Due to the widespread use of mobile and connected devices, as well as the Internet as a mass form of communication, digitalization has become a particularly pervasive influence on culture. The omnipresence of digital technologies in the modern world means that the study of digital culture is not restricted to the internet or modern communication technologies. Digital culture in an organization is described as the actions, behaviors, mindsets, and values shaped by the emergence and use of technology. Basically, it refers to how digital and online technologies are shaping the way we behave, think, interact and communicate in the workplace. It defines the relationship between people and technology and is a product of the boundless persuasive technology that constantly exists around us today.
An organization with a strong digital culture uses digital tools and data-powered insights to drive decisions and customer-centricity while innovating and collaborating across the organization. When implemented purposefully, digital culture can drive sustainable action and create value for all stakeholders. Although it is clear that culture in itself cannot be ‘digital’, the adoption and usage of technology have proven to be a significant driver for human behavior and action and embodies shared values in the organization.
A digital organization refers to more than just having digital products, services, and customer interactions. It also includes powering core business operations with technology for higher efficiency, digital skill sets and capabilities of the people in the organizations, as well as building digitally-enabled business models that prepare the company for the future. Therefore, becoming a digital organization requires a fundamental change in the activities people perform, their individual behaviors, as well as the interactions with others across the business ecosystem. Digital business transformation is a strategic paradigm shift and, like any major transformation, it requires creating a culture that supports change while enabling the strategic direction for business. Embedding a digital culture within an organization requires a combination of methodology, discipline, and a human touch.
Ignoring or neglecting corporate culture risks the failure of digital business transformation initiatives. The proportion of companies that report breakthrough or strong financial performance outcomes from digital business transformation when there is a high focus on culture. Over 80 percent of companies that focused on digital culture reported sustained strong or breakthrough performance as a result of the transformation efforts. This creates a strong case to continuously foster a digital culture in an organization. Empowering people during the transformation journey can drive faster results overall. Breaking down hierarchical structures in favor of flatter ones with more distributed control and decision points will enable increased agility and a sense of ownership and buy-in to the change process. The digital culture also serves as a code of conduct, providing employees with clear guidelines and boundaries on what is expected of them during the change process. Additionally, the digital culture acts as a magnet for the new generation of workforce and fulfills the basic needs of the younger generation of people. It also prepares leadership teams to motivate, lead and manage this generation of digitally-savvy employees who favor greater autonomy, collaboration, and creativity in their working environment.
Organizational culture shows itself in behaviors, mindsets, and values of people in their daily practices – how they do things, make decisions, as well as communicate and interact with one another. Behaviors are more tangible and readily visible. Mindsets and values on the other hand tend to be more hidden, consisting of expectations, beliefs, and deep-rooted assumptions that are far less visible and obvious. Companies are able to influence digital culture by implementing and embedding specific organizational practices to drive targeted actions. For example, a company that wants to promote innovation could put in place a simple system to capture ideas and reward contributions.
Behaviors are more readily influenced by organizational practices than mindsets and values, which are deeply embedded into the individual psyche and developed through lifelong experiences and beliefs. Mindsets and values are also closely aligned with regional and cultural elements. A company that has a cross-regional presence, or global employee base will need to take into account the cultural and regional differences that play a role in the way the people work. In order to successfully implement any change or transformation initiatives in an organization, it is important to gain a deep understanding of the values of individuals and teams, as it influences sustainable behaviors. When individuals’ values are aligned with the values embodied in organizational practices, it creates an environment with strong psychological safety and a feeling of belonging.
Digital transformation or any form of change that is introduced in the organization acts as a threat to the psychological safety that may exist within the organization and will be met with resistance. This is clearly described by the analogy of the human body when a foreign element is introduced, such as a virus or even a new transplant organ. The human body will shift into survival mode in order to protect the equilibrium that exists in the current environment and release antibodies to fight the foreign element. This may manifest itself as fever and in some extreme cases, result in cancer where the white blood cells falsely attack the healthy red blood cells. Similarly, an organization is a living system that functions based on the existence of elements that interact and engage to keep the system going. A foreign element, such as a major change or organization-wide transformation, introduced into the system will be met with resistance, even if the potential outcome could bring benefits or prevent the extinction of the system in the longer term.
Maslow’s Hierarchy of Needs offers effective guidance on how to influence behaviors, mindsets, and values of internal and external stakeholders in the business ecosystem. As discussed earlier in this chapter, people are motivated by satisfying their needs and wants. Essentially, by gaining a deeper understanding of people’s lower-level needs on the pyramid (namely physiological and safety needs), organizations will be able to shift behaviors. For example, implementing digital business transformation initiatives, and addressing the uncertainties and changes impacting roles, job structures or even ways of working will influence behaviors in a positive way.
Similarly, addressing the upper-level needs on the pyramid (love & belonging, self-esteem, and self-actualization) will effectively influence mindsets. Aligning digital business transformation initiatives to core values and a shared purpose will go a long way in rallying the internal stakeholders toward strategic change. This will also reflect in the way the organization and its people interact with external stakeholders – customers, partners, and suppliers.
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