A Tale Of Two Cultures And Their Digital Transformations

A Tale Of Two Cultures And Their Digital Transformations

By Flux7 Labs
April 2, 2020

This post originally appeared on Forbes.

Culture management is frequently part of any industry discussion about digital transformation. Yet recent research by NTT DATA Services (Full disclosure: NTT DATA Services is Flux7’s parent company) has found that organizations are more likely to focus on technology-related changes rather than culture change.

Download the NTT DATA "Every Cloud Has a Culture Lining" report.

In a market landscape where digital transformation success increasingly defines a company’s ability to innovate and compete, avoiding culture change is like racing a NASCAR without the pit crew. You can do it, but you’ll soon be running on bald tires and risking an accident, and you certainly won’t be setting the best track times.

As technologists, it’s easy to default to what we know: technology. However, focusing on technology to the detriment of culture kneecaps progress toward digital transformation goals. According to DORA’s (DevOps Research & Assessment) 2019 State of DevOps Report, “An organizational culture that optimizes for information flow, trust, innovation, and risk-sharing is predictive of software delivery and operational] performance.”

Chance And Change — Just One Little Letter

While there is no shortage of awareness that culture is key to success when it comes to digital transformation, in my experience, there are several roadblocks that make it easy to focus on technology instead. Fear of change, the lack of a road map and the perception that culture change is messy can all be hurdles. Yet organizations that take a chance on culture end up with business-impacting change.

To examine how, let’s look at the story of two very different organizations that are currently embarking upon digital transformation and the role culture has played at each. The first is an enterprise that has chosen (for the most part) to ignore culture and focus its efforts on technology. In contrast, the second company has taken active measures to support positive culture change that has, in turn, accelerated the business outcomes of its technology transformations. What special sauce does this team have that the first does not? Let’s explore:

Cultural Blinders

A Fortune 500 firm, this company is in a market rapidly evolving due to technological innovations in smart spaces. It must transform and grow the number of innovative solutions it offers to customers to remain competitive. As a result, the company created a center of excellence (CoE) chartered with moving its data center to the cloud where it could experiment and innovate faster.

I encourage CoEs as a mechanism for building a digital transformation foundation and then sharing knowledge about the technical, process and cultural changes undertaken to support the transformation. Unfortunately, this CoE became a victim of the broader culture and was prevented from embracing best practices. For example, intellectual curiosity was actively discouraged, and coaching was avoided, while information hoarding was encouraged for political gain, and there was no incentive to collaborate.

The company’s culture would benefit greatly from cultural best practices, such as encouraging psychological safety, where every team member is trusted and empowered to contribute by focusing on solving problems rather than navigating politics. Tone from the top can play a powerful role here, too. According to DORA, “A culture of psychological safety contributes to SDO performance, organizational performance, and productivity, showing that growing and fostering a healthy culture reaps benefits for organizations and individuals.”

Active Embrace Of Cultural Change

This second company is also in a highly competitive market space that is quickly being disrupted by new technological advancements. It, too, must rapidly innovate to remain relevant to its customers. Yet culture has a front seat within this organization’s digital transformation strategy.

In contrast, this group:

• Encourages learning across the organization in several ways. While cloud and modernization projects are full of complexities, saying, “I don’t know,” is treated as a starting place for learning, not a reason to penalize someone. This company has also set the tone from the top by assigning homework to employees, encouraging them to create healthy habits around stopping to learn and continuous learning.

• Treats innovation as a process of iterating on failures. This serves as a mechanism for learning, which helps drive continuous improvement. Working with machine learning models that are continuously updated, this manufacturer encourages ongoing learning and improvement in part by conducting regular meetings where teams discuss what went well and what could be improved. These honest discussions focus on what could be learned from each exercise and underscore a focus on outcomes, thus creating a culture of continuous optimization for business outcomes.

• Actively shares information, investing in both technology systems that can easily serve up data and information and peer coaches who willingly teach and share best practices across the organization. Employees feel trusted and empowered to do their best work, and they are given all the resources to do so. Trust is the bedrock to a healthy culture, and free information flow is a healthy signal that trust exists.

It is supported by top management, who actively work in support of their initiatives, ensuring potential obstacles to progress are addressed in a timely fashion. Moreover, management encourages open learning, sharing, and the expression of questions and ideas. Modeling this behavior in meetings with employees across the organization illustrates that the culture is not just supported but encouraged from the top down.

According to the NTT research, high performers are more likely to have developed a culture change strategy that accelerates the transition and grows employee retention, productivity and ROI. We can see this in our two highlighted organizations as well, with the second one releasing innovations quickly to market and being asked to highlight its achievements in industry talks and articles. With its teams in sync and trained on systems, processes and culture, it is able to work optimally, speeding new customer innovations to market quickly.

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Written by Flux7 Labs

Flux7, an NTT DATA Company, is the only Sherpa on the DevOps journey that assesses, designs, and teaches while implementing a holistic solution for its enterprise customers, thus giving its clients the skills needed to manage and expand on the technology moving forward. Not a reseller or an MSP, Flux7 recommendations are 100% focused on customer requirements and creating the most efficient infrastructure possible that automates operations, streamlines and enhances development, and supports specific business goals.