Digital Transformation and The Critical Role of Leading Culture Change in Global Organizations

organizational culture assessment for competitive advantage

Leading culture change in global organizations is crucial given rapid technological change, a global workforce, four generations of employees, and shifting values at work. Because we are living in a time of unprecedented rapid change, digital transformation is a top concern of CEOs and leaders – not only for companies in the technology industry but across all business sectors. Every aspect of the work experience and the business model is changing and shifting due to automation.

So How Can You Compete in a Business Culture of Digital Transformation

Digital transformation has not only increased the speed with which change takes place, but also the expectations of clients and employees who have never been more informed, conscious of, or connected to the world around them. This means in order to thrive and remain competitive, your business must hone in on what people want most, align people around a unique and appealing mission, focus on small consistent change, weed out people who don’t belong, rethink the idea of work-life balance, and create a culture of leadership at every level of your company.

Focus On What People Want Most

With four generations in the workplace, companies are struggling to foster aligned performance and efficiency, as there are tremendous differences in employee core values. How work is done, where work is done, and with whom work is done are all a significant part of the shift. Older generations and younger generations have different needs and motives they are seeking to fulfill. In addition, the very psychological contract of work itself has shifted: Employees expect the working relationship to be a two-way street – both parties must benefit. An investment in one’s career is about more than just a paycheck. People in the modern workplace expect to have basic human needs met – psychological safety, friendship, pride, freedom, and a sense of accomplishment.

It has been clearly proven that happier people at work create better company performance and that this happens mostly at the team level. Achieving employee happiness requires leaders who embrace and practice the basics of human psychology. Everyone wants to belong, feel appreciated, and be good at something. Leadership training and development thus need to create leaders who help employees and fellow leaders experience the fulfillment of these basic human needs. The more your company is able to show people how working for you fulfills their needs, the higher your ability to foster high performance and engagement.

This is a very different workplace world than what we experienced even a decade ago. For customers and employees who are more discerning and caring about your social stance, it has never been more important to differentiate clearly from competitors in the marketplace. This IS the power of culture work. Through developing the “caring and feeding of people” into your culture, you win loyal customers, create a powerful brand image, and foster “sticky” talent who can deliver that experience to your customers.

Mission is King

Do your mission and culture distinguish you from competitors to attract talent and customers? Do your employees deliver a consistent brand experience to your customers?

Your Culture Is Your Brand Company Culture Quotes On Leading ChangeYou know that mission provides a clear sense of purpose – which is crucial for high performing companies. But knowing does not equal doing! The opportunity to ignite and align people around your unique purpose and create excitement for achieving that purpose is a daily practice. In the simplest sense, culture-building is about igniting people toward a common mission. If your organization is very large, or global, or relies on people’s talent (more than automation), it is even more essential to build a mission-centered brand. Remember, a mission-centered brand is not what leaders believe it is, but rather what your employees think it is.

Culture improves employee engagement, which improves employee productivity, which increases profitability. This is a virtuous cycle that in turn spurs employee engagement to greater heights. However, numerous studies show that leaders cite culture as the #1 barrier to them achieving their business strategy. What they neglect is that culture and its alignment to the organization’s mission is like the fuel and wheels that move your business strategy engine forward. Culture is not a feel-good morale booster, which is a too-common perception that leaders hold. Changing culture should never be done as a fad or for its own sake. Rather, changing or improving culture is about aligning habits that will enable your mission and strategy. This is not a small point – one client we worked with, cited their $25 million dollar investment in a strategy with one of the prestigious global consulting firms, was not executable within their existing culture. The marrying of strategy and culture is gaining in popularity for good reason: They are integrally linked, and one cannot be changed or evolved without the other.

Small Change Works

Leading in a culture of change is in part about aligning employees and customers to embrace rapid change. In this new reality of constant, continuous, never-lets-up change most companies are being forced into a digital transformation. The more proactive companies are in embedding the capacity to change to compete faster, the more likely they are to avoid extinction. The speed at which entire industries disrupt, transform and pivot is punishing outdated culture traditions such as hierarchy and politics. In addition to being an antiquated strategy, “corporate” culture itself is a huge turnoff for younger employees who abhor the idea of corporate as a whole.

