New Study: Culture Determines Digital Transformation Success
Singapore Management University – Executive Development (SMU-ExD), Tata Communications, DBS Bank and KPMG in Singapore launched a new study entitled ‘Cultural Transformation in the Digital World’ that looks at the digital transformation journeys of major businesses. The study provides a deeper understanding on how business leaders view their journeys towards digital transformation, the culture within their organisation and what challenges they encounter as they seek to propel their businesses forward in the digital age.
The study was conducted in partnership with Fons Trompenaars of Trompenaars Hampden-Turner (THT) and is based on quantitative and qualitative insight from 48 C-suite leaders and 401 anonymous executives.
Culture determines transformation, not technology
The study found that leader effectiveness is directly correlated with perceptions of organisational readiness for digital transformation and that transformation initiatives will only succeed if they are championed by the actions – not the words – of an organisation’s leader.
87% of respondents agreed that culture created bigger barriers to digital transformation than technology and 70% agreed that their leaders had the ability to lead on digital transformation, but only 50% believed that they were appreciative of implementational challenges.
CEOs must assume the role of ‘chief evangelist’ of digital transformation to persuasively, persistently and convincingly articulate and communicate the “why” behind each initiative and champion changes, to create positive business impacts.
Digital transformation only succeeds if it’s rooted in behavioural change
The study identified that teams will only embrace change if they understand why transformation is needed and if they have faith in their leaders.
Interestingly, 100% of C-suite level executives agreed that digitalisation is the “new normal”, with a universal belief that embracing digital transformation was urgent and critical for the organisation to survive and thrive.
Furthermore, 80% of C-Suite interviews highlighted the importance of purposefully focusing on ‘people aspects’ during digital transformation journeys, suggesting an emphasis on the importance of inclusiveness.
“Readiness” was perceived to transcend well beyond technological readiness into the realm of organisational culture, new mindsets and leader behaviours. The “readier” the organisation was perceived to be for digital transformation, the greater the need was felt for cultural change and for embracing conducive leadership behaviours.
Open, flexible and agile organisations are better able to innovate
Each transformation journey is unique, but the research suggests common cultural attributes for those who are successful – openness, flexibility and agility. Today’s winners are focused on incremental change, flatter structures and experimentation. 71% of mid-level respondents acknowledged that they needed to adopt new leadership behaviours including agility, risk-taking, accountability, leading change and digital adoption.
The creation of small, agile, nimble-footed teams that are highly empowered to drive digital transformation, as opposed to making large-scale enterprise-wide changes that could be intimidating for employees, is a preferred implementation tactic. However, only 41% of those surveyed believed they had the skills that are necessary for the digital age, suggesting there is a pressing need to increase access to training to plug the ever-present skills gap.