How Does Corporate Culture Shape Digital Transformation?
Corporate culture plays an undeniably important role in businesses today.
One of the more recent corporate culture lessons we can see is from the WeWork unicorn case study in 2019. Why did a $47 billion tech unicorn collapse?
Many experts believe that the root cause is the unhealthy culture created by CEO Adam Neumann.
So what is corporate culture? How to build the right and most complete corporate culture? Find out with FieldCheck in the following content.
Corporate culture
What Is Corporate Culture?
Currently, corporate culture is understood in many different ways. However, in general, corporate culture is mostly seen as a set of values and norms of behavior, beliefs, ways of thinking, and ways of perception that are recognized and acted upon.
Corporate culture is considered the personality and life of employees in the office environment, affecting the behavior and the way employees work. The building of corporate culture plays an important role in the short and long-term development of organizations and businesses.
Corporate culture is considered the personality and life of employees in the office environment
Levels of Corporate Culture
According to former MIT Sloan Professor Edgar Henry Schein, we can divide the levels of corporate culture into three groups as follows:
- Level 1: This is the concrete structure of the business that includes events and things you can see and feel with your senses. They do not represent corporate culture's true value, and businesses can easily change these factors like policy documents, departmental structure, logo-slogans, uniforms, office architecture, etc.
- Level 2: Corporate culture at this level consists of accepted or declared values. Mission, vision, strategy, goals, and core values play an important role in coordinating the activities of employees in organizations and businesses.
- Level 3: This level includes general concepts that are difficult to recognize and adjust. This is because they belong to the internal nature of the business (i.e., business culture, enterprise).
When employees share and act on this level, it is difficult for them to accept opposite behaviors.
The levels of corporate culture
The Importance of Corporate Culture in Digital Transformation
According to a study from Deloitte, 94% of CEOs and 88% of employees believe that corporate culture plays a decisive role in the success of businesses.
Corporate culture in digital transformation contributes significantly to different operational areas of the business.
1. Maintain And Develop Employee Loyalty
Positive corporate culture helps businesses build employee attachment to the company. From there, employees become more loyal and dedicated to the industry.
When the income level reaches a certain level, many employees still decide to work in a comfortable, transparent, and sociable working environment despite the lower income.
2. Attracting Talents for Businesses
Human resources experts believe that a good corporate culture contributes significantly to attracting more candidates. Everyone wants a good working environment.
Good corporate culture contributes significantly to attracting more candidates
3. Boost Work Productivity
Employees dedicated to the task will help increase work efficiency, contributing to the achievement of the common goal of the whole enterprise. Besides, a positive corporate culture also reduces pressure and stress.
Since then, the working efficiency, as well as the health of employees, are both consolidated and guaranteed.
4. Limit Internal Conflict
One of the benefits of a good corporate culture is to help limit conflicts that may occur within the business. This is also considered the glue that helps connect the employees and the company's management level.
Company culture also helps members of the business to agree on a view on an issue, assessment, and course of action. When there is conflict, corporate culture is one of the important factors in helping people unite and integrate.
Company culture helps build good relationship among members
Characteristics of Corporate Culture in the Digital Age
To successfully implement a digital transformation, corporate culture needs to ensure certain properties as follows:
#1. Renew
In the era of digital transformation, corporate culture needs to be innovated. Management should implement policies that encourage and support ideas from employees.
The reason is that the digital transformation process needs to continue as new competitors always appear in the market with novel trends and tools. The innovation of thinking will help businesses quickly adapt to this competitiveness.
#2. Customer-Centered
This factor can determine the success or failure of organizations and companies in the current digital transformation era.
Businesses can rely on digital transformation to make adjustments to the size of their business to suit the actual market situation. But one factor that determines the outcome of the digital transformation process is the customer.
Therefore, businesses should put the customer first when implementing digital transformation.
You may not know it, but Walgreens – a famous pharmaceutical brand, also implements a customer-centric strategy when making changes and building growth strategies.
This business also realized its previous approach to customers was outdated, prevented them from promoting its employees' strengths, and lacked empowerment in the industry.
Businesses should put the customer first when implementing digital transformation
#3. Data-Driven Decisions
Unlike traditional methods, one of the characteristics that can be easily recognized in most businesses in the digital transformation period is the use of data to make decisions.
The above method has helped to limit the disadvantages of traditional management (often subjective on the part of managers).
All decisions use data collected and presented transparently, showing the trend of the business's performance.
Therefore, the results obtained from the above data-based decisions are often positive and reasonable and represent the business situation clearly and transparently.
