DCI Consulting Article

Culture Evolution to Ensure the Success of Digital Transformation

by DCI Team | January 5, 2024

If you are prepared for Digital Transformation, then… Possibly NOT! While the rewards are substantial, the cost in time and money to initiate it is enormous, and according to the McKenzie Digital “Unlocking success in digital transformations” study, the majority of the initiatives they surveyed had success rates between 4% and 11%, and up to 26% in the Tech industry… and those numbers are HORRIBLE!

However, according to a separate study conducted by the Economist Intelligence Unit, those who have successfully implemented digital transformation achieve profitable results in as little as two years, and 72% of respondents agree that a change in organizational culture is necessary for the success of a digital transformation initiative. Hence, IF YOU GET IT STARTED, IT WILL PAY OFF!

But WHY do the majority of digital transformation initiatives fail?

If they do culture change, organizations frequently launch their culture change initiatives concurrently with their Digital Transformation initiatives… The majority of the time, the culture is Unprepared! Without a “evolved” organizational culture, everything fails when there is too much to do. And, if their culture change initiatives are directed from the top down, they are almost undoubtedly doomed to fail.

However, the solution is neither intricate nor costly. In order to determine if your organization’s culture is aggressive and nimble enough to get over the Disruption Responsiveness barrier, the first step is to conduct a comparative analysis of its current state.

There are 5 Levels of Culture Evolution (see the Ultimate Guide to Leading Organizational Change for more information):

  • The Blame Culture — little trust, people wait to be told what to do, and little cooperation or innovation.
  • The Multi-Directional Culture — people are cliquish within their departments, but low trust and cooperation with management or other departments.
  • The Live and Let Live Culture — things get done but people are complacent and lack passion and creativity.
  • The Brand Congruent Culture — people believe in the product or service and support each other to expand on it. Innovation and passion is supported through processes, management, and culture.
  • The Leadership Enriched Culture — leadership is the role of everyone, and most are firm believers in the brand and the organization. Being creative about building the business supports excitement and people feel a sense of ownership.

Digital Transformation necessitates an adaptable culture with an established sense of trust. For a Digital Transformation initiative to be successful, the Brand Congruent Culture is the minimum culture evolution requirement.

The reason why the majority of organizations that undertake digital transformation fail is because their culture has only reached the Live and Let Live stage. And that is generosity! According to the 2017 DCI culture evolution study, 61% of organizations are still in the Blame Culture. 9% of organizations reach the Brand-Consistent Culture and 4% reach the Leadership-Enhanced Culture. Which corresponds with McKenzie’s success rates.

How do you know if your strategy for your culture evolution initiative is effective?

To evolve to a Brand Congruent culture, you must cultivate the proper psychology, and there are three psychological factors that support a sustainable and agile evolved culture.

  1. A stakeholder (employee) created set of guiding principles (behaviors) to ensure a great culture for all to succeed in.
  2. A systematic way to support people to express and personally feel their value to the organization and its objectives while applying their desired set of behaviors.
  3. A measurement system to measure the and visibly communicate the No 1 and No 2

So here are the 5 steps to take BEFORE Digital Transformation

  1. Benchmark your current organizational culture evolution! This is done with the OCEAN Culture Evolution Assessment. You will need perspectives from a minimum of 20% of the organization at different levels (Senior Management, Middle Management, and non-management) to get a usable understanding.
  2. Identify the gaps from where you are to where you need to be (unless you are already at Brand Congruent Culture or better).
  3. Share your results and culture goals with everyone. Include the description of what the Goal Culture will be like. See: The Ultimate Guide to Leading Organizational Change
  4. After 4 to 6 weeks, test the culture again to see progress and compare the graphs and evolution improvement. Share the progress and how ready (or close to ready you are). Sharing the measured progress supports motivation and excitement that the people are achieving the results they have set out to achieve.
  5. Begin your initiative with the above 3 factors in mind. Get the “Key Influencers” and everyone involved in feedback and implementation for making it happen. Also look at the article on One of the root causes Trust Fails in organizations to support the initiative.

There are 3 elements that are essential for success in this step:

  • It must be a top guided, Bottom-Up initiative
  • Desired behaviors must be measured often to show progress (see: www.squadli.com)
  • The people of the organization must see fast results to maintain momentum

To succeed in a specifically in a Pre-Digital Transformation Culture Change Initiative, the behaviors should be related to:

  • Innovation
  • Agility
  • Proactive actions
  • Fast decisions
  • Active trust (trusting people even if you don’t really trust them)
  • Synergizing/Leveraging with people who have different Ambiguity Relief Processes (Genetic process of getting clarity)
  • Short impactful meetings
  • Open communication (Identify and relate Communication process: www.coloredbrain.com)
  • No Blame (see www.noblame.zone)

Every reform initiative encounters opposition… People do not resist change, however. Imagine someone knocking on your door and handing you $10,000,000 to alter your life… Most likely, you will not respond, “No, I’m fine!”You will likely accept the money and accept the change.

People resist “Stupid Stuff” if they believe it will not benefit them or will only make their lives more difficult. But when the people create the culture in a bottom-up initiative guided from the top, they own it and create the change they desire. It is about creating a Clear, Supportive, Trusting, and Fun working environment where they can “feel” personally successful in the process of attaining organizational objectives, not about a higher salary (this should be predefined just in case).

Once the people are on board, enthusiastic about the possibilities, and believe they can visibly contribute to the organization and its brand… You are prepared to launch the Digital transformation initiatives.

You have just increased your chances of Digital Transformation success by 300%

NOTE: Evolving an organizational culture to a higher level has lots of moving parts, but in our experience in doing over 30 Organizational Culture Change initiatives… as long as the criteria is met (see the Ultimate Guide to Organizational Culture Change), and it is initiated and implemented in a very short time, it AWAYS works and it is always sustainable. More on our Organizational Culture Change Programs Here

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