The drastic challenges implicit in transforming a business into one equipped to handle 21st century digital requirements are clear. However, they’re far from universally accepted. In many organisations the challenge is not how to identify the massive forces driving digital change. Instead, bringing a complete organisation on board – often by making changes across protocol, delegation of responsibility and traditional understanding – is the most difficult part of the process.

This is partly due to the fact that the size of businesses requiring massive digital change makes any structural evolution difficult to navigate. But it is also exacerbated by the gravity of the change at hand. Leaders, especially in industries undergoing huge structural change such as retail, may expect any new digital direction and leadership to be accepted quietly – unfortunately, this is not always the case.

Embracing cross-channel connections

While a comprehensive strategy is crucial, it’s only one part of this equation. Changing a culture, which may be embedded in an organisation and its members based on nothing more than simple decades of operation repetition, is equally difficult.

It may very well be the one thing holding back an organisation from success.

The struggle of numerous, incalculable retailers over the past several years is an indication of this. While Borders, Blockbuster and department stores such as David Jones and Myer have had to transfer to a digital way of thinking, the essentials go beyond simply having an online store.

Most businesses recognise having a clear and dedicated focus on digital solutions, along with a recognition that the customer is “always on”, is important. The problem is culture.

Traditional retailers will have employees and departments dedicated to specific tasks. These are usually separated from each other, and are placed in a traditional hierarchy. A digital approach to this structure will use new tools, (e.g. enterprise social networks), in order to connect different elements of an organisation to transfer information and solutions more quickly. For instance, a completely new inventory system that ties together all channels – including physical and web stores – transforms the business into a seamless operation that’s equipped to provide an agile response to customer needs. This type of system doesn’t just provide a convenience, but instead makes every individual in the organisation focus on digital engagement.

A hierarchical structure is taken down in favour of a flatter, more efficient approach. Changing this culture, however, is easier said than done. While cultures can be shifted and evolved it is extremely difficult to initiate dramatic turns.

 Why digital leadership matters

While there are a large variety of techniques which can be used in order to initiate change within culture, including shifts in management policy, there is one specific method which must be adopted if any culture hopes to succeed: a strict and stringent belief that culture comes from the top-down. Any business hoping to change its culture to embrace digital transformation will not succeed unless there is a specific adoption of leadership policies which reflect this new way of working.

A digitally mature leader sets the standard for the entire organisation. They provide the vision but most importantly are able to overturn old and tired methods of management. Specifically, the CEO who defines and drives digital innovation must promote the capability and entrepreneurial culture that is necessary for businesses to thrive in a digital environment.

We look at digital channels today and obsess about putting policies in place to control how employees use those channels – whereas we have little or no policies in place for more mature digital media such as the mobile phone. This is symptomatic of the digital maturity of a company and its employees.

We should only need one policy focussed on the customer service we want to be famous for. Regardless of channel, all employees should be able to deliver a consistent engagement and service experience. However, given where we are in the journey this is remains idealistic for many traditional organisations and there is significantly more work required to slowly mature the organisation and its employees to be able to operate in the digital era.

Specifically, this should include:

  • Broaden thinking about digital resources and understand that it is essential for all employees to have digital skills, the right tools and know how to use them effectively
  • Clearly define roles, accountability and governance while providing enough agility for the organisation to adapt
  • Rethink all processes and policies to determine their relevance and remove any that restrict the business or don’t add value

As John C Maxwell explains, “a leader is one who knows the way, goes the way, and shows the way”. This incorporates an approach to digital culture which goes beyond merely choosing which IT products to use, and spans every decision made from the highest to the lowest levels of a business.

This can take form through innovation and process, such as adopting an agile lifecycle mindset, or by seeking new talent outside the organisation. As Kate Eriksson, Head of Innovation at PwC’s Digital Change, explains in her own words, innovation doesn’t just measure output, but rather the amount of new ideas and resources being pushed into a business.

There are a variety of methods organisations can use to improve their digital culture: widening talent pools to include new and previously ignored candidates, implementing technology to strike down knowledge barriers –but the most effective method is simply through leadership. Once a clear and focused leadership practice is established, and that leadership is determined to spread digital thinking across an organisation, digital culture can and will thrive.

 

Contributor

John Riccio

John is PwC Australia’s Design & Deploy, Experience Consulting partner.

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