New study: Culture Determines Digital Transformation Success
Prioritizing the fact that academic study proves a link between culture, organizational readiness and willingness to change, 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’. Conducted in partnership with Fons Trompenaars of Trompenaars Hampden-Turner (THT), the detailed study is based on quantitative and qualitative insight from 48 C-suite leaders and 401 anonymous executives and provides a deeper understanding on how business leaders view their journeys towards digital transformation, organizational culture and challenges they encounter as they seek to propel their businesses forward in the digital age.
Culture determines transformation, not technology
Underlining culture as the determining agent for transformation over technology, the study reveals that leader’s effectiveness is directly correlated with perceptions of organisational readiness for digital transformation. To achieve transformation initiatives, organisation’s leader must champion it by actions, not words. Further, the survey detailed during the study concludes that 87 percent respondents agrees that culture creates bigger barriers to digital transformation than technology, while 70 percent agrees on crediting their leaders for digital transformation. On the contrary, only 50 percent respondents believe that they were appreciative of implementational challenges. Further, it states 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 also highlights the fact that digital transformation only succeeds if it’s rooted in behavioural change. Only if the teams understand why transformation is needed and have faith in leaders, can they embrace the change in reality. Interestingly, cent percent C-suite level executives agrees on digitalisation being the new normal and believes in embracing it for organizational survival and thriving. On the flip side, 80 percent C-suite interviews highlights the importance of purposefully focusing on ‘people aspects’ during digital transformation journeys, suggesting an emphasis on the importance of inclusiveness. The study explains, ‘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
Although transformational journey is considered unique, the research reveals that 71 percent of mid-level respondents acknowledge adoption of new leadership behaviours including agility, risk-taking, accountability, leading change and digital adoption. Hencing, proving the fact that successful leaders share common cultural attributes – openness, flexibility and agility and focus on incremental change, flatter structures and experimentation. Creation of small, agile, nimble-footed teams that are highly empowered to drive digital transformation is a preferred implementation tactic. Only 41 percent of those surveyed believes in owning skills necessary for the digital age, suggesting a pressing need for increased access to training to plug the ever-present skills gap.
The Key Notes
On the occasion, Vinod Kumar, Managing Director & CEO, Tata Communications states, “In a fast-changing world, this research shows that business leaders must lead from the front and focus on building an innovation culture, where staff can become life-long learners. Today’s transformation leaders have focused on sparking a change in mindset by championing cultural traits like openness, flexibility and agility. As a result, they have more engaged teams that are better able to flex to market trends, spot opportunities and react fast.”
“There are so many changes happening in our current times that are linked to the introduction of ever more powerful digital tools and machines. Our focus is often technical and there is not so much attention devoted to the human and cultural side of digitalisation. I think that this research will reveal many of those insights and also how they relate to the technical side of digitalisation,” asserts Dr Fons Trompenaars, Founder, THT Consulting.
Underscoring placement of cultural change urgency as the focal point of the study, Ram Lakshminarayanan, Head of People & Change, KPMG in Singapore explains, “What is needed for true transformation is to combine technology, mindset and processes to remain competitive”. “Our focus is on saving people rather than saving jobs. Jobs will become redundant, but people are capable of learning and reskilling. It is also important for leaders to champion traits of a start-up culture, focus on agility and continuous learning, have a relentless focus on the customer and leverage data in their transformation journey,” adds Lee Yan Hong, Managing Director and Head, Group Human Resources, DBS Bank.
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