As businesses work to transform customer experiences and innovate their product and service lines, many are rightly identifying the need to overhaul internal procedures and operational processes too.
Despite the pressure to embrace digital transformation and innovation, the reality of becoming a truly innovative and digital organisation appears to be harder to achieve than anticipated.
A recent study by Capgemini and digital analyst Brian Solis has revealed that inflexible corporate cultures are holding organisations back.
In addition, the survey reveals a significant gap in perceptions between senior leadership teams and employees.
Of the 1,700 respondents across 340 organisations in eight different countries, 62% view corporate culture as the biggest hurdle to overcome in the process of organisational digitisation.
However, whilst 40% of senior-level executives consider their firms to have a digital culture, only 27% of the employees hold the same view.
So how can businesses tackle this lag in perceptions, and refresh their corporate culture?
Innovation in silos
It is important to recognise that achieving digital transformation requires buy-in from the entire organisation and should be approached hand-in-hand with driving innovation.
When reviewing their corporate culture, business leaders should be asking themselves: ‘does everyone in the business see innovation as part of their role?'
Successful digital transformation isn't the result of a one-off investment or project, and cannot be relegated to a specific digital or innovation team.
Digital enablement, customer centricity and innovative thinking must infiltrate all parts of the business.
We are seeing more interest in building innovation teams, projects and labs in major businesses across the world.
This can be viewed as a positive shift in the business community, which recognises the value and importance of shaking up established ways of thinking and working.
However, such projects and investments tend to place innovation in silos, and therefore fail to foster real change in the business.
To embed innovation within corporate culture, business leaders need to view innovation as ‘business as usual', rather than an isolated activity.
There needs to be a shift in the organisational structure and processes, which must be able to flex and adapt to enable innovation and digital change to occur on an ongoing basis.
Digital transformation is culture-driven, not technology-driven
The disconnect between senior-level executives and employees as revealed in Capgemini's report suggests that employees below the C-suite are not being fully involved in the digital transformation process.
If 62% of respondents in senior leadership positions felt they had a defined digital vision and strategy in comparison to just 37% of employees, it implies that the strategy is either being abandoned at the planning stage or its implementation is not trickling down and across the business.
A common trap business leaders fall into is the belief that digital transformation is a technology-driven effort.
Rather than focusing on the technology aspect itself, senior leaders need to consider broader changes to business processes and structures.
A starting point could be to review all job descriptions for new hires and make adjustments to include the ability to adopt new ideas, skills in capitalising on upcoming trends and lateral thinking.
Shifts in hiring processes can then be aligned with existing employee development and training programmes to empower current staff to fill skills gaps that are integral to digital change and innovative thinking.
Therefore, whilst digital transformation undoubtedly involves technological change, it requires a more fundamental shift to ensure the right skills and capabilities, in addition to budget and KPIs, are in place to support it.
It is also likely that changes to the structure of the senior leadership team will need to take place.
To ensure that a business is able to fully embrace innovative thinking and digital change, the right leaders need to be there to oversee the transformation.
For some businesses, this means appointing a Chief Experience Officer (CXO) to champion user experience from the top down.
For others, there's a need to counter an internally-focused, risk averse CIO with someone who will drive technical innovation and agility.
The incentives to innovate and embrace digital change are clear, from attracting the best talent to building a large customer base through improved customer experience.
And the biggest winners will be those that can successfully transform their culture and inner-workings alongside all the visible parts.
Article by Kristen Vang, Hatchd director