Digital Economy Dispatch #047 -- The Good, the Bad, and the Ugly of Digital Culture

Digital Economy Dispatch #0471st August 2021

The Good, the Bad, and the Ugly of Digital Transformation

Looking back over the past year or more, there is no doubt that It’s been a volatile and unpredictable time for all of us. Habits of a lifetime have been broken over a few weeks, and new ones have emerged. I’m not sure what it’s like in your household, but in mine there seem to be 3 things that might well be permanent impacts from the crazy 18 months of the pandemic:

1. No more shopping. I can’t remember when I was last in a supermarket or walked down the high street looking in the shop windows. Weekly food deliveries and online shopping have taken over. I’m pretty sure that after my immediate family, the person I see most throughout the week is the Sainsbury’s delivery driver!

2. Home working. I am so pleased to have gained 3 hours a day from not having to commute up to London. I have no intention of going back to it. That seems to be a common sentiment. Even so, I have to admit that the alternative of spending 10 hours a day in the spare bedroom that is now my office has lost much of its appeal. I’ve no idea what to expect of the future work pattern.

3. Moving less, weighing more. Just like many others, the restrictions are having impact on where I go and what I do. Many days I find I don’t go out of the house at all. One consequence is a gain of 5 kilos (10 pounds) of extra weight. Seems I am not alone. Time to get moving again.

As we head toward a post-pandemic digital economy, we can expect to see these and many more changes in our ways of working and living. Consequently, understanding, transforming, and supporting a digital way of life has become a key theme occupying a lot of attention across all organizations. How do we understand how to survive and thrive in a digital world? What is the basis for creating a digital culture in our organizations?

In the business world, the term “culture” is thrown about all too easily as a broad umbrella concept covering everything from leadership styles, attitudes to new technology, and meeting etiquette to the choices you make in how your office is furnished. It has become an essential concern when considering how to succeed in digital transformation. So, it is essential we spend a few minutes considering what are the key elements.

There are lots of academic publication on the topic of “digital culture”. They bring useful perspectives on this complex topic. However, I tend to focus on 4 ideas in my practical conversations with students, managers, and decision makers.

The first useful perspective on digital culture is a reinterpretation of the technical concepts of “hardware” and “software”. When thinking of digital culture, often there is significant attention paid to the formal elements of how to change the organization’s operating model by defining a new digitally-inspired vision, appointing a Chief Digital Officer, making updates to HR practices to hire digitally-savvy workers, and refreshing the digital skills of established workers. These represent the cultural “hardware” of the organization.

This is a necessary part of any digital transformation. But in most cases, it is insufficient. It is important to also update the “software” aspects of the organization: Those informal elements that define “how things are done around here”. This might include the workplace environment, the daily work schedule, and the way people interact, set their priorities, approach their tasks, and so on. Although more difficult to define, without this accompanying “software” update, the cultural “hardware” investments will fail to embed new ways of working into the organization’s everyday actions. This requires an explicit effort to work informally and consistently with people across the workforce to encourage and support essential new behaviours.

The second way to gain important insights into your digital culture is through a wider assessment of the key properties that characterize it. A really helpful way to do this is to look at Goran Ekvall’s model that distinguishes 10 key elements for measuring organizational structure and climate for creativity and innovation. Divided into two core areas, Ekvall’s model identifies 5 components of the “attitude to work” (idea time, risk taking, challenge freedom, and idea support) and 5 components of the “work atmosphere” (conflicts, debates, playfulness, trust, dynamism).

To gain a perspective on the innovation culture in an organization, I have found it to be very useful to use the components of the Ekvall model as a basis for conversations and discussion across individuals drawn from different groups. By taking an informal poll of their views, shared perspectives can be identified and variations in experiences can be explored.

The third part of a practical view on this topic is a more direct question: Is there something special about a “digital culture”? Several people seem to believe the answer is “yes!”. For example, McKinsey recently focused on three areas as the keys to a digital culture: Risk taking, strong customer focus, and cooperative working. This is taken one step further by George Westerman, Deborah Soule, and Anand Eswaran in an MIT Sloan article looking at how to build a digital-ready culture in traditional organizations. They emphasize how creating a more agile way of working is essential to a digital culture and requires an experimental approach to strategy driven by data.

To move in this direction, organizations have begun to adopt several important practices. Consequently, ideas such as Lean Startup, design thinking, and Value Stream Management are now popular across all aspects of digitally transformed organizations. They are part of a revolution in management and leadership affecting all domains and should be part of any digital strategy.

Finally, it is important to assess the experiences of workers in your organization as it undergoes digital transformation to gain insight to their perspective on these important changes. One approach starting to emerge is the use of AI-based conversational analysis to determine culture. Broad application of such an approach provides a way to compare and contrast the digital culture of organizations.

An example is the Culture500 ranking that looks at the conversations of 1.4 million people in Glassdoor to create a ranking of the best companies against various categories. Benchmarking your organization in this way can be useful to get a perspective on how your employees feel about your current digital transformation initiatives.

Understanding how we build new habits and routines is essential as digital technologies become more and more a part of our lives. Old ways of working are being questioned and new ones are being formed that are well adapted to the emerging digital economy. Perhaps the practical approaches described here will help guide you as you seek to refine the good, the bad, and the ugly elements of your digital culture.

Until then, you know where to find me. Sitting at my desk in my spare bedroom eating potato chips as the Sainsbury’s delivery truck drives away. C’est la vie.

Digital Economy Tidbits

The latest MIT article on culture change from John Kotter. Link.

Just saw this latest article by John Kotter on dealing with culture change as we come through the pandemic. Is there anything remotely new here? Hasn’t this been said a hundred times already? Is there nothing new to say about culture change or is it simply “must try harder”?

Driving intentional culture is a critical element of an adaptable organization that can respond to emerging challenges and opportunities at today’s fast pace. As the COVID-19 pandemic and the uncertainty and complexity that have accompanied it have clearly demonstrated, organizations need cultures that encourage flexibility, adaptability, and speed.

Home or office? Survey shows latest views of life after Covid, Link.

Another interesting survey and analysis about the future of work after the pandemic. This one is from the World Economic Forum and involved polling of 12,500 people across 29 countries.

Key messages are perhaps no surprise:

• Two-thirds of people around the world want to work flexibly when the COVID-19 pandemic is over, a new survey shows.

• And almost a third are prepared to quit their job if the boss makes them go back to the office full time.

• The survey of workers in 29 nations also shows people have coped better with homeworking than some feared.