Why Building a Digital Culture Can Make or Break Your Business
In today’s digital era, transformation is no longer a matter of choice. It is imperative for businesses to adopt digital technologies to stay competitive and relevant. Successful digital transformation is not just about incorporating technology. It also involves building a digital culture that promotes agility, intelligence, and innovation.
McKinsey & Company have established that close to a third of the differences in performance between businesses in the same niche derive from their different ability to build and sustain a digital culture. These findings reinforce the significance of establishing a culture that embraces digital objectives, as it directly affects an organization’s performance.
In fact, 40% of the C-suite globally believe that their organizations have managed to build a digital culture. However, only 27% of their employees share the same view. This disconnect highlights the importance of developing a company-wide culture promoting digital initiatives and adoption. In this article, we will explore what digital culture is, why it is important, and how you can develop a digital-first mindset in your business.
Let’s dive right into the details.
What Is Digital Culture?
In general, corporate culture encompasses the collective experiences, beliefs, and values of all employees. It also reflects the company’s leadership, vision, and commonly perceived and followed mission. How can we distinguish digital culture?
Digital Culture Definition
Digital culture is a concept that gained popularity in the last decade of the 20th century. It can be defined as a corporate culture that embraces and effectively uses technology to improve processes and increase efficiency. However, digital culture goes far beyond the process of digitization, digital transformation, and the application of innovation.
Digital culture is a seven-dimensional concept combining the following seven principal attributes:
- Digital-First Mindset
- Innovation
- Data-Driven Decision-Making
- Open Culture
- Customer Centricity
- Agility and Flexibility
- Collaboration
Digital culture also reflects employee experience and perception of these seven aspects. The focus is embedding a digital-first mindset in every employee and improving all business processes with the ultimate goal of ensuring outstanding customer experiences.
Digital Culture Example
Now that you’ve gained a better understanding of digital culture and its characteristics, let’s look at some companies that have become exemplary in achieving a successful transformation.
In less than a year and a half after introducing their Mobile Order & Pay app in December 2014, Starbucks managed to revolutionize the customer experience. As of the first quarter of 2016, close to a quarter of all orders in the U.S. were paid via Starbucks’ mobile app, compared to a fifth in the previous quarter. Bringing innovation to both customers and employees, the company succeeded in transitioning from a traditional to a digital mode of operation and promoting digital-first culture.
Netflix is a fast-moving digital company that achieved incredibly fast growth in less than ten years, expanding into hundreds of countries much faster than traditional media businesses like Disney. This breakthrough is attributed to the exceptional digital-first mindset and culture of self-discipline established in the organization.
Known as a customer-centered company, Amazon has adopted innovative trends and technology to enhance the buyer journey. Empowering the customer to give and use product reviews and introducing item-based collaborative filtering and personalized recommendations as early as 1998 are among the clearest indications of digital leadership.
Although the three companies above are giant global enterprises, small companies can also serve as a digital culture example. The creative agency Nuova Digital uses technology as a foundation of its entire operations, internal and external communications, and collaboration. With its fully remote team, the company has developed a digital culture and digital-first mindset for both employees and customers. This brings flexibility and agility, giving a competitive edge to small businesses and allowing them to thrive in today’s dynamic environment.
Why Do You Need to Create and Cultivate a Digital Culture in Your Business?
What is the impact of digital transformation on business models and revenue streams? Implementing technology and developing digital culture can go a long way in improving employee engagement, creativity, and overall performance. Research conducted by Microsoft indicates that almost twice as many employees feel highly productive in companies with a strong digital culture (22%) compared to companies with low digital culture (12%).
Here are more reasons why digital culture is important for businesses of any size and across all industries.
The Importance of Digital Culture for Large Enterprises
With large enterprises, digital transformation is essential for staying relevant and competitive. A strong digital culture enables them to manage large teams, multiple departments, and complex operations across multiple locations. This helps meet customer expectations and attract and retain top talent who value working for innovative, forward-thinking companies.
The Importance of Digital Culture for Small Businesses
Small businesses can benefit from creating and cultivating a digital culture because it allows them to optimize the efficiency of their lean teams and limited resources, streamline operations, and enhance customer experiences. A strong digital culture can foster innovation and agility, allowing small businesses to adapt quickly to changing market conditions and giving them a competitive edge over bigger industry players.
The Importance of Digital Culture for SaaS Companies
SaaS companies must create and cultivate a digital culture because their business model is built on technology and digital innovation. By adopting a digital-first mindset, they can deliver superior products and services, differentiating themselves from competitors. Top talent is essential for developing and delivering innovative SaaS solutions, and an organization with a strong digital culture holds a better chance to attract top performers.
The Importance of Digital Culture for Tech Startups
Tech startups need to create and cultivate a digital culture because they are often at the forefront of digital innovation and disruption. By adopting a digital-first mindset, tech startups can develop and deliver cutting-edge products and services that address unmet customer needs.