To begin, narrow your culture-building work to one team, one skill, or one new habit. Then, get it right and ensure it sticks before expanding. Instead of trying to take on too much and experiencing disappointment which tends to lower executive support for culture-building, always center your culture work around a felt-need or specific pain to demonstrate the value of culture change and culture work. Then, build on your successes.

Some People Don’t Belong

Whether it’s tomatoes or talented employees, a healthy environment is one in which growth can flourish. In many cases, the biggest energy-suckers in your organization are toxic leaders and employees, who are fostering a poor environment for productivity and an unhealthy work experience for team members. Weeding the garden of people who are not contributing in a productive manner to your organization’s cultural unity, is a significant commitment which should be done on a regular basis. It is a requirement for culture building in every company. Yes, you want to create an environment of diversity. Weeding the organizational garden is not about hiring the same breed of flower or vegetable, but rather about removing those who are most likely to choke the others. A healthy culture continuously eliminates energy-sucking elements.

Those who don’t have your company’s or team’s best interest at heart are obvious to your people. They undermine others through their ego and need for power. Because these people often achieve great business results individually, they cause leadership to perceive them as indispensable. They are not! In fact, they often cost more than they’re worth in attrition and lost productivity.

Some weeds actually help a garden grow, while others choke growth. Do not evaluate individual successes. Evaluate if there is a respect and fit for your style of office, your workflow, or your customers. Otherwise “weeds” are draining the productivity of the organization as a whole. It’s okay and necessary to let these people go. Your company will be better because of it. Teach and expect your leaders to set these weeds free on a new journey!

Work-Life Dance Versus Balance

Life today is fluid. It’s no longer a compartmentalized schedule of work, personal time, family. For most of us, it feels more like the Tango. Intense, dynamic, ever-changing, requiring high-trust relationships. Bottom line, we all need to learn to embrace and respond more quickly to change. This is a process that must be felt to be enjoyed. Relax the hold and get in the flow. Give team members the freedom to both succeed in their careers and their social lives. Better yet, combine the two!

If you don’t see the value in melding work with life, you end up with teams devoid of the social skills required to communicate, brainstorm, and perform. From Boulder tech startups to large financial institutions such as Charles Schwab, today’s companies struggle to integrate and manage employees who lack the ability to communicate effectively. I’ve seen organizations hire “extra staff” whose sole job it is to help these people talk to each other.

A Culture of Leadership is Needed Now More Than Ever

The old-school style of grid hierarchy is changing, but the need for catalyzing people towards a clear and inspired direction never will. If you want results and growth, your job as a leader is to hire great people and keep them focused and motivated. Always opt for less managing, and more removing of obstacles.

Training your first-level managers to lead is the most important work of our era. Why? They manage your customer-facing employees – and bad supervisors and managers are the biggest sources of voluntary attrition in every organization.

Leading Culture Change In Global Organizations Begins With YouThe good news for any leader contemplating a cultural change or improvement is that the research is very clear: culture pays big dividends. The most cited study was completed by Kotter and Haskett (Of Harvard University) which studied 200 companies over an 11 year period. The study compared the adaptive and non-adaptive cultures of direct competitors and analyzed how culture impacted economic performance in both cases. By being proactive in a changing world, adaptive cultures were significantly higher-performing. They placed a high value on employees, customers, and owners. They also encouraged leadership from everyone in the company. In contrast, non-adaptive cultures lacked these characteristics. Specifically, Kotter and Haskett’s research highlights the financial differences between twelve organizations who cultivated adaptive cultures, and twenty organizations that did not, over this 11 year period. The financial results were astonishing.

 Average Increase for Twelve Firms with Performance-Enhancing CulturesAverage Increase for Twenty Firms without Performance-Enhancing Cultures
Revenue Growth682%166%
Employment Growth282%36%
Stock Price Growth901%74%
Net Income Growth756%1%

That net revenue increased by a level of 756% compared to 1% in companies without non-adaptive cultures- simply by cultivating the ability to adapt more quickly to change is amazing.

Next Steps?

If you are facing culture change (whether the result of a merger, new CEO or turnaround) – or you just want to attract and retain the best talent – getting back to basics can simplify your culture-building process.

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