Every time an again I hear the question – “What is Digital?” Many have different views, but all would agree that the Digital transformation is not just an IT transformation, but entire business transformation. The culmination was the following quote many times repeated:

Like any other business transformation, it needs to be seen through the four lenses – People, Process, Data and Technology supporting it.

You must have heard a lot about Technology and Data aspects of digital transformation from many experts, so I wanted to draw your attention to the People aspects of digital transformation, People that create and transform the culture of our organisations – Consumers that we serve, Our internal business capabilities of talent, our skills and our ways of working, The partners that we take along – all of these greatly contributed to our success and I would like to share this with you today.

In fact, 46% of respondents in Gartner study named culture as the biggest barrier to scaling digital transformation.

So what is CULTURE?

The best way to describe a culture is through the footprint of values, behavior and ethics that guide

- the way we do things,

- how we behave in a social situation like work,

- how we approach challenges,

- how we select partners,

- how we make decisions.

Organizational culture plays a pivotal role in making organisations what they are, help explain their success or failures. Why do we need to count on it during digital transformations? Simply because Digital transformation is about using technology for change, but nobody likes to change. It is in our culture! Hence, to adjust the culture we need to understand the basic principles of how the culture is formed.

To start with, people always tend to identify themselves with groups – be part of, belonging is in our instincts. We quickly pick up

- what the rules of behaviour are,

- what should we do when we disagree,

- who the leader of the group is that give us the role model.

Then, people tend to like and be proud of belonging to the groups that are different and better than other groups in some way or form – ways of being special is a massive factor – professional communities, departments like sales, finance, local markets, teams, etc.

Lastly, groups of people tend to quickly identify the threats to their success – this is about survival, continue to exist. Like a good immune system, groups that enjoyed success in the past will fight against any change to the status quo. In fact, the deeper heritage, past success the more culture of the company will fight back to any change.

Let’s see how this applies to a typical company in a consumer goods industry. Putting this simply, it is likely that this company have had a great history and enjoys rich heritage, grown over the time through series of M&A, gained the substantial market share in the core markets or globally. Company name or their brands are commonly known and play a great role to differentiate the group from other companies.

It is also likely that such typical company would adopt the responsible corporate strategy addressing the current challenges of humanity – obesity, climate change, sustainability that hugely resonates with many of their employees making them very proud to work for that organisation.

That said, the very existence of the consumer goods industry that once made this typical company great has been threatened. And this serious threat is coming from the People outside of this organisation – their beloved consumers. It is their changing consumer behaviour is being feared across the retail and consumer goods industry.

Everything has changed with the advantage of digital age technologies - from consumers lifestyle to the way consumers shop. Consumers of the digital age are in control of their world. It is their expectations that set the bar consumer goods company must meet, driving perpetual change in products, services and the way the industry operates.

To thrive in this world, consumer goods company must pivot to become a consumer-obsessed organisation, understanding consumer needs, then developing products and services to meet those needs, wherever and however they want. Without this, company risk irrelevance. It does not matter how big the market share is, how rich the heritage is and therefore how proud the employees are - all could change very quickly in a "kodak" style.

While it is easy to talk about it - it is very difficult for a company and its employees to recognize that the old way is no longer working. So what do we, People of organisations, do instead? Of course – work harder but still the old way, the way we know, the way that brought us to success.

Accumulated high pressure from work, from customers, from competition activates and emphasize the survival instincts of the group As I mentioned at the beginning, a threat to survival, a threat to identity of the group, towards individual (am I still belong to the group) put people on defensive mode – rejection of change. Again, as I said earlier, the greater heritage, the greater identity the greater resistance from people in the organisation.

People make subconscious decisions, give emotion response against the change even when they support you in meetings (“groupthink”?)

With this comes a challenge of existing status quo coming from the well established organisational culture which every digital transformation will go through

So, how did we avoid the culture clash in our recent project? First of all, we did not fight our culture - we have fully embraced it, and this is how:

• We know that uncertainty stimulates defence, hence to reduce down the level of stress we started a corporate-wide campaign to promote the need for change using different channels, market our digital agenda, vision and strategy.

• We used Workplace, our internal social media pages where CEO was posting his views and blogs about digital transformation

• We brought our leadership to the Silicon Valley to inspire them by ways of working and mindset that exist in native digital organisations

• We started running the design thinking workshops to embed this method in our operating model discussions

• We used WhatsApp groups to speed up the process of decision making

• We got senior leadership to provide inspiration through a role model example

All in all, the message to our People read:

One should not underestimate the power of influencing people over the teams – they could do impossible when they make the emotional connection.

I do remember when one day in February this year it felt that a perfect storm was forming in the project – People from business team got a bit tired, the number of things to sort out was still big, hard dependencies existed on upgrade, etc.

At that particular time, we were sitting with market CEO and discussed project status when I suggested him to call a town hall meeting and deliver a message that would reignite the team, give them a hope, a light at the end of the tunnel.

Next day he told us all a story about the Apollo 13 mission, about the challenges they have faced and the courage they have to solve them. We had a chance to turn the situation around, we used this chance wisely and it worked! It helped unite the business team around a common goal, reignite their enthusiasm around same mission critical.

Selecting partners that you take along with you

When you challenge the company's status quo it is important to deliver the promise. Hence the selection of external partners becomes a crucial task.

I like the joke about a restaurant that offer 3 kinds of service – Cheap, Good, Fast but you only can take 2 – this provides a very good decision framework. To select the best team. You decide for yourself, but I suggest going for the best and the smallest team possible.

Another “2 pizzas rule” suggested by CEO and founder of Amazon for the formation of agile teams works here perfectly too. I would only add that people should be able to eat pizza together and hence they need to be co-located to reach the maximum efficiency.

This way it will be really “FAST” and “GOOD”. You might think it will not be “CHEAP” and you would be right. But if you think good employees are expensive – try bad ones!

A jokes aside, small highly experienced team will be able to deliver the project faster, without much overhead making it more economically viable option.

Finally, if you haven’t already done so you should subscribe for SAP Preferred Success services – the amount of value you will get from their People and money you will save of figuring this out yourself is simply amazing.