When we think about digital transformation, we often think about the impact of technology enabling new business models. However, research and practice are showing that people and culture can be either a key enabler of success, or a major barrier to transformation.
- A McKinsey report in 2017 found that cultural and behavioural challenges were the biggest single challenge in meeting digital priorities
- MIT found that changes such as business skills, incentives and operating models had 15 times more impact on the likelihood of success in digitisation than pure changes in technology
- Amazon Web Services found that the three main barriers to digital success were culture, skills and siloed organisations.
None of this is to say that technology is not a vital driver of digital transformation, but buying the latest shiny new tool alone is no guarantee of success.
Most core technologies are available to almost any company, so differentiation in future won’t be from the technology itself, but from the way we get people to adopt the technology and how we adapt our way of working and culture to take advantages of the opportunities this brings.
These are primarily people challenges and our approach is to focus on ways of working and culture as essential enablers of the use of new technology. Get it wrong however, and these potential enablers become your biggest barriers to change.
Some of the ideas behind agile and digital working represent significant challenges to established ways of working. For example, an agile approach based around constant experimentation and fast failure can feel risky to a traditional organisation used to attempting to be right first time. When we introduce autonomous teams, this represents a challenge to traditional hierarchy and control mechanisms.
Many organisations are still struggling with matrix management challenges such as how to cut across the traditional vertical silos and deliver accountability without control and influence without authority. These challenges will be accelerated by digital transformation which definitely doesn’t respect silos.
Now is the time to update our culture and skills to enable digital transformation to succeed.
If you would like to find out more about our agile and digital leadership programs please get in touch