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Society for New Communications Research Blog

Feb
01
2017

Building a New Organizational Culture to Succeed in an Era of Digital Transformation

By Alex Parkinson

In October, 2016, The Conference Board hosted The Future of Digital Transformation and Innovation unConference in Brussels, Belgium. It was an interactive event using facilitated breakout sessions, informal discussion groups, live polling, and multiple social media channels designed to be an ongoing crowd sourcing dialog to help organizations better understand the concepts behind and the impacts of digital transformation and to succeed in their transformation journeys. A report of the event, authored by Charles Mitchell and entitled Beyond Technology: Building a New Organizational Culture to Succeed in an Era of Digital Transformation, is now available for download. Here, we summarize some of its key findings.

One of the key messages from unConference participants was that if you or your organization feel challenged by the disruptions caused by the new digital economy, you are not alone. While many business leaders believe that digital transformation should be a strategic priority, most organizations are continuing to struggle mightily on their journeys toward achieving it.

So what is holding us back? Among the biggest obstacles are lack of leadership commitment to digital transformation, failure to recognize a burning platform, competing priorities within the organization, lack of familiarity with digital technologies, talent and skills shortages, and laws and regulations that are outmoded.[1] Holding on to legacy processes and outdated mind sets are not going to help organizations get to the digitized Promised Land.

No doubt European business leaders are facing a difficult and complex set of challenges as the pace of digital transformation accelerates. There is risk and there is opportunity, and judging from the participants at the The Future of Digital Transformation and Innovation unConference, there is certainly excitement but also anxious concern about how to get it done.

Lessons from the day-long gathering

Beyond Technology presents 28 lessons learned from participants—too many to go into detail here. So, I have identified some of the most interesting for our SNCR audience:

  • The new digital economy is overturning fundamental business paradigms. This shattering of long-held business truths requires the re-engineering of business models and processes, as well as interactions with customers, employees, and other stakeholders. Six outdated business assumptions that are no longer valid and may be hindering your ability to be relevant in the new digital economy include: automation is mechanical; scale economies require physical capital; customization is not scalable; products, not their usage, must be priced; firm hierarchies dominate the market; and value is created by firms and consumed by fragments and unsegmented individuals. In the new digital economy, the opposite of these six long-held assumptions forms the new digital reality.
  • Four critical elements are combining to disrupt and ultimately transform organizations in the new digital economy. The Conference Board identifies these four elements as:
    • Technologies from artificial intelligence, cognitive computing, cloud services, wearable devices, location sensors, and radio frequency identification tags to social media platforms and smartphone applications, are just some of the components that are altering how business is conducted and how we live our lives.
    • Connectedness The Internet of Things (IoT) is one example of digital technology’s ability to connect organizations, people, buildings, machines, and other devices to each other.
    • Data and analytics Wherever digital technology creates connectedness, it also generates data—continuously and in massive volumes. Digital transformation is fueled by this data and by the information and insights that can be extracted from it.
    • Digital strategy Companies need a disciplined way to assess where the biggest digital threats and opportunities lie for specific parts of their business. To execute a digital strategy, leaders need to think about how their culture, organizational design, job structure, operational processes, talent, and policies may need to change.
  • Digital transformation requires a big picture view that extends outside the corporate walls. Digital transformation stretches across the value chain and touches every aspect of business operations from the initial R&D phase to final delivery of a product or service. As businesses begin their digital transformation journey, they must overcome a series of challenges ranging from an insular corporate culture, weak or no enterprise-wide strategy, a leadership cadre that doesn’t get it, unfriendly or outdated regulatory policies, a lack of qualified talent, and internal competition for budget resources. Many organizations are trapped in an outdated mind-set when it comes to capital expenditure allocations which hinder their ability to launch a coherent enterprise-wide digital strategy. They are uncomfortable forming nontraditional alliances that can include competitors or diverse industry sectors.
  • Digital transformation means that those charged with communicating the transformation within an organization must think more like their marketing counterparts. They need to understand their audience and their emotional and rational motivators, deliver information in a way the audiences prefers to receive it, and most importantly, make it relevant. In a digital workplace the challenge is how you get knowledge and ideas to flow across the company. Business communication has so far failed to keep pace with the digital revolution in most organizations. Simply put: organizations need to get better at communication and building virtual networks both externally and internally to fuel digital transformation and achieve a more effective and collaborative knowledge sharing system, a basic building block of organization success in the digital age.

These are just a handful of insights from Beyond Technology: Building a New Organizational Culture to Succeed in an Era of Digital Transformation. To find out more, download the full report here.

[1] Adapted from Fitzgerald, Kruschwitz, Bonnet, and Welch, “Embracing Digital Technology,” MIT Sloan Management Review and Capgemini Consulting, 2013.



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