Otherwise successful companies often make the mistake of treating technology and culture as separate categories, rather than interconnected pieces which make up the core of the organization. Technology enables companies to facilitate group collaboration, break down silos, and develop new work processes—all necessary components of a healthy, growing corporate culture. Similarly, the level of support and motivation provided by a well-aligned corporate culture has a huge influence on employees' capacity to quickly adopt new technology and use it productively. McKinsey confirms this dynamic in a recent survey, in which more than half of executives named "cultural and behavioral challenges" as their most significant obstacle to achieving DX. In an era of rapid digital transformation, this means enterprises need to explore a diversity of cultural and technological solutions if they want to maintain stability and performance.
Digitizing culture
The marketplace disruptions that took place over the course of 2020 have changed the playing field for business—in some ways, permanently. Chief among these changes is the heightened influence of technology on all aspects of workplace culture. The rapid switch from in-person office life to majority-remote working conditions revealed structural vulnerabilities in many organizations that weren't previously obvious. Virtually overnight, companies experienced massive pressure to implement DX and expand their remote-working capabilities in order to survive. For better or worse, technology quickly became the dominant medium through which corporate culture was experienced by much of the workforce.
This high-speed digital transformation brought on a second wave of widespread transformation—this time, cultural—with the revelation that lean and agile-based teams were significantly outperforming their non-agile peers in the new remote tech environment. In the early months of the pandemic, over 70% of enterprises initiated agile transformations, marking a near-universal shifting of priorities away from traditional, top-down work processes and values, towards a more flexible and independent working environment across the board.
Many of these new workflows were designed specifically to work with the capabilities of available project management and orchestration software—corporate cultures being reshaped directly along the contours of their tech. Since then, plenty of organizations have committed to maintaining their digitally transformed work policies even as countries have re-opened. Looking forward, this seems like a clear sign that technology will continue to serve as a primary filter for corporate culture in the future, and enterprises will need to adapt to this new reality.
Developing talent
One of the biggest factors in digital transformation success is talent. With as many as 46% of active job seekers listing company culture as "very important" to their job search, and nearly a third of job seekers willing to take a pay cut for a job they're passionate about, it's clear that an appealing culture provides a unique competitive edge. For example, many tech-oriented hires are more interested in new challenges within their area of expertise than in a more traditional career path leading to management. In this hiring environment, organizations that place cultural emphasis on flexibility, independence, and learning—as opposed to more rigid cultures founded in hierarchy and competition—are in a better position to be responsive to the needs of their tech recruits.
Once that cultural norm has been established, it isn't a stretch for a flexible and responsive organization to adopt niche career advancement tracks based on unique ability rather than predefined roles. The ability to easily pivot and provide this kind of opportunity also reveals the difference between simply having enticing cultural values on paper, and actually realizing them on a structural level. When culture is real, it's visible—and it attracts new talent, increases employee buy-in, and reduces turnover.
Culture can also play an instrumental role in driving digital transformation. The human element can't be overlooked when it comes time for existing employees to acquire the new skills necessary for DX. In a 2020 survey of executives, lack of digital talent was one of the top 3 biggest challenges to transformation success, with 24% of executives listing it as the most significant barrier to DX. Upskilling is a crucial part of making a successful transition to new enterprise technology, and without a grounding cultural investment in the company, the motivation to learn and adapt to change isn't there. The communication, transparency, and flexibility throughout the entirety of the organization needs to be established before DX is possible.
This is particularly impactful for employees in non-technical roles, who face greater skill and motivational barriers when interfacing with new tools and technologies, yet are crucial to DX success. For example, sales reps may require training in data literacy skills—like how to maintain data hygiene and interpret advanced analytics—in order to work with AI-powered sales software. Without effective training for these users, as advanced as the software may be, it won't be able to perform accurate analysis or give the sales team meaningful insights. The whole of the organization needs to share a sense of cohesion and purpose, or risk letting valuable non-tech talent burn out under the strain of change.
Building an innovation culture
Corporate cultures that place significant value on innovation are naturally receptive to new ways of doing things—especially if they can improve the speed and quality of the work. Highly adaptable companies with cultures of innovation are particularly well-suited to take on digital transformations, whether planned out months in advance or in reaction to suddenly changing market conditions. One 2020 report notes that companies that remain innovative during crises have historically outperformed their competition and gone on to triple their gains on average, post-crisis.
While there's an abundance of thought leadership on the importance of "innovation" as a cultural value, there tends to be a lack of clarity on what that means in real terms. On the one hand, there's a push toward flattening corporate hierarchies, embracing independence over rigid process, and organizing teams around collaboration rather than competition. However, the companies that are able to successfully put these dynamic values into practice without risking chaos or stagnation among the workforce tend to balance out their looser structures with a higher baseline of accountability. To meet that baseline, these organizations meticulously select for highly capable individuals who are able to perform better when unencumbered by structure, rather than individuals who need structure to perform.
The degree of effort required to maintain innovation cultures may not be the best fit for every organization. But considering their aptitude for jump-starting DX, especially during periods of upheaval, choosing to adopt at least some aspects of innovation culture is likely a wise future-proofing strategy. This is especially true for companies with a substantial remote or partially remote workforce, where innovation and independence are key to productivity. Simple practices, made routine—such as leaders regularly collaborating with their team members to find consensus in project decisions, and extending flexibility when they choose to delegate—can spark a change across the entire company.
Creating a more balanced work environment
As the pace of change increases, it becomes even more essential for enterprises to maintain a durable relationship between their tech stack and their culture. The rush for digital transformation gives this relationship renewed visibility and urgency, while increasing the rate at which tech and culture conjoin. Culture generates the talent and innovation required to achieve DX success, while technology enables business to grow and advance past obstacles. Business leaders who can develop their competencies in both arenas and embrace the tech-culture relationship can set their organizations on track to thrive through any transformation that comes their way.
