Aspects of digitization: Cultural transformation & organization
Many automation initiatives turn out not to be as easy to implement as initially thought because they face internal resistance. That’s when many organizations realize that there is also an important aspect of a cultural transformation to digitization. Hence they start to “work on” their culture, e.g. through management tours through Silicon Valley, the hiring of agile coaches, the introduction of scrum methodologies and the like. All with the intention to become more “startup-like”.
However, those cultural change attempts more often than not only lead to minor improvements. It’s because culture is a complex beast: It’s not only about changing individuals’ behaviours, it also comprises all the explicit or implicit rules, codes, management systems and behaviours within an organization. In fact, it’s so terribly difficult for human beings to change substantially that this is the most difficult aspect of a digital transformation of them all.
In a fully digital organization, the culture
- is entirely focused on customer value creation
- is allowing communication to flow freely across departments, geographies and hierarchies
- is welcoming feedback, at any time, by anyone
- has a high appetite for experiments and the high tolerance for failure required for that.
The prerequisite for such a digital culture is a governance that makes it possible to create one. This means in particular that digital ventures/products must be kept isolated from the legacy business. In particular the legacy business must not be allowed to determine neither business modelling, nor strategic priorities nor operations of digital models.
Example artifacts of truly digital cultures: Netflix’ culture deck, Google’s mission statement
