthcoming change that he should be able to get his followers excited about the same.

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