The hidden element of your digital journey: Your culture

For IT professionals, addressing culture is crucial to any transformation

Undoubtedly, having an IT operating model supportive of the business strategy and integrated processes and functions (e.g., role clarity and feedback loops for professional development) are instrumental in taking the initial steps in the digital journey.

But to ensure the digital transformation “sticks,” it is essential to align the strategy and operating model with the organization’s culture. Culture is a source of strength, and in the context of the IT operating model of the future, a key success factor in its sustainment and success.

In fact, according to the 2018 Global Culture Survey conducted by the Katzenbach Center for culture and leadership at Strategy&, which surveyed over 2,000 professionals across more than 50 countries, 63 percent of IT professionals say that culture is more important to an organization’s performance than strategy or operating model.

And it’s clear that addressing culture is a pressing need - 82 percent of survey respondents in IT say culture must evolve for their organization to succeed in the next three to five years.

Five elements to make your IT culture digitally-ready

1. Take stock of your existing IT culture.
According to IT respondents, the most salient cultural traits in their organizations included:

• Being risk averse (73%)
• Being polite and cordial in interactions (71%)
• Following set processes (66%)
• Pursuing small, incremental improvements (66%)

These traits both provide benefits and present challenges to cultural evolution, and it is important to leverage those strengths while also mitigating the downsides when undertaking an effort to shift the culture to be more digitally-ready.

For instance, having a focus on set processes and being generally averse to risk may underlie a sense of detail-orientation and meticulousness that is crucial to the effective functioning of any IT function - the last thing an organization wants is an unstable IT infrastructure. On the other hand, it is important to recognize that such a culture may create difficulties when pushing initiatives to their workforce to be more willing to “fail forward” and experiment.

At many technology companies, for example at Google and Salesforce, the culture of failing fast and innovating rapidly is part of their organizational DNA, and IT organizations in any industry would want to borrow lessons from these tech leaders to start demonstrating more of a digital-ready culture. But this may run counter to the existing culture. For example, a global CPG company had IT availability metrics that were off the charts, rarely having an outage -- this provided a feeling of stability and security to their users, but did not necessarily allow them to be nimble, agile and responsive.

2. Identify a “Critical Few” behaviors that can move the needle the most.
In a major transformation, it is tempting to push out numerous changes and initiatives to “see what sticks.”

However our experience shows that it is more important than ever to prioritize the few - as in, three to five - behaviors that would have the greatest impact on the transformation if adopted.

Taking a disciplined approach to shifting culture is a valuable exercise; it gives leadership teams the opportunity to build clarity around the specific culture traits that they desire for their organization.

So what could some of these traits look like for a digitally-enabled IT organization? In the Global Culture Survey, IT professionals who believe their organization is digitally-savvy also tended to report the following two traits at higher rates:

• Valuing breadth of knowledge (best athlete) (79%)
• Stressing team performance (79%)

In both of these cases, there was a roughly 20 percent difference between respondents in self-reported “digitally-savvy” organizations than those who were not. These traits align with what millennials - a key part of the workforce of the future - look for in their organizations: a broad range of challenges, learning opportunities and an ability to collaborate with others. These are also some of the critical traits of a digitally-ready workforce that help an organization adapt to change and develop a “fail fast” approach.

In a large technology company, we found that the IT organization had developed deep specialists over many years, and the idea of having a “best athlete” was foreign to them. Showing how this flexibility and agility would allow their organization to be recognized as a valuable business partner pushed them to invest in the IT skills of the future.

However, the traits that support digitization may not support the fundamental “run-rate” qualities an IT organization needs to do its job. When engaging in a cultural transformation, IT leaders should take caution to not shift away from these necessary cultural traits.

3. Find the informal leaders who can help make the cultural evolution a reality.
According to the Global Culture Survey, nearly one in two respondents - both within IT and overall - say that the formal organization chart does not fully explain the way work really gets done in their organization.

Informal leaders - individuals who are able to influence others without a formal title or authority - play an important role in seeding the change, especially at the front-line. This is commonly achieved through “water cooler” conversations that help their colleagues understand the change from the bottom up and “what’s in it for them”.

Not only can they role model the new behaviors to their teams, but they also act as vital “emotional sensors” who can both help leadership teams identify the most compelling critical few behaviors and also provide on-the-ground feedback on what is working to spread them.

At a large technology company, we heard that it was very difficult for new hires to understand who did what, because accountability was very unclear. Key leaders said they trusted a few key people to be their institutional sherpas and drive any changes that were required.

4.Communicate the “why” and show the “how”.
According to the Global Culture Survey, there is a culture gap between senior leaders and the front-line: while more than 71 percent of C-suite executives say they have culture on their agenda, only 48 percent of front-line employees say it is a leadership agenda item in their organizations.

Leaders need to communicate their vision for the culture change and the driving factors behind the change. For effective change management, it is important to understand why this change is important. This will play a major role in getting employees onboard with the change. Once they are as convinced as you are about the intent behind that change, they will likely be just as much invested in its success and this will organically create drivers of change.

Employees typically go through a lot of emails through a typical day. In situations where they are managing their tasks through emails, formal communications may be easily overseen by them. To enable a successful cultural evolution, formal leaders must fully endorse aspects of change and “signal” that things are different by role-modeling the behaviors themselves.

For example, instead of just sending out mass emails, holding mini town-halls or having lunch with a few employees at a time can be a more effective way of communicating and of demonstrating new critical behaviors. Or using more “digital” communication tools such as Slack or Whatsapp may prove to be better at engaging a diverse employee base.

5. Make it a journey, one step at a time.
Going through a culture change is never easy. While changing behaviors is critical, it needs to be done at a pace that employees can keep up with.

According to the Global Culture Survey, 70 percent of respondents said they preferred small incremental changes over large revolutionary changes in their organization culture.

This is not surprising, as we all innately know that change is difficult, and transformational change even more so. Even in a large transformation, it is important to break down the change into bite-sized chunks focused on instilling the right behaviors. This gives everyone a chance to try new actions, new ways of working and ways of communicating to reflect the critical few behaviors.

At PwC, we have been undergoing a digital transformation for the past couple years, and while the goals are transformational, the most important part is that we take these steps together as an entire firm by involving each and every employee. This allows our staff to get comfortable with and excited for what’s changing.

Once employees get comfortable with the initial activities of change, it is important to gauge the effect of the change and employees’ digital readiness for the next step. This readiness helps understand the pace to which the workforce will react positively and get involved to create a lasting impact on the culture.

Conclusion

Digitization is more than just an exercise of implementing new technologies. It’s an opportunity for IT organizations to take the lead on reshaping how their companies do business - and the cultures that enable it.

For more on how to harness your organizational culture to accelerate your strategic goals, check out The Critical Few, a practical guide that lays out The Katzenbach Center's proven methodology for cultural evolution.