A strong digital culture can also foster innovation, agility, and resilience, allowing startups to pivot quickly in response to market changes and challenges. Finally, digital culture can help tech startups attract investors and partners looking for innovative and disruptive companies to support.
What are the benefits of a digital-first culture?
Innovation
A digital-first culture provides an environment where innovation can thrive. What’s more, the Microsoft study mentioned above reports that companies with strong digital cultures have almost three times more employees who consider themselves highly innovative compared with organizations with weak digital cultures.
Improved Transparency
Digital-first culture promotes easier, faster, and company-wide access to information. Employees can access important company updates, data, and insights in real time, allowing them to stay informed and engaged. This can lead to a better understanding of company goals and objectives, improved accountability, and greater trust between employees and management.
Enhanced Collaboration
Digital workplaces provide tools and platforms that enable effective communication and collaboration between teams and individuals, regardless of their physical location or time zone. They can easily share the latest updates, knowledge, and ideas, breaking down traditional barriers or silos.
Greater Agility and Adaptability
In the modern business environment, disruption is frequent, and companies must be able to adapt to remain competitive. A digital-first culture allows you to respond quickly to changing market conditions, customer needs, and business priorities, adjusting your products, services, and operations to current market trends and demands.
Improved Data Collection, Processing, and Storage
Digital tools like analytics, automation, and cloud computing allow businesses to gather and analyze real-time data, automate processes, and access resources anywhere. You can use all this information to identify patterns, discover inefficiencies, and make better-informed decisions.
Digital platforms provide an excellent opportunity to understand your customers better. You can collect and store data about customer preferences and behaviors through surveys, customer feedback, website analytics, and social media monitoring. Analyzing large amounts of data allows you to create products and experiences that meet customers’ needs, which gives you a significant competitive advantage.
Improved Customer Experiences
A digital-first culture can improve customer experiences by providing personalization, greater convenience, faster delivery, multichannel communication, and enhanced feedback and engagement. For example, an organization can conduct customer surveys, respond to customer reviews on social media, or use chatbots to answer customer questions. An e-commerce website can recommend products based on a customer’s past purchases and browsing history. These benefits can help organizations build stronger customer relationships and increase customer loyalty.
Enhanced Speed and Efficiency
Digital technologies enable organizations to deliver products and services quickly. For example, a customer can instantly download a software application or access an online service. This speed can help organizations meet customer expectations and set themselves apart.
10 Tips to Build and Promote Digital Cultures
So, are you looking to create a work environment embedding digital, ensure employee engagement and empowerment, and cultivate an in-house digital mindset? To help you achieve that, we’ve compiled ten effective strategies.
1. Establish and Communicate Your Company’s Digital Values
Fully understanding the meaning and values of digital is the first step of your journey. Build a clear vision of what these values are for your organization and draw a vivid and compelling picture of the outcomes and benefits of introducing a digital culture.
Then tell this story to your employees and make them feel part of it — make it their story. Convincing your team to see and believe in your company’s digital values is vital for ensuring the buy-in from employees, which is critical for successful transformation.
2. Establish and Communicate Your Company’s Digital Values
This is the most effective way to encourage change in your company culture. Live your values and be an inspiration for your team by making data-driven decisions, promoting openness and transparency, supporting innovative ideas, and rewarding customer-first initiatives.
3. Define and Communicate Your Goals
It’s important to clearly identify your goals, build your digital transformation roadmap, and share them with all stakeholders so you can get everybody involved in achieving your digital transformation objectives. Establish an adequate timeline and an action plan with responsibility allocation and deadlines. Communicate them effectively so everyone in your company is kept informed and on track.
4. Set the Leadership
The role of leadership in building and sustaining a digital culture is unquestionable. A committed digital leader who embodies digital culture principles can enhance the success and smoothness of digital transformation. To streamline your digitalization efforts, you can appoint a Chief Digital Officer responsible for providing a clear vision and participating in solving the problems encountered in the digitalization journey of your organization.
For instance, when they announced their transformation plans in 2019, Hewlett Packard Enterprise created a dedicated Transformation office and appointed a Chief Operating Officer as a lead. The Office was the driving force of the company’s transition to a cloud platform-as-a-service company.
5. Identify and Implement the Right Technology
To give it a go, evaluate the existing technology in your organization to identify gaps and areas for improvement. Determine if any outdated tools or software need to be upgraded or replaced. Next, align the technology choices with your organization’s goals, needs, and strategies. Make sure the technology you choose supports your overall objectives and enhances employee productivity.
By involving key stakeholders, such as management, IT, and end-users, in decision-making, you can get valuable ideas to help select the most appropriate tools and platforms. Also, make sure to prioritize user experience by opting for solutions that provide an intuitive and user-friendly experience to encourage adoption and minimize resistance to change. To avoid excessive expenditure, plan for scalability and choose technology that can grow with your organization, allowing you to scale up or down as needed.
