The Importance of Culture in the Digital Transformation Journey

Written by Sergio Vicente Ruiz and Alwyn Lobo

Many organizations today are grappling with how to operate and scale their digital businesses at scale. The complexity of modern computing and the scale of digital business has brought new complexity to IT operations, with systems and services to handle an ever-increasing volume of data, users, and services.

Traditional approaches to IT operations are often limited in their ability to meet current and future business needs and sometimes even create operational inefficiency. These hinder the ability to build a competitive digital organization, as it limits the ability to scale, innovate and achieve the best customer experience.

How are companies changing the way they operate in the new IT landscape? What role does corporate culture play in transforming into a more modern IT organization?

Over the last few years, all sciences and industries have seen numerous groundbreaking technological advancements, including Information Technology: Cloud Computing, Artificial Intelligence, Internet of Things, Edge Computing, 5G, Augmented Reality, and the Metaverse, to list a few.

The rise of these technologies has led to a new era of digital business. Companies of all sizes and in every industry are immersed in a digital transformation journey to innovate in their businesses, excel in consumer and employee engagement, create new business models, generate new revenue streams, and, in a nutshell, compete and differentiate themselves in the marketplace.

However, long-established companies are experiencing a more difficult path on this journey, trying to compete with a new generation of digital companies, which are born more nimble and agile, and can innovate faster and more efficiently.

Both long-established and digital-born companies have a clear vision and mission; both have a strong sense of purpose and direction; both have a clear technology path; both have adopted new ways of working and new ways of collaborating. Why is it more difficult for long-established companies to progress on their digital transformation journey?

We often see these companies failing to implement the new operating model that would allow them to adopt and scale Cloud and other digital technologies. Some complain that they don't have the skills and expertise, but some already do and still fail. Why? Most of the time, the answer is that the organization's culture constraints their employees' ability to move beyond the traditional ways.

The proper cultural foundation allows the organization to adopt and scale the new Digital/Cloud operating model to advance the digital transformation agenda. Essentially, the organization's culture builds the bridge between the company's digital strategy and its execution.

What is the right culture to adopt a Digital/Cloud operating model? Foremost, it must effectively address the challenges of the digital world.

When we look at which characteristics are most prominent in this era of Digital Transformation, two stand out very clearly:

• Change is constant; in fact, it is accelerating.
• Complexity will not fade away but will continue to ramp up.

Another key challenge of this era of Digital Transformation is how to transform into knowledge and actionable insight the volumes of data that are generated with increasing velocity and with greater variety.

Consequently, the right culture that allows the organization to adopt and scale the new Digital/Cloud operating model needs to:

• Instill a mindset that looks forward to the next innovation and encourages individuals to experiment with the next big thing and take controlled risks.
• Enable autonomous teams to network across the organization without artificial hierarchical barriers because no individual can know everything, and different viewpoints lead to better results.
• Transparently share contextualized information for a faster and more accurate decision-making process for its teams and builds trust within its workforce.

People have been trained for a long time to be risk averse and to go with the tried and tested. However, this is just the opposite of what is needed today. We live in an era of hyper-accelerated change, where the only way to keep up with the pace of change is to be constantly curious about new trends and technologies. The best companies encourage individuals to experiment and try new things continually. The best companies encourage individuals to invest emotionally in their ideas. The best companies encourage individuals equally to embrace failure and celebrate success.

Building a culture that enables autonomous teams to network across the organization starts with creating an environment that treats employees equally and makes them comfortable with being themselves. It embraces differences to bring a new level of diversity and inclusion that helps the organization to be more creative and innovative. Employees treat each other with the same respect and empathy and are more open to collaborating. Companies with high-performing teams allow them to decide the tools and methodologies that work best for the team in parallel to providing an ecosystem of tools to collaborate efficiently and share best practices and learnings across functions and business units.

Successful digital companies also build a culture of information sharing and transparency. They enable employees with contextualized information instead of just facts to help them build a deeper understanding of the situation and make better decisions. They encourage employees to ask questions and seek answers. They encourage employees to provide and receive feedback. Information sharing and transparency build trust within the company workforce and generate a strong sense of belonging and loyalty, which is paramount in times of uncertainty as when embarking on a Digital Transformation.

The roots of an organization built over many years can hinder the company's Digital Transformation journey. The importance of culture is not often recognized, but it is arguably the most significant factor in the success or failure of this journey. The change required to become a modern IT organization is often complicated to implement in existing organizational cultures. Therefore, transforming the organization's culture is often the first step in changing the operational landscape.

Sergio Vicente Ruiz

Alwyn Lobo

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The ideas, views, and opinions expressed in our LinkedIn posts and profiles represent our views and not of any of our current or previous employers or LinkedIn. We have made every reasonable effort to ensure that the information provided is reasonably comprehensive. We wrote this article just for your reading pleasure.