Digital Transformation is Cultural Transformation

Posted on 05/13/2015

Studio shot of butterfly over digital tabletAsk any group of CMOs, CEOs, CIOs or CDOs (Chief Digital Officers) what they think is most important in the digital transformation of a company and you get a range of answers… Choose the best technologies…  Make sure you have the right talent… Most of us overlook that a digital transformation is first and foremost a cultural transformation long before it is a technology or HR change.

Transforming culture is hard. You and your organization live in the current culture all day – this is how you work, how you communicate and much more.  Inc. defines corporate culture as “…the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. Corporate culture is rooted in an organization’s goals, strategies, structure, and approaches to labor, customers, investors, and the greater community.”

As an executive you often inherit a corporate culture.  CMOs or Chief Digital Officers are often brought in from the outside specifically to drive digital transformation. Being new to the company, they are not jaded by the current culture; yet have to work within it to transform it. This takes finesse, diligence and a lot of data. Assessing talent for the ability to successfully change their capabilities and the culture is a critical task that you end up doing this a few times throughout the transformation.  This assessment is defined by someone’s willingness and ability to acquire or exercise the needed capabilities in the timeframe required.

Over the years, I’ve built a simple model to do this assessment. It can be used in any company or industry. Before you start, you must get to know your people – what are they good at; what do they like to do; what do they want to do; what do they not want to do; etc. You need to build an org chart with empty boxes.  That’s right – not a single name, totally empty.  The org chart should have functional descriptions and key capabilities including soft skills in each box. Think holistically about what and how you need your organization to be, do, think and interact.

Then use this simple model to plot the people in your organization. The model has two dimensions – willingness and ability. Willingness is someone’s desire and motivation to add new or exercise digital skills and to embrace cultural change. People are either willing or they’re not – it is that simple. Willingness is driven by motivation so you need to know what motivates each person – do not assume all motivations are the same or that they are static for any individual over time. You and/or your direct reports have to get to know them to make the call on this because if you ask them directly, you’re unlikely to get any answer other than “of course I’m willing to do this” because large-scale change breeds fear of layoffs therefore this is the only answer you’ll hear.

Ability is whether the person has the know-how to add digital skills and change their behavior to the new culture in the time you have to make this transformation happen. Know-how does not mean they have to do this change solo. Know-how is a combination of being a self-starter, self-learner as well as an ability to take experiential or classroom learning and apply it to their role and team.  You must add the time dimension to this assessment. Open-ended transformations rarely go well. You have business metrics to deliver on, customers to serve, boards to answer to – you are operating on a timeline and your organization’s digital and cultural abilities must align to your timeline.  Assessing someone’s ability to add capabilities and change culturally has to have a time element that aligns to your business goals. Do you have six months or maybe a year to do a full-scale transformation? If so, then the ability assessment needs to include that timeline.

Time to plot out everyone in your organization. Stay objective and do not let yourself be clouded by how long or how well you know your colleagues.

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The Stars:  These individuals express both a high degree of ability and willingness to add needed digital capabilities as well as to embrace and lead a cultural change. These are the keepers and will be the backbone of your new organization. Place them in their preferred roles first, compensate them well with the things that motivate them and take care not to burn them out during the transformation.

The Skeptics: These people have all the abilities but for some reason seem to waver on or lack the willingness to make a digital transformation a reality. Try to get to the bottom of the lack of willingness and resort them in to either the Stars or Dead-Weight category. Perhaps they need more information or clarification on what the organization will look like after the transformation; perhaps they don’t agree with the need to transform; Perhaps they need more compensation or recognition to embrace this change; Perhaps it is something else all together. Skeptics and Dead Weights will derail your transformation the fastest. It is important to identify them early.

The Dead Weight: These people have neither the ability nor the willingness to make this journey of transformation. It does not mean they are bad people, it just means they are not the people for the next phase of your organization. Eliminate the Dead Weight early, cleanly and succinctly. Not only does this send a clear message that the digital transformation is real, it frees up valuable space to bring in new talent that has the willingness and abilities you need.

The Wanna-Be’s: Most people are in the Wanna-Be category because they don’t appear to be able to build the needed capabilities in the time required. The Wanna-Be’s will be the trickiest to deal with – they will tug at your heart with their enthusiasm for the digital transformation yet they simply won’t have the capabilities you need fast enough. So, if you have some more junior roles that will allow them to grow then that is an option for them or perhaps they would be better suited in a different organization in your company. If neither of these choices are an option, then they will need to move on from the company in a reasonable time frame.

As a CEO, CMO or Chief Digital Officer, a big part of one’s job is to parse talent, deliver today, build for tomorrow and ensure the company has the needed capabilities to deliver successfully on its strategy for the long term.  This framework has worked well for me for many years across different industries. I hope you find it helpful as well.  Please add your own learnings and ideas to the comments below.