6. Get Every Employee and Team on the Same Page
A 2021 Gartner study established that 60% of employees find new software solutions confusing due to ineffective support and training. So, investing in your employees and getting everyone engaged and involved in the process are vital steps in building a digital-first culture. How can you achieve that?
- Communicate, communicate, communicate: Clearly articulate the goals and benefits of adopting a digital culture to employees. Help them understand how it will improve their work experience and contribute to the organization’s success.
- Encourage employee involvement: Involve employees at all levels in the innovation process. Provide opportunities for them to contribute ideas, participate in brainstorming sessions, and engage in collaborative problem-solving.
- Provide training and support: Offer comprehensive training programs and resources to help employees become familiar with new technologies and digital tools. Create a support system that enables them to ask questions and seek assistance as needed.
- Encourage collaboration: Foster a culture of collaboration by promoting open communication and sharing of ideas. Implement collaboration tools to facilitate teamwork and knowledge sharing across departments and teams.
- Create digital champions: Identify and empower employees who are enthusiastic about digital transformation to become advocates within the organization. They can help mentor and guide others in embracing the new culture.
7. Eliminate Team Silos
Team silos can seriously impede communication, transparency, and openness in your organization. Encourage collaboration and knowledge sharing between teams by creating cross-functional projects or workgroups that bring together employees from different departments with diverse skills and perspectives. Also, utilize digital communication tools like instant messaging, video conferencing, and project management platforms to facilitate seamless communication between teams, regardless of physical location.
Schedule regular meetings between different teams or departments to discuss ongoing projects, share updates, and identify potential areas for collaboration. Another viable step is to flatten organizational hierarchy by encouraging open communication and minimizing the barriers created by traditional hierarchical structures. Adopting a more flexible and inclusive organizational culture will allow for greater interaction between employees at all levels.
8. Embrace Innovation, Experimentation, and Risk
Making innovation an integral part of your organization’s values and mission is a major aspect of building a digital culture. Encourage employees to think creatively and propose new ideas for products, processes, or services. Go further and establish a safe environment for experimentation, allowing them to test these new ideas without fear of failure or negative repercussions. Develop an organizational culture that embraces learning from mistakes and celebrates the iterative process of innovation. Encourage employees to analyze unsuccessful experiments or projects and learn from these experiences to refine their approach and drive future success.
Dedicate time, budget, and personnel to support innovation initiatives, such as research and development, pilot projects, and innovation labs. Also, reward and recognize innovative efforts. Acknowledge and celebrate employees who contribute to the organization’s innovation goals. Incentives, such as bonuses or public recognition, can go a long way in motivating and inspiring continued innovation.
9. Keep Track of Your Progress
Define clear and measurable objectives for your digital culture initiatives, and identify key performance indicators (KPIs) to help you assess progress towards these goals. To make the best out of monitoring your progress, establish a system for regularly tracking and evaluating your KPIs, including customer satisfaction, return on investment, and revenue growth. This can include periodic reports or dashboards that provide a visual representation of your progress.
Another rule of thumb is breaking down your overall digital culture goals into projects and smaller milestones that can be achieved in the short term. This will help you maintain momentum and ensure that your efforts remain on track. Utilize data and analytics tools to gain insights into the effectiveness of your digital culture initiatives. This can help you identify areas for improvement and make data-driven decisions to optimize your efforts.
10. Measure, Communicate, and Celebrate Your Success and Achievements
Communicate your organization’s digital culture successes and achievements with employees, stakeholders, and customers. This can include sharing case studies, testimonials, or success stories on your company’s website, social media, or internal communication channels. Also, make sure to acknowledge the efforts and accomplishments of employees and teams who have made significant contributions to your digital culture initiatives.
Host events, such as town halls, team lunches, or workshops, to celebrate milestones and achievements related to your digital culture initiatives. This can help reinforce a sense of community and shared purpose within your organization. Scheduling regular check-ins or meetings with team members, stakeholders, and management will allow you to discuss progress, address any challenges, and identify opportunities for further growth and development.
Ready to Start Promoting a Digital Culture at Your Organization?
Large enterprises, small businesses, SaaS companies, and tech startups alike can benefit from a strong digital culture that promotes efficiency, adaptability, and competitiveness. Embrace the digital era and boost your organization’s performance by cultivating a digital culture that fosters agility, innovation, and data-driven decision-making.
Recognizing the value of a digital-first mindset bridges the gap between leadership and employees and helps encourage innovation and transformation. Adopting the seven key attributes of digital culture will empower you to enhance customer experiences, improve collaboration, and stay ahead in today’s fast-paced business environment.
So, are you prepared to drive digital transformation and stay relevant in the evolving marketplace? Follow the tips I shared above and let your organization go digital and thrive.
Thank you for reading my article, and If you received some useful takeaways on how important the digital culture can be for your business and the tips to build and promote it, clap & let me know by commenting below.
