Transforming an organisation for the digital world isn’t just a case of deploying new technology. For traditional organizations, it’s fundamentally about changing mindsets, values, beliefs and how work gets done.
In this podcast, our experts discuss the key challenges organisations face when transforming their culture for success in the digital age, including how they can build a culture that can adapt to continuous change and how to measure success.
Press play to listen to the podcast (duration: 16:19) or scroll down for full transcript.
Senior Client Partner and Culture Transformation lead at Korn Ferry Hay Group, UK
Simon Constable: I’m Simon Constable, contributor to the Wall Street Journal and US News and World Report. Welcome to our podcast series on digital transformation. This audio series offers advice and insights from a range of Korn Ferry experts on the talent management areas that are crucial for organizations to get right in order to successfully digitally transform.
This podcast focuses on culture change for digital transformation. Culture can be one of the biggest barriers or accelerators for digital transformation. To successfully adapt, organizations need to break down traditional power structures and encourage innovation, openness, connectivity and collaboration across their workforce.
Our speakers on today’s podcast are Kirsta Anderson, Senior Client Partner and Culture Transformation Lead at Korn Ferry Hay Group in the UK, as well as Avdesh Mittal who is the Managing Director for Korn Ferry’s Digital Executive Search practice in Asia Pacific. Thank you both for joining us.
So let’s start with you, Kirsta. What is culture?
Kirsta Anderson: That’s a great place to start, actually, because I think, in thinking about what is culture, that really helps organizations to then start thinking about how do they change it. A lot of people talk about culture as simply being the way that things are done around here, which I think is true – but not very helpful in understanding why it’s so hard to change it. The definition that I find quite useful came from Edgar Schein who is an academic at MIT, and he defined culture as a set of shared assumptions that have been learned over time, are taught to new organization members and are believed to be the correct way to perceive, think and feel.
So I think the way to think about what culture is, is it is getting that: what are those assumptions that are driving people’s behavior and determining what they do when nobody is watching them, when nobody is telling them what to do and nobody is incentivizing them and so on, and by thinking of it in that way, you can start to think about how you actually uncover what those assumptions are and start to challenge those assumptions and get the right assumptions in place so that people are behaving in the way that you need them to.
Simon Constable: Avdesh, how important is culture change to achieving a digital transformation?
Avdesh Mittal: Simon, how important is oxygen to living? I mean, you know, digital transformation is not about technology or tools, it is not about achieving efficiencies in the short term. It is about dealing with the environment around us. There is disruption in every possible sphere of our lives, industry, everything. Therefore, if organizations have to not just survive but do well in an ecosystem like that, they need to build a culture that will respond to these disruptions spontaneously in the future. For once this transformation will happen, but it has to happen in such a way that in future the response to disruption is spontaneous and effective.
Simon Constable: Kirsta, lets come back to you on the importance of the culture in the business transformation and how that relates to digital transformation. What are the key things that you need in a culture when that’s happening?
Kirsta Anderson: I think you mentioned some of those things right up front, Simon. I think you talked about organizations needing to encourage innovation, openness, connectivity, collaboration. I think those are all of the things that companies that are going through digital transformation need to encourage because they are essentially just needing to move so fast and to move faster than the competition, that those are the cultural attributes that lead to that speed and agility.
Simon Constable: What about the willingness of top management to allow mistakes to be made? You know, you have a new project, it fails – when does that become okay and when does it not becoming okay get in the way of the business?
Kirsta Anderson: Yeah, it’s one that comes up a lot in sort of technology companies, you know: fail fast and learn fast. And I think it’s one of those things that’s very easy for people to say in large organizations that are publicly traded where there are regulations, consequences in terms of share price and in terms of in the financial services sector, prison time, when things go wrong. So it’s one of those things that is important, but I think also organizations need to be kind of realistic. I think one of the biggest mistakes that companies make when they’re trying to change their culture is, signing up to a bunch of aspirations that sound great and sexy and young and cool and fun, but that just aren’t realistic for them in terms of where they are.
So, saying that we’re going to fail fast and learn fast is great, but it’s just a different proposition when you’re a start-up in Silicon Valley in someone’s garage, versus when you’re a publicly traded company, and so being really clear about, you know, under what conditions are we going to fail fast and learn fast? Who’s going to fail fast and learn fast? Maybe not the CFO. Maybe product developers can afford to do that. And how are we going to deal with it when – how are we going to manage the risk of it, essentially?
Simon Constable: Avdesh, let me turn to you. What is the equivalent, then, of young and sexy and fun for a blue-chip company that is publicly traded, then? Presumably it’s not young and sexy and fun, it’s something different.
Avdesh Mittal: Yeah, and it better become young and sexy and fun, right. So, let me take a step back, Simon, let me go beyond transformation. We at Korn Ferry are actually talking not just transformation but digital sustainability. Transformation, by the very word, means moving from point A to point B; becoming, instead of this, become that. But digital sustainability is actually changing the DNA of the organization – almost like a bone marrow transplant – because you cannot afford to simply change, transform, and then stay there.
The way the world is moving and evolving, you have to continuously transform, all through each stage of equilibrium, then you can sustain all those fun, young, sexy attributes that you build into the organization. And that, to my mind, is driven top down. Now, if you see the three big A’s of the digital revolution – Alphabet, Amazon and Apple – right at the very top, if you see the individuals, they’re the ones who actually drove it, they led by example, they demonstrated who they are and they had the conviction and that’s what went right down into the organization.
