2017 Digital Transformation Trends: Culture and Organization

One of the most surprising trends we see is the continuing interest in both cultural and organizational change management. In two successive years, one of our most well attended webinars had to do with cultural change.  We also found it interesting how many people had questions about change. A typical webinar receives 2-4 questions.  These webinars received 10-15 with follow-up needed because we ran out of time.

This highlights the need to consider cultural and organizational change. It also highlights the angst many organizations feel about these aspects of their digital transformation.  Now let me give you some more anecdotal evidence:

• At one client this year, the biggest difficulty in change came from the lack of executive understanding and sponsorship.  While a few leaders believed in the need for transformation, the majority questioned the need and questioned whether mass changes were necessary.
• This same client lacked a culture of buy-in from the rank and file. Many had great ideas but were afraid to put forth their ideas. They also had no incentive to participate in change.
• As we made plans for the rollout of a more collaborative portal, we had to axe the commenting feature because multiple people from different departments felt that the culture would not allow for comments.  That type of interaction was specifically frowned upon within the culture.
• At another client, we are facing significant delays in the rollout of key features related to their digital strategy.   These delays can be found to have two root causes
  • 1. Approval for key changes is very slow and follows an almost unknown and haphazard process.  It takes time to get even small changes approved.
  • 2. Moving new features through release management proved difficult given the split nature of responsibilities.  One organization was responsible for infrastructure. Another claimed responsibility for a key vendor relationship and access to changing of key environment variables. Testing came from several organizations.  Approval came from several organizations.

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You get the idea.  A misaligned culture or the incorrect organizational structure will form the biggest impediments to success

Why Are Cultural and Organizational Change So Important?

Consider the nature of digital transformation.  Transformation implies great change.  Most organizations fear change. Most organizations are not setup to allow for change.   That puts Digital Transformations in direct opposition to cultural norms and to the way a group is organized.  Think about what a digital transformation could push and think about how culture and organization could impede it:

1. Transfer of investment from traditional marketing to digital marketing
2. Transfer of investment from a brick and mortar store to a digital store
3. The need to foster innovation within a company to address new competitors
4. A customer facing experience that forces individuals to change how they interact, track, and measure customer touch points
5. The need to open up your organizations data and systems to third parties via api’s or digital hooks.  Some might feel this is tantamount to giving away the crown jewels.

Again, you get the idea.  Failure to address the cultural and organizational challenges will stall your transformation.  Let me give you an example.  One client of ours needed to open up new sales channels.  They were too reliant on one channel for a large portion of their business. When they spoke to two potential partners, the first question asked was, “Do you have an API that makes it easy to get your offerings and complete a transaction?”  When no was the answer, both potential partner told our client that when they had the API, they would be ready to talk about a partnership.

So Why Is It Important In 2017?

Over the past two years, Digital Transformation has begun to mature.  It’s gone from a lot of hype to a more realistic set of expectations.   In our world, hype usually involves shiny new toys and a lot of dazzle.  Realistic expectations usually involves an entire company getting behind the changes that need to be made.  In 2017, many organizations will be ready to address the challenges involved cultural and organizational change.