#4. Cooperation
Enterprises need to create linkages between each department in the company.
The reason is that when this action is taken, the enterprise's internal operations will be able to operate more effectively, in addition to increasing the solidarity and sustainability among individuals in the enterprise.
Additionally, businesses can also transmit the necessary messages, ideas, and data more easily through it.
Enterprises need to create linkages between each department in the company
#5. Promoting Open Culture
You may not know it, but corporate culture facilitates strong relationships within the business with external organizations such as customers, suppliers, and distributors.
In today's flat world, the limits have all been removed. Therefore, the application of an open corporate culture, in addition to benefit sharing and collaborative thinking, will resonate to help business organizations adapt to any changes in the market.
#6. Digital Thinking
Businesses today are still trying to build a digital mindset. To do that, they must consider digital solutions as inevitable. Otherwise, digital transformation is just technology-based.
People are the decisive factor in the results of digital transformation. Therefore, all members of the organization and the business need to describe the business's digital transformation process so that they can change their thinking to be able to adapt to the process.
#7. Culture of Responsiveness and Flexibility
One of the other characteristics of corporate culture in the digital transformation era needs flexibility. Technology needs to change and improve constantly. Therefore, businesses should not rely on it but should continue to develop better.
The agile process will help businesses find opportunities in today's competitive market.
Technology needs to change and improve constantly
Barriers to Changing Corporate Culture in Digital Transformation
When implementing digital transformation, businesses often face several challenges, as follows.
#1. Competency Challenge
Successful businesses tend to sleep in victory and refuse to make other changes. Therefore, businesses and organizations often will not see the role of technology and backwardness in leadership and process thinking.
#2. Challenge of Speed
Senior leaders often underestimate the change in the growth rate of other competing brands. This will become a major hindrance for businesses.
Typically, management often has one of two tendencies: overestimating the business's speed and underestimating competitors' development process.
#3. Internal Barriers
Some other factors negatively affect digital transformation in some businesses: complacent behavior, lack of flexibility, and agility.
This problem entails several consequences, such as enterprises' lack of capacity and confidence to promote their growth in the future.
Digital transformation in some businesses
Solutions to Promote Digital Transformation of Corporate Culture
Above are some barriers when doing digital transformation. So the question arises, how can businesses remove these bottlenecks? At the same time, find the optimal method to conduct digital transformation comprehensively across the enterprise.
#1. Find Out The Value To Make Digital Conversions
One of the priorities businesses need to focus on is finding the values that need to be built on a digital foundation. To do that, companies can answer the following questions:
- How are members of the organization exhibiting the behavior expected by the company?
- How will members change if the business successfully transitions to a digital environment?
After finding the answers to the two questions above, you can figure out the right starting point. This is also considered one of the foundations to help build a digital corporate culture such as:
- Building a transition from awareness creation to a new digital corporate culture.
- Identify the characteristics of digital culture clearly.
Building a transition from awareness creation to a new digital corporate culture
#2. Conducting Tests
After taking step one, organizations and businesses should pilot in a small-scale HR group. This staffing group may include employees representing different departments and levels.
In addition, the management level should also be considered in this group because this is the group of people who lead other business members and help spread new values.
This test team needs enough members from all departments and levels in the enterprise.
And when it comes to testing, new behaviors need to be implemented daily by team members. The results should also be fully and carefully recorded.
This is because this is the basis for measuring the effectiveness of these values. Therefore, businesses can easily know who is responsible for the steps to be widely disseminated later.
Businesses can easily know who is responsible for the steps to be widely disseminated later
#3. Dissemination Across the Organization
Once the test is completed, the enterprise can implement enterprise-wide deployment. However, this will be more difficult than when testing.
The bigger the business, the more common problems are going to be. Therefore, managers and leaders should be the pioneers in this step.
#4. Carrying out Measurement, Calibration
Enterprises should not skip the measurement and calibration step until the dissemination is completed to all employees. Another small note is that businesses must perform annual or quarterly measurements.
This will help management understand the current situation of the business and can propose appropriate plans to ensure the achievement of long-term goals.
Enterprises should not skip the measurement and calibration step until the dissemination is completed to all employees
Wrapping Up
Above is some information about corporate culture, including concepts, importance, barriers, and solutions when building a digital culture.
With the advancement of science and technology, many businesses are now using software and applications to manage human resources and internal strategies more easily.
FieldCheck is proud to be one of the pioneers in building a platform to help manage KPIs or support the implementation of the OKR model. To learn more about the FieldCheck solution, please get in touch with us for a free consultation.
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