Why is digital transformation hard? Because it goes against the grain of established ways of working and is a threat to management practices that have existed for decades. It is therefore not surprising that the top challenges that slow down digital transformation are much deeper than just resistance to technology. Whether you’re starting up a transformation initiative or trying to re-energize an on-going one, the first place to look is in the work culture of your organization.
I have explored obstacles to digital transformation in my online surveys with organizations around the world over the past nine years. I have grouped the toughest ones – those considered to be serious and holding us back — into five categories:
- Decision-making: Slow or stalled decision-making caused by internal politics, competing priorities or attempting to reach consensus.
- Value perception: Inability to prove business value through traditional ROI calculations, resulting in lack of senior management sponsorship.
- Rethinking work: Too much focus on technology rather than willingness to address deep change and rethink how people work.
- Reality awareness: Lack of understanding operational issues at the decision-making level and difficulties when going from theory to practice.
- Fear and control: Fear by management or central functions about losing control, and fears that employees will waste time on social platforms.
Work cultures either accentuate or alleviate these obstacles. By work culture I mean the underlying assumptions and expectations about how people interact and get things done. The 2014 survey participants rated their internal work cultures on a scale of 5 to 1 for the following opposing characteristics:
- Strong, shared sense of purpose vs. weak, inconsistent sense of purpose
- Freedom to experiment vs. absolute compliance to rules and processes
- Distributed decision-making vs. centralized, hierarchical decision-making
- Open to the influence of the external world vs. closed to the external world
These characteristics are not mutually exclusive, obviously, but data show that organizations tend to be stronger in one area rather than the other three. Out of 280 organizations, 93 indicated the highest level for only one of the four characteristics. 17 indicated the highest level for 2 or 3 of the characteristics, and no one indicated the highest level for all 4. This lack of overlap lets us refine our understanding about which characteristic alleviates or accentuates which obstacles.
A strong, shared sense of purpose alleviates many obstacles, especially those of internal politics.
A strong sense of purpose alleviates political resistance: people are moving in the same direction driven by shared values. A low sense of purpose makes it difficult for people to come to agreements and decisions. They are 5 times more likely to face obstacles from internal politics, 5 times more likely to be concerned about employees wasting time and 3 times more likely to suffer from lack of senior management sponsorship than organizations where there is a strong, shared sense of purpose.
Freedom to experiment helps prioritize, make decisions and rethink work.
Freedom to experiment helps organizations prioritize. When people are not free to experiment or take initiatives, it is difficult to consider different ways of working. Without experimentation, there is little basis for prioritizing and making decisions.
These organizations are twice as likely to suffer from hesitation to rethink how we work and twice as likely to be held back by fears by management of losing control.
Distributed decision-making gives people at the edges of organizations a voice in digital transformation.
Organizations with distributed decision-making rarely face resistance to rethinking how they work. In contrast, centralized decision-making places control in the hands of people the least likely to be in touch with the reality of the edges — the front lines where people interact with customers. Far from operational issues, they worry about losing control, and are more comfortable talking about issues such as technology — which is important but not core to transformation. Fears about people wasting time will justify the need to keep tight controls. They are three times as likely to resist rethinking how they work. This is the single most negative work culture explored in the survey.
Organizations that are responsive to the influence of the external world are more likely to understand the value digital can bring.
Organizations that are open are more exposed to what is happening in the external world. People throughout, including senior management, are better informed, and this broader perspective helps them focus on their own priorities and be clear on ROI. Organizations that are closed to their external environment are twice as likely to report obstacles of competing priorities, slow decision making, hesitation to rethink how we work, no strong business case, ROI or proven value.
Digital Transformation —“Freedom Within a Framework”
A single individual can trigger change, but if other people do not get involved little will happen. Organizations whose work cultures show one or more of the four characteristics discussed earlier have a balance between individual freedom and organizational agreements. People are digitally enabled and organizational processes already are or are becoming collaborative and social. They also treat the digital workplace as a strategic asset — with senior level involvement, appropriate guidelines and governance. This balance between individual freedom and organizational strategy is conducive to digital transformation: it means people can engage with confidence in experiments and initiatives.
If you want to nudge your work culture towards one or more of the four work culture characteristics discussed here, consider establishing the strategic principle of freedom within a framework. The trick is to figure out how much freedom and how strong a framework. Each enterprise must find its own answers to these questions, and understand that the balance between freedom and framework is fluid. Times of crisis may require a stronger framework; periods of market changes may require greater freedom.
Exhibits with data relevant to this post can be found on http://www.netjmc.com/digital-transformation-and-work-cultures/
About the author:
Jane McConnell (NetJMC), based in Provence, France, is an independent digital strategy advisor and analyst, who works primarily with large organizations headquartered in Europe. www.netjmc.com.