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According to International Data Corporation (IDC), businesses around the world are expected to spend nearly $2.1 trillion by 2021 on digital transformation, including investments in mobility, data, and cloud computing, among other technologies. In fact, by 2020, 60 percent of all enterprises will be in the process of implementing an organization-wide digital platform strategy.
All of this comes with an important caveat.
“While we are seeing more companies becoming more digitally capable, there is a widening gap between leaders and laggards, with significant implications for those organizations that cannot make the transition to a digital-native organization,” said Shawn Fitzgerald, research director, Worldwide Digital Transformation Strategies, IDC.
To successfully make that transition often requires creating a digital-first culture, which not only prioritizes digital channels and methods but also ensures that employees are informed and empowered to face these changes.
“The underlying meaning of being digital first is to foster a team that is digitally fluent and customer-focused,” says Janice Liu, Vice President of Digital Solutions at Cossette. “Digital-first teams prioritize digital experiences and try to build cohesive, connected experiences that deliver real business outcomes.”
How do you get there? Let’s take a closer look.
“Digital First” Has to Come From the Top Down
Are you (or your boss) the type that complains about “kids staring at their phones”? Do you think social media is strictly a Russian propaganda tool?
You’re going to have to open your mind to new ideas.
“The CEO is the curator of an organization’s culture,” Satya Nadella, Microsoft’s Chief Executive Office, wrote in his book Hit Refresh. “Anything is possible for a company when its culture is about listening, learning, and harnessing individual passions and talents to the company’s mission. Creating that kind of culture is my chief job as CEO.”
It’s up to you (or your boss) to set the tone when trying to build a digital-first culture. The clearer you are about your expectations and what you hope to achieve, the less resistance you will encounter.
“Executive leadership is highly important because culture bleeds down. Always,” Liu says.
Do Your Homework
The companies that successfully adopt a digital-first culture start by conducting extensive external and internal assessments.
Where is value created? What assets do you have? Compared to industry leaders, what do you lack? You will have to answer these questions and more.
Cosmetic giant Estée Lauder, for example, adopted a digital-first approach involving: social media influencers; virtual reality makeup tests; and beauty consultants on Facebook. They looked at the assets and channels available to them, analyzed what their competitors were doing, and then gave their customers something of real value. They even realized where they fell short in the skills department, and sent teams to BrainStation for digital skills training. All of this has helped increase the company’s share price 60 percent in the last year, and put them in a good position for the future.
Essentially, you need to know where you stand to understand where you need to go.
Don’t Be Afraid to Be Bold
Building a digital-first culture often requires changing the core of your business. McKinsey recently compared the process to someone looking to strengthen their core muscles, “the central set of muscles that helps a body maintain its power, balance, and overall health.”
From an organizational structure, this means having to rethink your value proposition, marketing strategy, internal processes, and technology. This kind of change requires a measure of boldness, and evidence suggests that the companies that do best follow strategies that are “bold and disruptive.”
You don’t have to look further than your living room for a good example: Netflix started as a company that mailed DVDs. They then transitioned to a streaming subscription service, which led to them becoming a global entertainment company spending eight billion dollars on original content.
Get Your Managers On Board
If you really want to build a digital-first culture, you’ll need to get your managers on board.
They will need to be ambassadors for change throughout your company, helping people who may feel threatened or uncertain, and there will be people that feel that way. According to a Microsoft study:
- 49 percent of employees fear change when digital initiatives are introduced
- 59 percent are concerned about job security where automation is discussed
- 39 percent feel anxious at the introduction of new technology
This kind of uneasiness can also apply to your managerial group. The key is to highlight the importance of digital initiatives, and how “digital” intersects with the work of staff across the organization.
“I think it always comes down to a shared vision and how the change will benefit the business, the employee, and the employee experience. These need to be highly defined and well-articulated for Managers to be able to translate and empower their teams to embrace these changes,” says Liu, adding that empathy and openness are required when changes occur.
“Being accessible and open to questions is also really critical in helping employees feel like there’s thought being put into changes.”
Focus on Process and Habits
A 2014 report found that “the history of technological advance in business is littered with examples of companies focusing on technologies without investing in organizational capabilities that ensure their impact.” Basically, it’s not enough to adopt new technology if you’re not also changing the way you work.
After all, “culture is simply a shared way of doing something with a passion,” as Brian Chesky, the Co-Founder and CEO of Airbnb, once said.
Building a digital-first culture will often involve reviewing and changing everyday practices and processes. Consider the case of ING, who, while transforming itself into a digitally focused organization, cut out a layer of middle management. They now have senior leaders setting high-level strategy, will smaller teams free to handle execution. The result is a much more agile organization that can evolve at a quicker pace.
While this kind of shift isn’t always possible, almost every aspect of your business can be reviewed and improved with new technology, software, or ideas. Sometimes simply implementing Slack or a project management tool like Asana can be enough to set certain expectations.
You can also experiment with all-hands meetings, hackathons, and lunch and learns, which can encourage creativity and collaboration in pursuit of new processes and ideas.
Put an Emphasis on Continuous Learning
Creating a culture of continuous learning, with a focus on digital skills training and development, is a great way to show employees that you care. That, believe it or not, can be your secret weapon.
“Companies that invest in their people, commit to their development and respect their ideas, build a loyalty that makes change management much easier to realize within the walls of the company,” he wrote.
This can be further encouraged when leaders make it a point to set an example.
“Admitting when there are areas they don’t know and not always having the answers are critical in showing they can talk the talk but also walk the walk. Putting in place learning opportunities and internal programs to help make learning accessible is also key in supporting and fostering this type of culture,” Liu says.
Take Your Time and Hire Right
“Finding the right partner that doesn’t just deliver the work but adds strategic value is difficult to find. Further to that, identifying the right talent to put together the optimal team structures to operate the new world is also challenging for businesses across the board,” Liu says.
But as Jessica Herrin, the Founder of jewelry site Stella & Dot once said, “shaping your culture is more than half done when you hire your team.”
So what do you do?
First, understand what you’re getting into. According to McKinsey, “most companies embarking on digital transformations underestimate how long it takes to build capabilities.” This is partly because they haven’t fully identified the problems that need to be solved. By clarifying and isolating your current pain points, as well as gauging your digital skills competency, you can identify the skill sets you need.
Secondly, you need to think about how you’re integrating new hires. As we’ve recently explored, it’s not enough to simply hire a Data Scientist if you have no idea what you want them to do. Focus on results, and understand what new hires need to succeed.
If this seems like a lot of effort, trust that it will be worth it in the end.
“I hope that it helps to strip away unconscious bias and push forward hiring processes that are purely based on the person’s potential, talent, and capability,” Liu says, adding that a digital-first culture can often help businesses attract even more talent, for one simple reason: “It just demonstrates progress and forward-thinking momentum.”