Don’t Underestimate The Cultural Shift In A Digital Business Transformation

Chief Commercial Officer/SVP Global Sales at relayr overseeing the company’s sales, business development efforts.

In the last few months, I’ve heard dozens of chief experience officers highlight the need for business transformation and how it can come with a high upside. With that said, it’s important to remember it’s a journey and not a quick fix. A boost in revenue, better performance and optimized operations are advantages you could gain, but any success comes with fundamental changes to your organization’s structure and function.

Today, business transformations have digital capabilities as a cornerstone: internet of things, artificial intelligence, augmented and virtual reality, customer intimacy with digital — the list goes on. A transformation study conducted by Boston Consulting Group found that the number of companies reporting breakthrough or strong financial performance was five times greater (90% vs. 17%) among those that focused on culture compared to those that neglected culture.

To that end, in my opinion, the common link among the most successful transformations, especially with digital technologies, is that they focus on cultural transformations in parallel.

Where does the culture shift start?

It’s been said that necessity is the mother of invention. Businesses going down the road of transformation usually have their sights set on goals beyond growing. They want to disrupt and innovate. The cultural shift, especially in old-school businesses, then becomes about determining how you can be a bold company versus an overcautious, conservative one. It’s about not needing to see the work somewhere or being completely comfortable with the unknowns before jumping in. This innovation mindset can help set you up for a successful transformation. 

So, how do you get there?

First, it’s essential to listen to and understand what end customers are looking for to set the tone for transformation. Yes, you might be successful and growing, but are your customers’ needs fundamentally changing? Do you understand the “voice of the customer” and fully understand their reasoning?

Once this happens and you can confidently articulate what your customers want, or in some cases, lead the customers to what they should be looking for, only then can you plan for achieving it. The goals and success factors from each team/department needed to make it happen can come next.

Second, every department will play a role in the process — not just sales and marketing. Leaders can identify common competencies, focus on them and then give a clear methodology or effort for business leaders to implement the noncommon skills.

Don’t be afraid to get creative in problem-solving, collaboration and how you work with each other. For example, in my organizations’ transformation, we focused on competency-based hiring, as opposed to role-based hiring, in every department. This ensured we have the right skill foundation for almost every possible job role.

Just do it! Getting the ball rolling.

Many underestimate how much focus and energy it takes to keep the momentum going during a business transformation. For some companies, their first foray into a new direction is entirely different than what they’ve traditionally done for decades, and it can be overwhelming.

Because major transformations involve your entire organization, you’ll have various departments and areas using language and metrics that may not align with or even make sense to others. That’s why a cultural shift only works if there’s a clear understanding of the outcome and larger impact and if there are joint success metrics with each department’s elements. These might be different from the traditional departmental key performance indicators or goals. 

For example, to execute agile and partnership-style gain-share models, you might have to change your professional services team’s goals from fixed costs to time projects with profitability that differs from the core business.

In my opinion, you have to start regularly using the language and embracing new behaviors to make them part of the understanding. Change is hard, and it requires a cultural shift both technically and commercially to begin thinking about things in a new context.

In the same vein, culture can’t be dictated. The C-suite and executive leaders need to work from the front and set the tone while ensuring they celebrate different goals from your traditional business.

Focus on small wins.

Thinking of a business transformation as a one-off scenario will not lead to success. Undertaking such a massive change isn’t easy, and it’s not fast.

This is a significant change, but a big change can come with small victories. Create micro-goals within the larger strategy, and celebrate both the technical and commercial journeys along the way.

Maybe your first technical release isn’t perfect or quite the solution for the market you’re looking for, but it’s a step in the right direction. The focus should be on learning and improving the journey toward the BHAG (or big hairy audacious goal) that business transformations with digital bring.

Ultimately, a cultural shift embedded with innovation, new processes and behaviors should be the foundation of your business transformation journey. By listening and understanding and then fostering collaboration from the top down, you’ll be well on your way to long-term success.

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