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Do Aussies have the cultural edge in digital transformation?

Do Aussies have the cultural edge in digital transformation?

A new study finds that culture is the number one obstacle to digital transformation globally. So how do we stack up?

A new global study from consultancy firm Capgemini has revealed that 62 percent of respondents see corporate culture as one of the biggest hurdles in the journey to becoming a digital organisation.

The study was conducted in March and April 2017, and covered more than 1,700 respondents in 340 organisations from the United Kingdom (UK), France, Germany, Italy, Sweden, Netherlands, Spain and the United States (US).

While Australia was not included in the study, local partners believe that, as a country, we may be well ahead of the cultural pack.

Further, the study stated that, while 40 per cent of senior-level executives believe their firms have a digital culture, only 27 per cent of the employees surveyed agreed with this statement.

The survey asked respondents to assess their companies' digital culture based on seven attributes: their collaboration practices, innovation, open culture, digital-first mindset, agility and flexibility, customer-centricity and a data-driven culture. 

Insights gathered from the report and through a series of focus interviews helped to identify some of the reasons behind this digital culture gap including senior leaders failing to communicate a clear digital vision to the company, the absence of digital role models and a lack of KPIs aligned to digital transformation goals.

Capgemini head of digital services, Cyril Garcia, said digital technologies can bring significant new value, but organisations will only unlock that potential if they have the right sustainable digital culture ingrained and in place.

“Companies need to engage, empower and inspire all employees to enable the culture change together; working on this disconnect between leadership and employees is a key factor for growth,” she said. “Those businesses that make digital culture a core strategic pillar will improve their relationships with customers, attract the best talent and set themselves up for success in today’s digital world.”

The Missing Link CEO, Alex Gambotto, told ARN that culture definitely influenced technology buying decisions and digital transformation and thus investment in culture was something Australian institutions were, by and large, on top of.

“Culture can be a roadblock, but it is quite rare these days. Most people understand that convergence of technology is a fact of life and that, for the most part, it is beneficial,” he said. “The majority understand that it lowers costs and increases productivity. The time it takes to hit return on investment with infrastructure projects is becoming shorter."

Alex Gambotto - CEO, The Missing Link at the ARN awards in 2014
Alex Gambotto - CEO, The Missing Link at the ARN awards in 2014

Gambotto added that witnessing success of digital projects increases the appetite for change in general.

“It is increasing, [customers] are becoming more aware that they need to do something, particularly in the cyber security space,” he said.

The Missing Link recently launched managed service offerings based on the Australian Signals Directorate (ASD) Top 4 and Essential 8 cyber threat mitigation strategies. Gambotto said the interest in this service - from both business and government - demonstrates a distinct cultural shift toward cyber savviness.

“We have seen a huge increase in acceptance within organisations of the need for cyber security assistance,” he said. “It is more outcome driven now than product driven.”

According to Capgemini, only seven per cent of companies surveyed feel that their organisation can test new ideas and deploy them quickly. Additionally, it said 37 per cent of respondents stating that their organisations have a culture of innovation, experimentation and risk-taking against 75 per cent of senior executives.

So how does this play out in Australia? Deloitte human capital partner, Michael Williams, said synergy between management and employees was still an issue but managerial recognition of the expectations of employees was improving across many local companies.

“Our research is showing us that employees want the digital experience at work to be exactly like the digital experience they have in their private lives,” Williams explained.

He said the ability to work from mobile devices, collaborate seamlessly was becoming increasingly important.

“The ability to bring their best thinking to every problem and not be subjected to the structure and the hierarchy that corporates tend to bring on their people is exactly what people really want,” he added.

“Australian companies are recognising that culture is critical to successful digital transformation. Digital transformation is about being customer-centric, it is about being able to move at pace, shorter planning and execution cycles and agility."

He also said that this translates into being able to build cross functional teams with cultural skills and developing a culture of autonomy and test and learn with a tolerance for failure, which were shifts many Australian companies were undertaking.

Michael Williams - Deloitte partner, human capital
Michael Williams - Deloitte partner, human capital

“Culture is critical. It is the one fundamental requirement in any digital transformation and Australian companies are recognising that. The question is how fast can we change?”

“The majority of people in the Australian workforce want the type of cultural change that underpins digital transformation,” Williams said.

“The want autonomy, they want to be able to learn faster, to test ideas, collaborate and work seamlessly across business units.”

The research also identified a group of digital culture "front-runners", which made up 34 per cent of organisations surveyed who “performed consistently well across the seven dimensions of digital culture, and whose leadership has largely succeeded in aligning the wider organisation to the desired culture, Capgemini said.

The UK, Sweden and the US were the top countries for such organisations. The attributes of these companies are mirrored in experiences in Australia, according to Deloitte and The Missing Link, meaning the country is well placed globally for the next stage of digital transformation.

The report's author, Brian Solis, said that, to compete for the future, companies must invest in a digital culture that reaches everyone in the organisation.

“Our research shows that culture is either the number one inhibitor or catalyst to digital transformation and innovation,” he said. “However, many executives believe their culture is already digital, but when you ask employees, they will disagree. This gap signifies the lack of a digital vision, strategy and tactical execution plan from the top”

“Cultivating a digital culture is a way of business that understands how technology is changing behaviors, work and market dynamics. It helps all stakeholders grow to compete more effectively in an ever-shifting business climate," he said.

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Tags DeloitteCapgeminiThe Missing LinkCultureAlex gambottomichael williams

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