We should know by now the importance of organisational culture in supporting digital transformation and change (it’s the people, stupid!) but what exactly do we mean by digital culture? This new McKinsey research drawing on a global survey of senior executives amply demonstrates how powerful cultural and behavioural challenges can be in blocking digital progress.
Culture and behaviour are seen as greater potential barriers than knowledge and understanding, talent, structures,funding and even technology infrastructure. Selecting adjectives to describe the key characteristics of digital culture is arguably the easy part but since culture and behaviour so fundamentally inform, shape, and influence working practices, strategies, orientation, actions, values, it’s worth touching on some of these attributes to better explain what I mean. So for what it’s worth here’s my list for what digital culture really means:
Agile and Responsive:- in the book we describe how organisational agility is about more than just speed, it’s about manoeuvrability and responsiveness. This means an orientation towards greater experimentation, test and learn, a boldness and a less risk averse culture, the ability to move quickly when necessary.
Customer-centric:- customer-centricity is as wide as it is deep, and should be reflected in strategies, processes, and structures but more than anything it should be embedded in the culture. It shapes outlook and informs every decision. We talk about fast-feedback loops and data-driven decision-making but it’s better IMHO to be data-informed than it is to be data-driven – the latter may be good for incremental and continuous improvement but may also lack vision, empathy and intuition. The former allows space to create the new, and describes a more useful balance between vision/creativity and feedback/optimisation. Data is critical but we should not be slaves to it.
Commercially focused:- digital culture is results oriented, quick to explore, determine and assess opportunity, ready to disengage from existing advantage
Visionary:- characterised by a compelling common purpose that is well understood
Technology-literate:- a culture that is founded on comprehensive technology-literacy whilst supporting an optimal balance of generalist and specialist expertise, technology as enabler, greater trust and flexibility in technology (less lock-down)
Flexible and adaptive:- a willingness to change and flex, the kind of adaptability that builds resilience and momentum (antifragile), the environment to support greater fluidity, getting the balance right between vision and iteration (as Jeff Bezos says we should be ‘stubborn on vision, flexible on details’). Avoiding managing by proxies (as Jeff Bezos also says , e.g. process as proxy, instead of genuinely looking at customer-focused outcomes just making sure that a process is followed), greater autonomy and ownership, less rigid hierarchy
Networked:- flow of fresh perspectives into the organisation, flow of data through APIs, openness to utilise external resources and build off external capabilities, willingness and ability to capitalise on platform business economics, (Amazon, for example, systematically platformising individual component parts of its business in order to gain greater efficiences and leverage)
Exploring and curious:- digital culture is externally-facing, inquisitive, lateral-thinking, quick to explore technology and customer behaviour trends
Entrepreneurial and innovative:- bias to action, restless, continuous and systematic rather than episodic innovation
Collaboration and learning:- a culture that supports knowledge flow, continuous learning and ease of multidisciplinary collaboration (digital and customer experience are horizontal, cutting right across departmental siloes), embedded reflection and retrospective, learning from successes and failure
The McKinsey research goes further than simply demonstrating how significant a potential barrier culture and behaviour can be to digital progress. Cultural factors such as risk aversion, siloed mindsets and behaviours correlate clearly to economic performance:
The McKinsey piece also makes the point that waiting for culture to change organically is simply too slow, and yet that’s what many senior leadership teams seem to do. A key place to start is to understand and map the current culture and then to and then to actively challenge, promote, reward, demonstrate and recognise the attributes that can support
This needs to happen at the most fundamental level – culture is more than posters with slogans, words on walls, and coloured beanbags (visible artefacts and behaviours), and it’s more than written values statements, strategy documents and codes of conduct (espoused values). What truly shapes culture are the basic assumptions – the underlying, often invisible assumptions and practices that really influence how stuff gets done.
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Also published on Medium.