Click to learn more about author Deborah Soule.
This is the fifth part in a series of articles on digital transformation. Read Part One titled Where is Your Organization on the Digital Transformation Journey? Part Two is titled Stages of Transition in Becoming a Digital Organization. Part Three is titled Learning from the Cultures of High-Performing Digital Organizations. Insights Into the Cultures of High-Performing Digital Organizations can be found here.
Changing how an organization thinks and behaves can be a hard and slow process. This means that the rate of change in technology always outpaces the rate of change in organizations. But as digital technologies affect different spheres of activity, organizations will need to adapt and fluidly reconfigure skills, relationships, and operations to address those digital influences.
Culture is the sum of values, attitudes, customs and beliefs that distinguishes one group of people from another. In societies, culture is disseminated through language, material objects, rituals, institutions, and art, and similarly is transmitted from one generation to the next.
In organizations, culture comprises the shared values and practices that focus collective attention and engage individual effort, and help an organization succeed in its chosen environment. When ways of doing things seem to work well over time, people start to take them for granted, and implicitly teach them to newcomers as the right way to think and act “around here.” Culture can be evident in visible artifacts like logos, dress code, and workplace design. It also aggregates invisibly in taken-for-granted values, unspoken attitudes, and unwritten norms that have benefited the organization in the past.
The good thing about culture is that it provides coherence and continuity even as the individuals within an organization come and go. It helps the collective of individuals act as one. It shapes and guides collective attention, energy, and effort, enabling an organization to function efficiently and effectively in a known environment.
Environments change, however, and so organizational cultures need to evolve to remain effective as the organizational environment changes. The challenge is that culture – shared but also subconscious – can be hard to change. Like fish in water, insiders cannot easily see the culture in which they operate. Beliefs, values, and norms cannot be questioned when they are no longer explicitly acknowledged. Newcomers who try to examine assumptions or offer countercultural ideas may face resistance and an uphill fight. So, culture is often associated with stability and maintaining the status quo.
But is it possible that an organizational culture can be associated with change? Where openness to novelty and speed are central values? Can we learn from the cultures of successful digital companies? Do they have a different kind of culture that helps them to perform in today’s digital economy? And can this kind of culture be cultivated elsewhere?
Research suggests that the answer to all these questions is yes.
In the first phase of our research, we aimed to characterize a “digital culture” in terms of values and prominent behavioral practices. That research highlighted a set of four values that are common to many high-performing digital organizations. These are:
- Impact: They value having big aspirations to change the world, one customer at a time, and using technology to get there.
- Speed: They value an action orientation, preferring to move fast and iterate rather than waiting to have all the data or all the answers before acting.
- Openness: They value open and broad engagement with diverse sources of information, rather than being secretive or selective in seeking and sharing information.
- Autonomy: They value having high levels of discretion to engage flexibly in productive and experimental activities more than relying on controls and formally structured coordination.
We also identified a common set of digitally-enabled practices in these organizations, practices that reflect their values in action (i.e. values-in-practice). These include:
- Rapid experimenting: Constantly and systematically (e.g. A/B testing) experimenting, learning from the results, and quickly applying new insight.
- Self-organizing: Collaborating fluidly across functional, geographic, and organizational boundaries to solve complex problems and get things done.
- Driving actions and decisions with data: Collecting and using accurate data to make decisions, solve problems, and design solutions that can scale rapidly and economically.
- Obsessing over customers: Intensively focusing on and quickly addressing the stated and unstated needs of both current and potential customers.
- Focusing on results: Being accountable for achieving goals and continually striving for measurable results that really make a difference to customers.
In sum, a “digital culture” is one that enables rapid adaptation and innovation in fast-changing technological and competitive environments. These values and practices sustain organizational coherence and continuity in the face of digital’s transformative possibilities and, at the same time, enable the inevitable, ongoing change required of the organization.