Four things digital transformation leaders know about culture

November 10th, 2016 by Doug Palmer, Anh Nguyen Phillips | DD news

Organizations that rate high on digital maturity have remarkable similarities when it comes to culture. Read on for more insights on these characteristics, highlights of our 2016 report in collaboration with MIT, “Aligning the Organization for its Digital Future.”

The connection between organizational culture and digital maturity is clear. In our recent report on Aligning the Organization for Its Digital Future, nearly 80 percent of respondents from digitally maturing companies 1 say their companies are focused on creating an effective digital culture. They report being actively engaged in efforts to bolster key cultural attributes like risk-taking, agility, and collaboration. Compare this with the 23 percent of respondents from companies at the early stages of digital development who say their companies are actively cultivating those qualities in their people.

What is now clear is how remarkably similar the cultures of digitally progressive companies are. Digital strategies may vary by industry and be unique to each organization. But it seems that there really is one formula for an effective digital culture.

The right cultural mindset

Our survey identified a number of cultural characteristics common to digitally maturing companies. Taken together, they create a mindset that helps companies move from doing digital to being digital. Digitally maturing companies:

1. Value experimentation and speed.

The pace of business and technology change has picked up, and organizations have to be more agile. Our 2016 Global Human Capital report flags “speed in the exponential economy” as one of four drivers of organizational change. But our data indicates that digitally maturing companies know that it’s not just about changing organization structures to be more agile. They also speed things up by empowering employees, incentivizing them, and giving them the authority to enact and drive change. They use pilots to rapidly experiment with new ideas.

2. Embrace risk.

Digitally maturing companies build risk-taking into the fabric of how they manage. They think about their experiments as a portfolio and don’t get upset when something doesn’t pan out. Not surprisingly, these companies put a strong emphasis on innovation. They’re more than twice as likely (87 percent versus 38 percent) to be investing in innovation as are early-stage entities.

3. Organize for collaboration.

Think distributed, not hierarchical. For example, Visa’s marketing organization moved from a vertical departmental structure to a horizontal, project-based approach to keep up with the speed of change in their industry2.

4. Make data-driven decisions.

Driving a large-scale digital transformation can feel overwhelming. How can leaders possibly get the entire organization moving in the same direction? Digitally maturing companies set very clear goals and measurable objectives, then communicate them clearly. They get very specific and tactical on what they want to achieve and how to measure success.

Creating an effective digital culture is certainly not easy, but the formula for success isn’t a secret. The four cultural characteristics shown above can foster and drive digital transformation and position a company to become a more mature digital enterprise.

2017 MIT Digital Business Study

We’re already starting to collect data for next year’s report. We’re looking for leaders to help us understand how digital is shaping the future of your business. Participate in our 2017 MIT survey today.

Doug Palmer leads Deloitte Digital’s Social Business practice, advising clients in areas related to social business, digital strategy, enterprise collaboration, gamification, and the adoption of emerging technologies. Anh Nguyen Phillips leads strategic programs and thought leadership initiatives in Deloitte’s Center for Integrated Research.

[1] We measured digital maturity in this year’s study much like we did in previous years. We asked respondents to “imagine an ideal organization transformed by digital technologies and capabilities that improve processes, engage talent across the organization, and drive new value-generating business models.” We then asked respondents to rate their company against that ideal on a scale of 1 to 10. Three maturity groups were observed: “early” (1-3), “developing” (4-6), and “maturing” (7-10).
 
[2] Harvard Business Review and Marketo, “Designing a Marketing Organization for the Digital Age,” October 2015, http://hbr.org.
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