HBR’s Jane McConnell points out the cultural challenges of digital transformation.
Many companies struggle with digital transformation. It goes against the grain of established ways of working and is a threat to management practices that have existed for decades. Digital tools free people throughout the organization to share information easily. Communication managers no longer have total control over message, target, and timing of news and announcements. Horizontal and bottom-up information flows become stronger at the expense of the traditional top-down.
Digital lets expertise emerge naturally as people ask and answer questions peer-to-peer. People build up reputations across the organization as the “go to” person for topics even if they are not the official experts. This bypasses HR’s system and procedures for validating experts.
IT management risks losing control over enterprise technologies because in a fast-paced business world, teams — unwilling to wait for IT to rollout official solutions — solve their own needs quickly by resorting to cloud-based, consumer tools to manage projects and share information.
Personal branding worries management, as people who are active on the internal social network become “stars,” with greater name recognition inside the company than certain top managers. These de facto thought-leaders become a force to reckon with that is completely outside the hierarchy.
And yet despite all of these “threats,” some companies embrace the changes digital offers. What sets them apart?
To figure out what makes the transition easier for some companies than others, I have conducted several surveys with organizations around the world over the past nine years. I have grouped the toughest obstacles to change — those considered to be serious and holding us back — into five categories:
Work cultures can either accentuate or alleviate these obstacles. The 2014 survey participants rated their internal work cultures on a five-point scale for the following opposing characteristics:
These characteristics are not mutually exclusive, obviously, but data show that organizations tend to be stronger in one area rather than the other three. Out of 280 organizations, 66 indicated the highest level for one of the four characteristics,19 for two characteristics, eight for three, and none for all four. This minimal overlap lets us refine our understanding about which characteristic alleviates or accentuates which obstacles:
A strong, shared sense of purpose alleviates many obstacles, especially those of internal politics. A strong sense of purpose alleviates political resistance: people are moving in the same direction driven by shared values. A low sense of purpose makes it difficult for people to come to agreements and decisions. They are five times more likely to face obstacles from internal politics, five times more likely to be concerned about employees wasting time and three times more likely to suffer from lack of senior management sponsorship than organizations where there is a strong, shared sense of purpose.
Freedom to experiment helps people prioritize, make decisions, and rethink how they work. Freedom to experiment helps organizations prioritize. When people are not free to experiment or take initiative, it is difficult to consider different ways of working. Without experimentation, there is little basis for prioritizing and making decisions. These organizations are twice as likely to suffer from hesitation to rethink how we work and twice as likely to be held back by fears by management of losing control.