Your organisation’s culture is the key source of your competitive advantage. Business leaders are waking up to that. So what are the elements of a culture fit for the digital age?
Earlier this year Deloitte’s Global Human Capital Trends survey revealed the main challenge business leaders think they face – alongside leadership itself. And it’s culture.
That is not to suggest there is one single culture that is right for every organisation in every market. But there are key elements that underpin a strong culture in the digital age. Together these elements give your organisation a digital culture that is in tune with the world around it.
What does a thriving digital culture look like
A digital culture is not defined by technology spend and it isn’t about whether your CEO tweets. A digital culture is one that is adapted to the opportunities and threats offered by technology, the disruption of markets and changing customer behaviour. It is evident in new ways of working that ensure it can act like a disruptor, even when it is the incumbent.
Four key elements are present in every digital culture:
A digital culture organises around customers’ needs and continually seeks to understand them better.
Change has flattened not just the structure of companies, but the power relationships in markets. In No Ordinary Disruption, McKinsey’s think-tank experts say that “finding ways to capture value from the consumer surplus” should be a priority for every organisation. In non-strategist terms, that means customers are getting more value from internet disruption than companies are.
Organisations need to get close to their customers, work out what they want and how they might better serve them to ensure they stay on the right side of disruption.
Another reason for being customer centric is simplification. Digital disruption makes for an extremely complex environment of trends, new competitors and new technologies. Focusing on the customer simplifies decision making and priority setting down to a single criteria: is it right for our customer?
Compare this to incumbent organisations, which spend big to push products and services to customers. These organisations are often seen as self-serving, more interested in their own sales than the needs and welfare of their customers.
A digital culture is highly connected – both inside and outside of the organisation – and usually has less hierarchy.
Successful companies in the digital age recognise the power of networks, both internally and externally, to spark ideas and innovation and get things done faster.
Hierarchies don’t work when it comes to quickly getting vital information to leaders, and to all the places it needs to go in a modern organisation. Arguably, this has always been the case – the problem has just been exacerbated by the challenges of fast-moving markets and customers.
Twentieth century businesses favoured hierarchies because they allowed them to scale reliably. We are not suggesting that hierarchies should be done away with completely, but it is important to recognise when and where they become restrictive, and to find and test alternative approaches that provide flexibility and speed.
An open network of interconnected people moves information more rapidly to the places it needs to get to than a closed hierarchy. It means you can respond to opportunities faster, through rapid decision making and fast action.
Biased towards action
Digital cultures have devolved decision-making and responsibility that encourages speed to market and supports rapid learning and change.
If a company’s culture has a bias for action, getting things done quickly is prized above getting permission and consensus for decisions. A bias for action allows companies to lean forward into the future, rather than pulling back, nervous and waiting to see how things will pan out.
In the digital age, people want to participate more, not less. Employees don’t want to be micromanaged – they expect to contribute and shape decisions, to have a voice. The challenge for managers and leaders is to create the conditions for action – then get out of the way. By providing a direction of travel, and then handing over ownership to your people, you automatically create a bias for action.
Digital cultures align their efforts through a clear understanding of what they are all about.
In the digital age, the most successful organisations are united and animated by a clear sense of purpose, for both employees and customers. This common purpose is more than a vision and a mission, it goes to the heart of why your organisation exists in the world. Digital organisations disrupt traditional markets by drawing on a deep conviction about the validity of their purpose.
The challenge for existing organisations is to rediscover and integrate a clear sense of purpose into everything they do. That is not to suggest that every organisation re-engineers its business model. It’s rather about finding your purpose and expressing it clearly – to your people, to your customers, to the world.
This is the ‘why’ that great leaders and organisations start with, illustrated by Simon Sinek in his famous TED Talk and subsequent writing. And in the digital age, aligning your organisational ‘why’ with those of your customers is what creates truly impactful organisations.
To find out more about how to nurture a digital culture in your organisation download our book Culture Change In The Digital Age below.
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