Digital Transformation is Cultural Transformation
Michael Wong Shen Kai, Senior Manager, Digital Transformation Office, Sarawak Energy
Michael Wong Shen Kai, Senior Manager, Digital Transformation Office, Sarawak Energy
Digital Transformation (DX) - the buzzword that excites business leaders and organisations about its potential. However, despite this enthusiasm, low digital adoption rates and unclear digital value realisation often leave business leaders scratching their heads, wondering what went wrong.
In fact, a 2021 Boston Consulting Group (BCG) research involving 850 organisations worldwide found that only 35% of organisations achieved their digital transformation objectives. Furthermore, digital transformation a top priority on corporate agendas for at least a decade, with global spending on digital transformation expected to reach USD 3.4 trillion by 2026, according to IDC. Despite this significant investment, why are two-third of organisations still struggling?
A few observations can be made regarding the ill-conceived digital transformation we see in the market today:
• Customer/employee experience journeys are not being prioritised and optimised.
• Organisational culture and business processes improvement are not being considered for digital adoption and assimilation.
• Initiatives tend to focus on siloed incremental improvements that are limited to specific functions or departments.
• There is a sole focus on short-term financial metrics gains without considering the long-term impact on customer/employee needs, as well as market conditions.
• Prioritising technology advancement and deployment over user digital adoption
Did you notice that none of the points mentioned above are related to technology? Most organisations fail because they are looking at Digital Transformation as something to be addressed and resolved through digital technology enablement, while their employees still struggle to answer questions such as “Why change when it’s not broken?” and “What does it mean to me as an employee?”.
Digital transformation transcends technology, as organisation culture plays a critical role in successfully leading an organisation through the transformation journey. However, only a few organisational leaders understand how an organization’s culture changes as part of the digital transformation journey and more importantly, how it doesn’t change. Failing to comprehend employee values, beliefs, and cultural attributes, such as behaviours and mindsets, becomes the biggest barrier to achieving digital transformation success.
So, how can organisations effectively transform their culture to move beyond their current fleeting and disjointed transformation efforts and ensure sustainable digital transformation success?
Start with WHY
Business leaders must assume the role of being ‘digital evangelists’ during digital transformation, effectively communicating and articulating the “WHY” behind the transformation in a persuasive, persistent and convincing manner.
People are more likely to embrace change when they have faith in their leaders and understand their visions, enabling them to take ownership and champion the necessary changes throughout the organization. Therefore, it is important for business leaders to dedicate time to consistently and persistently articulate the “WHY” behind the transformation. This should be done with openness, clearly explaining what the transition means for employees as they transition from being digital laggards to being digital advocates.
Cultures play a crucial role in digital transformation by providing a foundation that enables organisations to adapt to sustainable change through innovation and agility
Digital Transformation success is rooted in CULTURAL ATTRIBUTES
While each transformation journey is unique, research suggests common cultural attributes for organisations that achieve success. These attributes include transparency, accountability, adaptability, and a willingness to take risks. Although a cultural shift might begin at the leadership level, it is crucial that these cultural attributes become adopted as norms and behaviours within the organisation’s core values, aligning with its vision and digital strategy. Without this alignment, the true value of digital transformation cannot be realised. Cultures play a crucial role in digital transformation by providing a foundation that enables organisations to adapt to sustainable change through innovation and agility.
It's not being done TO THEM; it’s being done WITH THEM
Digital transformation initiatives are most likely to fail when organisations fail to adequately consider how customer and employees will respond to and adopt the technology capabilities. Transformation undeniably involves change, and humans tend to resist change when it makes them feel isolated, left behind, or redundant. The value of digital transformation will only be realised if it is designed around people and constantly adapted based on their experiences. Organisations should develop an enterprise change management approach that includes continuous assessment of the organisation. A proper change management programme helps the workforce embrace digital adoption of new technologies while aligning with business processes. It ensures that employees are personally involved in reimagining the digital experience as part of the overall digital transformation process.
Build SUSTAINED digital transformation
Successful and enduring digital transformation does not occur in silos. It requires the support of a digital culture that embraces change, collaboration, innovation, and continuous learning. Organisational leaders are expected to be committed and aligned throughout the entire transformation journey. They serve as ultimate advocates for sustained change, delivering on-going hands-on support through day-to-day leadership. Lastly, organisations need to consider how the new technology will seamlessly fit with all other components of the employee experience and organisational culture. This harmonious integration is essential for driving sustainable digital transformation.
Ultimately, a human-centric approach to digital transformation is the most effective, and realistically, the only way to achieve your digital transformation goals. This approach involves transforming the organisation's culture to become adaptable, customer-centric, collaborative, and innovative. In the end, digital transformation is only 20% technology; the remaining 80% revolves around people. It is a journey undertaken for your people and achieved by your people.
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