Culture Shift – the practical key to digital transformation
Digital transformation is a complex challenge facing almost every modern business. Whatever sector you are in, whether you manufacture products or provide services, whatever continent you operate on, the digital world demands a new approach. The shift to that new approach is digital transformation.
But wait. That sounds too simplistic. Too theoretical. Too obvious. Exactly. The moment you try to implement digital transformation in practice, you realize that this is not all about having a slick website or popular customer app (although it’s absolutely fine to have those!).
Digital transformation affects the whole organization, potentially changing how it operates on every level in response to the world we live in.
What is Digital Transformation?
The phrase digital transformation often goes hand in hand with words such as agile, efficient, creative, user-centric, customer-oriented… and these are all good descriptors of a digital transformation process or project but what exactly is being transformed, and how?
At Boldare, we approach digital transformation from a primarily practical perspective. As such, we view it as a two-part concept:
- Digitization – the move from analog to digital in your products and services (for example, the shift from a customer service phone number to an online AI-powered chatbot to answer queries).
- Digitalization – using digital technologies to update and streamline your business model and processes.
One is external-facing, a transformation of how your customers or clients experience your products and services; the other is internal, focused on improving how you operate ‘behind the scenes’.
The key is to remember that in terms of digital transformation, both these practices are essential components. The Boldare approach covers both bases.
Yes, we work with clients to ‘digitize’ by creating high quality digital products, but we also bring our know-how to the table, benefiting the client with our practical experience of how organizations can fit into, and thrive in, the new digital business reality.
Before you begin, the idea of these transformations may sound drastic and all-encompassing (even overwhelming) but in our experience, these transformative processes often grow from a single seed, such as the introduction or updating of a single customer app.
Your digital transformation may be driven by one of various factors – customer or user expectations, changes in society, economic realities, a disruption to your sector or industry, or just the unstoppable ‘digital era’ in which we find ourselves – but the ultimate goal is always optimization, of the customer experience, of your business processes, of your digital fitness for purpose.
Digital transformation in a VUCA world – the outside influence
We all know it’s a complicated world and not getting any simpler but it’s more than that. Originally a military concept, VUCA is commonly used for the modern business world and stands for volatile, uncertain, complex, and ambiguous which is a comprehensive way of saying ‘extremely complicated’.
Against this external backdrop, any business practice, process or project must tread carefully – simplistic strategies don’t tend to work well in a complex environment. Any approach must be nuanced and start with a deep understanding of where you are, where you wish to be, and what exactly must be overcome along the way.
In a digital transformation, it’s all too easy (and tempting) to focus on the technology aspects of the change: What’s possible? What are we missing? What would work for our customers? and so on. However, technology is a surface issue (remember, digitization is only half the process here).
A genuine transformation must address the obstacles to change, such as internal inertia, legacy systems and processes. In other words, your existing business culture. In fact, the PwC report, Industry 4.0: Building the digital experience, cites a “lack of digital culture” as the biggest challenge facing companies right now.
What exactly does a “lack of digital culture” look like? The following points might indicate where you have work to do…
- Innovation, risk-taking, new ideas and disruptive thinking are uncommon among employees.
- Decision-making is a slow process, and few decisions are based on data and analytics.
- Managers and teams tend to work in silos; cross-functional collaboration is rare.
- The company is inward-looking, with few or no external partnerships.
- When faced with a challenge, the digital option is rarely the default.
- Customer needs are not at the heart of your business strategy.
Does that sound familiar to you?
Cultural change for digital transformation
The PwC research ties digital transformation closely to culture. Whatever we do towards digitization and digitalization has an impact on corporate culture, and whatever we do to change the culture will have an impact on digital transformation – there’s no separating the two and at Boldare, we’ve found that culture is a highly practical lens through which to view (and guide) the transformation process.
The idea of the organization as a complex social system (as opposed to being a kind of tribe or machine) began in the 1960s with sociologist, philosopher and systems theorist, Niklas Luhmann. With this perspective, organizational culture, as the summation of your internal processes, policies, attitudes, successes, failures, ways of working, company legends even, cannot be directly changed or influenced. True culture change comes from decisions and changes regarding the factors that contribute to your overall culture.
- Programmes – your business vision, strategy, policies, pricing, etc.
- Communication channels – your organizational structure, hierarchy, roles & accountabilities, regular meetings, comms tools, etc.
- Personnel – not your employees but rather the qualifications that they possess, and the potential career paths open to them.
Any decision or change to one of these three elements has an impact on your organizational culture (the system). But what does that look like in practice?
Digital transformation for real – our clients’ experiences
Currently, Boldare is involved in a number of digital transformation projects and details from one of these projects are useful to illustrate how the way in which we have built products together has driven the digital transformation process.
One of our clients undergoing digital transformation is definitely operating in a VUCA world, facing rising costs, legislative pressures, and a changing global business environment. Their digital transformation is well under way, however, the whole process began with work on scaling a single digital product.
The very first project we delivered together was strongly focused on the client’s customers. We worked in close cooperation with the client partner’s teams. Both sides followed the agile principles and scrum processes of digital product development with clear roles and responsibilities, and maintained full comms transparency while producing a product increment every two weeks. As a result, we created an MVP of an app that was widely acclaimed by the client’s customers - a digital product that continues to be developed.
As this first project continued, we started a second one, developing an a mobile app for one of the client’s core business services. Again, as we continued this digitization of the company’s services and customer experience, we followed principles of transparency and close collaboration. However, with two projects ongoing, a more strategic approach was necessary to synchronize iterations and project management.
A third product followed and faced with managing multiple development projects, the client and Boldare developed a common roadmap and a single backlog of tasks for all three projects. Ultimately, as a consequence of this more strategic approach, we assembled a joint R&D team to take the lead on further product development, including recruitment of employees with skills new to the organization.
In summary, we had:
- Three teams building three products, at different stages.
- The same processes and full transparency for all three.
- An interdisciplinary R&D team of people from both the client’s side and Boldare (50:50).
- An aligned strategy and methodology throughout.
- Steady, incremental growth
The process of transformation now includes both digitization and digitalization aspects and has so far been logical and organic, growing steadily and consolidating various inputs and changes to the three elements of the organization as a system: its programmes, its communications channels, and its personnel.
One of the biggest benefits of this kind close collaboration was that the client could take full advantage of our resources, knowledge and experience of development processes, bringing that expertise into their company and making it their own. We are proud that we could offer this kind of knowledge transfer, and our partnership continues to be beneficial for both sides.
Digital transformation – the big picture built on practical details
Faced with an increasingly complex world, in which consumers and customers increasingly insist on digital interaction and convenience, all businesses are faced with the need for digital transformation sooner or later. However, this is not just a challenge for your IT department or outsourced technology supplier.
Digital transformation is a change that affects the whole organization – the whole ‘system’ – and because of that, simply adding new technology is not enough.
Digital transformation relies on a cultural transformation and that depends on key changes to the ‘programmes’ on which your organization runs, the way in which you communicate internally and externally, and on the skills and competences you are able to access.
Above all, digital transformation is a journey towards fully leveraging the possibilities and opportunities of new technologies and their impact faster, better and in more innovative way. But, as the saying goes, a journey of a thousand miles begins with a single step. Start small and be aware of the broader impact of each digital project.