Digital Transformation is Cultural Transformation

Brian Scott shares what you need to know in order to have an equal balance between cultural change and digital transformation.

By: Brian Scott, President, ClearTone Consulting and Partner, Techmatch.co – a consultancy supporting digital acceleration within associations, B2B Media firms, and event organizations.

Digital transformation is not just a fanciful buzzword, it’s now an actual, critical activity for organizations that have awoken to realize the world has changed faster than they have. This painful awareness may be evident nowhere as much as within the exhibitions and meetings industry. According to those that measure things like this, the hardest part of digital transformation is the need for cultural change. Changing employee’s beliefs, work habits, processes, and communication tools takes a concentrated and dedicated effort by leadership and the transformation team. Unfortunately, digital transformation initiatives focus all too often solely on technology, which is a primary reason many transformations fail. Experiential evidence supports that three areas must be worked in an equal balance: People, Processes, and Technology. It’s with intent I list people first.

It’s worth exploring why it is so difficult to change an organization’s culture. According to scientists, humans have been identified as the most adaptable of species. Surprisingly, many scientists believe that the earth’s climate dynamics have played a significant role in our species’ development of adaptability. So, if we’re at the top of the adaptability food chain, why does change within the work environment appear to be so difficult? Data suggests that humans fear or are uncomfortable dealing with unknowns. The social, cultural and cognitive sciences all demonstrate that people will move away from things they perceive to be risky and unknowns certainly present risk to most of us.

Think about it. One of the most difficult periods of any person’s career is starting a new job. They find themselves fully surrounded by unknowns. They don’t know the people, the products, the systems, the communication norms. Remaining in this state of the unknown can be extremely stressful if it lasts for too long. In this light, introducing significant change within an organization is like asking all employees to voluntarily become “new employees” again, and all at the same time! Then, when we time this request of our employees to occur at a time of unprecedented industry, economic, and societal dynamics, it’s no wonder this is our biggest challenge within digital transformation.

To have any chance of success, it is imperative leaders understand this challenge and begin with some honest introspection regarding the organization’s baseline before sculpting a strategy. Some important questions for organizational leaders are: What do employees believe about change? How does leadership communicate their own willingness and interest to change? How does leadership demonstrate support for change and experimentation? What really happens when staff bring up new ideas? What happens when new experiments are attempted, but fail? How do peers treat others that are the change agents? What kind of behaviors are celebrated within the culture? What are the expectations for how often any given team is changing their procedures?

To change an organization’s culture, people must first understand what they believe and why. If we haven’t identified how we got to where we are, how should we expect that we can effect lasting change that will stick? In addition, leadership must communicate in a more transparent manner about the direction of the company and the critical need for transformation. Staff must truly believe that pursuing a new path, even one that is not formally understood at the beginning of the process, is an absolute necessity for their company to survive. They should be able to envision how a culture that supports new ideas from staff members, experimentation, failing fast, quick pivots, and agile work processes is the way business is conducted today. Any legacy fear of retribution or misunderstanding from peers or leadership for trying to blaze new trails will be detrimental to success. A formal, iterative experimentation culture needs to be nurtured until it becomes a core attribute of the organization, withstanding attrition at all levels.

Leaders within most organizations were hired into their positions due to their knowledge of the marketplace, finances, or product strategies. Few have the background and necessary experience to conduct organization-wide cultural transformation much less procedural and technology transformation. This is not an indictment of presidents and CEO’s, it’s an observation of an understandable situation. We all need to lean on external expertise for specific needs and leverage their objectivity, willingness to envision new paths, and daring to help us leap into unknown possibilities.

But what about dealing with that natural, innate fear of risk that lies deep within all our staff? The shift starts once everyone realizes that in this digital world, the biggest risk is not taking risks. I’m going to say that again because it’s simply that important. THE biggest risk is NOT taking risks. Period. Through education and effective leadership, staff should be convinced that not changing is what they should fear. Only then will the doors open to explore the new models of business that currently lie dormant and ‘just out of sight’.

Of course, as you would imagine, these concepts are all supported in research data. Mckinsey found that roughly one third of the variance in performance among companies in the same industry related to their ability to develop and sustain a culture that embraced digital objectives. Now is the time for leaders within associations and event organizations to step up, rip the band-aid off, and embrace digital transformation for the very future of their organization, customers, staff, and brand.  

I completely agree with and support our innate aversion to risk. It can be terrifying and may lead to certain doom. In today’s world, that risk is best described by Newton’s 1st law: An object at risk will remain at rest until acted upon by a force. Do you see the all the forces out there? Remember, the biggest risk is not taking risks. 

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