In the last decade, we’ve seen a significant confluence of disruptive technologies and changing customer expectations—both moving at a rapid pace—and its impact on how companies organize and manage people and teams, as well as, invest in education for employees.
The customer-centric marketplace of today requires an organization to have a digital culture built on exploration and experimentation; where people and teams foresee customer shifts, move quickly, and stay one step ahead of the competition.
So, how do companies today prepare their organizations for digital transformation, and how can they build an internal culture ready for the future?
Organizational Structure and Collaboration
For more established companies, digital transformation means not only the integration of new technologies but a radical change in organizational structures and the decision-making process.
Pamela Hinds, Professor of Management Science and Engineering at Stanford University, found that companies that cultivate a digital culture and are open to innovation and change are those who are customer-centric, agile and fast, promote unbound collaboration, and have an appetite for risks.
Hinds compares organizational structures of traditional companies and startups, and the capacities of each to innovate. She found that in startups, organizational rules are less defined, and people can step in and step up if they see a need for change.
What this means is that leaders must restructure organizations to support and encourage a new way of thinking and doing—creating a foundation built to respond quickly in a digital-focused marketplace.
As the pace of change increases, for digital transformation to happen, companies need to instill fluid collaboration between functional and organizational boundaries, bring diverse expertise together, and encourage global teams. Solutions and being nimble must take priority over hierarchical structure.
For example, Amy Edmondson, Novartis Professor of Leadership and Management at Harvard Business School, studies how organizations solve problems by creating ‘teams on the fly.’ This teamwork (what Edmondson refers to as ‘teaming’) brings together unique talents that rapidly adapt to projects and understand how, as a team, they can work together to solve the challenge at hand quickly.
Continual Learning Culture
In a McKinsey survey (2017), executives viewed ‘investing in retraining and upskilling existing workers as an urgent business priority.'(1) For these executives, they understand that the right skills are fundamental to helping their company to succeed.
When the CEO of AT&T, Randall Stephenson, saw back in 2012 that the company’s workforce did not have the skills required for the emerging technologies, he started an internal, ongoing learning program called Vision 2020.(2)
The initiative of ongoing reskilling and upskilling is a matter of staying relevant in today’s environment.
When Deloitte needed to improve its financial audits for clients, the professional services firm launched what is now its annual audit innovation challenge, which brings together students and employees. This innovative program helps the firm drive disruption within its industry by bringing together creative minds to work on how to improve the audit process and come up with new insurance services.
The Audit Innovation Campus Challenge also creates a learning environment for employees. As they observe students tackling the company’s real-world challenges, it provides insights on how Deloitte can better educate, train and set career goals for new hires.(3)
Forward-thinking companies are proactively preparing their workforce for the skills they will need in the future. In essence, they are future-proofing their company’s workforce by treating learning as part of the digital transformation strategy.
Incentives, Rewards and a Growth Mindset
How employees are incentified and rewarded is also essential as it directly influences the idea of exploration and experimentation; this is especially important in digital disruption where a sense of urgency is needed for organizations to foresee potential industry changes and embrace them.
To do this, companies must create a safe environment where employees can learn, try new strategies, accept failure and learn from it.
Robert Sutton, Professor of Management Science and Engineering at Stanford University, promotes what he calls “after-event reviews” and how they are instrumental to learning, regardless of whether they focus on success or failure. What is essential is the deep thinking and learnings which come from both.(4) That knowledge from success and failure is instrumental in the learning process.
In her research, Carol S. Dweck, author of Mindset, found that employees at companies with a fixed mindset worried about failing and pursued fewer innovative projects. In contrast, employees in growth mindset companies were viewed as more innovative, collaborative, and committed to growing.(5)
Digital transformation leaders are creating an appetite for risk while embracing and learning from failure. Instrumental is providing a safe place for employees to learn, upskill, try-out, and explore. This way, employees can come together, armed with the willingness to work together across teams and use their collaborative knowledge to make the impossible, possible.
This was part 3 in OpenClassrooms’ Digital Transformation Series. If you missed part 1 or 2 of this series:
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