At the turn of the 21st century, most companies didn't need a deep (if any) understanding of digital commerce to succeed. Although hard to believe, the world was very much an analog place then, with lots of custom software, minimal data sharing between systems, little online shopping and no mobile markets.
Today, however, digital commerce isn't just a capability that a group of millennial employees toy with in cloistered Silicon Valley offices. Digital is the primary driver of all business success today. Forward‑thinking brands no longer separate e‑commerce and mobile from brick‑and‑mortar operations; they combine all their efforts into a single omni‑channel to reach and sell to customers, whether they shop in a showroom or online.
For companies such as Amazon, Google, Alibaba and others born online, it's easier to foster an effective digital culture than it is for those that made their mark before the Internet went mainstream. But it is possible even for traditional companies to transform their culture in a digital direction.
Just look at General Electric, says Tina Juillerat, a director of change management within Cognizant Business Consulting. The industrial manufacturer has recently evolved into a successful datascience company by outfitting its core products with connectivity capabilities and applying real‑time analytics to the resulting data volumes. Similarly, Ford Motor Co. has also staged a tech-inspired turnaround. Even legacy software companies such as Intuit have successfully migrated their operations online, she says.
Others can replicate similar successes while staying true to their values. First, they should set a realistic deadline, says Anthony Harris, Cognizant's director of organization change management and culture transformation solutions. Culture change can take five to 10 years on average of sustained, calculated effort, he says. (T‑Mobile is a notable exception to this, having transformed in the past few years into a quasi-successful "un‑carrier.") Culture takes time to evolve and requires multi‑level changes, from how a company operates, to how it leads and even how it hires new employees.
Next, consider conducting a cultural assessment that monitors how employees interact and communicate, contends Harris. While describing culture is hard, he says, observing it is easy, especially when done by outsiders. Gauge employee morale and what kinds of policies frustrate their efforts and use storytelling among other techniques to start changing your narrative, he explains.
Finally, examine rival cultures. Chief executives are quicker to shift their thinking after seeing competitors or respected peers do the same, making comparison a powerful tool to benchmark your culture and change your thinking, Harris adds.
As with all change, cultural transformations must start at the top. Many companies have sought change by hiring junior‑level employees from the millennial generation in the hope that their savvy behavior might percolate upwards. But it doesn't work that way, Harris says. Senior management cannot defer or delegate digital culture down the line but must lead from the front.
Leaders must define what "digital transformation" means to the company, Juillerat says, not as a mandate, but as a synthesized understanding of it from the bottom to the top. It's all well and good to define an end goal of having every employee using digital tools on a daily basis, but it's not clear and specific enough to galvanize buy‑in. A better approach is to paint a desirable vision for the company, such as using digital tools to speed employee evaluations and compensation and enable remote work and flextime opportunities with reporting and analytics to validate and recognize their accomplishments.
Company leaders should also set company‑wide, explicit and measurable goals (e.g., 50% of sales online within three years). These should create a sense of urgency and speak to the hearts and minds of employees rather than just serving as financial goals. Examples include "50% of leads online," "fully omni‑channel within two years" and/or "launch two new consumer experience apps to enhance the satisfaction of younger customers."
Management must also use highly visible and symbolic actions to emphasize the transformation to internal and external audiences. Senior leaders must personally exemplify the new digital ways for working, communicating and collaborating. Per Gandhi teachings, "Be the change you wish to see in the world."
When that mantra fails or is unfeasible, the only other option is replacing the old guard with new executive blood, Harris says. This is what Microsoft did in hiring CEO Satya Nadella recently, a move that's been highly regarded by investors, employees and customers to help the company become a modern innovator in computing.
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Although creating a digital culture is certainly a challenge, especially for traditionally offline brands, there is some good news. Every company has digital capabilities baked into their existing DNA, even if they don't know it, asserts Juillerat, who has studied numerous companies and their efforts at digital transformation. The trick is finding, discovering or re‑emphasizing your own DNA.
KeyBank, for example, has seen its stock price triple in the last five years, during which time it has also intensively focused on big data analytics. If executives or employees want to make a decision based on experience or gut instinct, they must use analytics to back it up or risk having their decision overturned.
For more subtle changes, consider Marriott International, the world's largest hotel chain. Rather than let conference rooms sit idle and unused, the company recently joined the sharing economy (otherwise known as the collaborative consumption model) with its WorkSpace initiative, which lets remote or traveling workers reserve temporary office space online. By doing so, the mostly‑offline hotelier is now participating in the online economy, an act that forces greater digital culture.
For any established brand, achieving even a fraction of success is enough to make investors, employees and customers cheer. Unlike before, it all starts with the digital culture you chart today.
For more information, please visit Cognizant's Organization Change Management Practice, read about our IT improvement program or discover how to get your digital banking initiative into gear.