So, if you are going to transform, and then sustain that transformation, very clearly, you need to build an ecosystem – not just fun, energy and all that; that is all very important. But build an ecosystem where people are willing to leverage what we in our framework call their discretionary energy in the interest of the organization – because they’re going to do their day job in any case; over and above that, they need to go through this transformation cycle and make it sustainable, which means: how do you make people do well beyond what is hygiene? How do you make them leverage their discretionary energy? And what I love is asking people: where does the fire burn? We have to build an ecosystem where fire burns in people’s bellies, they want to do this. And that’s when culture will change permanently. And that’s how sustainability will be achieved.
Simon Constable: Kirsta, I was going to ask you about how most leaders are equipped for this – are they well equipped, badly equipped?
Kirsta Anderson: So the top team of the organization, the Executive Committee or the Board of the organization need to work together to create that ecosystem, yes by role-modelling the right kinds of behaviors, but also by sending the same messages. Because if you want to make a change or sustain a change, you need people hearing and seeing the same messages from everyone on the top team. Otherwise, what they do is they say: okay, the top team’s not aligned and therefore I’m going to kind of go in the direction of whoever I think is strongest, or whatever it might be – and it ends up creating more division.
So you need that top team 100% aligned, and the challenge is that most people haven’t actually operated on really truly aligned top teams, because most teams are run as collections of individuals where each person is, you know, hitting their own KPIs, running their own business unit, whatever it might be, and not actually having to work together. Often they’re pushing any conflict or tension down to the level below. So, when you ask if people are well equipped, if leaders are well equipped to lead this kind of change and to sustain it, I think everyone can do it, but almost no one has the experience of working on a team in the way that the team needs to work in order to do this. So it’s about helping teams accelerate that, and getting to a point where they can operate in that way.
Simon Constable: Kirsta, one follow-up on this: everyone who has worked in a big organization knows that new edicts occasionally come down from the management suite, and sometimes they last a week, sometimes they might last a few months, but frequently they just disappear, never to be heard from again, and so people don’t always sort of believe the new way of doing things initially, and they have to sort of wait and see that it’s sustainable. How would you coach leadership teams to get beyond that point?
Kirsta Anderson: Mm. Yeah, I think there’s two key things that they need to do to get beyond that. So one, it’s get really, really clear upfront on what you’re signing up to and make sure you don’t send out edicts that you’re not ready and willing and prepared to follow through on, and then the second piece is, once you’ve got that edict, whatever it might be, it’s about then making sure that you’re doing something symbolic for the organization that helps them see that the top team is kind of putting their money where their mouth is and making some kind of sacrifice themself, in order to again follow through on that. And that’s what then starts to make people raise their eyebrows a bit and say it might be different this time, and maybe I should pay attention to this one.
Simon Constable: Avdesh – raising eyebrows and putting your money where your mouth is – anything to add on that?
Avdesh Mittal: I think that’s a really good point Kirsta makes about top teams, you know, and how they function – and therefore how effective they are, or not. One needs to be sure, really, that: are people just agreeing, or are they really aligned and want to make it happen? And there is huge difference between these two things. And whether or not the transformation is successful is really a function of this difference. Just agreeing to something is very different from really wanting to do it.
Simon Constable: Kirsta, when you are putting in a culture transformation, how do you measure whether you’re actually making any progress or not?
Kirsta Anderson: I think the most common way that organizations measure their progress is through surveys of employees, asking them essentially, you know, how are we doing on this? And that is useful in terms of, I think, giving employees a voice; showing that the organization cares enough to invest in tracking their progress; and it can lead to some very useful insights in terms of what’s working and what isn’t, and what’s holding the organization back from making more progress. But I also think that the old adage “what gets measured gets done” is true, but can sort of backfire in a way, I think.
Leaders can end up kind of teaching to the test and doing whatever they need to do to get good scores on those surveys without actually making a real underlying difference to the organization. So I think what organizations also need to do to measure progress is focus on what are the outcomes that they’re trying to achieve through this, you know – so is it more market share amongst a certain population? Is it more patents? You know, what are the actual outcomes they’re trying to achieve? And then focus on those and tracking progress against those outcomes as much as people’s points of view or opinion.
Simon Constable: Avdesh?
Avdesh Mittal: The true measurement, in my opinion, can happen only over time where if you know your goal, what you set out to achieve, and assuming when an organization is going through a digital transformation, they have already got a strategy laid out, because digital transformation for different organizations can mean very different things. So hopefully they’ve got it figured out, what part of their business really needs to go through the biggest digital transformation and what does that mean, which means: where are they going to get to; what is the end objective? And if they can find themselves headed in that direction, I would say that they should assume that their culture, is transforming. Because I don’t believe any transformation will happen without cultural transformation. So if they’ve already achieved part of their business objectives, I would say the culture has been contributing to it.
And then, more importantly, they have to sustain it. So, if they’re not able to sustain it, then it means that it might have been more than technology or some tool rather than culture.
Simon Constable: There you go. If you’ve achieved it, you’re doing well; you’ve got to sustain it, though. Thank you very much, Kirsta and Avdesh.
Thanks for listening to our podcast on culture change for digital transformation today. Please check out the rest of the podcasts in this series on the Korn Ferry Digital Sustainability microsite. Goodbye from all of us.